Workers check equipment at the Al-Shu'aeba oil refinery, about 15 km (9 miles) southeast of the Iraqi city of Basra, Sept. 27, 2005. (photo by REUTERS/Atef Hassan)

Iraq Parliament Stalls Handout of Surplus Oil Cash

Author: alhayat Posted December 10, 2012

The Iraqi ministry of planning announced that 25% of oil revenue surplus is available to be distributed to the citizens, but parliamentary sources said that the implementation of the project requires its inclusion in next year’s budget.

SummaryPrint Iraqi Minister of Planning Ali al-Shukri has suggested distributing 25% of its oil-revenue surplus directly to its citizens at $200 each, but the project is facing several impediments ranging from disagreement on implementation to fears that such a move may trigger inflation, Naseer al-Hassoun reports.
Author Naseer al-Hassoun Posted December 10, 2012
TranslatorRani Geha

Minister of Planning Ali al-Shukri said in a statement that, “There is a fiscal surplus, and 25% of oil revenues should be distributed to the citizens according to the 2012 budget law. ... The clause in the current budget concerning that point is considered law, and should therefore be applied like any other law passed by parliament.”

The budget law for the current year provides that 25% of surplus oil revenues be distributed to the citizens whereby each citizen is expected to receive $200 a year.

The minister said that his ministry has completed preparations to execute the law but is waiting for the council of ministers and parliament to take a decision in that regard. In a statement, the minister said that, “The text of the 2012 budget law requires the council of ministers to implement the clause [about distributing 25% of oil revenues to the citizens].”

Member of the parliamentary services commission Suhad al-Obeidi said to Al-Hayat that next year’s budget did not allocate 25% of oil revenue surplus to be distributed to the citizens, which means that the implementation of such a project requires a fiscal appropriations bill.

MP Asma’ Moussawi indicated that “special attention should be given to the security, economic and social situation of Baghdad province by increasing spending on security matters.” MP Qasem Mohammad said that “the money allocations are poorly distributed between the ministries involved in development on the one hand, and the defense ministry and the security agencies on the other. Helping the ministries [involved in development] will contribute to helping the citizens during these harsh circumstances.”

MP Aziz al-Ukaili requested money to give grants to students who are suffering from difficult circumstances.

MP Walid al-Hilli recommended “increasing non-oil revenues by investing in industries based on oil derivatives, by building refineries and plastic factories, by activating the infrastructure bill, by subsidizing the service sectors, and by using scrupulous mechanisms to implementing the budget.”

MP Mohammad Nasseri called for abolishing interest rates for small loans and giving contract workers priority in government employment.

Member of the economic commission Nora al-Bejari said, “Everyone knows that prior years’ budgets were passed quickly because they had been delayed for months, during which government work was disrupted, and then everybody was forced to accept a fait accompli.” She pointed out that she has raised to the president and council of ministers a number of questions regarding the budget. One of her questions was: Why was the budget for developing the provinces based on an Iraqi population numbering 34.4 million, while a few weeks ago the ministers of planning and trade used totally different numbers?

In the same context, Mehdi Hassan from the University of Diyala said that the parliamentary panel tasked with determining the mechanism by which oil revenue is distributed has yet to agree on a formula that satisfies all political parties. He said that this would be difficult in light of the differences in opinions. "There are those who insist that the money be given directly to the citizens. But others fear the effects of such an approach on Iraq's economy whereby it will raise inflation, reducing how much the citizens will benefit from money that they receive once a year," he said.

He also said that the government was unable to insert appropriations into the budget because it is facing a $19 billion budget deficit next year. "Giving $200 to every citizen means that the government has to appropriate $6.8 billion," he said.

The proposals on how to distribute the surplus varied between focusing on the poorest citizens and how to restructure the social safety net.

Read More: http://www.al-monitor.com/pulse/business/2012/12/iraq-legal-and-political-differe.html

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