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Never enough: How much money does Iraq really need for the Budget DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

Never enough: How much money does Iraq really need for the Budget

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Never enough: How much money does Iraq really need for the Budget Empty Never enough: How much money does Iraq really need for the Budget

Post by Guest on Mon Apr 01, 2013 11:33 am

This is also from my friend Phil.
Awesome article, the author (economist) explains with Iraq approving their highest budget ($118 Bn) in the history of the country, it's still not enough to cover their expenses. If you look at the graph below, Iraq needs to generate $527 Bn in yearly revenues just meet the avg spending per capital of $15,331 per citizen. In 2009, Iraq spent $1,850 per citizen and forecast based off the $118 Bn 2013 budget to $3440 per citizen. With all that being said, this leads me to believe Iraq can't introduce a new rate (118 * 3.42 = 404) $404 Bn in additional revenue. This is why the economist are screaming from the top of their lungs for the Maliki government to pass the infrastructure laws, tariff's and banking laws to their economy can generate enough revenue to support a high currency value of $3.42 or better. From the graph below their economy needs to generate $527 Bn just to meet the OECD avg of $15,331 per citizen. Now you do the math ($118 / $527) would equal a rate of $4.46 dinars per dollars. Be Happy! The Maliki government can't hold this off forever!


Phil
never enough: how much money does iraq really need for budget?


Never enough: How much money does Iraq really need for the Budget 7419159

Iraq’s 2013 budget amounts to US$118 billion. But the figures don’t add up. Doing the sums results in one conclusion: unless something is done differently, Iraq will face serious debt and development problems.

In late October, the Iraqi Cabinet, headed by Iraqi Prime Minister Nouri al-Maliki, approved the 2013 draft budget. The total amount approved was USD $118 billion, making for an US$18 billion increase on 2012’s budget and making the budget Iraq’s highest ever. The draft will eventually go to the Iraqi Parliament for ratification.

If one considers the state of Iraq – still plagued by power cuts, growing youth unemployment and almost totally dependent on oil revenues – then an increase is surely a positive thing. But will this upcoming budget do the trick?

If Iraq is to become a more developed nation, is this increase enough and is it sustainable? And if it’s not, then what would the Iraqi budget be ideally?

A look at the facts and the figures around this issue may help to work out an answer to those questions. Iraq is near to completely reliant on oil revenues. Oil exports account for 95 percent of government revenues and are equal to 70 percent of the country’s gross domestic product.

Since the 2003 US-led invasion that toppled former Iraqi leader Saddam Hussein, and then the subsequent removal of international sanctions, Iraq’s oil production and exports have increased steadily. Exports have risen this has corresponded with an increase in oil prices throughout the 2000s, beginning from 2003. Due to this, Iraqi revenues from the oil sector have increased dramatically and this has been reflected in surges in the annual budget. The 2013 budget is the highest in Iraq’s history.


Never enough: How much money does Iraq really need for the Budget 1159984

But now we return to the question at hand: how big does the Iraqi budget need to be for it to be adequate? To decide how much is enough, one can look to developed nations for a benchmark - specifically the OECD average, to derive an approximate “ideal” figure from recent expenditure. The following table indicates how much each country spent per citizen in 2009; it also shows the OECD average spend per citizen for 2009.


Never enough: How much money does Iraq really need for the Budget 4860931_orig

This turns out to be US$15,331 per citizen. Meanwhile Iraq’s 2013 draft budget is US$118 billion. With Iraq’s population of over 34 million this means Iraq would only be spending about US$3,440 per citizen.

And if Iraq had to spend the OECD average on its citizens, this would add up to $500 billion. This is nigh on impossible.

A look at Iraq’s oil income indicates this: the most that oil income has ever bought Iraq have been US$83 billion in 2011. As Iraq’s highest ever oil revenue is significantly less than its highest budget of (US$118 billion in 2013) and drastically less than the desired budget of over US$500 billion, it quickly becomes evident that oil revenues are never going to cover Iraq’s spending needs.

Of course some might argue that the increasing Iraqi oil production will allow the government to meet Iraq’s fiscal needs in the future. Unfortunately this doesn’t seem very likely. Saudi Arabia is the world’s largest oil exporter and the highest that country has ever earned from oil revenues was US$318 billion in 2011 – still a way away from US$500 billion required in an “ideal” budget.

The International Energy Agency predicts that Iraq will produce more and more oil – up to 4.4 billion barrels per day by 2020 – but the revenues from that won’t even cover Iraq’s budgetary needs today, let alone in 2020 when the population will have risen to an estimated 41.8 million people.

In conclusion, even a simple look at these figures indicates that Iraq will have to look into diversifying beyond its oil revenues if it is ever to develop as a modern nation. The Iraqi government must shift gears and begin broadening revenue streams in order to meet the country’s needs and to see Iraq flourish as a modern nation in the years to come.

http://www.niqash.or...ticles/?id=3171

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Never enough: How much money does Iraq really need for the Budget Empty Re: Never enough: How much money does Iraq really need for the Budget

Post by Guest on Mon Apr 01, 2013 12:40 pm

Very interesting. Thanks for that.

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Post by Kevind53 on Mon Apr 01, 2013 12:55 pm

Never enough: How much money does Iraq really need for the Budget 1150991001

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Never enough: How much money does Iraq really need for the Budget Empty Re: Never enough: How much money does Iraq really need for the Budget

Post by Guest on Mon Apr 01, 2013 1:09 pm

How I dream of a $3+ rate...

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Post by Terbo56 on Mon Apr 01, 2013 4:53 pm

That's ALL it is- Until the time comes that it will be a reality- Someday.........
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Post by Guest on Mon Apr 01, 2013 7:55 pm

It will be reality one day...

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Post by Terbo56 on Mon Apr 01, 2013 11:06 pm

Somehow, I don't think I'll live to see it- It's gone too far too long-Never enough: How much money does Iraq really need for the Budget 490529750Twisted EvilNever enough: How much money does Iraq really need for the Budget 2837018037
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Never enough: How much money does Iraq really need for the Budget Empty Re: Never enough: How much money does Iraq really need for the Budget

Post by Guest on Mon Apr 01, 2013 11:59 pm

@terbo56 wrote:Somehow, I don't think I'll live to see it- It's gone too far too long-Never enough: How much money does Iraq really need for the Budget 490529750Twisted EvilNever enough: How much money does Iraq really need for the Budget 2837018037
Sounds like Turbo needs a break and get re-oiled, it did me wonders, even though I came on and just lurked once in a while! I had to get away from the madness of the Guroooos! Calling it everyday! AJ a newly oiled machine!

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Post by Guest on Tue Apr 02, 2013 12:13 am

@terbo56 wrote:Somehow, I don't think I'll live to see it- It's gone too far too long-Never enough: How much money does Iraq really need for the Budget 490529750Twisted EvilNever enough: How much money does Iraq really need for the Budget 2837018037

Go watch some good movies and eat some good food and hang out with a few good friends and stay off here for 6 days...come back on the 7th day and you will feel much better...for real...try it Smile

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Post by Terbo56 on Tue Apr 02, 2013 9:16 am

Actually, I'll do better than that-Twisted Evil
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Post by Guest on Tue Apr 02, 2013 9:25 am

@terbo56 wrote:Actually, I'll do better than that-Twisted Evil
Oh, and what would that be? Your in a good spot Terbo hang in there! AJ

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