THIS IS MERELY MY INTERPRETATION AND DOES NOT NECESSARILY REFLECT BGG'S OR POPPY'S OPINIONS AS MY INTERPRETATION IS NOT THE KNOW ALL BE ALL.. LOL
Iraq Budget 2013 -
POINTS PULLED FROM ANALYSIS:
• Notwithstanding the increase in oil production and revenues, oil alone is not enough to cover budget deficit and contribute to a financial resilient Iraq;
• financial reserves in Iraq can cover government operating expenditure for less than a year.
• In order to improve Iraq financial resilience and reserves in the short run, Iraq needs, in addition to its plan to increase oil revenues, to increase non-oil revenues
• (which are stable, around IQD 7 Trillion, since 2008),
○ STABLE IT GOOD!!! MOVING ON….
• Iraq is making progress in decentralizing planning at the local level, with governorates identifying their plans through a participatory and evidence-based approach. This progress is not matched with governorates/KRG participation in budgeting and this lack of participation has led to a longer period needed to approve and amend the budget, and to some extent to the low investment execution rate for the Regional Development Plan.
○ THIS IS THE STICKY PART.. KURDISTAN REGIONAL GOVERNMENT IS NOT WANTING TO COOPERATE WITH THE CENTRAL GOVERNMENT.. AS WE HAVE SEEN IN THE PAST WHEN THEY “DID” COOPERATE, IT LITERALLY TOOK AN ACT OF CONGRESS FOR THE KURDS TO GET THEIR MONEY FROM THE CENTRAL GOVERNMENT.. THE KURDS HAVE TO GET THEIR MONEY PROMPTLY TO PAY THE OIL COMPANIES..
•• The Government of Iraq is in the process of approving the draft budget for 2013
○ BINGO!!! I DID NOT THINK THIS DOCUMENT LOOKED LIKE PAST BUDGETS.. THIS IS MERELY AN “ANALYSIS” OF WHAT WE SHOULD SEE COMING FOLKS!!
1 Budget was approved by the Council of Ministers on Oct. 23, 2013 and submitted to the Council of Representatives for endorsement expected early February 2013. From previous years minor changes take place at this stage, and hence the analysis will not change significantly.
2 Calculated by staff using budget law assumption for 2013 GDP of IQD 192 Trillion.
3 This includes 250,000 bpd from KRG.
4 Data obtained from the Council of Representatives Finance Committee.
○ SO IT LOOKS TO ME, THESE PEOPLE CAME IN TO ANALYZE THE BUDGET AND HELP THEM GET THINGS IN PROPER ORDER.
○ PERHAPS THEY WERE PART OF THOSE DELEGATIONS THAT WERE OVER THERE???? (rhetorical)
• Government budgeted expenditure of IQD 138.4 Trillion has Energy, Security and Defense, and Social Services as the main headings
• Investment in Oil is key to economic prosperity in Iraq,
○ NO DOUBT AN “ANALYSIS” OF THE BUDGET. NOT THE “ACTUAL” BUDGET.. BECAUSE IT’S EASY TO READ LOL
IMF AND WORLD BANK:
• Budgeted deficit totaling IQD 19.1 Trillion has fallen to less than 14% of total expenditure.
• The deficit will be financed by funds retained from 2012 budget (estimated between IQD 5-7 Trillion),
• borrowing from IMF and WB (close to IQD 6 Trillion),
• the remaining will be covered from the Development Fund for Iraq, domestic borrowing, and unexpected rise in oil revenues.
○ ANOTHER REASON THE IMF AND WORLD BANK WERE JUST OVER THERE…??? ANALYZING???
• Government has consistently executed its operating budget at 80%-90%, financing primarily public servant’s salaries and social benefits, as well as day-to-day government operating expenses.
○ YEP.. MUST PAY THE GOVERNMENT OFFICIALS FIRST SINCE THEY ARE NOT GETTING ANYTHING ACCOMPLISHED FOR THE PEOPLE OF IRAQ…
• The execution rate falls to less than 60% in key development sectors including culture and youth 49%, Water and Sanitation 52%, Education 57%, and Health and Environment 58%.
• This is alarming, since not only these development sectors receive little of the total investment budget, but also inadequacies operationalizing these funds into the projects for which they were approved. On the other extreme we have execution rate of 93% for the Energy sector, 94% Industry
○ hmmmm.. IF IT WALKS LIKE DUCK, QUACKS LIKE A DUCK…… MUST BE CORRUPT!!! (I just made that up.. (giggles) )
• Budget execution rate indicates the effectiveness or lack thereof of the financial management system and government agencies in delivering the projects for which funds are approved;
• in Iraq this is hampered by delays in approving the budget generally taking place in February-March, delays in approving projects and transferring the funds,
• and lack of accountability.
○ LACK OF ACCOUNTABLITY???? WHAT??? YOU DON'T SAY??? (please pardon my wit and sarcasm.. but after so many years of reading this....well.... )
2013 and Beyond
• Budgets beyond 2013 will continue to be oil-centric; given Iraq’s current economic strategy, commitment to foreign companies investment, and increased demand for hydrocarbons from the east (China and India).
○ DEMANDS FOR HYDROCARBONS FROM CHINA AND INDIA…. Hmmmmm
• The trend today tells us that Iraq is focused on expanding oil and possibly gas production and exports to improve its financial resilience and foreign currency reserves.
○ NOT SURE WHY I DON’T LIKE THE SOUND OF THAT! FOREIGN CURRENCY RESERVES (PAGE 7)
• Iraq needs to adopt a more evidence-based approach to identify development priorities and set investment budget priorities accordingly
• so economic growth (primarily oil) can be intertwined with human development (Education, Health, Basic Services, and Employment).
• Security and Defense are prominent in 2013 budget.
• to secure oil production and exports
• Currently, Iraq allocates 40% of its budget to investment projects
• this share will remain relatively stable over the years to come.
• in order to improve financial resilience and reserves, it also needs to increase non-oil revenues (which are stable, around IQD 7 Trillion, since 2008),
PAGE 8 Selected recommendations for 2013
**** END OF ANALYSIS ON THE ANALYSIS OF THE BUDGET*** WELL.. NOT MUCH OF AN "IN-DEPTH ANALYSIS.. BUT THERE YOU GO.. THE POINTS PULLED MAY HELP "YOU" BE THE THINKER~ ♥ RED~