There is no budget without a new government.. How will Iraq manage its situation in 2023 without approving it?

There is no budget without a new government.. How will Iraq manage its situation in 2023 without approving it?

9-8-2022

Iraqis fear as the current fiscal year 2022 approaches its end on December 31, as Iraq has not witnessed the preparation of a general budget for the country for the current year due to the failure to form a new government whose formation requires political consensus between the political blocs, which has not happened yet. Eleven months have passed since the last legislative elections on October 10, 2021.

With the continuing political closure that hinders the formation of a new government, Iraq is heading to 2023 without a financial budget that needs to be prepared by the new government if it is formed for 4 months, according to economists.

Exclusive – Legal expert Ali Al-Tamimi
Legal expert Ali Al-Tamimi: The government has a legal basis to continue disbursing salaries in light of the lack of approval of the budget, depending on the last approved budget (Al-Jazeera) The
salaries of employees are secured
and after a wave of popular anger swept the country after talking about the possibility of stopping employees’ salaries, the Ministry confirmed The Iraqi Finance Ministry stated that the employees’ salaries are secured and that if the financial situation continues as it is, then resorting to the Financial Management Law will secure the employees’ salaries by evaluating the disbursement of 1 to 12 of the value of the last budget approved in the country.

In this regard, legal expert Ali Al-Tamimi says that the text of the article of the Financial Management and Public Debt Law No. 6 of 2019 is clear and explicit and includes “in the event of delaying the approval of the country’s general budget until January 31 of the fiscal year; The Minister of Finance is working to issue a circular to spend at the rate of 1 to 12 of the total expenditures of the previous approved budget.”

Al-Tamimi continued, in his speech to Al-Jazeera Net, that the government has a legal basis to continue paying salaries in light of the failure to approve the budget for 2023, as the 2021 budget is based on the exchange rate stipulated in the Financial Management Law, according to Al-Tamimi. It is noteworthy that Iraq’s budget for the year 2021 amounted to 90 billion dollars.

In this direction, the appearance of Muhammad Salih, the economic advisor to the Prime Minister, added, in his speech to Al Jazeera Net, that the employees’ salaries are secured and disposed of according to maturity with stopping the promotions for employees of government departments, pointing out that the lack of approval of the budget will affect the development projects and infrastructure projects that the government intended initiate it.

Jamal Cougar: The Iraqi constitution requires that the Iraqi government work with full authority to present the draft budget (Al-Jazeera)
the economic situation and
from the economic fears of not approving a general budget for the country for the second year in a row. Excellent” as a result of oil revenues that have been enhanced with the rise in oil prices in the past months.

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Speaking to Al Jazeera Net, Cougar explained that Iraq owns about 85 billion dollars in bonds in the US Federal Bank, but the government cannot dispose of these funds in economic development projects and infrastructure projects, due to the lack of a budget and the inability of the current caretaker government that It is headed by Mustafa Al-Kazemi to dispose of Iraq’s financial revenues.

Expected solutions
and how to get out of this problem, Cougar explained that the year 2022 has not yet witnessed the approval of a general budget for the country, but the government was able to submit a draft law to Parliament (the Food Security Law), which was overruled by the Federal Court because the government was unable to submit it to Parliament, and then the Finance Committee worked Parliament to adopt this project after obtaining the approval of the government to be approved later; Which allowed the government to resume many projects and initiate new projects in infrastructure and others.

As for the next year, Cougar explained that if the budget for the next year is not approved, the parliament can take the same path to pass laws related to specific projects, but in general, the parliament cannot adopt the presentation of the draft budget, as the Iraqi constitution requires that the Iraqi government work in full. The authority is to present the draft budget to Parliament, then the latter approves it, and the budget law is voted on to enter into force after its publication in the Official Gazette.

An exclusive photo sent by him – the economic advisor to the Iraqi Prime Minister – Mazhar Muhammad Salih
, the economic advisor, Mazhar Salih: It is not within the authority of the government to initiate new projects without approving the budget (Al-Jazeera
)
. Economic advisor Mazhar Muhammad Salih confirms that the projects that the government has begun work on; There is no problem in its continuation, as the financial allocations for these projects have already been approved in advance. As for the new projects, the government has no ability to initiate them without approving the budget.

On the other hand, economic researcher Muhammad al-Hamdani believes 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 About 10,000 schools, and there are 500 schools that were supposed to start during 2022 and 2023.

Not only that, as Al-Hamdani adds to Al-Jazeera Net that the electricity projects, roads, bridges, hospitals and health centers in all the countryside will not see the light except by approving the general budget of the country, pointing out that the areas recovered from the control of the Islamic State may be the most affected, commenting that “the lack of approval of the budget It will lead to economic stagnation in Iraqi markets. The Iraqi private sector is very weak and depends for a large part of its activity on the public sector, which will be paralyzed.”

For his part, and in a more pessimistic view, the economist, Hammam Al-Shamaa, comments that there is no difference on the ground if the budget is approved or not, attributing this to what he described as the case of “endemic corruption” in government institutions, and believes that previous budgets have already approved hundreds of Projects without seeing the light of day, and therefore there will not be a big difference, pointing out that Iraq had spent during the past years nearly 85 billion dollars on the electricity sector without this sector witnessing any noticeable improvement.

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