How are political finances and elections intertwined in the execution of the budget bill?, 26 SEPT
Shafaq News / Four months have elapsed since the approval of the Federal General Budget Law, yet its implementation remains pending. Experts point to the delay in the legislative process and subsequent delays in issuing implementation instructions as the reasons behind this. Nevertheless, some individuals raise concerns about the allocation of funds for the forthcoming local elections set for December 18.
For the first time in its history, Iraq has adopted a three-year financial budget in a single law, passed by Parliament in June. The government defended this move, stating that it aims to establish essential development plans for the country and prevent the recurring issue of annual budget approval delays.
According to the budget law, the budget for the current year and the following two years amounts to $153 billion, with an expected deficit of up to $48 billion. The budget is based on an oil price of $70 per barrel, considering that Iraqi oil exports constitute over 96% of the country's financial revenues.
Despite several months having passed since its approval, allocations from the triennial budget have not yet materialized on the ground, leading to speculations and questions about the reasons behind the delay in its implementation.
The reasons for the delay
In this context, Nermeen Ma'rouf, a member of the Financial Committee in the Iraqi Parliament, explained, "The budget law was approved in June last year, and it took more than half a year for implementation instructions to be issued. Therefore, the budget's non-implementation can be attributed to delays in legislating the law and subsequently issuing implementation instructions by the Ministries of Finance and Planning."
Ma'rouf further detailed, "The government continued to spend 12.1% of the previous year's budget, which limited spending to current expenditures, particularly salaries."
She pointed out that "the government needs to allocate funds for investment projects in the current year. Ministries and governors need to submit their plans for investment projects. Investment project spending is different from current expenditures and involves multiple stages, including planning, approval, project clearance in the Ministry of Planning, and then public announcement, until the project is approved."
She added, "These projects are funded in installments based on progress percentages, and this process takes several months until funds from the investment budget are disbursed on the ground. This is the primary obstacle to the implementation of the investment budget component in the current budget."
Budget funds
Regarding the fate of budget funds as the year-end approaches, Ma'rouf clarified, "The funds allocated for the investment budget are rolled over to the next year for project allocation. These funds do not expire, and disbursements for these projects continue until the end of the fiscal year."
She continued, "As for unspent funds from the current budget, these become surplus funds at the end of the year compared to the previous year. They are then carried over to the next year and added to the funds that will be allocated from the budget of the following year. This is as per the Budget Law and Financial Management Law."
Ma'rouf pointed out, "it is expected that before the end of the current year, the Ministry of Finance, through the Council of Ministers, will send new tables to estimate the revenues and expenditures for the next year, but based on the current legal provisions themselves."
She emphasized that "the provisions in the law, which consist of 78 legal articles, will not be changed. Only the expenditure and revenue tables estimated for the next year will be adjusted. Therefore, these tables must be submitted to the parliament for approval so that the government can implement the budget for the next year."
Exploitation for electoral purposes:
On the other hand, Iraqi politician Halim Salman mentioned that "the Prime Minister - according to leaks - has put a (freeze) on the flow of funds from the triennial budget for several reasons, including the fear of using budget funds to finance provincial council elections."
Salman added that "this explains the government's lack of trust in political parties and local governments that could potentially exploit budget funds for electoral purposes."
He cautioned, "these reasons have not been officially announced, but it seems that this is the case. Despite the budget's approval and the issuance of its instructions, there is still a delay in the process of releasing funds, which supports the claims made by some politicians."
Financial losses
Economic expert Jalil Al-Lami believes that "Al-Sudani's government is currently working to collect funds from the Emergency Support Law that was approved during the previous government's time to finance some projects that have achieved progress. The remaining time in the year is not sufficient for the government to announce and execute new projects or complete old projects, as they have faced setbacks and changes in estimated cost prices."
Al-Lami emphasized that "the delay in disbursing budget allocations will lead to contract cancellations with international and local companies for the development of new cities and provincial infrastructure. This will result in significant losses for Iraq due to penalty clauses that have been stipulated in contracts with these companies."
He concluded by saying that "the budget is the natural financial regulator for the functioning of institutions and administrations at all levels, civilian and military. To avoid the country's expenditure randomness at a rate of 12/1, there is no justification for the delay in implementing budget items."
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