2024 ended without what was planned.. Will Iraq succeed in escaping the “oil curse”?
2024 ended without what was planned.. Will Iraq succeed in escaping the “oil curse”?
2025-01-04 05:41
Shafaq News/ Iraq witnessed a significant increase in non-oil revenues at the end of last year 2024, as it reached 12% of total public revenues compared to non-oil revenues for the year 2023, while economic experts believe that this number is less than the planned target within the government’s plans.
In this regard, economic expert Nabil Al-Marsoumi told Shafaq News Agency, “The total non-oil revenues achieved in Iraq until last October amounted to 14.438 trillion dinars, representing 12% of total public revenues, compared to 7% in 2023,” noting that “the plan was to achieve 27 trillion dinars in non-oil revenues, representing 20% of public revenues, as Iraq was supposed to achieve non-oil revenues for the year 2024 worth 27 trillion, and this number has not been achieved so far, and almost half of it has been achieved.”
He stressed that “Al-Sudani’s plan is to achieve non-oil revenues of 20% of public revenues, which has not been achieved either, as only 12% has been achieved so far, slightly exceeding half,” indicating that “the increase in the percentage of non-oil revenues, which consists of fees, taxes, profits of public companies, and other financial matters, is important to the Iraqi economy and lies in getting rid of the dependence on oil revenues.”
Al-Marsoumi continued, “The importance of Iraq reaching the 20% rate that Al-Sudani called for is to make Iraq not rely on oil revenues because they are volatile due to prices,” stressing that “the biggest challenge facing Iraq in increasing non-oil revenues is the lack of diversification of the Iraqi economy. In other words, the government must increase agricultural and industrial activities and other activities in the gross domestic product, as today more than half of the GDP is contributed by one commodity, which is oil, and diversification in production means that we create an internal economic process as well as job opportunities for citizens.”
He added, “Iraq, to this day, does not have a clear development plan enacted by law. When there is diversity in production, we need a strict and efficient tax system capable of transferring tax money to the public treasury, and we are in fact very far from this matter at the present time.”
Add to “double”
In turn, the economic expert, Mustafa Hantoush, believes that the most prominent thing that led to the increase in non-oil revenues in Iraq during the year 2024 is the success of the United Nations (Scud) program, as many containers now come through (regular customs) after they used to enter randomly, stressing that this step led to an increase in the revenues of the Customs and Ports Authority to (double).
Hantoush told Shafak News Agency, “There are also some self-financing companies (profitable) that have led to an increase in non-oil revenue rates, as the state has withdrawn part of the money from those companies (their revenues) and returned it to them when needed.”
He explained that “the challenges facing non-oil revenues in Iraq are the absence of only two factors, the first: the regulatory laws that allow the state to seize all revenues for all parties, the second: the electronic factor, in other words today the central bank when it transfers 65 million billion dollars for the purpose of purchasing goods, for example, it is supposed that from these amounts comes customs and taxes of 6 billion dollars, but so far this amount has not come, as we now see the amounts collected are only one and a half billion dollars.”
He added, “If the process of linking the Central Bank with the transfers and credits process and the outlets is completed and the amounts are taken in advance, for example, any transfer for a certain commodity has the insurance and tax fees taken in advance, here we will be able to raise the customs tax revenues in the country to the specified number when transferring the amounts annually to purchase the goods,” indicating that “many tax and traffic revenues, if the process of automation is completed, we believe that they will double.”
He explained that “the positive effects of increasing non-oil revenues are related to increasing the state’s treasury and thus enabling the state to move in wider financial areas, as there are many non-oil sources, perhaps the most prominent of which is the Ministry of Oil itself, as well as electricity, transportation and communications. In these ministries, the state is supposed to improve its ability to collect and exploit its capabilities.”
Hantoush confirmed, “There are places like the Baghdad Municipality and municipalities that have a huge wealth of properties that are not fully utilized. If the state is able to exploit these places and sites through specialized committees, we can enable the government to obtain large sums of money in this regard.”
shafaq.com
