The financial crisis experienced by Iraq reflected on all aspects of life, especially the sector of economic investment projects, as the investment projects were revoked from the paragraphs of Iraq’s budget for the year 2017, which amounted to $ 85 billion.
The state adapted an operational and austerity budget because of the dire financial situation that the country is going through, which although allocated to the security sector, 20% of the budget, the security breaches are still continuing in Baghdad and other provinces.
Economists believe that the investment contributes to the allocation of part of imports to bring additional revenues to the state treasury, such as investments in the infrastructure of roads, bridges and projects of water and sewerage, electricity, schools, hospitals and factories , which thousands of them stopped, while consumer projects that do not add revenues but consume money and hard currency such as Malls and nightclubs continue , citing to its high cost as the cost of the Mall of Baghdad with its hotel amounted by $ 127 million? This is not commensurate with what achieved from hard currency or additional imports to the state.
We wonder:
Do the patient go for treatment in malls and whether the student go to study in it, and whether it supplies the people with water and electricity; and if the case continues on what it is, without the development and a real investment to upgrade the reality of the bitter economy, in a rich country with riches such as Iraq, and its transformation into a consumer market and unproductive consumer people , we will find most of the Iraqi people ‘s standard of living is deteriorating in a poor country where the burden of the state increases .
Iraq ‘s estimated losses from the delay of projects to $ 200 billion, according to specialists in this regard, where the stalled projects amounted to 400 in Basra and 600 in Babylon and 250 in Najaf, although the completion of some of them reached 75%.
The corruption was one of the most important reasons that hinder the completion of projects and its disruption in Iraq , and this is a reflection of the financial and administrative corruption of the country’s money, which left nobody and no institution but a share of it and increased it since 2003 until today noting that the fate of public money either theft or waste in projects that have not completed , stopped and disappeared because it has stopped for years and its allocations have gone to the pockets of the corrupt politicians amid of the government neglect and allegations of fighting and counter the corruption that brought the country to bankruptcy .
One reason for the delay in the completion of investment projects was the financial crisis, as it has been approved the release of financial bonds by the prime minister for contractors to work directly in those listed projects within the deferred plans and projects since 2013, and was part of the federal plan for projects of this year ‘s budget, and these projects did not achieve rates of the completion, and in 2014 , the disbursement of dues was stopped due to austerity and liquidity crisis.
And that federal allocations which are paid annually to the provinces and belong to regional development projects, amounting to 38 billion dinars, it has not paid to the lack of liquidity, for example; investment projects in Missan do not have allocations for being put on the table by the Authority and wait for local contractors, and is still mere ink on paper (of no effect) because of the financial crisis.
The provincial council revealed that the delay of most investment projects in the province was based on flimsy arguments of companies that are winning licenses, the governor of Maysan Ali Douai said :
There are several projects stalled in the province because of the lack of allocations from the federal budget, and some of which have rates of the completion of nearly 75% , which is stalled since 2013.
The head of the investment committee in the provincial council Mohammad Majid Hilfi, said most investment projects in the governorate suffer from the halt and delay for specific schedules for the completion in accordance with the timings according to the contracts signed between the companies and the authority of investment , for various reasons, pointing to the possibility to revoke licenses from the stalled companies and re – launch the project for the investment, and to hold accountable those involved with corruption with respect to those projects.
Hilfi pointed out that among the investment halted projects is the project of residential Diyar, which includes four thousand housing units on 650 dunums, by 85 residential buildings at a cost of $ 249 million, and the entertainment project of Lulu of Maysan at a cost of $ 80 million, which includes a commercial tower comprises 25 floors and a hotel of 12 floors and recreational and tourist areas.
Hilfi stressed that Maysan province demanded the Ministry of Finance to release petrodollar allocations for the completion of projects and disbursement of some staff assignments and payments to contractors and completion of some important projects of school buildings and others, stressing on non – payment of any amount to the province of Maysan from the displaced allocations.
He added the local government committed to take care of the displaced in cooperation with relief organizations calling for paying the dues of the province in this area, and the payment of employees ‘ salaries, on the permanent staffing for the year 2017.
Maysan Provincial Council called on the Ministry of Finance to facilitate the acquisition of its territory for the benefit of projects of the province and disengage the link of its departments and financial allocations and link them to the governorate where any administrative order has not been issued yet in this regard.
The Council of Maysan announced, the presence of 11 new investment opportunities in the province, regarding the sectors of industry, agriculture, electricity, youth and sports, accusing local authorities of hindering the investment and threatened to disclose them.
In the province of Anbar, work is turned off at the vital bridge Bzabz located on the Euphrates River, which connects it to the capital Baghdad, and the reason for the halt is due to the lack of financial allocations under the financial and administrative corruption suffered by the country.
The head of the local council of the district Amiriyat of steadfastness, “Shaker al – Issawi,” said the project is economic and commercial and important that facilitates movement of passengers and goods between Anbar and Baghdad.
al – Issawi, pointed out that ” the cost of the bridge 5 billion Iraqi dinars paid from the budget of Anbar province, and the work on it was started by specialized contracting company belonging to the private sector, and it has been completed only 5% of the project and the work stopped for lack of the necessary money .”
Regarding the project to secure the international road “Trebil” between Iraq and Jordan , the member of the Council of Anbar province Sabah Krhot admitted , that political differences have delayed US security company to proceed in carrying out its tasks, which include the rehabilitation of roads and bridges.
Karhot added the local government supports all measures that lead to inaugurate the Trebil outlet as quick as possible stressing on the beginning of reforming the highway and restructuring the bridges destroyed by the terrorist ISIS without delay being the economic lifeblood and basis for the sons of Anbar
In the province of Diwaniyah: There is a great project of the sewer of Diwaniya, approved by the Iraqi Council of Ministers on June 12, 2011, for the transmission it to the Rafidain Public Company of the Ministry of Water Resources, amounting to 218 billion Iraqi dinars, the duration of the completion of three years, although the company specializes only the establishment of dams, and has nothing to do with the projects related to sewage networks and heavy water.
Rafidain public company has not been completed, although skipped the date of delivery of the project according to the contract, but only 51% of the project, according to project maps , the areas included are more than fifty neighborhood , the company began simultaneously to open thirteen area, and did not perform any neighborhood of them actually and the company also stopped working completely for nearly two years despite the receipt of several operational advance , according to local officials in Diwaniyah , they think that it was spent on projects in other Iraqi provinces,
The governor of Diwaniya , Sami Hasnawi, said the reason for the stop of the projects is the Council of Ministers Resolution 347 , which halted all service projects and investment, and announced its support for the disbursement of benefits provided for the contractors on condition to deliver projects to the provinces.
Hasnawi indicated that the stalled projects have been disappeared due to its stop for long periods, including: bridges, residential complexes in addition to the Australian hospital.
The member of the Council of Diwaniya province Jaafar al – Moussawi stressed, on January 16 , 2017 that the stalled investment projects in the province are close to “collapse , ” he said, adding that the the province ‘s investment budget does not pay back the contractors debt.
And al-Moussawi pointed out that the stop of any strategic project will cause the loss of the rights of Diwaniya citizens who pay the price alone as the project could be a blessing to the city but it was turned to be a curse due to the government neglect , mismanagement ,planning and attempt to bring down the opponents , to spread the diseases and kill the citizens making the life in the city harder than ever .
In the capital Baghdad, hundreds of projects also stopped working because of corruption, according to what was confirmed by the provincial council member, “Abbas Hamdani” who admitted the existence of more than 750 delayed projects and stopped working in the capital.
In the housing sector , projects were stopped noting that the the numbers of the areas of slums have been increased in Baghdad to 350 area , despite the allocation of billions of dollars to them, but the corruption swallowed the money without resolving the crisis of slums in the capital, especially since 2006, as it has been allocated six billion dollars, and granted 421 license of investment in the housing sector, and in the light of that , the governor of Baghdad , Atwan Atwani acknowledged that Baghdad needs to one million housing units to cope with the crisis of suffocating housing especially for those with limited income.
In the same context, a member of the Federal Commission to monitor the investment in Iraq, Judge Abdel – Rahman al – Barzanji, said that “more than four billion dollars disappeared from the housing fund and investors received residential lands according to the investment licenses granted to them that were not built , but some investors established other projects on them, and some of them received loans from the commercial Bank of Iraq for the establishment of hundreds of housing units but they did not build one room, and they were not calling to account because they belong to the influential party in power.
Barzanji pointed out that he “owns the documents and evidence to reveal cases of corruption in the housing file and it will be handed over to the President of the Iraqi Kurdistan region, because it would be buried if handed over to the Iraqi judiciary in Baghdad.”
The financial crisis experienced by the government caused by widespread in all joints of corruption recognized also by al- Hamdani, acknowledging that this crisis in turn led to the failure of the Ministry of Finance to the disbursement sums of money to the province of Baghdad within the budget of the regional development and rely on the disbursement of payments, most recently 20 billion Iraqi dinars a year ago and a half year.
The most damage caused by the stop of the service projects took place on the simple Iraqi citizen, who is suffering from the deteriorating reality of the service at all levels, and receiving the most basic rights as a citizen have become a distant dream, in light of government corruption, failed policies pursued by the occupation governments in all fields .
In Basra: the Chairman of the Committee on Agriculture and Water Resources of the Council of Basra Jumaa Zaini acknowledged , that the Ministry of Water Resources did not implement the project of water desalination in the province taking advantage of the British loan, passed by the Council of Ministers, noting that the hindering the project comes to the lack of political will to implement it .
Al- Zini pointed out that “The central government insists on the referral of the project to the British By water company, which raises an objection of the Government of Basra due to the presence of Notes on the company that led to the disrupting of the starting of the project or discussion.
It is worth to be noted that the cabinet voted on the project of the desalination of drinking water for the province of Basra, and set the required trends to secure drinking water and water desalination and secure transportation and distribution networks, but there has been no progress on the projects.
In the province of Dhi Qar, the deputy governor of the Rifai, Jamal Messier has acknowledged that the contractors have stopped their projects in the district because they did not receive their financial dues from the Baghdad government.
Messier pointed out that there are a number of the stalled projects in the district , including 15 school contracted with the Ministry of industry to build in partnership with the Ministry of Education; noting that “stopping due to the financial crisis that has paralyzed the work in most state ministries, despite the rate of completion in the projects reached 75-80% “.
Messier added that the project of the sewer of Rifai, which is one of the important projects in the district, also suspended from work and was supposed to be completed in 2010, but began to disappear though 90% of it was completed. ”
And among the stalled projects as well, the project of the court building in Rifai, despite the arrival of the percentage of completion in it to the advanced stages, pointing out that the current location of the court is not suitable from the security perspective, as well as its small size compared to daily work done for the completion of transactions for citizens. ”
And Messier indicated that the federal government did not give the amounts that it has promised to launch it for them with a rate 40% to the owners of projects that the rate of completion did not exceed 80% and amounts 100% for the owners of projects which the rate of completion has exceeded 80% .
But in Kurdistan, the halt has hit hundreds of projects due to the corruption and the financial crisis, where the Minister of Education in the government of Kurdistan Bhtawan Sadiq acknowledged that the projects of the construction of 370 schools in Kurdistan stalled over the past two years, and the reason for this is due to the financial crisis experienced by the Kurdistan, because of rampant corruption in its institutions.
He added that the stop of the projects of the construction of schools in Kurdistan because of corruption and the financial crisis will be a major burden on the buildings of existing schools, the fact that 100 thousand new students annually go to school, which will impact negatively on the educational process as a whole and lead to the decline of it.
According to what was said by a member of the Economic Committee in the parliament from the Kurdistan Alliance Najiba Najib, the failed policies squandered almost 900 trillion Iraqi dinars on failed projects that have not completed since 2005 until now, because of the lack of the study of economic feasibility on it, causing the loss of those funds.
One of the main reasons for the failure of projects and its delay is the government negligence in the follow – up projects and companies executing it , which had a major role in the halt of these projects along with the corruption that was spread in it , as this has led to the reluctance of these companies in the implementation of projects, and then completely stop working, after wasting money, in addition to political conflicts on projects and companies on the service projects and investment in Iraq considered by some politicians as a booty for them , and often the interest of some of them are conflicting so they dispute on assuming responsibility for these projects.
The continued deterioration of economic conditions in Iraq and the increase in cases of corruption, neglect, looting and waste of public money led to the suspension of thousands of service projects and investment in Iraq as a result, and it seems that no solutions in sight by the government that it kept silent about this important file , and it was hoped that these projects would ease and alleviate the growing suffering of Iraqi citizen , if completed, but corruption and government neglect undermines it .
Shatha Khalil
Economic Unity
Rawabet Center for Research and Strategic Studies