INA discusses with the Minister of Finance, 2022 budget and Emergency Support Law

Economy/Investigations and reports
  • 6-06-2022, 21:49
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    Finance Minister Ali Allawi revealed on Monday, that the total amount of Food Security Law is adjustable, as he indicated that the Budget Law for 2022 has no alternative.

    Emergency Support Law

    Iraqi Minister of Finance explained that "the food security law submitted by the Parliament has a total amount of 26 trillion dinars, after adding a trillion to settle the file of lecturers and treat them according to Resolution 315," according to his interview with the Iraqi News Agency - INA.

    He noted that "the government's submission of the emergency support law before the Federal Court's decision was deliberate to support the fragile layers and to confront the rise in prices as a result of the Ukrainian war, in addition to support the agricultural sector and create job opportunities in small and medium projects," adding that the Financial Management Law does not give the space to process arrears and others, especially dues of Iranian gas accumulated since the year 2020.

    "The law's goal is also to provide sufficient storage of wheat to face any future problems. It cannot be a substitute for the budget law for 2022," he highlighted. 

    Allawi explained that "the food security law that was submitted by the government has been added to tabs away from food security a the government agreed to the basic provisions of the current emergency support law submitted by Parliament."

    He pointed out that "the Ministry of Finance has plans prepared to deal in the event the food security law is challenged again, but the government will face a problem and there will be a disruption in the economy. The Food Security Law has no any allocations to the Kurdistan Region."

    The Budget Law

    Allawi commented on the budget law saying that "the law represents the state's economic and investment vision as it addresses future issues as well as operational aspects and cannot be compensated by the emergency support law," pointing out that "the economic outlook in which the government deals according to the budget law for the year 2021 and cannot be continued because our vision differs for 2022."

    "The general budget for 2022 was prepared by the Ministry of Finance last March, according to calculating the price of a barrel of oil at $60, with a total amount of up to 150 trillion, as it may include a small part of the borrowing," he added, noting that "there are amendments that will be made to the law according to recent changes and the rise in oil prices."

    Investing the surplus

    The Minister of Finance regarded to the surplus of oil, clarifying that "Iraq does not have a financial glut because export revenues will be received after three months, as the increase may start from now, up to two billion dollars per month. Hence, the part of the financial increase will be invested in a sovereign and stable fund to address crises and prevent the recurrence of what happened from a shock in the late payment of salaries previously, as Iraq is now in a good financial position. The foreign currency reserve will amount to $80 billion, which gives the possibility to cover Iraq's need for imports for a year."

    He explained that "to maintain the spending levels, it is preferable to legislate a law under the name of Generations Fund, but if this is not possible, the Ministry of Finance has the ability to manage it implicitly according to the available incomes."

    Federal Court decision and KRG oil

    Allawi said that "the decision of the Federal Court on the KRG oil will force the Ministry of Finance to take into consideration the repercussions of this decision and not to give KRG the 12% and other allocations, unless a decision is reached to limit the region's oil exports to the hands of the federal government represented by SOMO," noting that "KRG oil exports after the Federal Court's decision have become illegal and no financial allocation for the region can be included in the current year's budget unless the issue of oil export is resolved and make it exclusive to the hands of SOMO."

    Working with an e-system to grant loans

    He indicated that "working an e-system in granting loans and advances to employees and citizens of government banks, Rafidain Bank in particular, as it will be soon after solving the technical issues associated with the contractor in managing the e-system," 

    "The interest imposed on granting loans and advances was developed according to a study to avoid the loss of any party according to the balance of market cost and competition," said Allawi.

    He concluded by saying that, "The revenues generated from state real estate for the year 2021 and the first quarter of this year amount to one hundred million dollars."