How Much Does Iraq Really Need For its Budget?

By Seerwan Jafar.

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraq’s 2013 budget amounts to US$118 billion. But the figures don’t add up. Doing the sums results in one conclusion: unless something is done differently, Iraq will face serious debt and development problems.

In late October, the Iraqi Cabinet, headed by Iraqi Prime Minister Nouri al-Maliki, approved the 2013 draft budget. The total amount approved was USD $118 billion, making for an US$18 billion increase on 2012’s budget and making the budget Iraq’s highest ever. The draft will eventually go to the Iraqi Parliament for ratification.

If one considers the state of Iraq – still plagued by power cuts, growing youth unemployment and almost totally dependent on oil revenues – then an increase is surely a positive thing. But will this upcoming budget do the trick?

If Iraq is to become a more developed nation, is this increase enough and is it sustainable? And if it’s not, then what would the Iraqi budget be ideally?

A look at the facts and the figures around this issue may help to work out an answer to those questions. Iraq is near to completely reliant on oil revenues. Oil exports account for 95 percent of government revenues and are equal to 70 percent of the country’s gross domestic product.

8 Responses to How Much Does Iraq Really Need For its Budget?

  1. Nibras Hadi December 28, 2012 at 4:13 pm #

    “The International Energy Agency predicts that Iraq will produce more and more oil – up to 4.4 billion barrels per day by 2020″(2nd to last paragraph – before the conclusion.

    Really ????? I think that’s an obvious mistake.

  2. Kickabuck December 29, 2012 at 12:57 am #

    Rework your figures, this number is insane:

    4.4 billion barrels per day by 2020

    Do you realize what they are producing now?

  3. Ramy S. December 31, 2012 at 7:13 am #

    Kickabuck, I believe they meant “4.4 Million”, Saudi produces only 11 million today, that figure is surely a mistake.

    Great article though, I loved it. This is why I love this site, it shows the other side of Iraq.

  4. Seerwan January 2, 2013 at 2:48 pm #

    Dear Nibras and Kickabuck,

    The entire article is referenced on my blog (http://seerwan.blogspot.co.uk/2012/12/what-should-iraqs-government-budget-be.html).
    This is the link to the International Energy Agency Iraq Energy Outlook, demonstrating that in the view of the IEA, Iraq will be exporting 4.4 million bpd in 2020 in the Central Scenario (please scroll to page 114): http://www.iea.org/publications/freepublications/publication/WEO_2012_Iraq_Energy_OutlookFINAL.pdf

    In any case gentlemen, whether Iraq will export 4.4 or 7.1 (the IEA High Case scenario) mbpd in 2020, the point still stands that it’s simply not enough to fund government spending to a developed nation level.

    Dear Ramy,

    The highest Saudi Arabia has produced in thirty years was 10.1m bpd set in June 2012 (http://www.ft.com/intl/cms/s/0/e7d9ac5c-43c2-11e2-844c-00144feabdc0.html#axzz2Gp9nVetZ), but according to OPEC figures Saudi Arabia exported an average of 7.2 million bpd in 2011 (which naturally was the latest annual figure at the time writing the article). Please see page 49 of the OPEC Annual Statistical Bulletin: http://www.opec.org/opec_web/static_files_project/media/downloads/publications/ASB2012.pdf
    Glad you liked the article.

    Thank you all for your interest.

    Best regards,
    Seerwan Jafar

  5. Editor January 2, 2013 at 3:42 pm #

    Dear Seerwan,

    many thanks for your comments – much appreciated! I’ve amended the text from ‘4.4 billion’ to ‘4.4 million’.

    Best Regards,

  6. Seerwan January 2, 2013 at 5:42 pm #

    Not at all.
    Thanks Editor.

  7. Ramy January 4, 2013 at 1:28 pm #

    Dear Seerwan, Thanks for stating those facts, I only meant 11million is their highest ever, also I was wrong there.

    I also saw your blog, amazing work! keep it up Seerwan.

  8. Seerwan January 4, 2013 at 6:37 pm #

    Dear Ramy,
    Oh, I see. My apologies.

    Thank you very much. Pleased you enjoyed my work.

    Best regards,
    Seerwan Jafar