2013 Iraq Budget Iraq 2013 Budget Background Paper/Analysis

[Rayzur]

Jan 31, 2013

Key Messages

• The Government expenditure for 2013 totals IQD 138.4 Trillion ($ 118.3 Billion), with an increase of 18% over 2012 and exceeding 70% of GDP. The budget has three main headings: Energy, Security / Defense .and Social Services, accounting for 21%, 14%, and 13% respectively of total budget

• Investment Expenditure represents 40% (IQD 55.1 Trillion) of government budgeted expenditure, the largest ever for Iraq. Investment in Oil and Electricity amountsto over 43% of the investment expenditure

• Government budgeted revenues amount to IQD 119.3 Trillion, with revenues from oil making 93%. The increase in oil revenues, made it possible for the government to cover its operating expenditure and allocate more to investment, yet heavy reliance on oil resulted in a budget fragile to oil shocks, and government going through complementary budgeting, and excessive delays in investment projects .implementation

• Notwithstanding the increase in oil production and revenues, oil alone is not enough to cover budget deficit and contribute to a financial resilient Iraq; financial reserves in Iraq can cover government operating expenditure for less than a year. In order to improve Iraq financial resilience and reserves in the short run, Iraq needs, in addition to its plan to increase oil revenues, to increase non-oil revenues which are stable, around IQD 7 Trillion, since 2008), and to rationalize operating expenditure (Iraq has) one of the largest public sectors relative to population). While in the long run, revenues diversification .goes hand by band with diversification of the economy and expansion of the private sector

• About 60% of Iraqi households are suffering from the lack of at least one of the following: access to improved drinking water source, access to improved sanitation facility, a minimum of 12 hours of .electricity from the public network a day, or food security

• Two factors undermine government’s budget contribution to Iraqi development needs on the ground first, funds allocated to the key development sectors are insufficient vis-a-vis Iraq’s development needs ,For example, in 2013 the total investment budget allocated to Education, Health and Environment Culture and Youth, and Water and Sanitation, is only IQD 6.5 Trillion, which is equivalent to 50% of the ,Energy sector investment budget. Second, low execution of investment budget remains a concern specifically for the aformentioned sectors, having been slightly above 50% in 2011. Not only are the development sectors receiving too little, they are also suffering from inadequate operationalization of .pertinent approved funds

• Iraq is making progress in decentralizing planning at the local level, with governorates identifying their plans through a participatory and evidence-based approach. This progress is not matched with governorates/KRG participation in budgeting and this lack of participation has led to a longer period needed to approve and amend the budget, and to some extent to the low investment execution rate for the Regional Development Plan.

www.Inter-Agency Information and Analysis Unit.gov

Edited February 24, 2013 by Markinsa
Added Tag as a Prefix | Inserted Iraq in Tag

[Rayzur]

I tried to post the whole thing, but the editor said it was too long.... didnt seem that long... but it would not post.... Will try to figure it out later.... This is the excerpt upshot....

 

Will try to at least capture the Beyond 2013 Analysis conclusion....

 

7 10 Iraq Energy Outlook, World Energy Special Report, International Energy Agency, 11 Ibid 2013 and Beyond Budgets beyond 2013 will continue to be oil-centric; given Iraq’s current economic strategy, commitment to foreign companies investment, and increased demand for hydrocarbons from the east (China and India). With regards to other sectors of the economy, the process should be clarified further. The trend today tells us that Iraq is focused on expanding oil and possibly gas production and exports to improve its financial resilience and foreign currency reserves. This has resulted over the years in growing government expenditure, smaller budget deficit, more investment in Oil, as well as in sporadic increase in other sectors’ budgets.

 

Iraq needs to adopt a more evidence-based approach to identify development priorities and set investment budget priorities accordingly; so economic growth (primarily oil) can be intertwined with human development (Education, Health, Basic Services, and Employment). Otherwise, Iraq’s human development rate will continue to have a slower pace in catching up with economic development, and citizens will continue to endure difficulties in food security, poverty, and access to basic services.

 

JAPU Joint Analysis Policy Unit Inter-Agency Information and Analysis Unit JANUARY 2013 Security and Defense are prominent in 2013 budget. Investment in these two sectors has increased immensely as compared to 2012. Part of this trend is to secure oil production and exports, as well as enhancing the state power. This sector will continue through 2014, as per the Government’s plan to build the capacity and equip its armed forces. Currently, Iraq allocates 40% of its budget to investment projects. Given the size of the public sector, and Government’s ability to execute the budget, this share will remain relatively stable over the years to come.

 

In addition, Iraq saves little of its Oil revenues; whereas reserves of oil revenues can cover Iraq operating expenses for less than a year 10 . Iraq is putting a large effort in increasing its Oil revenues, but in order to improve financial resilience and reserves, it also needs to increase non-oil revenues (which are stable, around IQD 7 Trillion, since 2008), and to rationalize its operating expenditure (Iraq has one of the largest public sectors relative to population11).

 

Selected recommendations for 2013

 

• Firstly, GoI should revisit its budget implementation process and work to eliminate all bottlenecks resulting in low execution rates for some provinces, ministries and sectors. This should include areas such as disclosing performance by implementing bodies and reducing bureaucracy in transferring funds.

 

• Secondly, GoI should request ministries to provide feasibility studies on their projects and generate the capacity to examine and verify those studies (this function is not prominently visible in the central and/or KRG governments).

 

• Thirdly, for the next budget cycle, GoI should start the budgeting process earlier and make it further participatory (including KRG). In Iraq, the process starts in June, while in most countries it starts around March-April.

 

Sorry it looks so weird... For whatever reason its not cut and pasting well.....

Edited February 24, 2013 by TexasGranny
increase readability

[TexasGranny]

Rayzur, are you copying from the internet? If so, when you paste, try the Paste in Plain Text icon (center one on the left) instead of using ctrl+v. See if that helps - haven't tried it myself yet. If not, copy your document into "notepad" and then copy it again from the notepad into your post. The problem is your copy is retaining code from the internet.

 

[Rayzur]

Thanks so much TG! I was copying from my work hard drive and noticed I was picking up code.... thanks so much for fixing it and making it readable... Thanks also for the advice as to how to fix/post in future... I have to also remember to preview before I post as it takes me so long to try and fix after the fact, that I think I make it worse... 

Thanks much again and I will try that next time 

2013 and Beyond

Budgets beyond 2013 will continue to be oil-centric; given Iraq’s current economic strategy, commitment to foreign companies investment, and increased demand for hydrocarbons from the east (China and India). With regards to other sectors of the economy, the process should be clarified further. The trend today tells us that Iraq is focused on expanding oil and possibly gas production and exports to improve its financial resilience and foreign currency reserves. This has resulted over the years in growing government expenditure, smaller budget deficit, more investment in Oil, as well as in sporadic increase in other sectors’ budgets. 
Iraq needs to adopt a more evidence-based approach to identify development priorities and set investment 
budget  priorities  accordingly;  so  economic  growth  (primarily  oil)  can  be  intertwined  with  human 
development (Education, Health, Basic Services, and Employment). Otherwise, Iraq’s human development 
rate will continue to have a slower pace in catching up with economic development, and citizens will 
continue to endure difficulties in food security, poverty, and access to basic services. 
 

JAPU
Joint Analysis
Policy Unit
Inter-Agency Information

and Analysis Unit JANUARY 2013

Security and Defense are prominent in 2013 budget. Investment in these two sectors has increased immensely as compared to 2012. Part of this trend is to secure oil production and exports, as well as enhancing the state power. This sector will continue through 2014, as per the Government’s plan to build the capacity and equip its armed forces. 

 

Currently, Iraq allocates 40% of its budget to investment projects. Given the size of the public sector, and 

Government’s ability to execute the budget, this share will remain relatively stable over the years to come. 
In addition, Iraq saves little of its Oil revenues; whereas reserves of oil revenues can cover Iraq operating 
expenses for less than a year10 . 

 

Iraq is putting a large effort in increasing its Oil revenues, but in order to improve financial resilience and 
reserves, it also needs to increase non-oil revenues (which are stable, around IQD 7 Trillion, since 2008), and to rationalize its operating expenditure (Iraq has one of the largest public sectors relative to population11).

 

Selected recommendations for 2013
•  Firstly, GoI should revisit its budget implementation process and work to eliminate all bottlenecks 
resulting in low execution rates for some provinces, ministries and sectors. This should include areas 
such as disclosing performance by implementing bodies and reducing bureaucracy in transferring funds.
•  Secondly, GoI should request ministries to provide feasibility studies on their projects and generate the 
capacity to examine and verify those studies (this function is not prominently visible in the central and/
or KRG governments). 
•  Thirdly, for the next budget cycle, GoI should start the budgeting process earlier and make it further 
participatory (including KRG). In Iraq, the process starts in June, while in most countries it starts around 
March-April. 

 

 

Hey Texas Granny (TG)! Look it came out pretty good that way... thanks!

[dontlop]

The increase in oil revenues, made it possible for the government to cover its operating expenditure and allocate more to investment,

Read more: http://dinarvets.com/forums/index.php?/topic/142201-iraq-2013-budget-background-paperanalysis/#ixzz2LrPdOBqy

 

 

this is how i understand it to .. the more they make the more they got to invest .. next year they will  have even more than this record amount for investing .. it just keeps snow balling .. getting bigger and bigger .. 5 million,, 6 million barrels a day is only a couple years out ..

Edited February 24, 2013 by dontlop

[Rayzur]

Thanks again TG!!, That works great!!! Here is some more from the Joint Analysis Policy Unit report:

 

Introduction: Iraq Budget for 2013

The Government of Iraq is in the process of approving the draft budget for 2013; the largest ever for Iraq1. 
Government expenditure totaling IQD 138.4 Trillion ($ 118.3 Billion), exceeds 70% of GDP2. The present 
budget is an increase of 18%, equivalent to IQD 21.3 Trillion, over 2012 total budgeted expenditure of IQD 
117.1 Trillion. Since 2009 Iraq budgeted expenditure has consistently grew by an average of 17% annually.
Investment expenditure of IQD 55.1 Trillion, or 40% of government expenditure, is at record high for Iraq. 
Investment expenditure has increased by 48% over 2012 levels, accounting for 85% of the increase in 2013 
total budgeted expenditure. 
Accounting for the development needs of Iraq - suffering from daily power cuts, high under five mortality 
and malnutrition, and high youth and women unemployment - an increase in total and mainly investment 
expenditure is a positive development. But the present budget may not fully meet those expectations.
  

 

Revenues

Budgeted government revenues totaling IQD 119.3 Trillion, have more than doubled since 2009, and are 
at record high. Oil revenues amount to IQD 111.1 Trillion equivalent to 93% of total revenues, while other 
revenues now reduced to IQD 8.2 Trillion; mainly composed of income, corporate, and other taxes. The 
government used an oil price of $90 per barrel and estimated 2.9 Million barrels per day (bpd) in exports for 
budgeting purposes3. 
The heavy reliance on oil revenues is more pronounced when looking at end of year balances; oil revenues 
made 99% of actual 2011 total revenues4. The increase in oil revenues made it possible for the government 
to  progressively  expand  expenditure  and  allocate  more  for  investment. This  in  turn  justifies  oil  being 
Government’s investment priority, accounting therefore for one third of 2013 investment expenditure, and 

this is expected to increase through the next several years with the government planning to increase its 
oil exports to more than 3.75 Million bpd. The negative consequence to this plan is a budget fragile to oil 
shocks, which resulted in the government’s complementing the budgets and to the excessive delays in 
executing investment projects in previous years. 

 

 

Structure of Expenditure: Investment and Operating

 

Government  budgeted  expenditure  of  IQD  138.4 Trillion  has  Energy,  Security  and  Defense,  and  Social Services as the main headings, constituting of 48% of total expenditure (21%, 14%, and 13% respectively), and accounting for 64% of budget increase over that of 2012.  

 

The continued increase in oil revenues over operating expenditure, since 2011, made it possible for the 
government to expand investment expenditure, moving away from a situation where budget deficit has by 
large been equated by investment expenditure. 2013 budgeted investment expenditure of IQD 55.1 Trillion 
depicts an increase in all sectors of investment budget to varying extent. Investment in Oil totaling IQD 18 
Trillion, 33% of budgeted investment expenditure, presents Government’s first priority. 

Oil investment plan aims at enlarging production, storage, transportation, and export capacity5, this all to 
accommodate the expected increase of oil production to reach 13 million bpd over the next seven years, 
as the present government contracts with foreign oil companies suggest. Investment in electricity of IQD 
6.1 Trillion has the second largest share of budgeted investment targeted at infrastructure reparations and 
increasing production. 

Investment in Security and Defense of IQD 4.3 Trillion increased by more than 9 folds over 2012 levels. The 
security and defense investment plan aims at improving the security of citizens, access to services, and oil 
production. The main component to this is a newly introduced government program to build the capacity 
and armaments of Iraq Armed Forces accounting for 3% of 2013 total budget (IQD 4.2 Trillions).  

 

“Budgeted” Deficit

Budgeted deficit totaling IQD 19.1 Trillion has fallen to less than 14% of total expenditure. The deficit will be 
financed by funds retained from 2012 budget (estimated between IQD 5-7 Trillion), borrowing from IMF and 
WB (close to IQD 6 Trillion), and the remaining will be covered from the Development Fund for Iraq, domestic 
borrowing, and unexpected rise in oil revenues. 
By looking at budget execution for the years 2009-2011 7, Government end-of-year balance ended with a 
surplus. Budget surplus was driven primarily from low-spending-budget execution, mainly the investment 
share of the budget; the second factor being an unexpected rise in oil prices (or it can be seen as a result of Government cautious budgeting assumption on oil price).

 

2013 Budget execution

 

Government  has  consistently  executed  its  operating  budget  at  80%-90%,  financing  primarily  public 
servant’s salaries and social benefits, as well as day-to-day government operating expenses. Execution of 
investment expenditure is lower, reduced to 75% in 2011. The execution rate falls to less than 60% in key 
development sectors including culture and youth 49%, Water and Sanitation 52%, Education 57%, and 
Health and Environment 58%. This is alarming, since not only these development sectors receive little of the 
total investment budget, but also inadequacies operationalizing these funds into the projects for which they 
were approved. On the other extreme we have execution rate of 93% for the Energy sector, 94% Industry, 

and 100% for KRG investment budget. 

Budget execution rate indicates the effectiveness or lack thereof of the financial management system and 
government agencies in delivering the projects for which funds are approved; in Iraq this is hampered by 
delays in approving the budget generally taking place in February-March, delays in approving projects and 
transferring the funds, and lack of accountability. 
In order to improve transparency and accountability over budget execution, the Ministry of Finance and 
Ministry of Planning, for fiscal 2013, requested government agencies to report execution rate for each 
project approved in the budget, and for projects with less than 25% execution rate to be questioned by the 
CoM and CoR.

 

 

Two factors may undermine government budget contribution to development:

•  Firstly, the allocated funds to key development sectors are insufficient against Iraq development needs. 
In 2013 a total of only IQD 6.5 Trillion is the total investment budget allocated to Education, Health 
and Environment, Culture and Youth, and Water and Sanitation; equivalent to barely 50% of the Energy 
sector investment budget. 
•  Secondly, low execution of investment budget - slightly above 50% in 2011 for the aforementioned 
sectors. Not only development sectors receive little, inadequate steps are taken to translate these funds 
into projects for which they were approved. This development challenge is exacerbated by foreign aid 
drying up as a result of the increase in oil revenues, Iraq being given a lower priority by donor countries.  
(UNDG Trust fund will end by 2013). 
decentralized Planning with central Budgeting
Sovereign expenditure totaling IQD 40.3 Trillion, or about 30% of total government budgeted expenditure, 
has doubled since 2011, contributing least to development at the provincial level. In addition this growing 
part is deducted from the budget before funds are allocated to the Regional Development Program and 
KRG. 
Progress to decentralize planning at the provincial level is being made, with UNDP Local Areas Development 
Program aiding governorates in setting their annual plans, through a participatory and evidence-based 
approach. From that experience, the progress in planning was however not matched by improvement in 
financial management: funds are insufficient, there are delays in budget approval, as well as bureaucracy 
between governorates and concerned ministries, lack of accountability, and restrictions on commitment of 
funds for long run infrastructure projects. All these factors resulted in an execution rate of 56% in 2011 for 
the regional development plan.

The UN Oil and Gas Outlook Report just released for Feb 2013 as well. Here is the link to the entire report... Maybe that should be a new topic.... not sure...  

 

http://www..org/documents/1851/Iraq%20Oil%20and%20Gas%20Factsheet.pdf

Here is the Feb 2013 Oil and Gas Report from UN for those who understand what it all means.... 

 

Iraq
Oil and Gas Outlook
produced by
Iraq Oil and Gas Outlook
Oil-Dependent Economy
The oil industry dominates the Iraqi economy. Oil contributes to over 70% of
GDP, to 99% of exports and to over 95% of Government revenue.i This
dominance will increase in future years as oil production and exports are set
to rise. This is accompanied with a progressive increase in Government
revenues derived from oil. Budgeted revenues for fiscal 2013 of $ 95 Billion
are more than double its level in 2009. The increase in oil revenues made it
possible for the government to increase total budget expenditure, $ 118
Billion for 2013 is the highest ever for Iraq. Country can now allocate more
towards the investment expenditure, $ 47.1 Billion for 2013, of which
investment in oil is the main budget line, accounting for one third. 

Iraq has proven oil reserves of 143 billion barrels, and a potential further
215 billion barrels have been identified and are recoverable. Under current
oil development plans, the country is the world’s third largest oil exporter
and it could even become the world’s second by 2030 with the ability to
influence markets on a global scale.ii Two thirds of reserves are located in
the South and a third are in the North.



 Source
 :
 Iraq
 DraH
 Budget
 Law
 2013
 
Over 2013 Iraq is predicted to produce 3.6 million barrels of oil per day: 
• 2.9 million barrels are exported.iii 
• 600 thousand barrels are refined domestically
• 100 thousand are used for electricity generation 
• Iraq net imports reach about 100-150 thousand barrels per day of
refined oil for electricity generation and road transport.
Iraq’s proven gas reserves are around 3,435 billion standard cubic meters,iv
equivalent to around 15 billion barrels of oil. Potential, another7,9 billion
bcm have been identified and are recoverable. These gas reserves are
currently underutilized.

Future Oil Sector Scenarios and Challenges
Given government contracts with international oil companies, oil production
is set to rise to between 4 and 5 million barrels per day by 2016-2017.
• At this production level, proven oil reserves would last for 70-90 years 
• Government revenues could double from US$ 75-80 billion in 2011 to
US$ 150-160 billion by 2016 if oil prices remain at $100 per barrel.v
The international Energy Agency recent report, 2012, projects oil production
to reach 8.3 mbd and associated $ 5 Trillion in oil exports over the same
period. Oil lies at the heart of Iraq socio-economic development; still there
are two challenges that may hinder oil sector development:

First, slow growth in oil production that will result in economic
stagnation and financial fragility. Notwithstanding that, oil production has
increased by 40% over the last five years, progress is still patchy and the
state of Iraq’s energy transport, storage and export infrastructure continues
to be a serious constraint. In order to fulfill oil production plans Iraq needs
to make progress across a wide front: improved institutions and human
capacity, better co-ordination of decision making, a strengthened and
unambiguous legal and regulatory framework, enhanced conditions to
support participation by the private and financial sectors, and a broader
political consensus on the direction of future policy.  
Second, slowdown of human and private sector development, as well
as economic diversification; at present, Iraq investment doesn’t fully meet
Iraq development needs, and worse still, all funds approved through
government budgets for development purposes are by large underutilized.  
 
Contracting for oil and gas
Over the past several years, both the Federal Government and Kurdistan
Regional Government (KRG) have contracted with international oil
companies (IOCs) to develop hydrocarbon resources. The Federal
Government and KRG use different methods of contracting. 
The Federal Government has signed Technical Services Contracts (TSCs)
with IOCs in which state participation is 25%. The KRG has signed
Production Sharing Agreements (PSAs) with oil companies in which state
participation is 20%. While similar to the Federal Government’s TSCs in
many respects, the PSAs give title to a share of the oil to the IOCs who
produce it, and the constitutionality of this feature is being contested. TSCs
could also be in question, as they have not yet been approved by
Parliament. The vagueness of constitutional articles dealing with oil and
federal-regional disagreements over their interpretation has prevented Iraq
from passing adequate oil legislation. 
At the federal level, four rounds of bidding for oil and gas have been
concluded successfully, and a fourth round is scheduled for mid-2013. IOCs
that won major contracts to produce oil include consortia led by BP, Shell,
ENI, ExxonMobil, Lukoil and CNOOC. In the KRG, in addition to two fields
currently producing, there are about 40 exploration contracts held by as
many foreign oil firms, including Talisman, Hess, KNOC, Marathon, and
Murphy Oil.
Oil’s impact on economy and governance
The size of Iraq’s oil revenue inhibits efforts to diversify Iraq’s economy. 
Oil export revenues have led to an appreciation of the real exchange rate.vi
This makes exporting difficult for non-oil sectors, increases competition from
imports and raises costs in non-traded sectors. 

Expansion of more labor-intensive non-oil sectors is therefore inhibited,
limiting the ability of the Iraqi economy to create sustainable jobs and
reduce poverty. This problem, commonly known as “Dutch Disease”, is set to
increase as Iraq’s oil sector expands faster than non-oil sectors over the
coming years. 23% of Iraq’s population lives below the poverty line of US$
2.2 expenditure per capita per day, and more jobs are required to alleviate
poverty.vii
Significant revenues from oil exports are channeled to the Government of
Iraq, constituting 90% of all Government revenues. The Government’s
reliance on tax revenues is therefore low, reducing the pressure for
accountability to the Iraqi public.

Oil Sector Non oil Sectors
Percentage of GDP  and employment provided by
the oil sector
GDP Employment
Source : Staff estimates based on IMF and
GOI
In addition, the size of the oil revenues relaxes the constraint on
Government spending, meaning that the private sector is crowded out. For
example, the Government is able to offer higher salaries than the private
sector, driving up private sector wages and making private sector
employment less attractive. The income of a household with a public sector
worker is on average 14% higher than a household with no public sector
workers.

viii
Mitigating the impact
A proportion of the oil revenue could be channeled towards the private
sector, possibly as long-term credit to assist with capital formation.
Investment in manufacturing should be fostered for providing high-
productivity, high-wage jobs. Other activities, such as high-end services and
small and medium enterprises should also be encouraged to grow. 
The potential for private sector growth will improve when state-owned
enterprises are reformed to separate company ownership from operational
management. This will reduce the role of the Government in the economy
and make it easier for private sector competition to emerge. In addition,
Iraq’s oil refining capacity is set to expand, creating further value-added and
employment.

ix
Oil revenues cannot be considered as ordinary, current income, as they arise
from the exploitation of a depletable natural resource. Some revenues
should therefore be saved for future generations, as well as to stabilize
spending from highly volatile revenues. A direct oil dividend to the
population may also be considered if such a system could be properly
managed and negative effects (such as inflation) put under control.
Underutilized gas reserves
Only a small amount of Iraq’s gas production is used effectively. Iraq
produces around 16-17 billion standard cubic meters of gas per year. One
billion is marketed locally and a further one billion is re-injected into the
reservoirs to boost underground pressure for oil production. The rest is
flared, lost or vented into the atmosphere. x

Gas is set to become the dominant fuel for Iraq’s electricity industry, partly
because Iraq lacks the capacity to refine enough oil to satisfy the country’s
electricity generation needs. Currently, the average household receives just
eight hours of electricity through the public network. xi  The use of
supplementary private generators places pressure on household
expenditures and could raise costs for small enterprises. Gas is cheaper and
more environmentally friendly than oil, making it a sound option for
electricity production. In the longer term, there is some potential for gas to
be exported.

 
 
 

[Rayzur]

Reading through this analysis,  this is how I bottom line put it all together in terms of an increase in appreciation of the real exchange rate.... imo

 

It would be surprising if they voted and approved the budget in the next few days, only because they seem to still be hammering out the additional request for accountability? Does anyone have any idea where they are in this process? 

 

In order to improve transparency and accountability over budget execution, the Ministry of Finance and Ministry of Planning, for fiscal 2013, requested government agencies to report execution rate for each project approved in the budget, and for projects with less than 25% execution rate to be questioned by the CoM and CoR

Read more: http://dinarvets.com/forums/index.php?/topic/142201-iraq-2013-budget-background-paperanalysis/#ixzz2LwqDSiKL

 

However, it is encouraging to read that the 2013 budget is an 18% increase over 2012 and that investment expenditure is increased by 48%...!!! Huge increase. 

 

 

The Government of Iraq is in the process of approving the draft budget for 2013; the largest ever for Iraq1. Government expenditure totaling IQD 138.4 Trillion ($ 118.3 Billion), exceeds 70% of GDP2. The present budget is an increase of 18%, equivalent to IQD 21.3 Trillion, over 2012 total budgeted expenditure of IQD 117.1 Trillion. Since 2009 Iraq budgeted expenditure has consistently grew by an average of 17% annually.Investment expenditure of IQD 55.1 Trillion, or 40% of government expenditure, is at record high for Iraq. Investment expenditure has increased by 48% over 2012 levels, accounting for 85% of the increase in 2013 total budgeted expenditure. 

Read more: http://dinarvets.com/forums/index.php?/topic/142201-iraq-2013-budget-background-paperanalysis/#ixzz2Lwr71FMT

 

It looks like the major oil players including foreign developers are still in the game with a 4th round bidding process to kick off within the next few months: 

 

At the federal level, four rounds of bidding for oil and gas have been concluded successfully, and a fourth round is scheduled for mid-2013. IOCs that won major contracts to produce oil include consortia led by BP, Shell, ENI, ExxonMobil, Lukoil and CNOOC. In the KRG, in addition to two fields currently producing, there are about 40 exploration contracts held by as many foreign oil firms, including Talisman, Hess, KNOC, Marathon, and Murphy Oil.

Read more: http://dinarvets.com/forums/index.php?/topic/142201-iraq-2013-budget-background-paperanalysis/#ixzz2LwsA41P3

 

Which is great as 90% of Iraq government revenues come from oil exportation. 

 

Significant revenues from oil exports are channeled to the Government of Iraq, constituting 90% of all Government revenues. The Government’s reliance on tax revenues is therefore low, reducing the pressure for accountability to the Iraqi public.

Read more: http://dinarvets.com/forums/index.php?/topic/142201-iraq-2013-budget-background-paperanalysis/#ixzz2Lwt8qYiP

 

And while that is not so great for the development of non oil sectors, its still helpful as oil revenues have led to an appreciation of the real exchange rate. 

 

Oil’s impact on economy and governance The size of Iraq’s oil revenue inhibits efforts to diversify Iraq’s economy. Oil export revenues have led to an appreciation of the real exchange rate.

vi
This makes exporting difficult for non-oil sectors, increases competition from imports and raises costs in non-traded sectors. 

Read more: http://dinarvets.com/forums/index.php?/topic/142201-iraq-2013-budget-background-paperanalysis/#ixzz2Lwt8qYiP