In a context where finance has been conceived as a conduit for Iraq\u2019s awaited prosperity,3<\/sup><\/a> the new 170-meters-high Central Bank of Iraq (CBI) tower stands as both a totem and mechanism of an impending national resurgence. Looming atop the skyline, the 90,000-square-meter structure itself, a modern-day ziggurat imagined by Zaha Hadid, offers material testament to Iraq\u2019s current developmental priorities.4<\/sup><\/a> Construction began in 2018\u2014delayed by Iraq\u2019s violent 2010s, the nadir of which was reached with the war against ISIS\u2014and is scheduled to be completed shortly. In official discourses, the tower symbolizes a new day dawning: its glass and rebar project growth, stability, and renewal. For some, the tower also augurs Baghdad\u2019s nascent financialization: The city\u2019s elevation as an investment hub at the center of the projected Iraq Development Road. All of this is in keeping with regional trends\u2014both architectural and economic. The CBI tower will join an archipelago of high-profile buildings designed by the late \u201cQueen of the desert\u201d in the Middle East and North Africa region, buildings that all in their own way testify to Arab states\u2019 growing power, capital, and social designs.5<\/sup><\/a><\/p>\n\n\n\n Beneath the narrative surrounding the CBI tower is a reality marked by competing actors and agendas and structured according to contradictions inherent to Iraq\u2019s political economy. This article probes these underlying dynamics by focusing on the intricate relationships between capital, developmental investments, and Iraq\u2019s \u201cstate partisan oligopoly\u201d.6<\/sup><\/a> In unwinding some of what is at play in the CBI\u2019s monetary and investment policies and in contemporary fiscal initiatives, a sightline into Iraq\u2019s nascent financialization is profered.<\/p>\n\n\n\n Iraq\u2019s political field crystallized following the defeat of ISIS in 2017. This event reopened \u201ca new round of critical state reinforcement in Iraq\u201d,7<\/sup><\/a> mobilising variegated public and private actors to deepen their involvement in national affairs. This had significant effects on the country\u2019s economic prospects and geography of power. Concerning the latter, Baghdad progressively reasserted its position as the dominant fulcrum of Iraq\u2019s political economy, a shift consolidated by its 2017 military campaign against Kurdish forces. Concurrently, numerous armed groups\u2019 executives underwent a process of \u201cnotabilization\u201d.8<\/sup><\/a><\/p>\n\n\n\n Notabilization entailed pursuit of strategies to secure revenues entrenched in state rent distribution. Beyond laying claim to oil wealth, those participating in the process worked to position themselves within the state\u2019s investment circuits and to acquire stakes within the country\u2019s consumption-driven economy (real estate, retail, imports, etc.). Real estate speculation, both commercial and residential, emerged as especially important. Visible in the proliferation of large-scale construction projects, particularly public-private partnerships (PPP) and state-backed housing developments, profits derived from the transformation of Baghdad\u2019s built environment brought new and old elites together into a novel class formation.<\/p>\n\n\n\n Indeed, Baghdad\u2019s changing skyline serves as a spatial map, revealing the socio-economic effects of power and capital accumulation strategies in the post-ISIS environment. Amidst macroeconomic fragility, clientelism, and deficits in foreign investments, the city\u2019s built environment shows where influence truly lies. As a corporate interlocutor explained to me in the beginning of 2025: \u201cOne shouldn\u2019t look at the public ministry or institution behind a project. What matters is the individual; it tells you everything, and it\u2019s not difficult to understand then what is going on and what is at stake\u201d. Whether directly affiliated with the \u201cstate partisan oligopoly\u201d or not, individuals and companies are still making \u201cbig money in Iraq\u201d,9<\/sup><\/a> and in so doing, acquiring major holdings of political capital as well.<\/p>\n\n\n\n Since the oil boom of the 1970s and Saddam Hussein\u2019s consolidation of power in 1979, the political economy of Iraq has been increasingly tethered to the vagaries of energy markets. Macroeconomic conditions and the state\u2019s fiscal health have long since swayed with price movements on the world\u2019s largest commodities exchanges. Moreover, due to a host of dynamics attendant to commodity dependence and war, non-extractive sectors have underdeveloped over time, amplifying the economy’s vulnerability. For a sense of scale, oil in 2023 accounted for 39% of Iraq\u2019s GDP and 91% of government expenditures.10<\/sup><\/a><\/p>\n\n\n\n At first glance, the recent drop in oil prices in April 2025 to less than US$65\/bbl\u2014driven by higher OPEC+ output under Saudi leadership and weakening global demand amid US tariff-related uncertainty\u2014would therefore seem to point to trouble.11<\/sup><\/a> With the IMF projecting the Iraqi economy to shrink by 1.5% in 2025, the expectation might be fiscal contraction and elite instability. <\/p>\n\n\n\n But this would overlook the role that debt has come to play in fastening the top ranks and buttressing the popular foundations of Iraq\u2019s contemporary political economy: Debt financing (especially during the Covid shock) has allowed Iraq\u2019s political governors to maintain if not grow public payrolls and other systems of patronage regardless of oil earnings. And attendant to this development, those actors able to extend lines of credit to the state\u2014namely, financial institutions, (under the guidance of the CBI) and individuals with substantial liquid wealth\u2014have acquired growing prominence.<\/p>\n\n\n\n Sitting 500m west of the Babylon Rotana Hotel and its corporate venues, the Central Bank of Iraq tower overlooks a dried-out Tigris riverbank.12<\/sup><\/a> Under Prime Minister al-Sudani\u2019s investment policies, the site has undergone intensive construction. With the tower at its heart, the neighborhood is set to become a nod of Baghdad\u2019s rising financial networks.13<\/sup><\/a><\/p>\n\n\n\n Since 2003, Iraq\u2019s monetary policy\u2014despite turbulence and political constraints\u2014has been steered by and through the CBI, which has steadily worked to expand its authority and influence over monetary policy and economic governance. The Coalition Provisional Authority established the bank as a legally independent institution under Law No. 56 (2004). As we will see, legal independence never implied operational independence. Regardless, despite facing political turmoil, as a general rule, those in charge of the bank have followed a core mandate that could be reduced to \u201cSolidity, Stability and Sustainability\u201d.14<\/sup><\/a><\/em> Materially, this implied the maintenance of currency and price stability through inflation targeting and reserve accumulation. A key part of the CBI\u2019s efforts was the dollar auction window, which was used to control the money supply and dollar liquidity.<\/p>\n\n\n\n With time, the CBI, like many other central banks around the world, expanded its interventions in a number of directions. Cognizant of the country\u2019s vulnerability to energy market volatility, the CBI developed refinancing facilities for state and commercial banks, allowing the latter to sustain lending capacity in the face of liquidity crunches. More recently, the CBI has also stepped up its regulatory reach. The need to do so was made apparent in 2023, when the US Treasury censored fourteen Iraqi banks over non-compliance with Iran-targeted sanctions (Another five Iraqi banks were censored in 2025).15<\/sup><\/a> By dint of the Treasury\u2019s actions, the Iraqi banks in question were prevented from conducting cross-border dollar transactions. With exclusion from dollar-based financial markets posing a systemic threat to the country\u2019s financial system, the CBI took the task of bringing all parties up to speed with compliance seriously. Likewise, it has used its regulatory authorities to demand that domestic banks meet the paid-up capital requirements necessary for their being reconnected to the SWIFT network. In terms of knock-on effects, this second regulatory initiative is certain to precipitate greater financial market concentration: Having set capital requirement thresholds of 400 billion Iraqi dinar, smaller banks will have no choice but to accept merger and acquisition bids.<\/p>\n\n\n\n Beneath the surface, the CBI\u2019s history reveals struggle and contentiousness. This is apparent even in developments related to the construction of its new tower facility. The project to construct a new home for the central bank was launched in February 2012 when Sinan al-Shabibi\u2014former director of the CBI and leading technocratic figure of the post 2003 Iraq\u2014signed a deal with Zaha Hadid and her London based architecture company. The deal was agreed after several months of tensions between Shabibi and former Prime Minister Nouri al Maliki. The tensions stemmed from al Maliki\u2019s desire to go around the constitution in order to entrench government control, that is to say cabinet control, over the CBI. Al-Shabibi actively resisted this, viewing the CBI as a technocratic instrument designed to implement monetary policies inspired by IFI recommendations. In the end, however, the Prime Minister won out. Nine months after the deal was signed with Zaha Hadid, al Maliki replaced al Shabibi and other high-ranked officials of the CBI.<\/p>\n\n\n\n Thereafter, CBI control remained a major and hotly contested political prize to capture. Current CBI director Ali Mohsen al-Alaq has held court for the preponderance of the post-2012 period, his reign interrupted only by a brief interlude from 2020 to 2023 when Mustafa Ghalib Mukheef, considered an ally of Muqtada al-Sadr, took the reins. Al-Alaq\u2019s longevity derives from the support he has retained within the Coordination Framework, but also from his capacity to manage the Americans. In many ways, his personal story is instructive.<\/p>\n\n\n\n After earning his diploma in the University of Baghdad, al-Alaq pursued a career in finance that took him to the Gulf and Canada. After the American invasion of 2003, he quickly carved out roles within the upper reaches of the state apparatus. Initially taking a post at the Ministry of Oil, al-Alaq was appointed chairman of the Joint Anti-Corruption Council in 2006. There, he worked in collaboration with US officials while also working as Secretary General for the Council of Ministers under Maliki\u2019s government. The skills developed in engaging these two constituencies\u2014American officialdom and local power brokers\u2014proved of great use when al-Alaq moved to the central bank. In enforcing financial sanctions, handling fraud monitoring, and delivering price stability, the central banker won a number of allies in Washington. In enabling expansionary fiscal policies via deficit financing and juicing local credit markets (in the latter case, by establishing refinancing facilities and lowering the benchmark interest rate from 7,5% to 5%), al-Alaq kept relevant stakeholders happy at home, too. Likewise, recent moves toward directing credit allocation have served to secure buy-in from the major power brokers of post-ISIS Iraq.<\/p>\n\n\n\n Pretenses toward developmentalism notwithstanding, recent CBI interventions in credit markets have largely been undertaken with an eye on the built environment. Critical here were two lending initiatives\u2014combined capitalized at eight trillion Iraqi dinar in 2015\u2014notionally meant to support non-oil sectors. The first provided subsidized loans through commercial banks to small and medium enterprises (SMEs) \u201cengaged in manufacturing, agriculture, and other high-growth sectors\u201d16<\/sup><\/a>. In actuality, though, 83% of the allocated credit wound up concentrating in the residential real estate sector, with just 9% making its way to industry (and but 1% to agriculturalists). The second provided subsidized credit to state-owned commercial banks with an eye on boosting lending to the real<\/em> (i.e. productive) economy. As breakdown of the CBI\u2019s financial flows as of 2023 reveal, however, a large majority of the liquidity injected wound up again designated for real estate: Of the 12,6 trillion dinars allocated in 2023 through this program, 96% went to the state-owned Real Estate Bank and Iraqi Housing Fund, with 3% accruing to the Industrial Bank and less than 1% to the Agricultural Bank and Al Rasheed Bank17<\/sup><\/a>.<\/p>\n\n\n\n By often fostering luxury-oriented real estate speculation, the CBI\u2019s activist turn has produced material, social, and political effects. At the highest level of abstraction, the CBI\u2019s policies have helped turn Baghdad\u2019s built environment into a device for capital accumulation and transnational coalition-building. This process has been expedited by the profits available in real estate development. The latter is not only be attributed to the CBI, of course. Other high-level state investments and public-private partnerships have pushed in this direction as well.18<\/sup><\/a> So too have domestic and regional politics19<\/sup><\/a>, cheap labour costs\u2014fueled by youth unemployment amid demographic pressure\u2014and a weak regulatory environment. The need of Iraq\u2019s elites for a store of wealth\u2014for a place where sizable holdings of surplus capital could be deployed and appreciated\u2014has clearly factored in the spiking profit rates available in property development as well, as have internal migrations and tourism development in Baghdad. But in directing credit in the manner it has, the CBI has nevertheless played an outsized role in supercharging the construction of high-end residential apartment complexes across Baghdad\u2019s sprawl.20<\/sup><\/a><\/p>\n\n\n\n Profit and Power in Baghdad\u2019s Construction Boom<\/strong><\/p>\n\n\n\n An interlocutor interviewed in early 2025, a Baghdad-based businessman, recounted quite clearly how real estate investment has come to the forefront of Iraq\u2019s political economy: \u201cIt\u2019s quite simple, I\u2019ll tell you. The absence of stringent regulations lets us generate profits impossible abroad. That is why many Iraqi elites\u2014those that don\u2019t know how to work outside of Iraq, those reliant on political and local networks of solidarity and influence from which they benefit here, those that don\u2019t know how to do business abroad\u2014have constantly failed to develop ventures overseas. They eventually return here to seek new capital accumulation. Also, they want to to replicate lifestyles experienced abroad. [Do you think about the Gulf model?] The Gulf, certainly. Their aim is to preserve and secure that elite lifestyle here in Baghdad. You know, it\u2019s not something you want to lose when it contrasts so much with the hardships you experienced in the past.\u201d Expectantly, foreign parties, whether companies or financiers, have taken note of the profits that can be had in post-ISIS Iraq. Overseeing the planned makeover of the symbolic Turkish Restaurant of Tahrir\u2019s square, for instance, is Italy\u2019s GKSD Holding. The building redesign, of which GKSD Holding is part, epitomizes well the political economy of contemporary Iraq and finance\u2019s rising role therein, as the project is to transform the building into a modern luxurious private hospital complex. The airport refurbishment also speaks of this trend.21<\/sup><\/a> There, state and private banks have signaled Iraq\u2019s standing as gateway for Chinese, Turkish, Iranian, Western and Arab investors and economic partners. The main lounge, a space of socialisation and a hub for business networking, was funded by the International Development Bank, a major Iraqi commercial bank, whose group ZK Holding is based in the United Arab Emirates (UAE). The social space\u2014reserved for travelers of significant means alone\u2014 suggests Iraq may, through its new development turn, wind up embedded within circuits of accumulation dominated by GCC monarchies.<\/p>\n<\/div>\n\n\n\n The new Central Bank of Iraq tower stands not just as a symbol of progress and as a hub for finance development in the country, but as the embodiment of Iraq\u2019s enduring underlying political struggles and aspirations. Indeed, the reality is that the CBI functions less as a technocratic institution than as an intermediary of power, one balancing US and IFI expectations against the demands of local power brokers.<\/p>\n\n\n\n Materially, the CBI\u2019s policies have disproportionately amplified speculative investments in urban real estate. This distributional pattern reinforces a state-backed capital allocation model that sustains accumulation for elites at the expense of economic diversification. It speaks, moreover, to a recalibration of Iraqi rentierism. Empowered and emboldened, the CBI is now at the heart of efforts to streamline accumulation, stabilize political power, absorb fiscal socks, and manage dissent.<\/p>\n\n\n\n This publication has been supported by the Rosa-Luxemburg-Stiftung. The positions expressed herein do not necessarily reflect the views of Rosa-Luxemburg-Stiftung<\/em>.<\/p>\n\n\n\n 1<\/a>Michelle Woodward, \u2018The Enduring Lessons of the Iraq Sanctions\u2019, MERIP, 15 June 2020.<\/p>\n\n\n\n 2<\/a>Irene Costantini, \u2018Statebuilding and Foreign Direct Investment: The Case of Post-2003 Iraq\u2019, International Peacekeeping, 20.3 (2013), pp. 263\u201379 (p. 266.); Yousef K. Baker, \u2018Global Capitalism and Iraq: The Making of a Neoliberal State\u2019, International Review of Modern Sociology, 40.2 (2014), pp. 121\u201348.<\/p>\n\n\n\n 3<\/a>\u201cThere was widespread hope that the Central Bank and Iraq\u2019s financial institutions would spearhead a transformation, one rooted in modern banking laws, institutional independence, and integration with global standards. [\u2026]. [Since ] Prime Minister Mohammed Shia al-Sudani came to power in late 2022, a new reform narrative has emerged, prioritizing financial and economic overhaul. In this context, the Central Bank was tasked with playing an instrumental role in restoring macroeconomic balance and institutional credibility.\u201d in \u201cReforming Iraq\u2019s Financial System: The role of the Central Bank\u201d, Middle East Research Institute <\/em>(MERI), Erbil, 2025.<\/p>\n\n\n\n 4<\/a>Saleh Mahood Salman, CBI’s director general of administration, says that the tower is \u201can “architectural statement about the bank’s role in the Iraqi economy.\u201d \u2018Iraq\u2019s $772m Central Bank HQ Project on Track\u2019, Trade Arabia, 12 May 2019 and the governor of the CBI, Ali Mushen Al-Allaq assert that the \u201cbanking sector reform [is their] top priority\u201d Chloe Domat, \u2018Pursuing Reform: Q&A With Iraq\u2019s Central Bank Governor Ali Muhsen Al-Allaq\u2019, Global Finance Magazine, 10 October 2024.<\/p>\n\n\n\n 5<\/a>These buildings, like the Beeah<\/em> group headquarters in Sharjah or the Grand Th\u00e9\u00e2tre <\/em>of Rabat, weave a map of burgeoning offers that her office started receiving from various \u201cArab power brokers\u201d on the eave of the Arab spring. Joseph Giovannini, \u2018Architect Zaha Hadid\u2019s Dreams Rise in the Desert\u2019, Vanity Fair, 19 November 2021.<\/p>\n\n\n\n 6<\/a>Robin Beaumont, \u2018Irak, l\u2019\u00c9tat captif\u2019, Questions internationales, 103104.2 (2020), pp. 104\u201309.<\/p>\n\n\n\n 7<\/a>Renad Mansour, Iraq After the Fall of ISIS: The Struggle for the State – Kalam<\/em> (Chatham House, 4 July 2017), p. 33.<\/p>\n\n\n\n 8<\/a>Robin Beaumont, \u2018L\u2019Irak, ou la R\u00e9sistance \u00ab\u202fd\u00e9sax\u00e9e\u202f\u00bb\u2019, Orient XXI<\/em>, 6 January 2025.<\/p>\n\n\n\n 9<\/a>Pete W. Moore, \u2018Making Big Money on Iraq\u2019, Middle East Report<\/em>, no. 252 (2009), pp. 22\u201329.<\/p>\n\n\n\n 10<\/a>See \u201cTable 1. Iraq: Selected Economic and Financial Indicators, 2020\u201329\u201d in Iraq: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Iraq<\/em>, IMF Country Report (International Monetary Fund), p. 24.<\/p>\n\n\n\n 11<\/a>World Bank Group, \u201cReemerging Pressures – Iraq\u2019s Recovery at Risk\u201d, Iraq Economic Monitor<\/em>, 2023, p. 12.<\/p>\n\n\n\n 12<\/a>\u2018Twilight of the Tigris: Iraq\u2019s Mighty River Drying up\u2019, Arab News<\/em>, 20 September 2022.<\/p>\n\n\n\n 13<\/a>One can note that the main contractor handling its construction is the Azebaijan-based company DAAX Construction. The company began as a 50-50 joint venture with the UAE\u2019s DIA Holding FZCO and has worked on large PPP projects in Azerbaijan, Turkey and Kurdistan Region of Iraq. DAAX is also a member of the Iraq Britain Business Council, a key institution that brings together firms shaping the expanding Iraqi private business landscape and networks.<\/p>\n\n\n\n 14<\/a>\u201cRising from the sloping banks of the Tigris River in Baghdad, the design for the headquarters of the Central Bank of Iraq (CBI) conveys the core values at the heart of the institution: Solidity, Stability and Sustainability.\u201d. \u201cCentral Bank of Iraq\u201d \u2013 Architecture \u2013 Zaha Hadid Architects<\/em>, 2012.<\/a><\/p>\n\n\n\n 15<\/a>David S. Cloud, \u2018WSJ News Exclusive | U.S. Bans 14 Iraqi Banks in Crackdown on Iran Dollar Trade\u2019, Wall Street Journal<\/em>, 19 July 2023; Maha El Dahan, Ahmed Rasheed, \u2018Exclusive: Five Iraqi Banks to Be Banned from US Dollar Transactions\u2019, Reuters<\/em>, 16 February 2025.<\/p>\n\n\n\n 16<\/a>Central Bank of Iraq, The National Strategy for Bank Lending in Iraq,<\/em> 2023, pp. 23-24.<\/p>\n\n\n\n 17<\/a>Central Bank of Iraq, Annual Economic Report<\/em>, 2023, pp 52-53.<\/p>\n\n\n\n 18<\/a>Projects being built by Modon Real Estate Development\u2014a subsidiary of Dubai\u2019s Al Handal International Group (HIG)–testifies well to this development. Today, Modon\u2019s activities span from the Gulf and Turkey to Japan. In Baghdad, it has enjoyed the spoils of PPP projects like the $6,5 billion Medinat al Mustaqbal (City of the Future), where Bloom Holding a company of the Abu Dhabi based investment company National Holding is also staked.<\/p>\n\n\n\n 19<\/a>Beaumont, \u2018L\u2019Irak, ou la R\u00e9sistance \u00ab\u202fd\u00e9sax\u00e9e\u202f\u00bb\u2019.<\/p>\n\n\n\n 20<\/a>\u201cIn his interview, Mr. Hardan praised the pioneering role of government agencies and institutions in supporting and encouraging investments in overcoming difficulties, most notably The Central Bank of Iraq, National Investment Commission and Baghdad Investment Commission.\u201d \u201c<\/a>Modon\u201d awarded best real estate developer in Iraq<\/a>\u201d, Al Handal<\/em>, 2022.<\/p>\n\n\n\nA political economy of post-ISIS Iraq<\/strong><\/h2>\n\n\n\n
Fiscal troubles further consolidate Iraq\u2019s emergent elite<\/strong><\/h2>\n\n\n\n
Central banking: between technocracy and power<\/h2>\n\n\n\n
The CBI\u2019s growing “developmental” role<\/h2>\n\n\n\n
Conclusion: Baghdad\u2019s emerging financialisation<\/h2>\n\n\n\n
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