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.