IRAQ REMAINS WITHOUT BUDGET AS POLITICAL RIVALS BICKER

▶ Caretaker government’s spending curbed by court

The Iraqi government’s ability to manage vital services such as electricity, water and school construction will be paralysed by a Supreme Court ruling that prohibits it from spending money, officials said yesterday.

The decision issued by the Federal Supreme Court stated that Prime Minister Mustafa Al Kadhimi’s caretaker government has no authority to present bills to Parliament or sign any commercial agreements.

“It will have consequences,” Finance Minister Ali Allawi said, as it will “limit our abilities” to mitigate the impact of rising commodity prices, meet electricity needs before summer, cover oil production expenses and boost agriculture.

Critics of Mr Al Kadhimi said his government’s powers should be limited.

With this year’s budget shelved amid deadlock over forming a new government, monthly spending is limited to one twelfth of the 2021 budget.

Last year’s budget was 130 trillion Iraqi dinars ($89.65 billion), with an estimated deficit of 28.7tn dinars. To meet needs, the government sent a draft to Parliament of an emergency law for food security and development.

The latest bill calls for 27tn dinars. About 8tn dinars have been allocated to the Ministry of Trade to buy wheat from local farmers and international suppliers and to keep the government-run food ration programme going, Mr Sanad said. The bill sets aside 10tn dinars for development projects, as well as 3tn dinars for the Electricity Ministry to buy Iranian gas to keep generators going.

Iraq produces about 21 gigawatts of electricity, but in the summer demand soars to at least 27 gigawatts.

Iraq has planned to increase investment in upgrading the national grid, and Mr Al Kadhimi’s government planned to increase solar power generation to 30 per cent of production by 2030. Several high-profile deals have been signed with international companies to construct solar parks, but no work has begun.

The Supreme Court’s ruling has put a stop to any new plans of this scale, curbing Mr Al Kadhimi’s ability to govern.

“Arguably some of the Cabinet decisions are subject to challenge as well,” said Kirk Sowell of Utica Risk Services, a consultancy firm. “But no one is challenging them, and if Al Kadhimi can point to some previous policy decision that they are simply completing, then perhaps some decisions can be defended as being valid caretaker powers.”

In October, Iraq held early elections in response to one of the core demands of a nationwide, pro-reform protest movement that erupted in 2019.

Since then, political rivals have failed to reach an agreement on a new government.

Shiite cleric Moqtada Al Sadr, whose political group took 73 of the 329 seats in Parliament, wants to form a majority government only with the winners among Sunni and Kurdish political parties.

This has irritated his rivals from the Iran-backed Co-ordination Framework, who have delayed forming the government to force Mr Al Sadr to give them a voice.

Sunday’s ruling came after some politicians aligned with the Co-ordination Framework requested an explanation from President Barham Salih on the government’s authority. He sent the question to the court.

The ruling is “politically motivated as the bill has been supported by one side and rejected by another which wants to derail the process to exercise more pressure”, Hadi Jalo Marie, chairman of the Political Decision think tank in Baghdad, told The National.

After the court ruling, Mr Al Sadr acknowledged that he had failed to form a new government, giving his partners and rivals 30 days to reach an agreement. “Due to the increased pressure on me on the idea of forming a national majority government, I didn’t succeed at this endeavour,” he said.

He blamed independents who have resisted calls from both rival political blocs to take a side.

“We are left with one option that we should try, which is turning into a national opposition for at least 30 days,” Mr Al Sadr said.

If the other parties fail to agree to form the government, “we will have another announcement”, he said.