Since the establishment of the modern Iraqi state, the will of the ruling authority and its leaders has been driven by the adoption of strict, centralized policies across various sectors, particularly regarding the duality of revenue collection and its distribution to administrative institutions and local authorities. This financial methodology and mechanism guaranteed that those who monopolized power possessed a surplus of instruments to control every aspect of life and public affairs, consistently at the expense of those marginalized and excluded from the center. Indeed, those controlling the Iraqi state did not merely employ the army, political parties, and security apparatuses; they also—and perhaps primarily—utilized the wealth of the Iraqi people to secure further forms of control and hegemony. An economic and financial reading of the history of authority in Iraq thoroughly proves this; the synchronicity between the escalation of political and security authoritarianism in the mid-1970s and the oil price boom era was by no means a historical coincidence.
Despite recurrent historical attempts to devise alternative, fairer formulas capable of creating a balance among the components of the Iraqi people—including the “March 11 Manifesto of 1970” which recognized autonomy for the Kurdish people—these understandings never saw the light of day. This failure was due to the rulers’ insistence on pursuing a vision rooted in a “one-party” mentality and absolute centralization in managing the country’s affairs. Ultimately, this led to the abortion of successive political processes and the depletion of the Iraqi state’s public resources across all human, economic, cultural, and social dimensions. The miserable condition of Iraq as a whole following the years of rule by centralized regimes stands as the greatest witness and proof of this structural wretchedness.
Countless historical experiences have proven, time and again, that centralization in managing public funds has never led to any genuine and sustainable development, or to tangible, outcome-driven transparency. Yet, despite all the tragedies, it appears as though Iraq, as a state and a people, lives without a memory. Since the establishment of the new political system in the country after 2004, the massive influx of funds from Iraq’s revenues—with the exception of the Kurdistan Region of Iraq—has not been optimally utilized across various sectors, specifically in basic services, institution-building, infrastructure, and general human development. What made Iraq poor and needy throughout its modern history has remained unchanged in its contemporary history, for the exact same structural reasons.
The mindset and mechanism of public financial management over the past decades have proven their inadequacy; they mechanically led to the absence of diligent monitoring, serious follow-up, and real accountability, consequently producing waste and the squandering of immense financial fortunes. With a mere fraction of such wealth, other nations have succeeded in building their modern global presence. Financial centralization has caused all this regression without ever being subjected to criticism or deconstruction, because it has been transformed into a supreme and “sacred” slogan raised by political parties and parliamentary blocs, election cycle after election cycle, in order to attract certain miserable social bases that possess a psychological responsiveness to populist slogans. Deep down, there is an implicit implication that financial centralization means the control of one local Iraqi group over another, and one political trend over another—an essence completely contradictory to the core of the political process and the modern Iraqi Constitution, which insists in every single clause on equal citizenship at the individual level, and on consensus among the country’s constituent groups at the collective level.
The danger of this centralized approach is not confined to the economic aspect alone; rather, it extends to become a direct influence on the nature and reality of the federal system stipulated in the Constitution. Many legislations under which certain federal ministries still operate today, and by which they bind other institutions, were originally constructed according to a totalitarian, one-party philosophy. Yet, the Region and the governorates are demanded to adhere to them literally, in a glaring legislative paradox. This situation represents what can be termed an “intellectual and philosophical dilemma” for the mechanism of wealth management—specifically the concept of the peripheries’ contribution to the state’s financial basket—a dilemma that is difficult to escape unless the political and ruling elites address it with seriousness and deep reflection.
Conversely, successful federal experiences—and the Arab region possesses a prominent model represented by the United Arab Emirates, which practices financial federalism in its exact sense—prove that the “voluntary financial contribution of the peripheries” to funding the federal state, rather than waiting for intermittent grants and handouts from the center, is the correct and sustainable path to building a state with healthy institutions, vital production, effective performance, and sustainable development.
The problem with the prevailing financial thinking among some political elites lies in viewing the relationship with the Region and the governorates through a narrow, centralized perspective regarding the management of revenues and expenditures. Although the union established under the 2005 Constitution explicitly stated that it is a voluntary union built upon the entirely free will of the components forming the new Iraqi political system, actual implementation is moving in the opposite direction. The constitutional premise dictates that were it not for these components and entities, the current political system would not have been formed. Therefore, it was expected that the components would negotiate with the federal state over “the size of their financial contribution” and “their political representation” in managing that state, and not the other way around as is happening now.
What we are witnessing today contradicts the essence of the concept of voluntary integration. Instead of the components determining a certain percentage of their total revenues as a contribution to funding the “sovereign expenditures” of the federal state in accordance with fair constitutional standards, we find that the federal state is the entity that—according to certain technical standards whose accuracy and context are questionable—determines and withholds the revenues of the components, only to grant them back to them in the form of conditional funding! This clearly demonstrates that the federal philosophy of public finance, as explicitly stated in the 2005 Constitution, has been turned completely upside down, transforming from a tool for partnership and empowerment into an instrument for centralization and obstruction.
Building a strong and stable state that supports current reform trends requires intellectual courage to return the train of financial federalism to its correct constitutional track, and to transition from the mentality of “centralized hegemony” to the wide expanse of “fair contractual partnership.”
Note: This text is translated from the original Arabic version… Read the Arabic version:Click here
