Oil is absent from other sectors in Iraq

by **Rocky** Tue 08 Mar 2022, 8:08 am

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Oil is absent from other sectors in Iraq

by Rocky Tue 08 Mar 2022, 8:08 am

Oil is absent from other sectors in Iraq

Successive governments did not present plans to diversify sources of income

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Tuesday, March 8, 2022 9:56

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Reliance on oil is one of the most prominent aspects of the rentier economy in Iraq (Reuters)[/size]

For years , [You must be registered and logged in to see this link.] has been the backbone of Iraqi budgets, and although [You must be registered and logged in to see this link.] has many sources of income that supplement the budget with revenues, successive governments have not presented plans to diversify sources of income due to the absence of economic policy. The industry’s contribution to the GDP has reached three percent. For 2020, which is a small percentage, in addition to the disruption of several vital sectors due to neglect, the deterioration [You must be registered and logged in to see this link.] in some areas, energy problems and rampant [You must be registered and logged in to see this link.] in the country.

No economic policy

The specialist in economic affairs, Saleh Lafta, says, "The truth that is no longer hidden is that Iraq does not have a clear-cut economic policy, and it does not have future plans to confront economic dangers, and what could happen if oil, which constitutes more than 90 percent of the revenues of the general budget, became no Enough to meet Iraq's financial needs.

Lafta continues, "Despite the government and popular recognition of the need for reform and finding alternatives, and talking about a major development in various sectors to take the place of oil, they are in fact just statements issued by the government and repeated by the official media to end as it began without change, the Corona pandemic, global closure and low prices Oil revealed the fragility of the Iraqi economy.

He added, "Successive governments did not take advantage of the financial abundance after 2003 to develop non-oil sectors that would guarantee economic transformation and comprehensive development." He asks, "What is the size of the growth of tourism in Iraq, and what is the size of the development in this aspect?", pointing out that "if serious steps were taken to develop the promising tourism sector, everyone would now witness millions of tourists from different countries roaming all over Iraq, adding tourism a lot. to the country's economy, attracting hard currency and providing new job opportunities.

He believes that "what was spent and allocated from the state's general budget for the development of agriculture and support for farmers was enough to make it a pillar of the national economy, and the migration of families from the countryside to the cities is only evidence of the extent of the devastation."

He believes that "there are billions spent in the so-called investment and clean energy, but that remained below the required level."

It is characterized by absolute rentierism

In the same context, Bassam Raad, a specialist in economic affairs, confirms that “the budget revenues are characterized by the absolute rentier nature, as oil revenues until November 2021 represent about 88 percent, while the percentage of non-oil revenues constitutes about 12 percent of the total revenues, By following the budgets of the past years, we note that they do not provide radical and strategic solutions to diversify sources of income, as the industry’s contribution to the gross domestic product amounted to three percent for 2020, which is a small percentage, and it is noted that more than 80 percent of industrial projects are suspended due to neglect and problems. Energy, in addition to the rampant corruption in the country, which contributed to the destruction of the industry.

[rtl]Raad points out that “abandoning factories and farms has weakened the production capacity and the country has become an importer of most agricultural and industrial products and goods from neighboring countries. Big and dangerous.[/rtl]

He considers that "the country needs to develop and support industry, agriculture, tourism and internal trade to diversify sources of income and ensure the well-being of citizens in the medium and long term," adding that "in order to achieve successful economic diversification and achieve sustainable economic growth, Iraq needs to build effective industrial and agricultural sectors that provide products and goods." Basically, it is possible to invest oil revenues in creating these sectors.”

optimistic look

The specialist in economic affairs, Nabil Jabbar Al-Ali notes that “the government has put in its estimates for the 2021 budget an optimistic view towards the value of non-oil revenues feeding the state’s accounts. achieved, especially with the correction of those revenue streams.”

According to the accounting data of the Ministry of Finance, the total non-oil revenues until the end of 2021 are approximately 12 trillion dinars, meaning that they achieved only 60 percent of what was planned at the beginning of the fiscal year, according to Al-Ali.

And he continues, "The reason for the government's failure to achieve its estimates of non-oil revenues for the year 2021 is the failure of its plan to make deductions from the salaries that the government pays to public employees, or its failure to try to impose fees and taxes on their salaries, in addition to its failure to impose income taxes on some institutions." Such as malls, beauty centers, barbershops, and others.

He pointed out that "referring to the accounting data for the past years, we find that the highest realized revenues were in the year 2017 at 12.25 trillion dinars, or 17% of the volume of the annual budget. As for the year 2020, the volume of oil revenues amounted to nearly 8.8 trillion dinars, or nearly eight percent of the volume of revenue." general of the country.

Al-Ali estimates the volume of non-oil revenues that can be earned during the year 2021, as follows: “Taxes on goods, services and government payments are three trillion dinars (representing three percent of every Iraqi dinar paid by government agencies for salaries and public spending), while other taxes and fees, including Real estate tax, traffic department fees and value-added tax for the [You must be registered and logged in to see this link.]Income taxes on telecommunications companies may approach 2.25 trillion dinars or more, and with regard to the transformational revenues resulting from the revenues of the pension fund, insurance companies, the guarantee fund and others, they are estimated at five trillion dinars and more, and with regard to the revenues generated from public sector profits, they are estimated at two trillion and more, and customs revenues are four trillion dinars. dinars, and capital revenues are 0.25 trillion dinars, with a total of approximately 16.5 trillion dinars at least, which represents 17% of the total annual revenue for the year 2021.

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Oil is absent from other sectors in Iraq

Oil is absent from other sectors in Iraq

Successive governments did not present plans to diversify sources of income

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