Tag Archive | "Budget"

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Budget Problems go Beyond Erbil-Baghdad Crisis


By Harith Hasan for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The Iraqi parliament still has not been able to approve the draft general budget for 2014, prompting Prime Minister Nouri al-Maliki to warn of the possibility of a major financial crisis and a disruption of state institutions.

This delay in ratifying the budget is mainly because of the continuing dispute between Baghdad and the Kurdistan Regional Government (KRG) regarding Iraqi Kurdistan’s share of the budget. According to a member of the Maliki-led State of Law Coalition, the Kurds are demanding a 17% share of the budget, without deducting the revenues they obtain from the approximately 400,000 barrels of oil the region exports daily according to Iraqi government’s calculations.

Baghdad is demanding that Iraqi Kurdistan places its oil exports under the direct supervision of the State Oil Marketing Organization (SOMO), which is under the authority of the central Iraqi government. The Kurdistan Region of Iraq, however, refuses to do this. For their part, the Kurdish forces argue that the central government is disregarding the constitution, which grants the region the authority to supervise its own resources, and that Baghdad is trying to deduct from Iraqi Kurdistan’s share, which was decided upon in previous budgets.

These forces held a meeting in Erbil on Feb. 23 and issued a statement confirming the region’s right to “receive its share of Iraq’s revenues.” The statement noted that negotiations with Baghdad on this issue are ongoing and called on Maliki to abandon this “illegal and unconstitutional policy.”

An “independent” report on the Iraqi budget prepared by the Movement for Change (Gorran) noted that the actual share the budget grants to Iraqi Kurdistan is 9.9%, and that the government expects the region to export what amounted to 400,000 barrels per day under its supervision, compared to 250,000 a day last year.

According to the report, the government is demanding that auditing agencies from both Baghdad and Erbil identify and calculate Kurdish oil revenues, and that Erbil sends the amount to Baghdad on a monthly basis. These are conditions that the KRG considers to be unfair.

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Draft Budget Fuels Kurdish Export Row


Kurdish ministers have reportedly walked out of a cabinet session in protest at the country’s draft 2014 budget.

Reuters reports that the draft budget requires the Kurds to export 400,000 bpd, well above the region’s current export capacity, and says Baghdad will deduct any shortfall from the 17 percent share of state revenues to which they are entitled.

Industry sources estimate Kurdistan’s current export capacity at around 255,000 bpd, and do not expect it to reach 400,000 bpd until the end of this year or early 2015.

Kurdish members of parliament boycotted last year’s budget, but this did not prevent it being passed.

(Source: Reuters)

(Budget image via Shutterstock)

Posted in Banking & Finance, Oil & Gas, PoliticsComments (0)

Govt Allocates $14bn for Electricity


By John Lee.

The Ministry of Electricity’s 2013 budget has soared to $14 billion to help it end power outages in the country, reports Azzaman.

But the ministry’s spokesperson Musaib Mudaris said the blackouts will continue until the end of the year, by which time output will reach 13,000 megawatts, enough to meet the country’s domestic needs.

Mudaris said half of this year’s allocations were invested in power plants and enhancement of the national grid.

The ministry’s operating costs amount to $7 billion a year, he added.

Mudaris also revealed that Electricity Ministry’s budget in the years from 2003-2012 had amounted to $37 billion.

Currently, he said, Iraq’s combined power output was in the range of 11,000 megawatts, still short of the country’s total needs, estimated at 13,000 megawatts.

However, many in Iraq doubt whether the ministry will be able to put an end to outages any time soon, given the precarious security situation and the dramatic increases in demand due to improved living standards.

However, Mudaris insisted that the country to be able to produce up to 20,000 megawatts by the end of 2014.

(Source: Azzaman)

Posted in Construction & Engineering, Oil & Gas, Public WorksComments (1)

Oil Production Fall Could Create Budget Deficit


By Matthew Gayle.

Iraqi parliament Oil & Energy Committee member, MP Suzan al-Sa’ad, recently stressed that the country’s decline in crude oil production during 2013 will lead to major deficit in the federal budget of 2014.

According to a report by the Oil Ministry, Iraq oil exports decreased at average of seven million barrels in June, following the sabotage of the northern pipeline and the bad weather.

The spokesperson of the Oil Ministry, Asim Jihad said some days ago that the oil exports for past June decreased to 69,800,000 barrel, at average of 2,326,000 barrel a day, while the oil exports reached in past May 76,900,000 barrel per day.

(Source: All Iraq News)

Posted in Oil & Gas, PoliticsComments (0)

Video: Baghdad holds Talks with KRG


From Iran’s PressTV. Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

Negotiations between Iraq’s central government and Kurdistan’s regional government have been described as productive.

Officials in the Kurdistan Region have sent a letter to Iraq’s ruling National Alliance. The alliance has visited Kurdish officials to help resolve the issues between the two sides.

Kurdish members of Iraq’s central government and parliament started boycotting sessions last month.

Iraq’s parliament passed the national budget without Kurdish consensus. Iraq’s parliament passed the national budget as Kurdish MPs and half of the opposition Iraqiya bloc boycotted the session.

Baghdad gave the Kurds a fraction of the billions of dollars requested for expenses for oil companies in Kurdistan.

Dale McEwan reports from Erbil for Iran’s PressTV:

(Source: PressTV)

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New Iraqi Budget Deepens Housing Crisis


By Omar al-Shaher for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The strenuous efforts exerted to handle the housing crisis were quickly rendered useless when the ratified 2013 general budget did away with the allocations for the housing fund, which was to grant loans for those wishing to build new homes.

The Iraqi parliament ratified the 2013 general budget on March 7 after a heated debate among involved parties regarding the share allotted to the semi-autonomous Kurdistan region. The budget did not include any housing allocations, which were held back until an increase in oil revenues is seen.

The housing fund is set out by the Ministry of Construction and Housing. The biggest real-estate funding body in Iraq, with a capital of one billion Iraqi dinars ($900 million), the housing fund was established specifically to solve the housing crisis.

The fund grants zero-interest loans in monthly payments with a ceiling of $30,000 for those wishing to build a private home in the Iraqi capital. Should the construction take place in other provinces, the loan limit drops to $25,000. The 2013 budget stipulated that allocations for this fund would come from the surplus in oil revenues, instead of from fixed budget lines.

This surplus, however, is not expected to be reached until the middle of the next fiscal year, which means that the fund will not receive any money in the coming months.

Director-general of the fund Burhanuddin Bassam affirmed that the fund would not accept new loan applications from any of Iraq’s provinces. He stressed that the available money could only cover the payments due to applicants who had already registered.

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Parliament Passes Budget, KRG Unhappy with Oil Revenues


By John Lee.

The Iraqi parliament passed the 2013 budget of the 138 trillion Iraqi dinars ($118.5 billion) on Thursday, allocating to Kurdistan just a fraction of the oil revenue the region requested, reports Wall Street Journal.

Ibrahim al-Mutlaq, a member of the parliamentary finance committee, said the budget allocates 750 billion Iraqi dinars ($644 million) for oil companies operating in the semi-autonomous region, which include majors such as Exxon Mobil, Gazprom Neft and Chevron; the Kurdish government had asked for $3.5 billion, including outstanding payments covering all exports between 2010 and 2013.

The budget decision adds to existing tensions between the Kurdish region and Baghdad over oil exploration rights, trade with Turkey and the redevelopment of oil fields in a disputed territory.

Kurdish lawmakers boycotted the session which led to the passing of the budget, Mr. al-Mutlaq said.

Jaber al-Jaberi, an Iraqiya MP among those who boycotted the session, said he expects the Kurds to go to the federal court to disrupt the budget.

(Sources: WSJ, Reuters)

Posted in Oil & Gas, PoliticsComments (6)

KRG President Approves 2013 Budget


By John Lee.

The President of Kurdistan Region, Massoud Barzani (pictured), has approved the budget for 2013, officials from Ministry of Justice from KRG said.

This follows the budget’s approval last week by a majority of the Kurdistan parliament.

(Sources: Kurdsat, AIN)

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