Basra’s Mighty Petro-Dollar

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.

Basra’s Mighty Petro-Dollar: But Does the Province Have Anything to Show for it?

Basra is one of the country’s wealthiest provinces in terms of oil it produces; its budget for 2014 is bigger than some small countries’. Yet somehow the money doesn’t seem to be improving locals’ lives. Provincial authorities hope this year will be different – only the central government in Baghdad seems to be standing in their way.

Authorities in the province of Basra have many plans to improve the lot of their people – the province is one of Iraq’s biggest oil producers yet somehow the revenue from oil sales never seems to return in sufficient amounts to alleviate poverty and to allow completion of projects such as roading and housing in the area.

Still maybe this year will be different. Local politicians have high hopes, saying there is more money than ever and that various deals have been done with international firms to try and circumvent local corruption and inefficiency and to improve the region’s services.

Indeed the province’s income for 2014 will be as much as US$15 billion. This includes amounts still owed from 2013 and the amount agreed upon last year when Law 21, which governs the powers that Iraq’s provinces can have, was amended. The amendments to Article 44 of the law firmed up how much an oil producing province should get per barrel of oil: five petrodollars per barrel of oil or 150 cubic meters of natural gas.

“Basra’s budget is higher than Jordan’s,” local economist Adnan Farhan, said. “This puts the province ahead of other Iraqi cities in terms of growth and construction – if the budget is properly spent,” he cautions.

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