Triumph for Maliki as Iraq Passes the Annual Budget

Last year, the Kurds pressed hard to obtain cost coverage for foreign oil companies operating in Kurdistan. This heading still exists, but the main Kurdish achievement this year seems to be the privilege of having the central government financing their electricity sector outside their fixed 17% share of the budget (at least, that is how some Kurdish politicians interpret the new arrangements). By way of contrast, oil is referred to in the same way as last year but with a somewhat Delphic reference to payment of costs to foreign companies “according to all articles of agreement between the oil minister in Baghdad and the KRG energy minister”. Whether this refers to the existing pragmatic cost-oil recovery scheme or something else (and maybe future) remains unclear.

As regards the governorates, the role of the governor in implementing investment projects seems somewhat strengthened and in some cases is defined as an exclusive prerogative. The petrodollar scheme for producing governorates also continues, and there is money for the pilgrimage cities (Karbala gets the lion’s share followed by Najaf). Not all of the enhanced governorate focus is necessarily progressive – there are now for example governorate quotas for foreign scholarships. Also, regardless of what the budget says, much of this will depend on implementation capacity in the governorates, which is often substandard.

In this way – and perhaps with the added incentive for Iraqi parliamentarians to show up and vote since they will now get their armoured cars as a result of today’s vote – the budget passed despite a pessimistic outlook earlier in the week.

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