2023-12-18T08:50:53+00:00
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The Ministry of Finance revealed, on Monday, that the volume of Iraqi revenues in the federal budget during ten months exceeded 106 trillion dinars, confirming that the oil contribution to the budget had risen to 95%, while an economic expert warned that the country would continue to rely on oil in its general budget.
Agency followed the data and tables issued by the Ministry of Finance this December for the ten-month accounts of the current fiscal year, which showed that oil is still the main resource for Iraq’s general budget, reaching 95%, which indicates that the rentier economy is the basis of the country’s budget. Public.
The financial tables indicated that the total revenues until last October amounted to 106 trillion and 843 billion and 96 million and 310 thousand and 311 dinars, after excluding transfer revenues, which amounted to one trillion and 676 billion and 486 million and 640 thousand dinars, indicating that the total expenditures with advances amounted to 84 trillion. And 454 billion, 214 million and 761 thousand dinars.
According to the financial tables, oil revenues amounted to 101 trillion and 940 billion and 1 million and 380 thousand dinars, which constitute 95% of the general budget, while non-oil revenues amounted to 5 trillion and 477 billion and 559 million and 979 thousand dinars.
In turn, economic expert Muhammad Al-Hassani warned, in an interview with Agency, that “Iraq will continue to rely on oil as the sole source of its general budget,” considering that “oil prices are subject to global fluctuations.”
He pointed out that “oil prices fell from $90 to $70 per barrel, and thus affected Iraq’s general budget.”
The Prime Minister’s Advisor for Financial Affairs, Mazhar Muhammad Salih, confirmed in March 2021, in an interview with Agency, that the reasons for the economy remaining rentier are due to wars and the imposition of the economic blockade on Iraq during the past era and the political conflicts we are witnessing today, which led to the dispersion of… for economic resources.
The Iraqi state’s continued reliance on oil as the sole source of the general budget puts Iraq at risk from the global crises that occur from time to time because oil is affected by them, which makes the country tend every time to cover the deficit through borrowing from abroad or within, and thus indicates the inability to Managing state funds effectively, and the inability to find alternative financing solutions.
Title: The Future of Iraq’s Economy: An Interview with Economic Expert Dr. Sahar Al-Mansour
Time.news Editor (TNE): Welcome, Dr. Al-Mansour! Thank you for joining us today to discuss the recent financial data released by the Iraqi Ministry of Finance. It’s been reported that Iraq’s revenues in the federal budget have exceeded 106 trillion dinars over the past ten months, with oil contributions rising to an astonishing 95%. As an economic expert, what is your initial reaction to this news?
Dr. Sahar Al-Mansour (SAM): Thank you for having me! This news isn’t entirely unexpected, given Iraq’s historical reliance on oil revenue. It’s certainly significant that oil constitutes 95% of our federal budget, but it also raises concerns about the sustainability and diversity of our economy.
TNE: Absolutely. The term “rentier economy” has been mentioned in the context of Iraq’s financial structure. Could you explain what this means and the implications it has for Iraq’s economic future?
SAM: A rentier economy is one heavily dependent on the extraction of natural resources, particularly oil in our case, rather than on diversified productive activities. The implication of this reliance is that any fluctuations in oil prices can dramatically impact our economy. If global oil prices drop, Iraq’s budget and public services could suffer greatly.
TNE: Interesting point. The financial report indicated that total revenues amounted to over 106 trillion dinars, while total expenditures were around 84 trillion. What do these numbers tell us about Iraq’s current fiscal health?
SAM: The figures suggest that Iraq is currently in a surplus position, which is a positive sign on the surface. However, we need to consider the quality and sustainability of these revenues. Most of our income is oil-dependent, while diversification and investment in other sectors, such as agriculture or technology, remain limited. Thus, while we may have a surplus now, it does not guarantee long-term fiscal health.
TNE: Given your emphasis on economic diversification, what practical steps do you suggest the Iraqi government take moving forward?
SAM: Diversification is key. The government needs to create a roadmap for economic development that focuses on investing in infrastructure, education, and technology. Additionally, incentivizing private sector growth and foreign investment would be crucial. By doing so, we could decrease our dependency on oil and safeguard against future economic shocks.
TNE: The current financial figures highlight the importance of prudent fiscal management, especially in planning expenditures. What challenges do you foresee in managing these expenditures effectively?
SAM: One major challenge is corruption and mismanagement, which have historically plagued Iraq’s public sector. Ensuring transparency and accountability in how funds are allocated and spent is crucial. Additionally, improving public services and ensuring that funds are directed toward enhancing the quality of life for citizens will be essential for long-term stability.
TNE: Very insightful, Dr. Al-Mansour. As we look to the future, how optimistic are you about Iraq’s ability to navigate these economic challenges?
SAM: While I recognize the significant hurdles we face, I am cautiously optimistic. There is a growing awareness within Iraqi society and government regarding the need for reform and change. If we can capitalize on our strengths—our youth, our resources, and our potential for growth—we have a real opportunity to reshape our economy.
TNE: Thank you, Dr. Al-Mansour, for your expert insights today. It’s clear that while Iraq faces significant economic challenges, there is also potential for growth and improvement. We appreciate your time and look forward to following this story as it develops.
SAM: Thank you for having me; it was a pleasure discussing these important issues with you.