The new Prime Minister, Ali Al-Zaidi, is seeking to find new sources other than oil to finance the budget and address the crisis left by the Iranian-American war and the repercussions of the closure of the Strait of Hormuz.
A statement from Al-Zaydi’s office said that he “visited the Ministry of Finance as part of his follow-up on the work of ministries and their executive, service and economic programs, and chaired a meeting of the ministry’s senior staff, and listened to reports concerning the ministry’s work in all its departments, where he stressed that Iraq is going through a sensitive financial and economic situation imposed by regional and international developments and their repercussions on the global economy.”
Al-Zaydi: “90% of the budget depends on oil revenues, and we must work on expanding the non-oil economy and adopting alternatives that support diversification.”
Al-Zaydi explained that “these changes have affected Iraq’s export capacity and oil revenues,” indicating that “90% of the budget depends on oil revenues, and work must be done to expand the non-oil economy and adopt alternatives that support diversification,” noting the need to “be frank with citizens about the financial challenges, without exaggeration or embellishment.”
He pointed out that “the Ministry of Finance is required to formulate the financial policy for Iraq, and we are preparing the Iraq 2035 plan, stressing that there must be a clear vision for the ministry and that the budget should be a roadmap for the future.”
He stressed the need to “maximize budget resources and not continue to rely solely on oil,” reminding everyone that “Iraq is a meeting point for the world and we must invest in its geographical location to boost its revenues.”
Regarding employee pensions, Al-Zaydi stated that “they must be released on time, so as not to cause concern among the people, as well as the salaries of the social protection network,” directing that “a payment of the dues of farmers, and the dues of contractors and investors be prepared, and their rights should not be delayed to ensure the continuation of work.”
According to the Prime Minister, “There is a concept that the state manages the economy, but we want the economy to manage the state. If the change in concepts is achieved, we will not have to change people. The state is not just a budget and allocations, but rather seeks to achieve a high GDP.” He pointed out that “there are governing and operational expenses that do not reflect positively on development, so we seek to change traditional financial concepts.”
He stressed, saying: “We do not want to replicate yesterday’s experiences. The role of the state is regulation and oversight, and we support the private sector, as it is the one that will drive development. It is also our duty to look after the poor, but we must not continue to operate with a socialist mindset in the economy.”
He directed “the preparation of a report on the customs situation in terms of revenues during the last six months, especially for materials with high customs duties.”
Al-Zaydi directed “the preparation of a report on the customs situation in terms of revenues during the last six months, especially for materials with high customs duties.”
He added: “We have noticed that high-tariff materials are being replaced with cheaper materials through devious means, and automation will put an end to this manipulation.”
This comes as the “Echo Iraq” observatory announced the House of Representatives’ intention to pass 23 draft laws during its legislative session, which is nearing its end, noting that most of them are geared towards expanding administrative structures and increasing public spending.
The observatory said in a press statement that “Parliament, during its legislative session which ends with the Eid holiday, read 23 draft laws distributed among the various committees,” indicating that “about 70% of these drafts include a trend towards increasing bureaucratic redundancy by creating new bodies and councils, some of which are linked to ministries, and some of which are not directly linked.”
He added that “these drafts also include increases in public spending through the creation of operational funds financed by state funds, or granting additional financial allowances to employees.”
He pointed out that “among the proposed bills is the National Service Bill, which stipulates that the breadwinner be granted the salary of a volunteer soldier during his service period, while state employees continue to receive their salaries from their original departments,noting “the allocation of funds such as costs related to building camps and covering living and transportation expenses.”
Regarding the Civil Aviation Authority draft law, the Observatory explained that “one of the articles of the draft stipulates granting the Authority’s employees allowances that may reach 200% of the nominal salary, which represents an additional burden on current public spending.”
The bill grants the head of the authority powers and privileges equivalent to those of a minister, which will result in increased public spending to cover salaries, security details, and office allowances.
He explained that “the draft law grants the head of the commission powers and privileges at the level of a minister, which entails an increase in public spending to cover salaries, protections and office allowances,” adding: “The law includes opening offices inside and outside Iraq and what this requires in terms of financial allocations for real estate, equipment and delegations.”
Regarding the Ministry of Communications, the Observatory explained that “the draft law includes an expansion of administrative structures, an increase in special grades, and the creation of new departments within the Ministry’s headquarters,” noting “the establishment of a communications development fund as stated in the draft, which will reflect on an increase in public spending.”
Regarding the National Water Council, the observatory noted that “the proposed law stipulates the allocation of an independent budget for the council that includes revenues and expenditures, which adds a new financial burden to the state’s general budget.”
