Expert Blog: Iraqi Extractive Industry

By Ahmed Mousa Jiyad.

Iraq Extractive Industry: Legal, Fiscal and Revenue Allocation and Management Issues

This is an Executive Summary of a research work commissioned by the Natural Resource Governance Institute (NRGI), USA, as part of the preparation for NRGI’s strategic plan for interlinked and complementary interventions in Iraq during the upcoming three years.

This research was structured to address and analyze four broad topics, review development of related issues and answer with benchmarking main questions therein.

The four topics, their related reviews and main questions are:

  1. Legal and Institutional Framework Governing Extractive Industry Sector in Iraq
  • Review policies and laws that govern the extractive sector, their coherences and overlaps;
  • Review the roles of institutions that implement the laws governing extractive sector laws, their consistencies and overlaps.
  1. Revenue distribution:
  • Does the government invest revenues to achieve optimal and equitable outcomes, for current and future generations?
  • Does government invest savings in assets to earn the highest expected social returns over the long-term, and to avoid domestic inflation?
  • Does government balance local and regional demands for revenue distribution with the needs of the entire country?
  1. Revenue volatility:
  • Does government smooth’s domestic spending of revenues to account for revenue volatility?
  • Resource revenue volatility: Is government spending stabilized relative to resource revenues?
  • Savings fund: Does government use saving funds efficiently to limit the economic impact of large and volatile resource revenues?
  • As a test of its volatility protections, how effectively has the government been able to manage the recent drop in oil prices?
  1. Government spending:
  • Does government use EI revenues as an opportunity to increase the efficiency of public spending at the national and sub-national levels?
  • Administrative capacity: Has government strengthened its efficiently capability to invest resource revenues in the domestic economy (i.e. quality of expenditures)?
  • Corruption. Does government take effective steps to reduce corruption in public spending? Where is corruption in public spending most problematic?
  • Economic absorptive capacity: Does the country face problems absorbing the large public spending associated with oil and gas? If so, what steps have been taken? If not, what are the main problems?

Moreover, for each of the topics above mentioned, the paper will:

(a) Explain the current state of affairs, and

(b) Answer the questions listed for each topic.

Please click here to download Ahmed Mousa Jiyad's full report.

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