Oil prices are rising, and they may keep going up at least until the end of the year. This means that Iraq’s budget, which was facing major deficit and which was going to be covered via foreign debts, may be able to overcome the earlier shortfall and come into surplus.
This year’s budget was based on the estimate that the price of oil will not exceed more than $46 per barrel, while the price currently stands at about $70. As US sanctions against Iran and which focus on boycotting Iran’s oil exports intensify and as the Libyan civil war continues to affect the production and export of oil, prices are expected to rise further. Moreover the level of our oil exports is also rising every month.
This is of course good news when it comes to overcoming this year’s budget deficit or even possibly making a significant surplus, in addition to the prospect of setting up a non-deficit budget for the next year.
The rule is that the unspent amount should be returned to the Treasury, but we never come to know how much was not spent and how much was returned to the Treasury.Adnan Hussein
What is more important though is how the Iraqi government (the current and future one) will handle this huge increase in oil revenues. It is logical that the government would inject this money into major projects that could help in getting rid of oil dependency. This government, as well as previous governments, failed to properly and correctly invest in the country’s resources.
The last two governments squandered hundreds of billions of dollars on failed projects. This is in addition to increased administrative and financial corruption that greatly affected oil revenues for years thus contributing to the failure of economic projects and in further corruption and lack of transparency in governmental work, particularly in terms of expenditure.
The clearest example is that the constitution stated that when the government submits its draft budget, it must submit an account’s statement for the previous year’s budget. However, no government committed to this. The issue is that the Parliament, which is supposed to represent the people, never fulfilled its duty in this regard and did not address the issue and handle it. The reason is clear and well-known; it is because most MPs were only concerned with their parties and their privileges. It is for this reason that the Iraqi public opinion stood firmly against renewing the term of the last parliament.
In addition, it is known that the governorates and the state institutions usually do not spend all of their financial allocations. The rule is that the unspent amount should be returned to the Treasury, but we never come to know how much was not spent and how much was returned to the Treasury and how much was squandered due to the huge administrative and financial corruption.
Like previous governments, Haider al-Abadi’s government did not have an honorable record on the level of economy and services. It will thus do good if it concludes its term by revealing the fate of the people’s money.
This article is also available in Arabic.
Adnan Hussein is the executive editor-in-chief of Al-Mada newspaper and head of the National Union of Iraqi journalists. Previously, he has held the position of Managing Editor in Asharq al-Awsat newspaper. He tweets under the handle @adnanhussein