The financial advisor to the Prime Minister, Dr. Mazhar Muhammad Salih, on Saturday, set a condition for the establishment of the Sovereign Wealth Fund, while indicating who can manage the Fund.
“The concept of the Sovereign Wealth Fund stems from the text and spirit of Article 19 of the amended Federal Financial Management Law No. 6 of 2019, which stipulates the establishment of a (Sovereign Fund) in which financial savings will be deposited after covering the expenditures stipulated in the annual federal budget law, including covering the hypothetical deficit or the scheme in the annual general budget estimates,” Saleh told the Iraqi News Agency (INA).
"The Sovereign Fund or the Generation Fund, requires approving the law for the Federal General Budget for the year 2022, in order to defined and set the rules and mechanisms for the Fund's work at the end of the current fiscal year, especially after the Central Bank of Iraq (CBI) expressed its willingness to manage the Fund since it is the state bank and its financial agent in managing all its financial investments.”
Saleh pointed out that "The financial savings achieved outside the Emergency Law for Food Security and Development No. 2 of 2022 and the applications of Article 13 of the Financial Management Law No. 6 of 2019 amended regarding the restriction of exchange at 1/12 of the total actual current spending for the year 2021, are still managed as reserve financial savings by the CBI and according to the best practices available globally for the management of safe short-term financial investments.”
He also added, “Any savings outside the expenses of the two laws above will be partly spent within the opening balance of the next fiscal year 2023, and the other part will remain a financial reserve for the government pending the enactment of a budget law for the year 2023, so that the Generation Fund or the Sovereign Fund can be established, due to the legal connection between the Sovereign Fund and the availability of Surplus funds through an approved annual budget and legally bound by its provisions.”