Five months after taking office, Iraqi Prime Minister Ali al-Zaidi has completed his cabinet — a milestone that arrives not in calm, but amid the grinding pressures of regional war, fiscal strain, and the ancient tension between sovereignty and foreign entanglement. The approval of eleven ministerial posts and three deputy prime ministers, one of them a US-designated terrorist tied to an Iran-backed militia, reveals how Iraq continues to balance competing loyalties in a region where neutrality is rarely permitted. With oil revenues disrupted, the dinar devalued, and a debt inherited from the p
Iraq completes cabinet formation as economic crisis deepens
The government requires 10.7 billion dollars monthly just to cover salaries
Mark
So the cabinet is finally complete. What took five months?
Mimi
Political horse-trading. Iraq's government is built on consensus among different factions—Shia parties, Sunni groups, Kurdish blocs. Getting everyone to agree on who sits where takes time, and some positions are still contested.
Luke
Right, but they still haven't filled the migration minister slot. That's not just delay—that's active disagreement. We should name that.
Mark
And then there's this deputy PM under US sanctions. How does that even happen?
Mimi
Laith al-Khazali comes from a powerful militia faction. His group has real influence in parliament. From Baghdad's perspective, including him is about balance and power-sharing. From Washington's perspective, it's a problem.
Luke
The US designated him a terrorist in 2020 and sanctioned him in 2019. So this isn't new information. The question is whether al-Zaidi is deliberately defying the US or whether he has no choice politically.
Mark
What's the actual economic emergency here?
Mimi
Oil revenue has collapsed because of the regional war. Iraq normally exports 3.5 million barrels a day through the Strait of Hormuz—that's 90 percent of government income. The war disrupted that. Now the state can't pay salaries.
Luke
We should be clear: the source says the war "has imposed" these challenges, but Iraq's economy was already fragile. The debt was 139 billion dollars when al-Zaidi took office. The war made it worse, but it wasn't healthy before.
Mark
So devaluing the dinar—that's a band-aid?
Mimi
It's a necessary move to free up cash in the short term. But it also means everything imported becomes more expensive, which hits ordinary Iraqis hard.
Luke
The source doesn't tell us what happened to prices after the devaluation or how people actually experienced it. We know he did it; we don't know the full fallout yet.
Il Polso
- A cabinet five months in the making was finally sealed, but the inclusion of a US-sanctioned militia leader as deputy prime minister immediately cast a shadow over its legitimacy in Western eyes.
- Regional war has severed Iraq's oil export lifeline through the Strait of Hormuz, draining the revenues that once funded nearly all of government operations.
- To keep the state solvent, al-Zaidi devalued the Iraqi dinar by 15 percent — a painful measure that shifts economic burden onto ordinary citizens already strained by conflict and uncertainty.
- The government inherited over $139 billion in public debt and must find $10.7 billion every month just to pay salaries and keep essential services running.
- Al-Zaidi has pledged to disarm non-state armed groups and complete the withdrawal of US forces — promises that sit uneasily alongside a cabinet seat held by a leader of one of those very armed factions.
Five months after taking office, Iraqi Prime Minister Ali al-Zaidi has completed his cabinet — a milestone that arrives not in calm, but amid the grinding pressures of regional war, fiscal strain, and the ancient tension between sovereignty and foreign entanglement. The approval of eleven ministerial posts and three deputy prime ministers, one of them a US-designated terrorist tied to an Iran-backed militia, reveals how Iraq continues to balance competing loyalties in a region where neutrality is rarely permitted. With oil revenues disrupted, the dinar devalued, and a debt inherited from the previous government, al-Zaidi's government now faces the enduring question that has shadowed Iraqi statecraft for decades: whether political completion can translate into genuine governance.
Iraq's parliament voted Thursday to complete Prime Minister Ali al-Zaidi's cabinet, approving eleven ministerial posts and three deputy prime ministers — a process that had stretched five months since al-Zaidi assumed office in May. Key appointments included a defence minister, an interior minister, and heads of planning, culture, and higher education. Lawmakers deferred only one post, the migration and displacement ministry, due to unresolved factional disagreement.
The vote's most consequential and controversial outcome was the confirmation of Laith al-Khazali as one of three deputy prime ministers. Al-Khazali is a senior figure in Asaib Ahl al-Haq, an Iran-backed militia the United States designated a foreign terrorist organization in 2020. Both Laith and his brother Qais were sanctioned by the US Treasury in 2019 following their roles in the killing of Iraqi protesters, with the designation also rooted in a 2007 attack that killed five American soldiers.
The political milestone arrives against a backdrop of acute economic crisis. Before the regional war erupted on February 28, Iraq exported roughly 3.5 million barrels of oil daily through the Strait of Hormuz — a flow accounting for about 90 percent of government revenue. That pipeline has since been severely disrupted. To manage the resulting cash shortfall, al-Zaidi devalued the dinar by nearly 15 percent, even as the government requires over $10 billion each month to cover public sector wages and basic expenditures.
Al-Zaidi, a former banker, inherited a state carrying more than $139 billion in public debt and has pledged to fight corruption, disarm non-state armed groups, and complete the withdrawal of US forces. Whether a cabinet that seats a sanctioned militia leader can credibly pursue those goals — while simultaneously managing Washington's concerns — is the defining tension his government must now confront.
Iraq's parliament completed the formation of Prime Minister Ali al-Zaidi's government on Thursday, five months after he took office in May, approving eleven cabinet positions and three deputy prime ministers in a vote that underscored both the country's political complexity and its deepening economic distress.
The approved posts included Nayef al-Shammari as defence minister, Yasir al-Maliki as interior minister, along with ministers for planning, culture, and higher education and scientific research. The only significant holdout came when lawmakers postponed voting on a migration and displacement minister due to disagreement among political factions. The cabinet completion, however, carried immediate controversy: among the three newly approved deputy prime ministers was Laith al-Khazali, a senior leader of Asaib Ahl al-Haq, an Iran-backed militia movement. The United States has designated the group as a foreign terrorist organization since 2020 and named both Laith and his brother Qais, the movement's leader, as specially designated global terrorists. The Treasury Department had previously sanctioned both brothers in 2019 following their involvement in the killing of Iraqi protesters. The designation stems partly from a 2007 attack that killed five American soldiers.
Al-Zaidi, a former banker, framed the cabinet's completion as a step toward addressing what he called exceptional economic and security challenges. In a statement after the vote, he called on his ministers and deputy prime ministers to work with "the highest levels of commitment, competence and integrity." Yet the economic reality facing his government is severe. Before the US-Israel conflict with Iran began on February 28, Iraq had exported roughly 3.5 million barrels of oil per day through the Strait of Hormuz, a flow that generated approximately 90 percent of government revenue. The ongoing regional war has disrupted that pipeline, creating acute liquidity shortages across the state.
To manage immediate cash needs, al-Zaidi devalued the Iraqi dinar by nearly 15 percent against the US dollar. The government requires approximately 10.7 billion dollars monthly simply to cover public sector salaries and essential spending. When al-Zaidi's administration took office, it inherited public debt exceeding 139 billion dollars at the new exchange rate—a figure that raised questions about the financial management of his predecessor, Mohammed Shia al-Sudani. Al-Zaidi has pledged to fight corruption, disarm non-state armed groups, and strengthen Iraqi sovereignty by completing the withdrawal of US military forces from the country. Whether a cabinet that includes a sanctioned militia leader can credibly execute those commitments remains an open question as Iraq navigates both its fiscal crisis and its fraught relationship with Washington.
Citazioni salienti
The war has imposed, and continues to impose, extraordinary economic challenges on Iraq— Prime Minister Ali al-Zaidi
Fulfil their responsibilities with the highest levels of commitment, competence and integrity— Prime Minister Ali al-Zaidi, addressing his cabinet
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Politics & Governance