The deficit in the public budgets of the Federal .. and the future of oil in Iraq

9/19/2016 0:00

Mohammed Abdul-Zahra al-Hindawi
2017 budget will not differ much from the current year's budget in terms of total public spending or the size of the expected rate of investment side revenues, but there are details that may seem important will be present in the next budget from the most important to estimate the price of a barrel of oil will be $ 35 in the light of expectations suggest that prices You will see an improvement starting from early next year until it reaches $ 71 at the end of the year, and this according to these expectations, the price difference between the estimated price and is selling it will contribute to reduce the proportion of the deficit, amounting to about 30 percent, though the availability of such a surplus seems weak with the existence and payable financial benefits for companies licensing oil amounting to $ 12 billion is needed from the government fulfill them in 2017, and it seems clear also the percentage contribution of oil from 92 percent in the current budget fell to 83 percent in the next draft budget of the total size of the expected revenues and reaches 70 trillion dinars of which 57 trillion dinars from oil sales and the rest from other sources is Oil.

This oil decline would give us a positive signal that the work vigorously to activate other sectors and increase its contribution to the budget support as alternatives to oil down to get out of the oil monounsaturated and dye rentier Iraqi economy, despite the fact that the oil gap remains large and impressive, but in the end were not our choice but it is never a matter of the governor of what could have been surpassed.

As long as the talk about the impact of oil in the economy will remain topping for decades to come before the world turns around significantly towards alternative sources of energy, what is required is a vision of oil for future long-term up to ten years based this vision on the basis of determining the average price for the sale of the oil upon which the calculation expected - revenue as oil experts talk and the economy - and the idea of ​​setting a price maybe this will help in financing the annual deficit budgets through the creation of sovereign funds to hold the amounts realized from the sale of more than the average price fixed, for the assumption that the average price for the period from 2017 up to 2027 fixed at $ 50 a barrel and then see prices rise during the first three years to $ 80 and then back to drop to $ 30 in the three years that followed, and experiencing fluctuations between the rise and fall in the last four years of the experiment, and here is the scene as follows: when rising prices are deposit amounts derived from the price increase in the first stage in the sovereign funds investing format and can utilize them to finance investment projects, either in the process of falling prices below the ceiling, it is certain that the budget will face a deficit and clear - this on the assumption that oil dependence remains is Alsaid- here we can resort to the surplus of the past years to finance the deficit until prices improved and so can spare the economy violent tremors unexpected, and subject to the experiment to re-evaluate every two years to determine the diffraction and distractions in order Evaluated.

Also be sure to experiment will achieve greater success if has development and revitalization of other sectors and increase its contribution to the GDP, such as agriculture and tourism, as well as the revitalization of the tax base in the country, as it is almost Iraq is the only country in the world which is witnessing tax system is an actor, either because of the nature of the tax laws or because of corruption, which leads to the prevalence of the phenomenon of evading the payment of tax liabilities under the arguments of different, and in this context, the government can activate taxes and achieve good revenues as is the case in most countries of the world by educating the citizens of the importance of paying taxes and this awareness must be accompanied by encouraging action on the part of the strict on the other hand ..

Perhaps one of the measures that can be used is to reduce the tax rate and the procedure can work in two directions: the first is to encourage citizens to whiten tax discharged Venhakq ​​so good revenues to the treasury, while the second is to contribute to the fight against corruption because high tax rates pay-designate to look for ways to evade through bribery for this employee or that question, and information indicates that what goes into the pockets of corrupt is much more than the money involved to size the public treasury.

I think that such visions and ideas raised by many economists are looking for solutions to real and processors to improve the reality of the Iraqi economy can contribute to the economic reality of treatment, because of all the measures taken by the government of preparing an austerity budget this year or next year, that goal was out of danger economist who was staring in Iraq since the second half of 2014, it seems that the 2017 budget will be peace budget after it is completed źDaesh╗ just before the end of this year willing, Allah, and here will be transformed military expenditure which is not a little to the reconstruction and the provision of services, especially in areas Liberated.

The government has already succeeded in its measures to get out of the bottleneck, although the challenges are still great and these challenges will grow more that is not the search for solutions and treatments have extended periods of short and medium time and this is one of the inputs to the national development plan to be prepared for the years 2018-2022.