Budget

Oil Production Down in Nov. 09, But Exports Up

The latest numbers for Iraq’s oil industry are out, and they show that while production declined in November 2009, exports actually increased. Last month, Iraq produced an average of 2.36 million barrels a day of petroleum, while exporting 1.99 million barrels a day. In October Iraq produced an average of 2.50 million barrels, and exported 1.89 million barrels.

Iraq Still Has Problems Spending Its Money

The new Special Inspector General for Iraq Reconstruction report to Congress was released at the end of October 2009. It notes that Iraq is still having problems spending its budget. By June 2009 50% of Iraq’s $58.6 billion budget had been released, but only $16.4 billion, 27.9%, had been spent as of that month. $1.6 billion of that was for capital projects that are investments in infrastructure and services.

Iraq's Provincial Budget Expenditures - 2009

One of the major problems with the Iraqi government is its inability to spend its budget effectively. The country’s eighteen provinces do much worse than the central government in Baghdad. The new Special Inspector General for Iraq Reconstruction’s quarterly report to Congress has the latest numbers on how Iraq’s governorates have done up to October 13, 2009.

Iraq’s Budget Problems Will Continue Into Next Year

Iraq’s cabinet has passed a new preliminary 2010 budget. It stands at $67.29 billion, an $8.4 billion increase from 2009. Like previous budgets, the overwhelming majority of the spending will go towards operational costs. Of the $67 billion, 73%, $49.17 billion will be for salaries, pensions, etc. That leaves only $17.83 billion for the capital budget that goes towards development and infrastructure.

Iraq’s Oil Exports Continue To Rise And Fall

The October 7, 2009 State Department Iraq Status Report, found that while Iraq’s oil production has continued to increase since the beginning of the year, its exports took a dip over the last two months. 2008 saw the highest average monthly oil production since the U.S. invasion. For that year, Iraq produced an average of 2.41 million barrels per day, and exported 1.84 million barrels.

Maliki’s Campaign Promises May Be Unrealistic

Prime Minister Nouri al-Maliki recently went on a short tour of southern Iraq to drum up support in anticipation of the January 2010 parliamentary elections. First he went to Basra, Iraq’s second largest city, on September 10, 2009. He then went to neighboring Dhi Qar province on September 14.

Iraq’s Electricity Minister Tries To Explain Continued Supply Problems

Iraq’s Electricity Minister gave a press conference on September 7, 2009 to try to explain Iraq’s long, hot summer. The Minister said Iraq is facing five problems with its electricity supply. First, the country does not have enough fuel to run some of its power plants. Second, the country’s budget problems are limiting the ministry’s spending power to boost and maintain production.

Too Many Costs and Corruption To Develop Iraqi Economy

While on a trip to Ninewa province, Planning Minister Ali Baban said that the government had too many costs and too much corruption to develop the economy. The Minister noted that of the $58.6 billion in the 2009 budget, 80% went to operational costs such as salaries, pensions, and the food ration system, leaving only 20% for investment in infrastructure and development. He said that wasn’t near enough to finance the amount of projects Iraq needed.

Iraq's Provinces Still Having Budget Problems

Iraq's eighteen provinces are still struggling with their finances this year. In 2008 when the price of Iraqi crude was soaring, Iraq's budget increased with it. Iraq's governorates signed dozens of new development projects as a result. Few of those were finished however, so the bills rolled over into the new fiscal year. That coincided with a collapse in world oil prices with the recession. That means the new provincial councils elected in January 2009 are now faced with the outstanding obligations of their predecessors, leaving little to no funds for their own plans.

Maliki On The 2010 Campaign Trail

Prime Minister Nouri al-Maliki has been in full campaign mode for several months now anticipating the January 2010 parliamentary elections. The themes he is promoting are largely the same ones he used in the 2009 provincial vote: security, services, nationalism, and one new one, getting the Americans to leave Iraq. After Maliki’s State of Law List rode to victory in the governorates’ balloting it seemed like Maliki was assured of returning to the prime ministership using these issues.