The risk of delaying the budget threatens the flow of repayment of external and internal debts

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[size=52]The risk of delaying the budget threatens the flow of repayment of external and internal debts[/size]

[size=45]Baghdad / Hussein Hatem[/size]
[size=45]There are conflicting economic opinions regarding the mechanism for repaying Iraq’s internal and external debts, as specialists believe that delaying the 2022 budget will complicate the payment mechanism for a longer period. On the other hand, the budget delay is not related to the payment of debts, as it is scheduled within the 2021 budget.[/size]
[size=45]There is a financial glut resulting from high oil prices. According to the latest official government statements, Iraq's debt is divided into three types: internal, external, and long-term very concessional.[/size]
[size=45]The internal public debt amounts to 50 billion dollars, and the Central Bank of Iraq still possesses 63% of the principal debt and its interests, and the annual interest ranges between 2 and 3%, and the rest of the internal debt is still in the possession of government commercial banks, which means that they are settlements within the financial system The government, exclusively, in the form of treasury transfers for a period of one year, the payment of which was postponed until the annual interest on it was paid from the annual allocations in the general budget, according to a government financial advisor.[/size]
[size=45]As for the external public debt, it is twofold. The first is payable debt, amounting to 20 billion dollars, which is currently paid annually on a regular basis by the Ministry of Finance, and is expected to be repaid by 2028.[/size]
[size=45]As for the second part of the foreign debt, amounting to 40 billion dollars, it represents almost bad debts that the creditors did not claim under the terms of the Paris Club agreement for the year 2004 regarding the cancellation of 80% of Iraq’s foreign debts before 1990, and it dates back to the era of the former regime.[/size]
[size=45]According to official government statements, the suspended external debt belongs to 8 countries, 4 of which are Gulf countries that loaned Iraq during its war with Iran, and it is considered in international norms as obnoxious or hateful debts because it financed the war and did not serve economic development, but it still appears in the accounts books of those countries It is expected to be written off 100%, without specifying a time.[/size]
[size=45]As for the last part, which was detailed by the official figures, it is a very soft long-term debt related to the financing of development projects provided after 2003 according to the pledges of the Madrid Donor Conference in October 2003, and it is due to be paid after more than 20 years, and it is estimated at about $6 billion belonging to the Agency for International Economic Cooperation. Japan and some EU funds.[/size]
[size=45]A member of the Parliamentary Finance Committee, Jamal Cougar, said in an interview with Al-Mada that "the payment of internal and external debts is proven in the 2021 budget."[/size]
[size=45]And Cougar continued, "If there are debts that are due to be paid, the delay in the 2022 budget will have an impact on it, as long-term amounts have not been allocated to it."[/size]
[size=45]A member of the Parliamentary Finance Committee added, "The rise in oil prices enabled the economy to restore its monetary activity, raise reserve rates, and pay large sums of debts owed internally and externally."[/size]
[size=45]In turn, the rapporteur of the Finance Committee in the former parliament, Ahmed Al-Saffar, said in an interview with (Al-Mada), that "a large part of the debt was paid as a result of the financial abundance resulting from the rise in oil prices."[/size]
[size=45]Al-Saffar explained, “There is a debt scheduling that has nothing to do with the current year’s budget, since foreign debts are investment loans, and are not limited to one year,” adding, “This does not mean that delaying the budget does not affect, as its delay affects the joints of the state in general.” “.[/size]
[size=45]The former deputy pointed out, "The internal debts are of unknown fate, due to the lack of transparency, and the failure of the Ministry of Finance to show its periodic reports related to the total revenues, expenditures and the remaining balance."[/size]
[size=45]And Al-Saffar, that "Iraq's debts during the previous parliamentary session amounted to about 80 billion dollars, internally and externally."[/size]
[size=45]He pointed out that "the government is currently working according to the 1/12 system related to the 2021 budget, despite the approval of the Food Security and Development Law for emergency support," noting that "the amounts allocated within the Food Security Law are still unknown, and there is no actual data showing the percentage of implementation this is the law".[/size]
[size=45]For his part, financial expert Safwan Qusay told Al-Mada that "the debt settlement process, especially long-term, requires the approval of a financial budget."[/size]
[size=45]Qusay added, "The absence of a budget means delaying the payment of debts for a longer time, especially foreign debts."[/size]
[size=45]The financial expert pointed out that "there is at least $20 billion in external debt, and at least $50 billion in internal debt."[/size]
[size=45]Qusay explained, "The internal debts can be settled in a quick way, through the Ministry of Finance's transfer of those debts to the balances of the retirement fund and some Iraqi banks."[/size]
[size=45]For his part, constitutional law professor Wael Munther said in an interview with Al-Mada that “the payment of internal and external debts depends on the operational budget that falls within the general budget.”[/size]
[size=45]Munther added, "The absence of the budget does not affect the payment of debts if the payments owed by Iraq are equal," adding, "In this case, payment can be made according to the 1/12 mechanism."[/size]
[size=45]Iraq relies on more than 95% of crude oil exports to build the general budget annually, while the agricultural, industry, tourism and other sectors constitute only about 5% of the annual finance.[/size]
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