Large operating budgets do not contribute to the development of the economy

At the beginning of March 2013 the Iraqi parliament finally able to pass the annual budget, which was delayed for several months because of the conflict between the Kurdistan Regional Government and the central government on oil policy pursued by the region. This conflict can not find a solution in time at which the vote was taken, which led to the grumbling of the Kurdistan Alliance. With regard to the actual budget, it is the largest in the history of Iraq, as it includes the largest investment spending, but many ministries have proven their inability to spend all the money allocated to them.

Budget is usually one of the few legislative paragraphs that can be agreed upon by all parties because they all use to enrich themselves and perpetuate their own patronage networks. The current year’s budget proved to be divisive as is the case with other statutes, as it turns out escalating dysfunction in Baghdad. On the seventh of March 2013, Iraq’s parliament voted on the annual budget.

The number of deputies present 168 of a total of 325 provided the necessary quorum to pass. Half of the members of the Iraqi List, did not attend the voting session, while the Kurdistan Alliance boycotted. Budget to parliament remained for several months, where he took it back the Council of Ministers after approval in T1 2012. The reason behind the delay was the dispute over the oil policy of the Kurdistan region, where the government demanded the region, including $ 3.5 billion for dues oil companies operating in the region over the past few years. For its part, claimed the Baghdad government that the Kurds do not deliver all their profits to the central government and that they are engaged in the smuggling of oil and they did not submit their records, and did not abide by their shares of exports. Held high-level meetings between the two sides in Erbil and Baghdad in February but it did not help in resolving the Kurdish problem because they say that the budget will serve as a punishment for them in the event of non-implementation, they have to be performed while not located on the central government any consequences in the event of non-performance of its obligations . The result is not used more than $ 650 million for energy companies in Kurdistan and this is the reason not to vote Kurdistan Alliance on the budget. Then objected members of the Kurdish list to be passed, and according to the Ministry of Natural Resources in Kurdistan that it will not meet its share of export amounting to 250 thousand barrels per day, there is also talk of withdrawal from the central government.

revealed budget growing differences between the regional governments and the central and large menus. As the Iraqi List, split after one day of the 2010 elections to the fact that a lot of parties with different agendas, and this is the reason not to attend half of the Iraqi List, to the voting session. Years ago and continuing differences between Baghdad and Erbil, on energy policy. Where demands of the Kurdistan Regional Government the right to sign oil contracts independently while the Oil Ministry is illegal. The Kurds also are accused of smuggling oil to Turkey and Iran since the nineties, and today they have an agreement with Ankara to charge small amounts of refinery products, more than the wrath of the central government. In order to reciprocate, the Prime Minister Nuri al-Maliki does not pay dues of foreign companies operating in the region but from time to time and which led to the continuous delay in energy deals between the two sides. Years ago and promised KRG oil companies that the oil and gas law will be passed and that their contracts will be approved by the government in Baghdad and they will be able to export and receipt of receivables. The budget is the last story in the conflict, and the Kurds have lost this round.

budget (118.6 billion dollars) Tattabralcbr ever, where more than the previous budget by 18%, and 93% of the money comes from oil. 38% of the total value – $ 45.5 billion – earmarked for investment and is the highest percentage ever at all. What is left goes into the operating budget, which goes mostly to the salaries of the public sector, which is considered one of the largest sectors proportion of the population in the world. And have got the energy, security and services to the highest: 21%, 14%, 13%, respectively. It is expected that there will be deficit of $ 15.5 billion and that the government is preparing for his coverage of unspent funds, and through loans from international institutions. You can not Baghdad and the provinces of spending all the money, which means that there is a surplus, as the years past. In 2011, for example, has been spending less than 50% of the funds allocated for investment in services, security and culture, while the energy and industry sectors only two Anfaqa more than 90% of the funds allocated to them.

current year budget recurred three problems. The first is that the huge operational budgets do not contribute to the development of the economy. It is an obstacle through the perpetuation of the large state sector. The second problem is that large capital budget allocated for investment could mean that less money would be spent because it would sink many ministries that lack the capacity to manage their money. The third is that important sectors such as education, health and water do not get the money they deserve to meet the needs of the country. In the past, the budget was a unifying document, but this year, it refers to sharp divisions occur in the country. The conflict over oil between Baghdad and Erbil appeared again through the failure to meet the Prime Minister al-Maliki to demand that the Kurds entitlements of foreign companies operating in the region and which he considers significant.

huge increase in spending will also be mixed. The Baghdad government has proven its ability to pay its employees, but that would hinder the development of the country through the truncated funds should have been spent in the diversification of the economy away from oil. Also, a large part of the funds allocated for investment is likely to not be spent because of the mismanagement of government departments in the implementation of projects. Was expected to indicate the budget 2013 step toward meeting the national development plan in the country and calling for decoding dependence on oil and to reduce the incidence of poverty and rebuild the country’s infrastructure. Seems as if it will be repeated because of political differences and the government’s lack of capacity.