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UN Office for the Coordination of Humanitarian Affairs

IRAQ: Greater transparency needed for 2004 budget, says OSI

ANKARA, 12 September 2003 (IRIN) - Greater transparency is needed for next year's budget in Iraq, the Iraq Revenue Watch Project, run by the Open Society Institute (OSI), said on releasing recommendations on budget procedures for 2004.

"The draft budget for 2003 was never made public and although we are aware that they were pressed for time, there is a need for transparency," the director of the Iraq Revenue Watch Project, Svetlana Tsalik, told IRIN from New York on Thursday.

"This type of action undermines us being there and if you don't implement some customs of transparency then it is a perpetuation of the regime Saddam had in place."

Iraq's budget for 2003 of US$ 6.1 billion was announced, along with a new currency, on 7 July by the head of the Coalition Provisional Authority (CPA), Paul Bremer. There is an expected deficit of US $2.2 billion, which could increase markedly if oil markets don't have good returns over the next few months and if pipeline sabotage continues, according to the watchdog.

The Iraq Revenue Watch Project's paper on the budget said that the draft budget was reviewed by officials from the Iraqi Finance and Planning ministries, USAID and UN representatives were briefed on it, and was then approved by the Programme Review Board, a board comprising Coalition representatives and reporting to Bremer.

"Although the budget documentation shows both the proposed and approved levels, it offers no explanation in those cases where the approved level is different than the proposed amount," Tsalik noted. The report and recommendations on the budget state that greater transparency would be needed for state-owned enterprises and on expenditure that is outside the line ministries.

The production of a budget available for public scrutiny was seen as a huge step in a country where budgets were closely guarded state secrets and it was a crime to reveal them. In a list of recommendations on how to improve the budgetary process in 2004, the report calls for greater inclusion of Iraqis in the process, transparency of the Development Fund for Iraq (ordered by the Bush administration in May and includes the proceeds of Iraqi oil products), the publication of minutes of the Program Review Board and the elimination of off-budget funds.

Giving examples of where no information had been made available, Tsalik said: "The Development Fund for Iraq, which holds 95 percent of oil revenues is supposed to be transparent, but we can't find any information on it."

She added that there needed to be more detailed descriptions from each government department on how the money would help fulfill national policies or meet the needs of the people in the absence of such policies. "The 2004 budget should be made public and Iraqis should be allowed to express their opinions on it," she maintained.

No one was available for comment from the CPA.

Theme(s): (IRIN) Governance

[ENDS]

This material comes to you via IRIN, a UN humanitarian information unit, but may not necessarily reflect the views of the United Nations or its agencies. If you re-print, copy, archive or re-post this item, please retain this credit and disclaimer. Quotations or extracts should include attribution to the original sources. All materials copyright © UN Office for the Coordination of Humanitarian Affairs 2003