The Iraqi budget awaits the political consensus between Baghdad and Erbil

The Iraqi budget awaits the political consensus between Baghdad and Erbil

12-6-2022

The Iraqi budget awaits the political consensus between Baghdad and ErbilWhile the Services and Reconstruction Committee in the Iraqi parliament called on the government of Muhammad Shia’ al-Sudani to send the financial budget for the year 2023 to Parliament before next Thursday, the failure to resolve the main files between the federal government and the Kurdistan Regional Government raises fears that the decision on the budget may be postponed, and it may be carried forward to next year. next.
In this context, the Parliamentary Services and Reconstruction Committee confirmed, yesterday (Monday), that the federal budget will face the consequences of the debt and the financial dimensions arising from it, in addition to the difficulty of achieving it amid the continuing dispute over the oil file with the Kurdistan region. The head of the Finance Committee in the Iraqi parliament, Mahma Khalil Qassem, said, in a statement to the official Iraqi News Agency, that “all debts and financial dimensions arising from the budget will affect it, and have negative consequences for the economy in general, and although there are some advantages in internal and external loans, they It’s also weighty.” He explained that «if the loans are invested properly in the service-productive sectors that have an impact on moving the Iraqi economy; It will be in the interest of the budget and the Iraqi interest, but if it is without investment and moving the economy; Its effects will be negative.”
Qassem stressed that “the committee will follow up on the importance of past loans in order to see their benefits and where they were invested, so the loans must focus on revitalizing the service, industrial and agricultural sectors that have positive repercussions on the budget.”
The Parliamentary Committee’s request to the government to send the draft budget law to Parliament coincides with the end of the current legislative term, which begins early next week and continues until January 9, 2023. If the government sends the draft budget within the next two days, Parliament will have to To extend his legislative term for the purpose of approving it despite the differences that surround it, especially between the center and the region (Baghdad and Erbil). In the event that the government was unable to send it during this period, Iraq, despite its current large financial reserves, will set the record in the number of years in which the budget was not approved, and in the number of years in which the final accounts were not sent to Parliament to find out how the money was spent according to known exchange doors. In 2014, the financial budget was not approved due to the occupation of a number of western Iraqi provinces by ISIS. Shortly after assuming his position as prime minister to succeed former Prime Minister Nuri al-Maliki, Haider al-Abadi announced that he had found with the Ministry of Finance immediately after taking office only 600 million dollars, while he had to pay several billions of dollars in monthly salaries to about 6 million employees. And in the year 2022, the Iraqi parliament was unable to approve the financial budget, because the government that was headed by Mustafa Al-Kazemi turned since February of that year into a caretaker government, which makes it impossible for Parliament to approve a budget in light of the failure to form a government with full powers. .
And because of the failure of the political forces to form a new government for a whole year; It searched for a “graduate” to spend part of the money that flowed into the Central Bank of Iraq due to the rise in oil prices, by approving the so-called “Food Security Law” through which some activities were funded, especially in the food and health aspects. With the departure of former Prime Minister Mustafa Al-Kadhimi from office last October, the total amount of funds classified as foreign currency reserves amounted to $85 billion (this amount has now increased to $90 billion), in addition to about 35 tons of gold.
While the government is looking forward to approving the financial budget to start spending on projects that were announced within the ministerial program, eyes are turning to the federal government and the Kurdistan Regional Government to see if they are able to resolve the chronic differences between them. These differences are related to the percentage of the Kurds in the federal budget, which is a disputed percentage due to the lack of a population census. There is also an oil dispute between the two parties. As it is assumed that the regional government is committed to depositing oil money that is exported from the territory of the region in the central treasury, which does not happen from Baghdad’s point of view. Erbil, on the other hand, believes that the center did not provide what it owed in favor of the region, especially in the field of salaries.
In this context, politicians fear that failure to resolve the financial and oil dispute between Baghdad and Erbil will mean that the budget will not be approved within an appropriate period in parliament, which means that a decision on it will be postponed to the second legislative term.
And in the event that the budget is not approved at the end of the current year, the Minister of Finance can issue a circular to spend 1/12 of the total expenditures of the previous approved budget, according to what the legal expert, Ali Al-Tamimi, said in a statement to Asharq Al-Awsat. Al-Tamimi added that the government has “a legal basis that enables it to continue paying salaries in light of the failure to approve the budget for the year 2023, which means its approval of the 2021 budget as the basis for the exchange rate stipulated in the Financial Management Law.”

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