The government’s budget plans and its move to raise the dollar exchange rate to increase revenues have faced strong criticism from politicians, economists, and members of parliament. Critics say the government is following the same approach as previous administrations by focusing on salaries, hiring, and operating expenses. This puts more pressure on the budget and raises costs for the public. There are also concerns that the government could keep raising the dollar exchange rate against the dinar during each parliamentary session to bring in more money.
Former Parliamentary Finance Committee member Muhammad al-Shabaki told dinaropinions.com that raising the dollar exchange rate to cover expenses and increase revenues is a poor approach. He said it could add around 250,000 new jobs to the government payroll every year, including positions filled by job seekers.
Al-Shabaki said the government needs a clear employment plan through 2030. He proposed accepting 500,000 new employees while also creating vacancies through retirements to help meet the demand for government jobs.
He also criticized plans to include one million jobs, including contract positions, in next year’s budget. He said this is a risky move given Iraq’s financial crisis and funding shortage, which have already pushed the government to devalue the dinar against the dollar.
MP Saba al-Saadi explained that financial allocations to governorates are based on several factors, including population, service needs, and infrastructure requirements. She said the aim is to distribute public funds fairly while considering each governorate’s needs.
She added that some governorates receive extra funding through the petrodollar system because of their oil activities. Others rely on the Regional Development Program to fund public services, construction projects, and infrastructure improvements.
Al-Saadi also pointed to investment budget allocations, petrodollar funds, regional development funding, border crossing revenues, and special funds as other sources of financing. She said funding differences between governorates mean their total allocations must be considered rather than comparing just one funding source.
Meanwhile, MP Mukhtar al-Youssef said Iraq’s oil revenue outlook is concerning because exports have fallen following the closure of the Strait of Hormuz. He said exports through Turkey and Syria’s Banias port are not enough to cover the government’s actual spending needs.
Al-Youssef warned that the next budget could become focused almost entirely on operating expenses, leaving little room for investment projects. He also raised concerns that even salary payments could face difficulties in the coming period if the financial crisis continues.