Iraq to cut food subsidies
1 February 2008
The Arab newspaper Azzaman reported last week that the Iraqi government plans to reduce its food rationing program "in line with the obligations it has made to the World Bank."
According to Reuters, Iraq's Trade Minister said in a statement that the number of items in the food packages will be reduced from ten to five.
The food rationing system was set up by Saddam Hussein in 1990 as a response to United Nations sanctions and, according to a World Bank study, 60 percent of Iraqis still rely on the rations to meet their basic needs.
The World Bank has played a key role in setting the priorities of the government's economic reform agenda, and has long pressed for the reform of the food distribution system. The Bank has criticized the program as expensive and inefficient - the program absorbs as much as 21 percent of the government's expenditure - but acknowledges in a 2006 study that there "are no other large-scale safety nets functioning in Iraq that could take over the role" of the mechanism.
When asked to what extent the World Bank and the International Monetary Fund (IMF) have imposed their policies on the government, the Trade Minister stressed in an interview with Al-Arabiya that while these institutions have merely encouraged the country's economic reform agenda, the government is required to reduce its expenditure in order to relieve the remainder of the debt acquired under the previous regime.
Resources