Iraq needs to boost its 2012 investment budget to as much as 60 trillion dinars ($51 billion) from a planned 40 trillion dinars, to allow funds for new projects, the planning minister said on Monday.
Iraq has been starved of investment during the years of conflict triggered by the 2003 US-led invasion to topple Saddam Hussein and the process of rebuilding has been slow.
“What is being put forth is 40 trillion Iraqi dinars (as the investment budget). We are now trying to increase it to a minimum of 55 or 60 trillion dinars,” Planning Minister Ali Al Shukri said on Monday.
Finance Minister Rafie al-Esawi said in May the 2012 budget would allocate 40 trillion ($34 billion) for investment projects, with the rest of the proposed 115 trillion dinars budget allocated for government spending.
The proposed change would need to be approved by cabinet and parliament. Mr. Shukri said the Finance Ministry had sent the investment budget to the cabinet for discussion.
He said the suggested investment budget for 2012 was not enough to finance existing projects or launch new ones.
The 2011 budget, which was approved in February, allocated $25.7 billion for investment.
“We want to increase it in order to pay for the ongoing (projects) and to create new ones,” Mr. Shukri said.
“Our goal is to increase the investment budget by four to five percent each year.”
Budget shortfalls are challenging Iraq’s ability to rebuild. The country has announced massive projects to build hundreds of thousands of new homes and to boost electricity generation.
Its economy is still largely disconnected from the global financial system and is dominated by oil, with exports from some of the world’s largest reserves in the world accounting for more than 95 percent of state revenues.