Federal Budget Delay causes Family Hardship

Mustafa Saadoun writes for nina-iraq.com

Mustafa Saadoun writes for nina-iraq.com

By Mustafa Saadoun, Head of Iraqi Human Rights Observatory

Investment company worker Samer Mohammed had a long trip home recently, weighed down by the knowledge that he had lost his job and thus his 20,000 IQD salary. He had been made redundant earlier that day because the salary budget had been cut and so his position was no longer sustainable. His future and indeed his family’s way of life were hanging on by a thread.

Most companies which operate inside Iraq depend on financial liquidity based on contracts and agreements signed off by the Iraqi government.  The delay in approving the federal budget this year has thus led to many more stories like Samer’s. Job losses have been a direct result of projects being put on hold, as companies can no longer sustain staffing levels without the income generated by government contracts.

The federal budget was supposed to be presented to the Council of Representatives in mid-October last year, to be approved before the beginning of this year. Reports both at national and international level put the cost of these federal budget delays to the economy at more than USD 6 billion.

The Ministry of Planning for example has warned that the implementation of the Five-year Strategic Development Plan as well as the Poverty Reduction Strategy and other important initiatives would be affected by that delay. Indeed, they have gone so far as to say that delays in approving the budget have potentially disabled up to one third of the available development opportunities this year.

Economic experts have also expressed concerns. They have pointed out that a combination of general expenditure and this budget approval delay have led to an accumulated pressure on the Iraqi economy. With this threat of economic instability looming, some have publicly commented.

For example, Iraqi Economist Rabie Karim, has gone on record to say that;

“Discussions and the ensuing delays surrounding budget approval have led to State institutions being in a ‘holding position’. Their inability to act will have a direct impact on jobs in the civil service and the private sector.”

He clarifies further-

“Those who will be most affected by the delays are staff working for companies implementing State projects. Public institutions will also suffer”.

This situation bears testament to the fact that high level political disagreements don’t just affect national security and economic progress – they can and do have a real impact the daily life of people.

Financial expert Sana Al-Abayechi also comments. Sana has indicated that this delay has stopped both current investment expenditure as well as the implementation of the all-important industrial and agricultural projects.

“As an example, one  month’s delay to budget approval means that the government needs to use around 10% of the budget to cover the current expenditure including salaries. This results in ongoing costs to Iraq of up to USD 30 million per day!”

Most Iraqi families depend on at least one working family member. Most need two, to cover their daily living costs. If they are salaried they are lucky. Many contracted workers for private companies have no rights and can be dismissed without any formal notice.

Samer’s story at least has a relatively happy ending. A two-month job search resulted in a new role at a water bottling plant. However, as he is now earning less than he used to he has been forced to look for a cheaper family home to rent.

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