Investigation: $1.4 Trillion Up in the Air: Two Decades of Explosive Budgets in Iraq
Investigation: $1.4 Trillion Up in the Air: Two Decades of Explosive Budgets in Iraq
2025-08-02 05:05
Shafaq News- Baghdad/ Special investigation.
Since 2003, when the US invasion toppled Saddam Hussein’s regime and the so-called New Democratic System was inaugurated, Iraq has entered a completely different phase. The first Governing Council was established, followed by an elected parliament, before the process of drafting a constitution began. But behind this formal façade, a single mechanism governed the country’s progress: the general budget, which has generated considerable controversy.
The federal budget was intended to finance operating expenses and urgent reconstruction projects in a country exhausted by wars and sanctions. Electricity, water, education, health, security, and services were all on the table. But nearly 20 years later, these issues remain a priority for the “new regime,” and Iraq is searching for solutions to address them.
In a rich country like Iraq, cities weren’t supposed to suffer from thirst, streets flood with the first rain shower, or lights go out every hour due to a lack of electricity. Yet all these scenes remain familiar in the daily lives of Iraqis.
While official slogans promised reconstruction and progress, funds were being withdrawn, projects were being suspended, and corruption was being legalized. Could a country with such vast resources fail in this way? A special review by Shafaq News Agency reveals the answer.
$1.396 Trillion: Is the State Built?
Shafaq News Agency conducted a detailed inventory of all Iraqi budgets from 2006 to 2024, the period for which public government data is available. The result: $1 trillion and 396.6 billion:
– 2006: The budget amounted to $34 billion, and it was simple, lacking complex details.
-2007-2009: Budgets stabilized between $41 and $43 billion, with no significant changes.
-2010: The budget jumped to $72.5 billion, and reconstruction projects appeared on paper that have yet to be implemented, such as the rebuilding of Sadr City in Baghdad or the reconstruction projects in Basra, Nineveh, and Maysan.
-2011–2013: Budgets ballooned to $115 billion in 2013.
-2014: The budget was completely lost due to the ISIS invasion and the attempt to pass on spending according to the 1/12 rule.
-2015–2019: Ranged between $66 and $112 billion, with ups and downs depending on oil prices and political unrest.
-2020: No budget again, due to the October unrest and the resignation of Abdul-Mahdi’s government.
-2021: A budget of $89.6 billion was approved.
-2022: The budget was absent for the third time due to political deadlock.
-2023: Iraq witnessed the two highest figures in its financial history, with the 2023 general budget reaching approximately $153 billion, followed by 2024 with a budget of $155 billion, as part of what is known as the three-year budget approved to cover the years 2023–2025.
Economists interviewed by Shafaq News Agency said that these figures would have been sufficient to build a national dam network, rehabilitate the electricity grid, construct modern sewers for all cities, develop the transportation sector, and perhaps even establish a sovereign wealth fund for future generations. “But the situation remains stagnant.”
drought and stagnant water
Today, Iraq is suffering from the most severe drought in its modern history. Entire cities such as Amarah, Nasiriyah, and Basra are suffering from water shortages and desertification, with a sharp decline in agricultural production and the collapse of livestock and fisheries.
The irony, however, is that the cost of building the Basra and Makhoul dams does not exceed $4 billion, according to an official at the Ministry of Water Resources, while the country has spent hundreds of times that amount over the past 18 years.
– Basra Dam: It has been discussed dozens of times, and its estimated cost is $1.1 billion, but it has not been completed.
– Makhoul Dam: Announced by the Minister of Water Resources in 2022, its estimated cost is $3 billion. However, it remains pending between studies and allocations.
Local and international environmental studies have warned that Iraq will enter a “critical phase of water poverty” within five years, without any corresponding implementation plans.
In contrast, with the first wave of rain, Baghdad, the capital, and other major cities, for example, turn into stagnant lakes, revealing the absence of effective drainage networks. Sewage projects, considered among the easiest infrastructure projects to implement, have become centers of waste and corruption:
– The Grand Hilla Sewerage Project: Halted for ten years, it was then referred again in 2019, at a cost of 380 billion dinars (approximately $290 million).
– Al-Siniya District (Diwaniyah) Sewerage Project: Referred at a cost of 34 billion dinars (about 26 million dollars).
Economists say that “these projects alone demonstrate that billions are not being spent on actual construction, but rather on contracts that stall midway through or become fronts for corruption, without effective oversight.”
$17 billion in electricity
In a country that is one of the world’s largest oil producers, electricity is still cut off for several hours a day in most areas. After 2003, Iraq purchased gas-fired power plants without the necessary infrastructure to supply them, and was subsequently forced to import gas from Iran in a $17 billion deal signed in 2017.
Examples of spending:
– 2021 budget: included loans worth $145 million, and another $100 million for power plant maintenance.
– Al-Dura power plant in Baghdad: $301 million was allocated for maintenance alone, with no improvement in actual production.
Tracking projects and contracts reveals that a large portion of budgets were not actually spent as intended. Among the most notable corruption scandals:
– Russian arms deal (2012): later cancelled amid allegations of $4.2 billion in kickbacks and bribes.
– Theft of the Century (2022): $2.5 billion was stolen from the tax authority, and businessmen and political figures were accused of it. Nour Zahir was later released on bail and his assets were recovered.
Currency smuggling: Prior to Washington’s intervention in 2022, money transfers and smuggling operations were conducted through banks linked to influential politicians, forcing the United States to impose an international regulatory regime on the Iraqi banking system.
State of employees
One of the most significant budget challenges is the size of operating expenses, which include salaries, pensions, protection, and special allowances. The number of government employees exceeds 4 million, with approximately 2 million retirees, according to conflicting official figures.
Prime Minister Mohammed Shia al-Sudani revealed that salaries alone amounted to 64 trillion dinars last year, equivalent to $49 billion.
As for the House of Representatives, a previous Shafaq News investigation revealed that its cumulative cost since 2006 has reached approximately 426 billion dinars (more than $325 million), including salaries, allowances, and protection.
Over the course of 18 years, Iraq has spent nearly $1.4 trillion in its public budgets, a staggering figure by regional standards and even exceeding the combined budgets of some neighboring countries during the same period.
While countries like Saudi Arabia, Turkey, and Iran have managed to build productive sectors, expand infrastructure networks, and improve education and health sectors, Iraq’s cities remain submerged in stagnant water, farms are paralyzed, electricity is cut off, and dams remain merely a work in progress.
digital comparison
Comparing the total budgets spent by countries in the region between 2006 and 2024, Iraq outspent countries with larger populations and more diversified economies. Iraq’s budgets during this period amounted to approximately $1.396 trillion, at a time when its population did not exceed 44 million. However, the country still suffers from dilapidated infrastructure, chronic power outages, a stifling water crisis, and an unproductive rentier economy.
In contrast, Turkey, a country beset by economic problems, spent approximately $1.2 trillion over the same period, despite having a population of over 85 million, nearly twice that of Iraq. However, this money translated into a sophisticated road and railway network, food self-sufficiency, and a broad industrial base.
Iran, shackled by international sanctions, has spent nearly $1.1 trillion and has a population of over 90 million. Yet, it has managed to achieve self-sufficiency in medicine and agriculture, build a domestic defense industry, and increase its oil and gas production without relying entirely on foreign sources.
Saudi Arabia leads the world in spending, with a total budget of $2.2 trillion. However, it has also achieved clear results on the ground: modern infrastructure, the launch of mega-projects such as NEOM, and the establishment of a sovereign wealth fund valued at approximately $800 billion.
Note: All figures are estimates based on reports from ministries of finance, the World Bank, and national sovereign funds.
shafaq.com
