Article 44: Revenues for the governorates are for the first time specified in law (rather than being the subject of annual budget negotiations). This includes 5 petrodollars per barrel of oil or 150 cubic metres of natural gas. Various potential taxes are mentioned, including the right of governorates to tax companies for damages to the environment.
Article 45: This was formerly a vague cooperation council between the central government and the governorates. The council is now being tasked with transferring, within 2 years, control of all governorate-based government departments under the following ministries to local authorities: Municipalities, housing, employment and social issues, education, health, agriculture, finance, sports. If the transfer is not complete within 2 years, the transfer will nonetheless be considered a legal fact. Henceforth, the role of the ministries will be limited to “general planning” only.
It has been suggested that these dramatic changes were acceded to even by sceptics as an alternative to the creation of federal regions. The question is: What is the point in arguing about the creation of federal regions when this law effectively transforms Iraq into a confederation consisting of all its governorates plus the virtually independent Kurdistan? Is it perhaps just the word “federalism” they fear more than anything else? Do Iraqi politicians realise the implications of giving governorate decisions priority in areas of shared competency? It is for example very hard to see any exemption of the oil and gas sector from the general scheme of provincial dominance, since energy is specifically referred to in the new law through a reference to article 112 of the Iraqi constitution.
Whereas decentralisers among the Kurds and ISCI will have been very happy with these new changes, it is more surprising to find Iraqiyya and the State of Law alliance of Prime Minister Nuri al-Maliki backing them in a parliamentary session with unusually high attendance (217 out of 325 deputies). Of course, parts of Iraqiyya have long been drifting in a pro-federal direction, and with even Ayyad Allawi calling for widespread decentralisation of services. More surprising is the apparent green light from Maliki, whose parliamentary allies reportedly objected only to an initial article that further limited the powers of the Iraqi army locally – and who expressed satisfaction at the compromise that later emerged on this. Maybe it is the complications of government formation after the 20 April local elections that have prompted this apparent outburst of modesty on the part of State of Law?