Financial Sustainability in Iraq After 2003Reality and Challenges

Abstract

The issue of financial sustainability gained increasing importance in the last quarter of the twentieth century due to global economic changes and the new challenges facing governments and countries. Achieving financial sustainability has become a fundamental requirement for ensuring the stability of national economies and their ability to confront financial crises by adopting balanced financial policies that enable governments to enhance the efficiency of public spending and ensure the sustainability of financial resources. In Iraq, financial policy has gained particular importance since 2003 due to the profound economic and political transformations that the country has witnessed, which have led to fundamental changes in the structure of public finances and the management of financial resources in general. It has played an increasingly important role in the economy, especially with the expansion of the state's economic and social role, most notably the payment of compensation to public sector employees, the provision of support and assistance programs for vulnerable groups, and the reconstruction of the country. This has led to a significant increase in public expenditures, particularly operating expenses, which has cast a shadow over the state's ability to achieve true financial sustainability and has exacerbated the financial deficit and public debt. Hence, the importance of this research lies in analyzing the reality of fiscal policy and financial sustainability indicators in Iraq after 2003, with a focus on the challenges facing fiscal sustainability and within the framework of the search for effective solutions.

The research reached a set of conclusions, most notably the excessive reliance on oil as the primary source of public revenues and the resulting fluctuations in the volume of oil revenues due to price changes in global markets. This leads to recurring financial crises that negatively impact fiscal sustainability. Furthermore, the widespread financial and administrative corruption in most of the state's institutions and institutions has led to the waste and misallocation of resources, increasing pressure on the legislature and reducing the efficiency of government spending.