[You must be registered and logged in to see this link.]
"Legal violation and financial disaster" .. Parliament intends to legislate a mini-budget
March 30, 2022
Ultra Iraq - Editorial Team
On Monday, March 28, 2022, the Iraqi parliament completed its second reading of a 9-paragraph draft law whose name has not yet been decided. It was titled “Supporting Food Security, Development, Financial Precaution and Poverty Alleviation” and for the purposes of this law it is called “the Account”.
35% of the account is financed to achieve food security and reduce poverty. This includes the ration card, the purchase of wheat and rye crops, and the payment of farmers' dues.
The reasons for the draft law stated that it was initiated “in order to achieve food security, reduce poverty, achieve financial stability in light of urgent global developments, continue to provide services to citizens and raise the standard of living for them after the budget law expires, create job opportunities, and maximize Iraqis’ benefit from state resources and advance development.” The resumption of work on stalled and lagging projects due to lack of funding and the progression of new projects of importance.”
Funding the account was assigned to the funds in the accounts of the Ministry of Finance in excess of the total amounts of expenditures, "with no more than 25 trillion Iraqi dinars", in addition to grants, subsidies and loans, but the Finance Committee voted to cancel the loans clause later.
Funding is carried out on a monthly, quarterly or annual basis, at a rate of "35% to achieve food security and reduce poverty. This includes the ration card, the purchase of wheat and rye crops, and the payment of farmers' dues for previous seasons, with the approval of the Council of Ministers."
Amounts are also being distributed in the same proportion to "priority projects that are stalled and lagging due to lack of funding", and "necessary new service projects whose cost does not exceed 20 billion Iraqi dinars."
The other ratios were as follows:
- 10% to enhance the preventive liquidity of the public treasury.
- 10% repayment of external debt, gas import debt, and energy purchase.
- 5% of the cost of producing crude oil.
- 5% of emergency expenses at the suggestion of the Minister of Finance and the approval of the Council of Ministers.
“Nothing in the law has anything to do with food security,” economist Mustafa Hantoush believes, “except for the paragraph that stipulates allocating 35% of the state’s 25 trillion surplus oil revenues, and excluding it from Article 6/1 Financial Management Law No. 6 for the year 2019", as it puts in this account "up to 25 trillion, 35% of which can finance the ration card and others, and 65% of it goes to service works or municipal projects."
An economist believes that the law has nothing to do with food security, but rather a mini budget law
In an interview with Ultra Iraq, Hantoush says, "This law has nothing to do with food security, but rather a mini budget law," wondering about its purpose.
The economist points out, "the lack of experience of the new financial committee, and some of them may be satisfied with some simple commissions, and this law may pass them easily," as he put it.
He adds, "We saw some members of the Finance Committee happy with this law, and he did not understand that such a law needs a schedule of investment projects, and each project and its completion rates, or its strategic importance, or does the project serve the country."
The expert confirms that "this is a mini budget law, as there is no budget for 2022, and the oil surpluses that were achieved as a result of the price hike will be consumed in vague projects, which the Ministry of Planning will rely on to enter into work without clarity of strategic vision, but it seems that the lack of experience of the new committee, prompted The Council of Ministers does not have the right to send a mini budget law.”
Hantoush considered the law's passage a "financial disaster", as "25 trillion will go directly to thousands of lagging projects."
A deputy from the Sadrist bloc says that the Emergency Support Law for Food Security and Development will provide new job opportunities
Hantoush believes that the law "neglected an important paragraph, as the law of the General Company for Central Markets (67 Central), which represents the basis for achieving food security, this company, worth 3 trillion dollars, has been neglected for 18 years, and this law did not address it, so what food security is this?"
Likewise, “the law did not address the establishment of a strategic treasury for a period of 6 months, and it only cost 5 trillion,” Hantoush explains, and says: With the central markets and warehousing, we need 5 trillion, as well as farmers’ dues and support for the agricultural initiative, we need 8 trillion, so what is the need for 25 trillion? ?".
The law creates jobs!
On the other hand, the representative of the Sadrist bloc, Ibtisam Al-Tamimi, says that the law of emergency support for food security and development will provide new job opportunities, alleviate poverty and maximize citizens' benefit from state resources.
As the first law that Parliament seeks to legislate, according to Al-Tamimi, it will ensure "creating new job opportunities, resuming work on stalled and lagging projects, and launching new ones, and it will work to achieve financial stability, provide food security, and advance development."
Al-Tamimi confirmed in a press interview followed by “Ultra Iraq” that “the essence of the bill is related to giving the authority to spend to achieve food security and in a manner that does not contradict the budget law,” noting that “it will be presented for a vote on it after submitting a report by the Finance Committee of the House of Representatives due to the delay in approving the 2022 budget. ".
'The law is illegal'
In the event that the tripartite coalition in the House of Representatives fails to pass its candidate for the presidency, this law - when enacted - will be at the disposal of the caretaker government headed by Mustafa Al-Kazemi.
The draft law on financial support for food security and development is against the constitution, according to two lawmakers
The current government is considered a caretaker government according to the constitution, which is "a description that gives the government the right to take decisions and measures that cannot be postponed, which would ensure the regular and steady work of state institutions and public utilities."
Legal expert Hayyan Al-Khayat explains about the government’s powers: “It does not include, for example, proposing draft laws, contracting loans, appointing and exempting senior positions in the state, or restructuring ministries and departments. This is what is stated in Article 42/Second of the Cabinet’s internal system for the year 2019".
In sum, Al-Khayyat said in an interview with Ultra Iraq, that this "makes the draft law on financial support for food security and development unconstitutional, and should be repealed by the Federal Supreme Court if it is legislated."
Former member of the Legal Committee Hussein Al-Aqabi agrees with the legal expert by saying, "There is no constitutional basis for the government to send laws to Parliament."
Al-Uqabi added in a television interview, followed by "Ultra Iraq", that "the surplus funds were supposed to cover the budget deficit," stressing that "the emergency food support law has no constitutional basis."