The Political Economy of Iraq 2020: The Story of the Federal Budget Deficit and the possible collaps

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Dr.. Hussein Allawi *
 
The story of the economy in Iraq started since the end of the war in liberated cities, the liberation of lands and the expulsion of the terrorist organization ISIS in 2017, the signs of the post-war deficit are very clear and the initial estimates for the war were at $ 88 billion. The international community has called for financing Iraq through three areas to revive the economy Iraqi through financing grants and grants to improve the economic climate, as well as the blocks of financial investments that were supposed to be syndrome after the announcement of the results of the Kuwait Conference for the Reconstruction of the liberated areas, and we hear now that there is an influx of funds to the liberated areas and strategic projects Its own cities liberated.
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What worries us if leaks are correct: The fiscal deficit reached (51 trillion dinars), equivalent to (48 billion dollars) in the draft budget for the year 2020 compared to the deficit in the public budget for 2019, which was estimated at (23 billion dollars) at the time, and we are now facing a challenge Great, the potential economic implications of the Corona virus in Iraq will lead to a decrease in imports of the largest buyer of Iraqi oil by (33.40%) of all Chinese exports, according to the “Oil Sales Statistics in December 2019, when China imports (3.7) million Bpd "from Iraq.
The new public budget for the year 2020 needs to be rebuilt and rewritten again. It was written and prepared with political courtesies in order to silence the demonstrations as they expected, and other unprecedented jobs that the state does not need burdened the budget. Therefore, the restructuring of the budget again, and review the recent decisions of the Abdul Mahdi government, It would reset the financial pace of the country's economy, and, conversely, Iraq would be facing an unprecedented deficit scenario.
Therefore, we believe that the federal budget for the year 2020 needs a bold financing surgical operation, not austerity owed by it, but rather the pursuit of financial sustainability with high performance of public finances, i.e. the availability of ways and principles of financial discipline to Iraq without austerity or deprivation.
In fact, we need the new government to be an inclusive national government with a political decision to build a better federal budget for a decent life for Iraq and the Iraqis.
Recommendations
1- Referring the federal budget for the year 2020 to a committee of foreign consulting companies specialized in formulating the state’s public finances, under the supervision of the Finance Committee in the Iraqi Parliament and the membership of both the Ministry of Finance and Planning and the financial advisers to the Iraqi government and the Ministry of Oil.
2- Publishing real data about Iraq's financial and monetary ability to inform the public opinion about the Iraqi treasury, the funds obtained from the Iraqi oil trade, the expected revenues from investment projects, public tax revenues and debts received or to be paid by Iraq internally and externally, and the size of grants and international aid.
3- Inviting the International Monetary Fund and the World Bank to increase technical and logistical assistance in developing a sound methodology for the structure of the public budget in line with the philosophy of the Iraqi constitution and the equitable distribution of wealth.
* Head of the Akad Center for Strategic Affairs and Future Studies


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