Iraq approves its largest ever budget
The Kurdish Globe - [3/3/2012]
Kurds are overall satisfied with the outcome

After numerous sessions, delays, and amendments, the Iraqi Parliament finally voted on the largest ever budget of the country on 23 February 2012. Voted for by the majority of votes, the total budget is about 116 trillion Iraqi dinars (approximately $100 billion). Kurdistan Region's share in the budget was set at 12.6 trillion ID, approximately 11.25% of the country's total budget.

Calculation of the budget is based on fixing the price of oil at $80 per barrel, and under the assumption that Iraq will export 2.6 million barrels of oil per day.

Voting for the budget means allocating 40 trillion ID for sovereign issues, approximately four times the budget allocated to Kurdistan Region. This has hurt the Region's share by reducing it by around 7 trillion ID.

According to a political agreement between Baghdad and Erbil, the Region's share in the Iraqi budget should be 17%, (approximately 19.89 trillion ID this year), but calculating this rate after deducting the 40 trillion ID, it is now only 10.7%.

Although Iraq's budget has significantly increased this year and bypassed previous years' amounts, Kurdistan Region's budget share has not increased accordingly.

Kurdish authorities argue the central government has used the excess budget to increase the sovereign budget, and the remainder of the budget that is used to calculate the Region's share has only gone up slightly.

Dr. Ahmed Chawsheen, a Finance Committee Member of Parliament of the Kurdistan Alliance says since 2004, Kurdistan's share in Iraq's budget has been between 10 and 12%. "Most of the issues for which budget is allocated under the sovereign budget could be managed within the budget of the Ministries and other governmental institutions," MP Chawsheen told The Kurdish Globe. He added that during a session of his committee with the federal Minister of Finance, he questioned the Minister about the rationale behind the inclusion of so many projects under the sovereign budget, but with "no concrete answer." The Minister replied that this has been the same way before and "we agreed to do it the way we have always done it."

The sovereign budget is divided between the presidential budget (9 trillion ID) and the federal budget (31 trillion ID), out of which 7 trillion is allocated for defense, while nothing has been allocated for the Peshmarga Forces, which are part of the Iraqi Defense System by law.

Although not all the demands of the Kurds were considered in the budget, Kurdish representatives are generally satisfied with it.

Azad Sreshmayee, a Kurdish MP, says Parliament added nine articles to the law immediately before voting, which he describes as being merely to "persuade different political groups" to vote for the draft.

"These articles are not related to the budget law," stated MP Sreshmayee in an interview with The Globe. "This will hurt the objectives of the budget law and would put more load and pressure on the government."

He believes Parliament does not have the authority to introduce any articles to the draft, and is only entitled to remove or modify existing articles. But this addition was a political decision.

Another criticism Sreshmayee had on the budget was the political accord on which the budget is grounded, which means that it would target political aims rather than service and development aims.

One of the nine articles added to the draft was proposed by the Sadr MPs to distribute 25% of the discretionary budget over the country's population, which according to MP Najiba Najib, is merely aimed at serving the popularity of the Sadr to be used for future political purposes.

Kurds have succeeded in seizing the authority of the Ministry of Finance to hold the Region's budget in case oil exports are stopped, and now the Iraqi government will monitor the Region's exports directly. They also persuaded Baghdad to pay the fees for the oil companies producing oil in Kurdistan.

However, the Peshmarga budget issue, which was one of the key points of disagreement between Erbil and Baghdad, was kept on hold and is still to be addressed and settled between the central and regional governments at a later stage. This means the same scenario of previous years will repeat itself this year.

Although the majority of the demands of the Kurdish members were accepted, some Kurdish MPs still doubt whether all these promises will be implemented or if they will have to fight for them again.

"These things are approved, but will they be implemented?" asks Saeed Rasul, a Kurdish MP. Sreshmayee is also doubtful about the future and says there should be a law to govern such political agreements.