Iraq's Capital Budget and Regional Development Fund: review and comments on execution capacity and implications

Abstract

This article discusses the unique situation of Iraq: tremendous need in the infrastructure and basic services, huge financial resources and the sub-optimal capacity of the Government of Iraq (GoI) to utilize them to satisfy the needs. In 2007 only 65.1 of the Iraqi dinars (ID) 7,826 billion Capital Budget and 34 of the ID 2,883 billion Regional Development Fund have been spent. The physical performance on the ground under-performs as well. This article identifies the legal framework, planning capacity, economic and financial policies, coordination among the GoI institutions and the implementation capacity that can be classified under one title: the sub-optimal conduct of the GoI including the legislative branch, the executive branch and the local governments. This article suggests a series of actions and measures to improve the conduct of the GoI in Capital Budget execution.