By Ahmed Mousa Jiyad.
Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.
Budget Law 2017 and OPEC Production Cut Impact – Preliminary Remarks
On 7 December, the Iraqi Parliament passed Budget Law 2017 by a majority voting with 186 attendances, before the House went into a month recess.
The passing of the Law was immediately condemned severely by the Barzani bloc, though it was supported by other Kurdish groups; indicating a new phase of political reality in the Kurdish region and doubtful compliance of KRG to budget provisions.
Some skeptics (among parliamentarians) considered budget debate nothing but early-election rhetoric; others think the draft does not deserve even the “ink it was written by” and others question the “integrity and accuracy” of some provisions of the law itself.
In the meantime, the apparent failure of Iraq during the recent OPEC meeting could increase the economic burden, of passivism and mentality of secrecy that dominate the Ministry of Oil, estimated to $3.1 billion during first half of 2017 one side and by making revenue side of 2017 budget highly susceptive to multiple sources of uncertainty.
Thus, international oil prices has to be at least $54.73/ b for Iraq to attain a breakeven price of $46.6/b on its oil export revenues to accommodate the impact of oil production cut. Hence, both Iraq (by conceding) and IMF (by imposing) took a gamble by adopting $42/b. Time will tell!
Mr Jiyad is an independent development consultant, scholar and Associate with Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: [email protected], Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad’s biography here.