Shafaq News / The Iraqi Ministry of Finance announced on Sunday that the country's revenues for the first half of 2023 have exceeded 54 trillion dinars. It highlighted that oil's contribution to the federal budget has risen to 97%. Meanwhile, an expert has likened the country's economy to the "Dutch Disease".

According to the data released by the Ministry of Finance in August for the semi-annual accounts of 2023, oil continues to be the primary source of revenue for Iraq's general budget, accounting for 97%. This indicates that the rentier economy is the basis of Iraq's general budget.

The financial reports indicate that total revenues up to May reached 54,308,339,824,760 dinars. This excludes the conversion revenues totaling 2,142,885,417,000 dinars. The total expenditures, including advances, amounted to 46,484,966,743,000 dinars.

According to the financial tables, oil revenues amounted to 35,887,299,711,339 dinars, constituting 97% of the general budget. Non-oil revenues reached 2,534,765,062,152 dinars.

Economic expert Basim Jamil Antoine remarked that "the Iraqi economic structure does not foster investment or productivity, leading to a form of dependency, the Dutch Disease, resulting in a large-scale economic disruption."

Antoine warned that if oil prices contract, the economy would be severely impacted, noting that nations with resource-dependent economies have suffered collapses over time.

He emphasized that oil revenues should not be entirely allocated to salaries and allowances, but should instead be channeled into productive projects that engage the industrial and agricultural sectors. These projects should provide essential services like water and electricity and offer opportunities and training to the youth for employment and productivity.

Antoine pointed out that the state requires comprehensive economic strategies led by experienced economists and experts to combat the rampant corruption that plagues Iraq's economy.

The "Dutch Disease" is a concept that describes an economic phenomenon where rapid development in one sector (especially natural resources) leads to the deterioration of other sectors. It is a paradox where positive news in one sector, such as the discovery of natural resources, negatively affects the overall economy of a country.

Advisor to the Prime Minister for Financial Affairs, Mudhhir Mohammed Saleh, previously highlighted that the persistence of Iraq's oil-dependency stems from past wars, economic blockades, and ongoing political conflicts, all of which have scattered the country's economic resources.

Iraq's continued reliance on oil as the sole source for its general budget exposes the country to global crises that intermittently impact oil prices. This constant need to cover deficits through external or internal borrowing indicates an inability to effectively manage state funds and an incapacity to find alternative financing solutions.