Resistance leader demands end to US direct financial leverage over Iraq

“Among the most conspicuous aspects of the Iraqi government’s loss of sovereignty is the American economic control and dominance over the country’s revenues and assets, its complete appropriation of the Iraqi [natural] resources, and occupation of Iraq,” Abu Ala al-Walai wrote on X on Saturday night.

He said that the “noble Iraqi nation” would not accept their natural resources to be aggressively plundered, and not to be recognized as a genuine sovereign right.

“Is it outrageous to demand liberation from American financial and economic dominance, diversification of export markets and banking relationships, and establishment of an economy that controls its own decision-making, wealth, and trade routes?” Walai noted.

The secretary general of the Iraqi Kata’ib Sayyid al-Shuhada resistance group noted that sovereignty is not simply achieved through control over territory, but rather requires the authority to take decisions in political, economic, and financial spheres, far from the domination of any foreign power.

The United States, since its 2003 invasion of Iraq, has held effective control over the country’s petrodollars and enjoys extraordinary leverage over Baghdad’s affairs.

The US dominance regarding Iraq’s oil revenues is largely due to the oversight of Iraq’s oil income through the Federal Reserve Bank of New York.

Iraq’s primary source of revenue is oil, which constitutes approximately 90% of the national budget. This grants Washington considerable influence over the economic and political stability of the nation.

In 2020, when the Iraqi government requested the withdrawal of US troops from the country, Washington reportedly warned that it would restrict Iraq’s access to funds held at the New York Federal Reserve, leading Baghdad to ultimately retract its request.

Since the early years of the US occupation, the Iraqi government has achieved greater control over its financial matters; however, the continuing relationship underscores the persistent influence of the US on Iraq’s economic environment, despite the country’s efforts to establish its sovereignty and independence.