The rise in oil prices gives Iraq the opportunity to stimulate development away from the excuse of scarcity of financing
The rise in oil prices gives Iraq the opportunity to stimulate development away from the excuse of scarcity of financing
10-18-2023
Baghdad – The rise in oil prices over the past three months has provided an opportunity for Iraqi Prime Minister Muhammad Shiaa Al-Sudani to resume attention to development issues, especially industrial and agricultural ones, which the government has lagged behind in view of the scarcity of financial resources.
Specialists in development affairs said that policymakers in Iraq must look at the current financial abundance as not always available in view of the volatility of global energy markets, calling for investing it to the fullest extent through good planning on the one hand, and protecting it, on the other hand, from the danger of corruption that preceded. It may have swallowed hundreds of billions of dollars that Iraq earned from oil revenues over nearly two decades.
The opportunity offered by surplus oil revenues is among the rarest opportunities, and perhaps the last, to start a new development path.
Estimates indicate that Iraq is now earning more than two billion dollars a month, in addition to the estimates on which the general budget was based, which used to estimate the price of a barrel at 70 dollars, but now it ranges between 85 and 90 dollars, which provides the Iraqi government with a surplus that guarantees budget stability, and provides the government with funds to implement… Development projects in the industrial and agricultural fields and financing small projects, which are a main pillar of local development.
Al-Sudani chaired a meeting of the Supreme Commission for Coordination between the Governorates, during which the monthly status of the projects was reviewed, and the most important problems and obstacles hindering their completion, in addition to proposals to remove the obstacles. During the session, the investment map for the governorates of Karbala and Diwaniyah was approved, taking into account the observations of the Technical Affairs Department in the Coordinating Body between the Governorates, while Al-Sudani stressed the necessity of implementing his previous directives to give priority in investment to industrial and agricultural projects in all governorates, because of their important impact in providing Job opportunities and development targeted by the government in its plans and programmes.
The meeting included several other issues related to various development aspects, such as the educational sector, providing a suitable school environment for students, providing potable water in schools, and ensuring a decent living for the segment of beneficiaries of the social protection network, who were decided to be included in the allocation of residential plots of land, according to controls set by the Ministry of Construction, Housing and Municipalities. Public after approval.
The meeting also addressed issues of administrative reforms that the government is working on, as it was decided to form a committee headed by the General Coordinator for Governorate Affairs and membership of the Minister of Finance, three governorates, and the National Investment Authority, which will determine the powers to be transferred to the directors of sub-departments affiliated with the State Real Estate Department in the governorates.
Last September, Al-Sudani complained that Iraq was facing challenges in financing the sustainable development goals, and pointed out that some of them were due to the financial losses he suffered in his war against ISIS. He stressed that the priority was to finance climate action, since Iraq is considered the most vulnerable to the effects of climate change.
During his participation in the Sustainable Development Goals Summit held in New York, Al-Sudani affirmed “Iraq’s commitment to the action plan of the International Conference on Financing for Development, which was held in Addis Ababa in 2015, and the international plan it issued calling for the development of integrated national financing frameworks to complement national development strategies.” sustainable development, as well as Iraq’s welcome of the summit’s adoption of the political declaration that confirms the urgent need to work seriously to accelerate the implementation of development goals.”
However, observers believe that the additional money that Iraq is earning from the rise in oil prices is no longer an excuse for lack of funds, especially those related to the consequences of climate change.
Auk Lootsma, Special Representative of the United Nations Development Program in Iraq, said that Iraq is severely affected by the effects of climate change, mainly due to the decline in water levels, and that the United Nations is working to help the Iraqi government to increase the flow of water into the country.
Lootsma pointed out that the effects of climate change do not revolve only around lower water levels, but also around other issues such as rising temperatures, loss of biodiversity, sand and dust storms, and electricity shortages, which affect many of Iraq’s residents.
Lootsma stressed that Iraq has recognized climate change as one of its major priorities, as it is part of the national development agenda headed by Al-Sudani.
Financial abundance gives Iraq the opportunity to break the development stagnation on the condition that it is protected from the scourge of corruption that has swallowed up huge sums of money.
Iraq had committed to a national development plan prepared by the United Nations Development Program between 2018 and 2022, but it failed due to a lack of funds. The plan aimed to achieve sustainable development goals, and focused on the main priorities for development in Iraq, including improving governance, strengthening the private sector, post-conflict reconstruction and development, improving the business and investment environment, increasing exports of basic goods, increasing agricultural and industrial production, and improving Financial and monetary integration with capital markets.
Al-Sudani himself had previously pledged to bring about “a gradual transformation from a rentier economy by modernizing the functioning of the economy, by focusing on the energies of youth in building small and medium-sized companies in agriculture, industry, information technology, services and the environment.” “This creates job opportunities and attracts local and international investments.”
Observers believe that the opportunity provided by surplus oil revenues is among the rarest opportunities, and perhaps the last of them, to start a new development path that revives agriculture and industry and combats the effects of climate change, before prices witness new fluctuations, or the costs of the government’s “operating budget” rise to eat green and dry land again. .
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