Budget impasse: stalemate over Iraq's 2023 fiscal plan shakes government and impacts election outlook

Shafaq News / The Iraqi 2023 budget bill remains stalled after entering its sixth month of the current year, despite the Parliamentary Finance Committee finalizing the majority of the budget articles and the House of Representatives scheduling its ratification last Saturday. However, an emergent disagreement on some provisions led to the postponement of the vote until further notice.

The Kurdistan Democratic Party (KDP) and the Kurdistan Islamic Union both withdrew from the Finance Committee meetings last Thursday in protest over amendments to articles 13 and 14 of the budget law. The KDP deemed this an overturning of political agreements that led to the formation of the "State Administration" alliance and the formation of the current government led by Prime Minister Mohammed Shia Al-Sudani.

The Parliamentary Finance Committee voted on several amendments related to the Kurdistan region, including an amendment in article (13-second-A), which originally required the Kurdistan region to export at least 400,000 barrels of oil daily. After the amendment, the region is now required to deliver the crude oil produced in its fields at a rate of no less than 400,000 barrels per day to the Ministry of Oil, for export through the government-owned company (SOMO), or for domestic use in Iraqi refineries.

The continued delay of the budget hampers the government program focused on improving the service sector, which citizens in various Iraqi cities suffer from its inadequacy. During his meetings with stakeholders, Prime Minister Mohammed Shia Al-Sudani emphasized the necessity of focusing on the service reality, in addition to personally overseeing this matter, as it "satisfies citizens' needs, strengthens their faith in the political system, and establishes the duties of governmental bodies in serving society."

Observers believe this governmental service-oriented approach does not favor some political powers but creates a new political competitor, especially with elections approaching. Consequently, they attempt to hinder the government's work by delaying the budget ratification.

Passing the budget is considered the "greatest challenge" facing the success of the government's launch of the projects announced in its program and for which it has laid the groundwork. These are particularly major strategic projects, whether at the level of hospitals, city reconstruction, highways, or concerning industry and agriculture. These are all prerequisites for launching the development project, according to Fadi Al-Shammari, the political advisor to the Prime Minister.

Al-Shammari, in his talk to Shafaq News Agency, didn't hide the presence of political parties hindering the government's work. He confirmed, "The government appreciates the nature of these challenges and obstacles, but it does not wish to clash with anyone. Its path is to carry out the largest internal reform operation through combating corruption and providing services."

The Iraqi House of Representatives received the draft of the general budget law, which was read for the first time and transferred to the Finance Committee. The latter held more than 60 meetings and completed its procedures "in record time". This indicates that the House of Representatives and political powers in general are keen to expedite the budget's approval and the success of the new government, according to Firas Al-Muslemawi, a deputy from the State of Law Coalition.

In his talk to Shafaq News agency, Al-Muslemawi placed the responsibility of the budget's delay on the Kurds, "because of the Democratic Party's disagreement on the oil export issue and depositing oil revenues into an account approved by the government. They claim that this is what the government agreement stipulated."

As for the view of the Parliamentary Finance Committee, it is that this matter must be included in the budget items in line with the Federal Court's decision, according to Al-Muslemawi. He clarified that "the absence of this clause from the budget means that the Democratic Party will challenge the budget, thereby delaying its procedures. Therefore, a final agreement should be reached, otherwise, the matter will be settled by a vote under the dome of parliament."

For his part, independent politician Haidar Hisham Al-Faily, viewed that "Al-Sudani has been able to solve many longstanding problems in a short period since taking office, and restore governmental and political balance through achieving services, infrastructure, job positions, and cooperation between the regional and central governments."

Al-Faily told Shafaq News Agency, "these successes have placed the government under Al-Sudani's administration in front of many challenges. The most important are the obstacles posed by political entities who do not wish for this government or Al-Sudani to succeed because it threatens their positions or personal goals."

Abbas Al-Jubouri, Director of Al-Rafid Media and Strategic Studies Center, stood in close agreement with Haidar Al-Feili, saying, "There are intersecting interests among political blocs, some of which are not pleased with the success of the Prime Minister for fear he might become the leader of a large bloc and win seats in the upcoming elections, therefore they try to hinder the government's work by not approving the budget."

Al-Jubouri, during his talk to Shafaq News Agency, urged the Prime Minister to be decisive in many decisions, so he can work correctly.

Meanwhile, the Kurdistan Democratic Party stressed the importance of adhering to the political agreement, as non-compliance would be a blow to the government of Mohammed Shia' Al-Sudani.

Shabaz Sewul, a senior member of the Kurdistan Democratic Party in Sulaymaniyah, told Shafaq News Agency, "It is clear to everyone that a few months ago a political agreement was concluded between the Iraqi government and the Kurdistan Regional Government regarding the federal budget law for this year, and there was a smooth agreement on the items of this budget, especially those related to the region's share of the federal budget."

Regarding the changes made to the budget articles, especially articles 13 and 14 related to the region's share, Sewul clarified that the Democratic Party would reject any changes outside that political agreement, as these changes infringe on the rights of the region and also transgress the constitutionally recognized entity of the region.

The member of the Kurdistan Democratic Party asked the Prime Minister to "implement the early agreement between the Kurdistan Regional Government and the Al-Sudani government."

Shabaz explained, "What is happening now is not only a transgression against the region but is a blow to the Al-Sudani government, as the current Iraqi government was formed on the basis of a partnership within the management of the state among most of the Iraqi people's components."

He concluded by saying, "We in the Kurdistan Democratic Party, a major part of this coalition, in case of non-compliance with the political agreements and encroachment on the rights of the region, we will have several options, which may include withdrawing from the political process and also through diplomatic routes, but we do not wish for it to reach that stage, and we hope that the rights of the region will not be infringed upon."

Abbas Al-Jubouri, Director of Al-Rafid Media and Strategic Studies Center, stood in close agreement with Haidar Al-Feili, saying, "There are intersecting interests among political blocs, some of which are not pleased with the success of the Prime Minister for fear he might become the leader of a large bloc and win seats in the upcoming elections, therefore they try to hinder the government's work by not approving the budget."

Al-Jubouri, during his talk to Shafaq News Agency, urged the Prime Minister to be decisive in many decisions, so he can work correctly.

Meanwhile, the Kurdistan Democratic Party stressed the importance of adhering to the political agreement, as non-compliance would be a blow to the government of Mohammed Shia' Al-Sudani.

Shabaz Sewul, a senior member of the Kurdistan Democratic Party in Sulaymaniyah, told Shafaq News Agency, "It is clear to everyone that a few months ago a political agreement was concluded between the Iraqi government and the Kurdistan Regional Government regarding the federal budget law for this year, and there was a smooth agreement on the items of this budget, especially those related to the region's share of the federal budget."

Regarding the changes made to the budget articles, especially articles 13 and 14 related to the region's share, Sewul clarified that the Democratic Party would reject any changes outside that political agreement, as these changes infringe on the rights of the region and also transgress the constitutionally recognized entity of the region.

The member of the Kurdistan Democratic Party asked the Prime Minister to "implement the early agreement between the Kurdistan Regional Government and the Al-Sudani government."

Shabaz explained, "What is happening now is not only a transgression against the region but is a blow to the Al-Sudani government, as the current Iraqi government was formed on the basis of a partnership within the State Administration (alliance) among most of the Iraqi people's components."

He concluded by saying, "We in the Kurdistan Democratic Party, a major part of this coalition, in case of non-compliance with the political agreements and encroachment on the rights of the region, we will have several options, which may include withdrawing from the political process and also through diplomatic routes, but we do not wish for it to reach that stage, and we hope that the rights of the region will not be infringed upon."