How Much Does Iraq Really Need For its Budget?

And if Iraq had to spend the OECD average on its citizens, this would add up to $500 billion. This is nigh on impossible.

A look at Iraq’s oil income indicates this: the most that oil income has ever bought Iraq have been US$83 billion in 2011. As Iraq’s highest ever oil revenue is significantly less than its highest budget of (US$118 billion in 2013) and drastically less than the desired budget of over US$500 billion, it quickly becomes evident that oil revenues are never going to cover Iraq’s spending needs.

Of course some might argue that the increasing Iraqi oil production will allow the government to meet Iraq’s fiscal needs in the future. Unfortunately this doesn’t seem very likely. Saudi Arabia is the world’s largest oil exporter and the highest that country has ever earned from oil revenues was US$318 billion in 2011 – still a way away from US$500 billion required in an “ideal” budget.

The International Energy Agency predicts that Iraq will produce more and more oil – up to 4.4 billion [Correction: 4.4 million - Ed.] barrels per day by 2020 – but the revenues from that won’t even cover Iraq’s budgetary needs today, let alone in 2020 when the population will have risen to an estimated 41.8 million people.

In conclusion, even a simple look at these figures indicates that Iraq will have to look into diversifying beyond its oil revenues if it is ever to develop as a modern nation. The Iraqi government must shift gears and begin broadening revenue streams in order to meet the country’s needs and to see Iraq flourish as a modern nation in the years to come.

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

  1. Nibras Hadi 28th December 2012 at 16:13 #

    "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 29th December 2012 at 00:57 #

    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. 31st December 2012 at 07:13 #

    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 2nd January 2013 at 14:48 #

    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 2nd January 2013 at 15:42 #

    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 2nd January 2013 at 17:42 #

    Not at all.
    Thanks Editor.

  7. Ramy 4th January 2013 at 13:28 #

    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 4th January 2013 at 18:37 #

    Dear Ramy,
    Oh, I see. My apologies.

    Thank you very much. Pleased you enjoyed my work.

    Best regards,
    Seerwan Jafar