Iraq, Struggling to Pay Debts and Salaries, Plunges Into Economic Crisis | WHAT REALLY HAPPENED

Iraq, Struggling to Pay Debts and Salaries, Plunges Into Economic Crisis

In the wholesale market of Jamila, near Baghdad’s sprawling Sadr City neighborhood, a merchant, Hassan al-Mozani, was surrounded by towering piles of unsold 110-pound sacks of flour.

“Normally at a minimum I would sell 700 to 1,000 tons a month,” he said. “But since the crisis started we have only sold 170 to 200 tons.”

His troubles are a ground-level indicator of what economists say is the biggest financial threat to Iraq since Saddam Hussein’s time. Iraq is running out of money to pay its bills. That has created a financial crisis with the potential to destabilize the government — which was ousted a year ago after mass protests over corruption and unemployment — touch off fighting among armed groups, and empower Iraq’s neighbor and longtime rival, Iran.

Iran in the past has taken the opportunity posed by a weak Iraqi central government to strengthen its political power and the role of its paramilitaries within Iraq.

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