Republic of Iraq — BUDGET REVENUES AND EXPENSES (MISC-d887aa61)

Republic of Iraq BUDGET REVENUES AND EXPENSES 2003 July-December Budget Summary Ministry of Finance Ministry of Planning Coalition Provisional Authority Contents Budget summary............................................................................3 Budget balance and financing...........................................................5 Expenditures by organization..............................................................6 by input............................................................................7 other proposed ..............................................................7 Revenues......................................................................................8 2 Interim Budget for the period July to December 2003 This interim budget provides authority for the commitment and expenditure of money by the Interim Government of Iraq for the period July to December 2003. It sets the groundwork for the preparation and authorization of the budget for 2004. It was prepared using the existing systems, forms and formats that have traditionally been used in Iraqi budgets. Each Iraqi Ministry and Kurd region prepared a budget with their Coalition Senior Advisor. That budget was discussed with the Coalition Finance Advisor. The proposed Budget was then reviewed by appropriate officials from the Iraqi Finance and Planning Ministries, briefed to AID and UN representatives and approved by the CPA Program Review Board. The Budget balance for July to December 2003 shows a deficit of around $US2.2 billion. This will be funded from committed financial assets, without the need for borrowing. Budget Summary ($USm) Expenditures Operating 2,002.1 Capital 352.7 Reconstruction 256.8 Other Expenditures 3,488.0 Total 6,099.6 Revenues Oil revenues 3,455.0 Fees, charges and taxes 59.1 Returns from State Owned Enterprises 373.6 Total 3,887.7 BUDGET BALANCE (Deficit) -2,211.9 The Budget ensures fiscal discipline in the use of budgetary resources in order to rebuild the confidence necessary for the international donor and investment community to support the country’s efforts. Oil revenues totaling around $3.4 billion are fully committed to programs that benefit the Iraqi people. Major priorities addressed include the reconstruction and restoration of essential facilities and services such as water, electricity, education and health care to meet the basic needs of the Iraqi people; restoring and revitalizing the banking system, productive enterprises, agriculture and trade to reintegrate Iraq into the world economy. 3 Key initiatives of this budget include (in $US millions): • Electrical improvements $294 • Subsidies to state owned enterprises reduced by: $269 • Reconstruction $257 • Security and Justice improvements $233 • Defense funding $225 • Public Health improvements $211 • Communications improvements $150 • Water and Sewerage improvements $73 In addition, $900m/year has been redirected from army and special Baathist programs to needs of the Iraqi budget. 4 Table 1: Net Budget Position ($USm) Revenues 3,887.7 Expenditures 6,099.6 BUDGET BALANCE (Deficit) -2,211.9 Table 2: Budget Financing ($USm) Vested Assets 1,700.0 Seized Assets 795.0 Development Fund for Iraq 1,192.0 Iraq Relief (appropriated) 2,475.0 Natural Resource Risk Remediation Fund 489.0 less spending before 1 July 2003 1,248.0 NET POSITON as at 1 July 2003 less: Budget Deficit 2,211.9 Central bank currency support 2,100.0 5,403.0 NET POSITION as at 31 December 2003 1,091.1 5 Table 3: Expenditures by Organization Operational Expenditure ($USm) Capital Expenditure ($USm) Total ($USm) Organization Ministry of Agriculture 9.4 10.0 19.4 Baghdad Mayoralty 12.1 4.3 16.4 Board of Supreme Audit 0.4 0.0 0.4 Central Organization of Standards 0.0 0.0 0.0 Ministry of Culture 1.2 61.6 62.8 Ministry of Defense 45.0 120.0 165.0 Ministry of Education 9.7 0.0 9.7 Electricity Commission 24.0 77.6 101.6 Ministry of Foreign Affairs 23.5 0.0 23.5 Ministry of Finance 199.4 1.2 200.6 Ministry of Health 210.6 1.0 211.6 Ministry of Higher Education and Scientific Research 32.8 4.0 36.8 Ministry of Housing & Construction 6.0 32.6 38.6 Ministry of Industry & Minerals 209.1 0.3 209.4 Ministry of the Interior 2.4 20.5 22.9 Ministry of Irrigation 2.7 30.5 33.2 Ministry of Labor and Social Affairs 6.4 0.0 6.4 Ministry of Justice (excluding Prisons) 5.8 25.7 31.5 Ministry of Justice (Prisons) 6.3 21.9 28.1 Ministry of Oil* * * * Ministry of Planning 4.6 0.0 4.6 Ministry of Municipalities and Utilities/Public Works 20.8 52.0 72.8 Ministry of Religious Affairs 0.7 3.2 3.9 Iraq Science and Technology Commission 11.8 1.6 13.4 Ministry of Trade 4.0 0.0 4.0 Ministry of Transportation and Communication 10.8 138.7 149.6 Youth Commission 2.6 2.8 5.4 Total Organization Expenditures (excl salaries) 862.1 609.5 1,471.6 Total Salaries and Pensions 1,140.0 Total Organization Expenditures 2,611.6 * Operational and capital expenditure to be funded through extra realised revenues. funded off-budget. Over $1 billion of capital expenditure to be 6 Table 4: Operating Expenses by Input ($USm) Service Requirements 133.9 Goods Requirements 221.9 Assets Maintenance 46.5 Operating capital 48.2 Transferred Expenditures (plus SOE support) 234.5 Foreign Obligations (Kuwait war reparations) 177.0 Special Programs 0.1 Total Operating Expenses by Input 862.1 Table 5: Other Proposed Expenditures ($USm) Social Safety Net 1,350.0 Electricity restructuring 192.0 Police 150.0 LPG and Gas 135.0 Currency Reprinting 100.0 Construction Fund 100.0 Military De-Mobilization 60.0 Regional Commanders 6.0 US Government Department and Agency Support 35.0 Program Review Board 35.0 Various expenditures 925.0 USAID programs Bechtel 400.0 Total Additional Expenditures 3,488.0 TOTAL EXPENDITURES 6,099.6 7 Table 6: Revenues ($USm) Oil revenues 3,455.0 Transfers from State Enterprises 373.6 Taxes, Fees and Charges 59.1 TOTAL REVENUES 3,887.7 8