Volume 1 - Iraq Watch

Key Budgetary ActorsAnnex CIraq’s Budgetary ProcessMinistry of FinanceThe MOF oversaw the formulation of the generalgovernment budget, which was based on the calendaryear.• The budget process began in June when the MOF,headed by Hikmat Mizban Ibrahim al-Azzawi,Minister of Finance from 1995-2003, requestedthat other ministries and organizations submit theirbudget proposals.• In October or November, each ministry submittedits proposed budget for the next fiscal year to theMoF Budget Office. The Budget Office and thevarious organizations began discussions at the technicallevel. The office negotiated with each ministryto arrive at an acceptable budget figure. If theycould not reach an agreement, the finance ministermet personally with the other minister to reach anaccord.In the early 1980s, as a result of fluctuations in economicresources and the effects of the war with Iran,Iraq suspended its use of long-term economic planning.In 2001 and 2002, the former Regime restoredthe use of five-year and ten-year plans, respectively,as long-term planning tools. According to Iraqi pressreports, the five-year plan was designed to fostereconomic development, distribute resources amonggovernment projects, and improve the country’s productioncapabilities. The ten-year plan was concernedwith long-term economic policy to achieve higheconomic growth rates. The Planning Commissionworked with the EAC to create the ten-year plan andprobably worked with the EAC on the five-year planas well.• In November 1994, Law No. 24 established thePlanning Commission, abolished the MoP and tookover all its rights and duties.• In August 2002, an RCC decree reestablished theMoP (Some details of Law No. 24 continued toapply) and abolished the Planning Commission.The MoP “assumed its tasks, jurisdiction, rights,and obligations.” This decree appointed ‘Abd al-Mun’im al-Khattab, former head of the PlanningCommission since the mid 1990s, as Minister ofPlanning.Regime Financeand Procurement• Budget proposals from each ministry formed theRegime’s current spending (operating expenditure)input to the general government budget.Ministry of PlanningThe Ministry of Planning (MoP) also negotiatedwith each ministry to arrive at an acceptable budgetfigure for their respective projects.• Projects submitted from each ministry formed theRegime’s capital spending (infrastructure expenditure)budget input to the general governmentbudget.• This ministry was responsible for large projectsdesigned to improve production and foster developmentin various sectors of the economy, particularlywithin the ministries of industry and agriculture, aswell as the MoO and MoD, according to the governorof the CBI.Economic Affairs CommitteeIn late 1995, Saddam re-established the EAC tohandle economic issues that would have normallygone to the Presidential Diwan. The EAC had influenceover fiscal and monetary policy issues such asgovernment spending, taxation, importation andinterest rates and met weekly at the MoP. Someissues, presumably sensitive, were handled only bythe head of the committee, rather than presentingthem to the other committee members.• Upon approval by the finance and planning ministries,the combined operating and capital/projectbudgets would go to the EAC—subcommittee ofthe CoM—for approval.Members of the EAC were also heads of ministriesand organizations within the régime. The chairmanof the EAC was Deputy Prime Minister and Ministerof Finance al-Azzawi. The MIC Head, Abd al-Tawab201