The rise in oil prices gives Iraq the opportunity to stimulate development away from the excuse of scarcity of financing

The rise in oil prices gives Iraq the opportunity to stimulate development away from the excuse of scarcity of financing

The increase in oil prices in the last three months has given Iraqi Prime Minister Muhammad Shiaa Al-Sudani a chance to refocus on development issues, particularly those related to industry and agriculture. Due to the shortage of financial resources, the government needs to catch up in these areas.

Specialists in development affairs have advised policymakers in Iraq not to view the current financial abundance as a permanent source of revenue due to the volatility of global energy markets. They recommend investing the funds to the fullest extent through proper planning while also taking measures to protect it from the dangers of corruption that have previously plagued the country. Iraq has lost hundreds of billions of dollars from oil revenues over the last two decades due to crime.

The opportunity presented by surplus oil revenues is a rare chance to embark on a new path of development, which may be the last.

According to estimates, Iraq’s monthly earnings now exceed two billion dollars. The general budget was based on an estimate of the price of a barrel of oil at $70, but it now ranges between $85 and $90. This provides the Iraqi government with a surplus, allowing for budget stability and funding for various development projects in the industrial and agricultural sectors, as well as small projects that are crucial for local development.

Al-Sudani led a meeting of the Supreme Commission for Coordination between the Governorates, where they reviewed the monthly status of ongoing projects, discussed the major problems and obstacles hindering their completion, and proposed solutions to overcome these issues. During the session, the investment map for the governorates of Karbala and Diwaniyah was approved, taking into account the observations made by the Technical Affairs Department in the Coordinating Body between the Governorates. Al-Sudani emphasized the need to prioritize investment in industrial and agricultural projects in all governorates to provide job opportunities and support the government’s development plans and programs.

During the meeting, several issues were discussed related to various aspects of development. These included the educational sector, providing a suitable school environment for students, ensuring potable water in schools, and securing a decent living for the segment of beneficiaries of the social protection network. It was also decided that these beneficiaries would be included in the allocation of residential plots of land in accordance with the controls set by the Ministry of Construction, Housing, and Municipalities. The decision will be made public after its approval.

During the meeting, the government discussed administrative reforms and decided to form a committee led by the General Coordinator for Governorate Affairs, along with the Minister of Finance, representatives from three governorates, and the National Investment Authority. The committee will determine the powers to be transferred to the directors of sub-departments affiliated with the State Real Estate Department in the governorates.

In September of last year, Al-Sudani expressed concern about Iraq’s ability to finance the sustainable development goals due to financial losses incurred during their war against ISIS. He emphasized the importance of prioritizing climate action, as Iraq is considered to be the most vulnerable to the effects of climate change.

During his participation in the Sustainable Development Goals Summit held in New York, Al-Sudani affirmed Iraq’s commitment to the action plan of the International Conference on Financing for Development, which was held in Addis Ababa in 2015. He also mentioned the international plan that was issued, which calls for the development of integrated national financing frameworks to complement national development strategies. Al-Sudani highlighted the importance of sustainable development and expressed Iraq’s welcome of the summit’s adoption of the political declaration that confirms the urgent need to work seriously towards accelerating the implementation of development goals.

Observers believe that Iraq can no longer use the additional money earned from the rise in oil prices as an excuse for lack of funds, particularly related to climate change consequences.

According to Auk Lootsma, the Special Representative of the United Nations Development Program in Iraq, Iraq is suffering greatly from the impact of climate change. There has been a significant decrease in water levels, which has severely affected the country. The United Nations is currently working with the Iraqi government to help increase the flow of water into the country.

Apart from lower water levels, climate change has brought about a multitude of problems in Iraq, including rising temperatures, loss of biodiversity, sand and dust storms, and electricity shortages. These issues have affected the lives of many Iraqis, as pointed out by Lootsma.

Lootsma emphasized that Iraq has prioritized climate change as part of its national development agenda led by Al-Sudani.

Financial abundance presents an opportunity for Iraq to break development stagnation if protected from corruption that has misused large sums of money.

Iraq had committed to a national development plan prepared by the United Nations Development Program for the period of 2018 to 2022. However, the plan failed to achieve its goals due to insufficient funding. The primary aim of the plan was to achieve sustainable development goals in Iraq. It focused on several key priorities for development, including improving governance, strengthening the private sector, post-conflict reconstruction and development, improving business and investment environments, increasing exports of basic goods, boosting agricultural and industrial production, and enhancing financial and monetary integration with capital markets.

Al-Sudani had promised to gradually shift from a rentier economy by modernizing its functioning. His plan was to focus on the young generation’s potential in building small and medium-sized companies in various fields, including agriculture, industry, information technology, services, and the environment. His vision aimed to create job opportunities and attract both local and international investments.

Many experts believe that the surplus oil revenues present a unique and possibly final opportunity to pave a new path toward agricultural and industrial development. This would help combat the impact of climate change before new price fluctuations or increased government spending eat up the land and resources again.