Wednesday, January 13, 2010

Provinces Complain About 2010 Budget

Five of Iraq’s eighteen provinces have complained about the proposed 2010 budget, and several others have rejected it outright. Anbar was the first, when the head of its provincial council said on December 12, 2009 that the budget would not set aside enough for its needs. It called for the central government to appropriate more funds. Then on December 15, Baghdad’s governor said that the budget would threaten several development plans including new hospitals. On December 19, Wasit’s provincial council said they rejected the budget, and called on other provinces to do the same. A council member said they would only get $87 million next year, compared to $91 million they got this year. Later, on December 29 the governor of Maysan said the central government should give the provinces more money for development, and warned of a rejection as well. On December 31, a conference of southern and central provincial councils held in Najaf called on Baghdad to allocate 25% of the 2010 budget to the provinces. They claimed the proposed budget only appropriates 6% to provincial councils, which they said would not be enough for further reconstruction. Some of those same provinces later announced that they too were rejecting the new budget. That was followed by reporters being told by Basra's deputy governor on January 4 that the next budget would leave his province with a 30% deficit. The same day, the governor of the province said that they deserved more money due to Basra's size and importance. He called for  the central government to either allow Basra to charge fees on its oil and trade, or set aside 20% of the ministries' spending to development efforts. Finally, on January 6 Tamim's governor sent an official letter to protest its proposed allocation.

Iraq’s 2009 budget was for $58.6 billion. The 2010 budget is for $67 billion, and has been approved by the cabinet, but is still in parliament for debate. A spokesman said $17.83 billion of the budget would be for development, 26.6% of the total, and the rest would be for operational costs that go towards salaries, pensions, the food ration system, etc. That would be an increase from the 2009 budget, where approximately $11.72 billion, 20%, was for investment. The provinces however, have seen a large cut in their funding since 2008 after oil prices dropped, which is the major source of revenue for the government. From 2008 to 2009 for example, Iraq’s eighteen governorates faced a $1.748.2 million decrease.

It’s unlikely that these local demands will be met. Iraq is currently running a $16 billion deficit, and the 2010 budget is projected to be short $15.3 billion. The major reason is that Iraq has not been able to meet the oil export mark set in the budget. The provincial councils also signed a large number of projects in 2008, which they are still paying for. Iraq’s provinces then, will have to suffer like the rest of Iraq’s government.

SOURCES

Alsumaria, "Iraq central and southern provinces reject 2010 allocations," 1/4/10

Aswat al-Iraq, “Anbar official says 2010 budget for province insufficient,” 12/12/09
- “Baghdad’s governor presses for higher budget,” 12/15/09
- "Basra faces 30 percent deficit in budget," 1/4/10
- “Missan governor demands higher budget for provincial development projects,” 12/29/09
- “Najaf conf. wants 25% of budget to provinces,” 12/31/09
- “Wassit council rejects 2010 provincial budget,” 12/19/09

Salaheddin, Sinan, “Iraq Cabinet approves $67 billion budget for 2010,” Associated Press, 10/14/09

Special Inspector General for Iraq Reconstruction, “Quarterly Report to the United States Congress,” 10/30/09

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