Professor of Economics at the University of Baghdad
Although the fiscal policy reflect the views of the actors who had established the executive branch and in the case of Iraq (voters), but the decisions and procedures of the executive branch after taking economic management, reflected in fiscal policy and the arm of the general budget, and then the lives of people (voters) and their future in the economy leads all facilities of the public sector as is the case in Iraq.
It is noted that most of the literature focused on constructive criticism and procedures and the results of the general budget, promised economic trends representative of the executive power without being accompanied by a clear and shed light on the economic mistakes that made the management and implementation of fiscal policy is constrained through the general budget.
So we will try to identify the deeper economic mistakes that turned into a limitation in the budget in 2015 and now in 2016 so that can not be bypassed or Astosalha.
Committed all economic departments caused by uncertainty and rapid changes element errors, particularly in rentier states that the oil market and its players control returns of these countries, but the results of mistakes are adjustable and reduce burdensome and even short acceptance term, but economic error turn into a sin when it touches the depth of the capabilities of the economy National and restricts the present and future.
From this point committed executive power in Iraq and during the decade ago many economic mistakes elevated Khtian them (hard modest) to the ranks of sin, which restricted the different economic policies, especially fiscal policy, and resulted in them being difficult to escape from him for builders and Musharawa general budget.
The first sin: the expansion of the public work force
Exercised the successive governments during the previous years, the broad employment policy is linked to the actual need or the economic potential existing or potential, in an economy with deep structural imbalances because of the value-added single source.
The estimated statistics (inaccurate) The number of employees in the government exceeded 5 million, as well as access to the number of retirees (2) almost million.
Was it a political and social claims Atjd convincing economic justification as the desire of some to get the electoral votes, or even dealing with the economy, several social welfare institution, as well as the desire to expand the role of government and to link these numbers (and their hosts) to power through the government pay.
Effects of sin and did not stop as soon as the expansion of the operation, but also accompanied by the following: -
The new pieces of employment of young people and therefore will continue to charge their salaries for a long time to come.
Added years of service to wide segments, increasing the size of the allocations in the budget.
Assigned to government employment and large in favor of religious institutions, social and political functions and to interfere in the government's performance.
Take special legislation and the general increases in salaries and allowances without its close association with the possibilities and decisions.
Download part of the general budget Abye retirees who's also expanded dramatically salaries in time is supposed to block the deductions such salaries.
And additions in the accumulation of salaries and allowances the size of salaries and allowances of more than 40 billion dollars, representing almost straight-line state in the operational part of the general budget.
Which means that the operating budget in its part Alanvaqa become restricted (premium salaries hard knowing that he is growing annually) and identified so the flexibility of current and future spending power, and carried the fiscal policy burdens inescapable, especially since all of the studies indicate that the low productivity of workers in the public sector.
So the operating sin reflected in the budget both its Alanvaqa not in the budgets of 2015.2016, but, long-term Next, with reference to the uncontrolled employment policy born socially and politically influential, noticed economic Orbiter through public employment claims and conversion of temporary contracts to permanent ongoing protests.
The second sin: oil service contracts
This sin related side Alaiardi the general budget and the most important supplier, which is oil revenues.
As the licensing rounds putative (four), which began to put forward in 2008 and signed Bwakirha 2009 resulted in the nascent contractually distorted (service contracts) to Aitabak in named (Service) and Atgarn negative details with previous decades and the same label or other, as they put in duration (25 years) and extended (30) years, or in dealing with the costs or the basic assumptions in the production fields, all the way to the tariff barrel (2) dollars to foreign companies, so that we reap the results are clear with the first decline in the price of oil per barrel.
The consequent on these contracts and a clear rise in costs for reasons no room to mention here, and the payment to claw Alaiardi financed from the general budget of the low revenue and bound him strongly.
Scientific research and articles and interviews about the risks of these contracts have been published by specialists Hendsien and economists, but the problem was the support of some specialists Unfortunately for these contracts, who ignored the details of these contracts and the tours and went to pour their criticism to Almkasemh contracts in Kurdistan (also bad) (which translates Unfortunately participation of the term while sharing the reality of the oil profit sharing in profit oil), and here's Oil Ministry demanding to leave the model service contracts towards Almkasemh decades.
Mazad and it is bad that the Integrated Energy Strategy (2010) provided perceptions of anti-realism of the results of the tours and her newborn (service contracts), so that resulted in an almost complete separation between production and export a great disaster and the painful truth.
The economy in March the national sector oil direct investment for nearly four decades, punctuated by wars, was able to return to the level of production of 3,500 million barrels per day as the 1989 event, while licensing rounds with all the capabilities and cost prohibitive barrel (exceeded 20 dollars a barrel in some fields) did not up to the level of 3.5 mb / d and is able to reduce the cost to less than $ 10 level as in the past.
The detailed results of sin or resource exists in scientific studies, but the oil sector officials diagnosed it.
It has no right to any specialist say that these generated criticism because of the low price of a barrel, because of the adoption of oil contracts, he must realize that oil prices fluctuate as historically and continue it in the future.
Indeed, it is funding priorities that Leverage Leverage achieved revenue of positive in upward market Bullish as in the oil market by the fourth quarter of 2014, and reflected a negative strongly in descending market Bearish as in 2015 and up to now, especially since the return companies Remuneration constant for Ajribt price changes (fixed cost) .
From all of this is my sin broad employment and service contracts as restrictions on both sides of the spending (increase) and revenue (decrease) These cuffs Measurement Botherhma the makers the ability of the budget and the legislators in 2015 and 2016, as well as social and political impacts and will continue it to the verge of a long history, and the problem that it is difficult to escape who are they.