Baghdad signed into law one of its largest-ever spending packages last week after months of gridlock. At $111.8 billion, the 2019 budget is a nearly 45 percent increase on the previous year's, featuring the highest deficit and second-highest spending volume in Iraq's history since the fall of Saddam Hussein in 2003.
But despite desperate need for reconstruction funding after its devastating three-year war with the Islamic State, and with a crippled business sector beset by government corruption, Iraqi experts say the spending plan still fails to address the country's most urgent problems.
"The amount of waste and wrongly allocated money is outrageous," Abbas Kadhim, director of the Atlantic Council's Iraq Initiative, told CNBC on Tuesday. "Despite being a very large spending plan, Iraq's new budget still suffers from the same problems. Too much of the budget goes to salaries… In the meantime, necessary spending on new infrastructure and reconstruction is not adequate."
Nearly half of the budget — $52 billion — will go to public sector salaries, pensions, and social security for government employees, a 15 percent spike from 2018. $27.8 billion will go to investments, with the deficit set to more than double to $23.1 billion, as reported by AFP.
Parliament members from the predominantly Sunni areas devastated by the anti-Islamic State (IS) campaign accuse the Shia-dominated government of not allocating sufficient funds to their areas' reconstruction. The International Monetary Fund (IMF) has calculated Iraq would need more than $88 billion to rebuild those areas, but international commitments have yet to meet even half of that goal.