Iraq - Public finance

There are several budgets: the ordinary budget, under which the regular activities of the government are financed; separate budgets for the Iraqi State Railways, the Port of Basra Authority, the Al-Faw Dredging Scheme, and the tobacco monopoly; municipal budgets requiring government approval; and allocations for semi-independent government agencies. In addition, there is a separate development budget, as well as an undeclared budget for the military believed to have absorbed over half of state funds during the war with Iran. Since 1980, the decline in oil exports and huge war expenditures forced Iraq to borrow and to raise funds from abroad. Iraq's invasion of Kuwait in 1990, with the consequent infrastructural damage, UN sanctions, and oil embargo, have severely diminished revenues. The future of the Iraqi economy is highly uncertain. Until a stable government is in place, it will be very difficult for any commercial activity to take place. Certainly Iraq will be borne into independence with huge external debts.