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Federal financial management in Iraq: crises of money, politics, and the budget

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Federal financial management in Iraq: crises of money, politics, and the budget

   Saturday, 06-04-2022, AM 12:02 Karar Al Asadi 294
By: Dr. Emad Abdel Latif Salem

Why do we make laws, and not enforce them?

Why do we set laws, then begin to circumvent them with alternative laws, contradicting them, and violating their provisions?

Why do we set laws that specify binding “timings” for preparing the federal general budget (for example), and we do not abide by these timings, or does an authority (of the three authorities) take decisions, or legislate laws that intersect with it?

How useful would it have been for us, if the provisions of the Federal Financial Management Law No. (6) of 2019 were implemented instead of this financial-political “nonsense”, which everyone has plunged into its noise, its “fuss”, and the lack of it now?

Who is legally (and mandated) legally (and constitutionally) qualified to file lawsuits against “the authorities” responsible for the severe consequences of violating the provisions of this law, prosecute them, and put them behind bars?

Those who are interested should answer questions like these, because I am not “legally” qualified (by virtue of my jurisdiction) to answer them.

Below I will present to you the most important “provisions” of the financial management law referred to, which I believe is the failure to comply with it, which led us to the financial - living - political dilemma - the consequences of which we are now experiencing.

Federal Financial Management Law No. 6 of 2019
(articles related to the current political-financial “blockages”)

1- Article -4- Second: “The annual budget starts from 1/1 and ends on 31/12 of the same year. The Federal Ministry of Finance has the right to prepare a medium-term budget for a period of three years, to be submitted once, and it is legislated, and the first year is obligatory, and to the Council of Ministers based on the A proposal from the Ministries of Planning and Finance to amend it for the second and third years, with the approval of the House of Representatives.“

I don’t know why such a budget was not prepared (or put into practice), knowing that there is a “strategy” for the general budget that is prepared every three years?

2- Article -6- Fourth: “The deficit in the planning budget may not exceed 3% of GDP.”

That is, if the gross domestic product is $200 billion, then the budget deficit should not exceed $6 billion (what Approximately 9 trillion dinars) .. and this has not been adhered to in any budget law for twenty years.. and for information only, the total planned deficit in the federal general budget for the year 2021 is 28.672 trillion dinars (equivalent to three times the deficit specified in the Administration Law effective finance).

3- Article -11-: “The Council of Ministers shall discuss, approve, and present the draft budget law to the House of Representatives, before mid-October of each year.”

If this is the case, then how was the date of the early parliamentary elections determined, so that the early parliamentary elections would not be held? Will we even have a parliament in mid-October 2021? Why did no authority (or party) object to this?

4- Article -8- Second: The federal general budget draft law includes the following:
D- “An emergency reserve for a fiscal year, not exceeding 5% of the total estimated expenditures in the budget (both commercial and investment), for emergency and unexpected situations that occur after the issuance of the The Federal General Budget Law...

If this "reserve" was present in the 2021 budget... would it have been a possible (and sufficient) alternative to the "Emergency Support Law for Food Security and Development"?... If this "reserve" did not exist, then the calamity greatest.

5- Article -13- Third: “In the event that the draft general budget law for a particular fiscal year is not approved, the final financial statements for the previous year shall be considered the basis for the financial statements for this year, and they shall be submitted to the House of Representatives for the purpose of approval.”

6- Article -18- Second: “In the event of a law entailing the disbursement of sums on the general budget, its application should be from the following year, in order to make the necessary allocation to it.”

7- Article 19- Second: “When the actual revenues exceed the estimates in the general budget law for the fiscal year, and after covering the actual deficit (if any), the surplus is provided for use in the budgets of the following years in a sovereign fund.”

I do not know (personally) that Whether this "sovereign fund" existed or not, but I admit that I heard some "officials" on this subject, talking about it, for many years.

8- Article -19- Third: “The Council of Ministers, when declaring a state of emergency, may submit to the Council of Representatives a draft law to increase spending.”

9- Article -20- First: “The Council of Ministers may use the emergency reserve allocations to cover urgent, unexpected and emergency expenses that were arranged after the issuance of the Federal General Budget Law, and were approved by the Council of Ministers based on a proposal from the Prime Minister or the Minister of Finance.”

I think (and I may be wrong, of course) that the implementation (or application) of Articles 19 and 20 above may intersect with the Federal Court's decision regarding the powers and duties of the "caretaker" government... not to mention the responsibilities and limitations of declaring a "state of emergency".

Finally, I hope that there will be sound, wise and efficient financial-economic solutions that take into account the interests of the poorest and most vulnerable segments of the population, away from the useless political “clownism” in these very difficult and dangerous circumstances, from which Iraq is suffering from severe pressures now. , despite the large (and unprecedented) revenues from crude oil exports.

(Source: Federal Financial Management Law No. (6) of 2019, Al-Waqa’i Al-Iraqiya newspaper, No. 4550, August 5, 2019)

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