Iraq’s parliament has completed the formation of Prime Minister Ali al-Zaidi’s government after lawmakers approved previously vacant cabinet posts and three deputy prime ministers, including one who is under US sanctions.

Lawmakers voted on Thursday, approving 11 portfolios, including Nayef al-Shammari as defence minister, Yasir al-Maliki as interior minister, a planning minister, a culture minister and a minister of higher education and scientific research.

Lawmakers postponed a vote on the nominee for migration and displacement minister due to disagreement among parties.

Lawmakers also approved three deputy prime ministers, including Laith al-Khazali, a senior leader of the Iran-backed Asaib Ahl al-Haq movement and brother of the group’s leader, Qais al-Khazali.

The US designated Asaib Ahl al-Haq as a foreign terrorist organisation in 2020 and named both brothers as “specially designated global terrorists”, citing attacks including a 2007 assault that killed five US soldiers. The Treasury Department had sanctioned the brothers in 2019 over the killing of protesters in Iraq.

In a statement following the cabinet approval, al-Zaidi thanked parliament and called upon his fellow deputy prime ministers and ministers to “fulfil their responsibilities with the highest levels of commitment, competence and integrity”. He said the government was embarking on a phase of accelerated, diligent work to address exceptional economic and security challenges imposed by the US-Israel war on Iran, which began on February 28.

Challenges facing Iraq

Iraq is facing severe liquidity shortages stemming from the ongoing conflict. Before the war, Iraq exported roughly 3.5 million barrels of oil per day through the Strait of Hormuz, generating 90 percent of government revenue. Al-Zaidi said the war “has imposed, and continues to impose, extraordinary economic challenges on Iraq.”

To cover essential public spending and government salaries, al-Zaidi, a former banker, devalued the dinar by almost 15 percent against the US dollar.

He said his government inherited public debt exceeding 208 trillion Iraqi dinars ($139bn at the new exchange rate) when it took office in May, raising questions about former Prime Minister Mohammed Shia al-Sudani’s administration. Al-Zaidi added that the state needs about 10 trillion dinars ($6.7bn) monthly to cover salaries and critical spending.

Al-Zaidi vowed to fight corruption, disarm non-state armed groups and strengthen sovereignty by completing the withdrawal of US forces from the country.