The high contribution of oil to the federal budget, and an expert warns: We will fall into crises again
Shafaq News/ On Monday, the Ministry of Finance issued the Iraqi state accounts for the month of February for the fiscal year 2022, which confirmed the return of the high contribution of oil to the federal budget, and while an economic expert considered that the rise in international oil prices cast a shadow on its impact on the budget, he confirmed that "Iraq If he wants to avoid future surprise, he must develop the rest of the other sectors and not depend on oil only because it is "exposed to crises again."
Shafak News Agency followed the data and tables issued by the Ministry of Finance in the current month of May for the accounts of last February, in which it indicated that "oil is still the main resource for Iraq's general budget, as it rose by 1.06% from last January, bringing the contribution of oil to the general budget to 95%." After it was 94% last January, despite the doubled non-oil revenues," which indicates that "the rentier economic system is the basis of its general budget."
According to the financial tables, it appears that “the total oil revenues for the month of February amounted to 21 trillion and 47 billion and 174 million and 260 thousand and 393 dinars, which represents 95% of the total revenues, while the total non-oil revenues amounted to one trillion and 28 billion and 95 million and 602 thousand and 691 dinars, which constitute 5 % of the total revenues, while the total oil and non-oil revenues amounted to 22 trillion and 75 billion and 269 million and 863 thousand and 83 dinars, which is 120% higher than the same period last year 2021, which amounted to 10 trillion and 28 billion dinars as a result of high oil prices.
According to the report of the Ministry of Finance, “the non-oil revenues for the month of February came from current revenues and mineral wealth, amounting to 21 trillion and 963 million and 700 thousand and 973 dinars, and came from taxes on income and wealth at a rate of 96 billion and 504 million and 957 thousand and 707 dinars.”
It also came from “commodity taxes and production fees at 127 billion and 864 million and 565 thousand and 413 dinars, and from fees that amounted to 187 billion and 742 million and 314 thousand and 438 dinars, and from the share of public sector profits at 66 billion and 88 million and 602 thousand and 537 dinars, and from transfer revenues Which amounted to 394 billion and 805 million and 21 thousand and 803 dinars, and from other revenues by 189 billion and 536 million and 253 thousand and 166 dinars, and from capital revenues that amounted to 11 billion and 764 million and 447 thousand and 57 dinars.
For his part, the economic expert, Hilal Al-Tahhan, said in an interview with Shafaq News Agency that "the significant rise in global oil prices was behind the high percentage of oil's contribution to the federal budget at the expense of non-oil revenues, which also rose during the month of February," noting that "the rise in revenues Non-oil did not come from the development of other economic sectors, but came from raising taxes and customs duties imposed on imported goods.
Al-Tahhan added, "We have not seen any serious attempts by the government to get out of the rentier economy, and this in itself constitutes an economic danger in the event of a drop in oil prices globally, and this is an expected matter that will expose us to future financial crises similar to what happened in 2020."
And the economic expert continued, "If Iraq wants to avoid future surprise, it must develop the rest of the other sectors of agriculture and industry, taking advantage of the large oil revenues that it is currently receiving and reducing operating expenses," noting that "the electricity sector is of great importance in moving the wheel of economic growth." In Iraq, this file must be finished as soon as possible."
Adviser to the Prime Minister for Financial Affairs, Mazhar Muhammad Salih, had confirmed in March 2021 that the reasons for the economy to remain rentier are due to wars and the imposition of sieges during the past era and the political conflicts we are witnessing today, which led to the dispersal of economic resources.
The continuation of the Iraqi state to rely on oil as the only source of the general budget makes Iraq at risk from the global crises that occur from time to time due to the impact of oil on it, which makes Iraq tend every time to cover the deficit through borrowing from abroad or inside, which thus indicates the inability to manage Effectively state funds, and the inability to find alternative financing solutions.
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