4 months without a financial budget… Paralysis hits the business sector in Iraq | Economie


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Economists’ warnings escalated that the country would remain without a financial budget, and not address the effects of that, especially since its approval needs a few more months, in case the political crisis in the country is overcome.

Baghdad The political blockage in Iraq has disrupted the adoption of the draft financial budget law for the current year 2022, which has paralyzed the most prominent economic sectors, as well as its wide impact on the lives of citizens, in light of the dependence of thousands of workers on investment projects related to that budget.

Iraq held parliamentary elections on the tenth of last October, and differences are still raging over the nature of the next government. The leader of the Sadrist movement, Muqtada al-Sadr, gave the forces of the “coordinating framework” until the tenth of Shawwal (next May 12) to form the government, in A move he wanted to embarrass his opponents.

But this conflict quickly withdrew on the economic situation and the country’s financial balance, as laws prevent caretaker governments from sending legislation to Parliament for approval.

Exclusive M - Member of the Parliamentary Finance Committee - Ahmed Hama Rashid
Hama Rashid: The internal system of the government prevents the enactment of bills or sending them to Parliament as a caretaker government (Al-Jazeera)

A clear violation of the law

In this context, the former deputy in the Finance Committee, Ahmed Hama Rashid, confirmed that the internal system of the Council of Ministers prevented the enactment of bills or sending them to Parliament, given that this government is not granted confidence by this Parliament, “When sending this law, we will be facing an explicit violation, as well as About half of Parliament has not yet participated in the sessions, due to political differences.

Rashid asserts – to Al Jazeera Net – that if the approval of the budget is delayed, the Financial Management Law provides for spending each month in accordance with last year’s budget program, where budgets are formed from two main parts: the investment and operational budget, and if the operational is covered by the law, the investment depends on Approval of the general budget.

On the other hand, a dispute arose between the government and parliament over the budget, while Hakim al-Zamili, the deputy speaker of the House of Representatives, confirmed that the government could be allowed to send the financial budget, by voting on it, the Ministry of Planning announced that it would leave that task to the next government.

Al-Zamili said – last week – that Parliament will vote to authorize the caretaker government to send the budget law to the parliament, while the technical representative of the Ministry of Planning, Maher Hammad, replied, in press statements, that the current government will not submit the budget law to the House of Representatives, but will leave it to the next government.

Financial budgets represent the main tool for achieving the state’s general policies, whether economic, social, or service, and 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 to reorganize their distribution according to spending priorities in order to serve the community. Most importantly, the budget is a tool that reflects the power and symbolism of the state through spending spending on all departments and institutions according to spending plans that are developed in a manner consistent with Citizen priorities, which means economic aspects will be disrupted if they are not approved.

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Ahmed Abu Abatin, an Iraqi economist, Al Jazeera Net
Abu Abatin saw that the delay in approving the budget was causing wastage of public money and a lack of revenue (Al Jazeera Net)

Waste of public money

In this context, the economist Ahmed Abu Abatin believes that the impact of Iraq’s remaining without a financial budget will quickly be 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 maximizing revenue.

Abu Abatin adds, to Al Jazeera Net, that 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 the projects planned before The government according to the priorities and needs of the citizen.

The Iraqi expert warns that this delay will have serious repercussions, as it necessarily leads to “delayed completion of planned projects, and these projects may have something urgent related to food security, support for poor social strata, or state security and its needs for weapons, devices and equipment or Medical, service, and educational projects of critical importance that cannot be delayed.

However, an official in the Iraqi Ministry of Planning believes that the delay in approving the budget, even if it will hit multiple sectors, can rise again, as there will be a large financial accumulation estimated at billions of dollars in the state treasury, when 2022 remains without a budget.

The official, who declined to be named, adds to Al Jazeera Net that benefiting from this financial buffer is contingent on the advent of a capable government, able to benefit from it, compensate for what happened in the current year, and resume projects, at a record speed, to address the effects of the political blockage.

The public finances in Iraq were subjected to a severe external shock in 2014 and 2020 as a result of the collapse of oil prices to below $20 a barrel. At that time, the Iraqi economy entered into an economic stagnation as a result of the direct and indirect association of most economic sectors with the oil export sector.

Abdulhassan Al-Shamry, social media economist
Al-Shammari warned that the budget delay would hit the investment sector and contribute to the spread of unemployment (communication sites)

Warnings

And the economists’ warnings escalated that the country would remain without a financial budget, and not address the effects of that, especially since its approval needs a few more months, in case the political crisis in the country is overcome.

Here, the expert in economic affairs, Abdul Hassan Al-Shammari, says that “this delay will hit the investment sector, and will contribute to the spread of unemployment among young people, and will even raise poverty indicators to higher levels.”

In his speech to Al-Jazeera Net, Al-Shammari believes that “addressing the effects of this will be difficult, and not as easy as some officials are talking about, so the political blocs must be aware of the danger of the current stage, and avoid taking risks.”

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