The most important challenges for approving the general financial budget in Iraq 2023

The most important challenges for approving the general financial budget in Iraq 2023

10-31-2022

Researcher Shatha Khalil*
One of the biggest challenges facing approving the budget for the year 2023 is the unstable political situation, which has caused the disruption of all investment projects planned to be completed since 2022, as the economic sectors were completely paralyzed, which reflected on the life of the Iraqi citizen, and one of the fears is the lack of approval of a general budget for the country For the second year in a row, what Iraqis fear is the possibility of stopping the salaries of government employees, retirees, and those with social care, as well as stopping all development projects for the country, including infrastructure projects, the suspension of which will lead to stagnation in the labor market, which is already suffering from reluctance and mismanagement.
There are also great concerns about the lack of “food security”, severe droughts and the factors of change that the country is going through, without the slightest responsibility, and intensified in the midst of the current rise in the prices of basic commodities globally, while the level of domestic food production is less than the level of demand resulting from growth rapid population. Achieving food security requires coordinating efforts to improve local food production and more efficient management of water resources.

And the lack of approval of the new budget increases these fears, and how it can be successful in light of the challenges and circumstances that offend Boom after another, and more turmoil on the political side, government disputes, and the approval of the 2022 budget may limit the use of the country’s sudden oil revenues, as The actual ceilings of the 2021 budget have been reached, and the implementation of new investment projects has been suspended, which may reduce economic growth. As for the “white paper” drawn up by the Iraqi government, it remains to this day a model and a bold blueprint for a comprehensive economic reform program towards economic diversification.
Some economic researchers assert that the main problem in not approving the budget does not lie in the salaries of employees, which are insured according to the Financial Management Law, and the main problem lies in infrastructure projects such as building schools, as Iraq needs to build at least 10,000 schools, And there are 500 schools that were supposed to be launched during 2022 and 2023. And the projects of electricity, roads, bridges, hospitals and health centers in the countryside were all not completed, except with the approval of the country’s general budget, in addition to the areas liberated from the control of the terrorist organization ISIS, which need to be restored Emaar, failure to pass the budget will lead to economic stagnation in the Iraqi markets. Iraqi private sector.

The economic advisor, Mazhar Muhammad Salih, confirmed that the number of projects that he originally started and were not completed is not problematic, because the financial allocations for these projects have already been approved in advance, and with regard to new projects, the government has no ability to initiate them without approving the budget is very weak and depends In a large part of his activity on the public sector, which will be paralyzed.”
As for the economic expert, Hammam Al-Shamaa, he explained that the state of “endemic corruption” in Iraqi government institutions makes it more difficult to move towards investment, and says that previous budgets have already approved hundreds of projects without seeing the light of day, and therefore there will be no big difference, pointing to That Iraq had spent during the past years nearly 85 billion dollars on the electricity sector, without this sector witnessing any improvement touched by the Iraqi citizen.

Financial budgets represent the main tool for achieving the general policies of the State of Iraq, whether economic, social, or service. They serve as a presentation of the government’s annual plans and programs, which it prepares in response to current challenges. Budgets give governments the best planning to achieve the maximum revenue, and reorganize their distribution according to Expenditure priorities in order to serve the community, and most importantly, the budget is a tool in which the power and symbolism of the state is reflected through spending spending on all departments and institutions according to spending plans that are developed in a way that corresponds to the priorities of the citizen, which means that the economic aspects will be disrupted if they are not approved.In this context, some specialists said that the impact of Iraq remaining without a financial budget will be quickly reflected on revenues, as the delay in approving the budget causes wastage of public money, and a lack of revenues due to the failure to implement the government’s financial plan represented by the budget, which will necessarily include measures to maximize financial resources, and achieve The maximum revenues, and the other damage is the expenses that are always planned according to the revenues, and since the imbalance and shortage of revenues will inevitably occur, this will have a definite reflection on the expenses, and the lack of revenues will lead to the reduction of projects planned by the government according to the priorities and needs of the citizen .

In conclusion, the fragility of the financial, social and economic situation in Iraq dictates the need to accelerate the much-needed macro-structural and financial reforms to remove obstacles to private sector development, increase investments in water efficiency and agri-food systems, and shift towards more sustainable sources of energy, in addition to removing carbon from the transportation sector. And that the delay in approving the budget will have serious repercussions, as it necessarily leads to “delayed completion of the planned projects, and these projects may have something urgent related to food security, support for poor social strata, or state security and their needs for weapons, devices, equipment or medical projects And service and education of the utmost importance that cannot be delayed.

Economic Studies Unit / North American Office

Rawabet Center for Research and Strategic Studies

rawabetcenter.com