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Press Release13 October 2003
Iraq Releases Fiscally Responsible 2004 Budget
The Iraqi Minister of Finance Mr. Kamil al-Gailani announced today the release of the Iraqi Budget for 2004.
The budget provides authority for the commitment and expenditure of money by the Iraqi Ministries for 2004 and sets the fiscal framework for 2005 and 2006. It meets the recurrent expenditures of the Ministries, including a significant social safety net, along with some of the most pressing capital projects, and provides for the most urgent daily and social needs of the Iraqi people.
Commenting on the preparation of the budget, Minister al-Gailani said, “This budget represents an important step towards the rebuilding of Iraq by Iraqis. The Budget was prepared by a team of Iraqi experts, with a series of budget hearings attended by representatives from the various Iraqi ministries, and chaired by officials of the Ministry of Finance.”
Consistent with responsible fiscal policy this budget does not rely on increased borrowing, printing money, or foreign assistance.
The public release of the 2004 budget further demonstrates the Governing Council’s commitment to public sector transparency. On the road to modernization, it is important for Iraq’s institutions to be open to public scrutiny. This ensures spending will be directed towards those areas the Iraqi people feel have the greatest need. This transparency will also help reduce cases of corruption and strengthen the overall confidence of the Iraqi people and investors.
However, Iraq has very substantial reconstruction and redevelopment needs that are not able to be funded in the 2004 budget. With this in mind, the Iraqi Governing Council plans to exert all possible efforts to finance the above mentioned needs through activating the national economy and the private sector. The Governing Council also plans to seek the support of the international community at the International Donors Conference in late October in Madrid.
Mr. al-Gailani concluded: “Iraq is a country with enormous economic and human potential. By applying sound economic financial and monetary policies, and creating a good investment environment with international donors over the transition, Iraq will restore the economic and financial status which it previously held.”
Notes for editors
1. The Budget for 2004 expects revenues of around NID 19.5 trillion (US$ 13 billion), with expenditures of NID 20.25 trillion (US$ 13.5 billion), meaning the Budget in 2004 will run a deficit of around NID 900 billion (US$ 600 million). This deficit will be funded through refunds from cancelled Oil-For-Food contracts, meaning there will be no need for Iraq to borrow or print money to finance its deficit. In 2005 and 2006, the Budget is in balance, with spending matching revenues.
2. The budget reflects the 5 core principles laid out by the Iraqi ministries to drive the economic agenda. The core principles include: economic openness, private sector development, international integration, transparency in Government spending, and providing a safety net for the poor.
3. Journalists can obtain copies of the Iraqi 2004 Budget at the Convention Center.
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