MPs Slam Maliki’s Proposal for $37.5 Billion in Foreign Loans
September 26 2012
Iraqi Prime Minister Nuri al-Maliki has presented parliament with a new bill which some observers call "a show of force."
The bill proposes taking a loan of $37.5 billion from several foreign companies to shore up the economic infrastructure of Iraq.
Members of the Sunni-majority Iraqiya bloc, who have opposed the bill from the beginning, have asked why Iraq should be burdened with a long-term loan when it is one of the biggest oil producing countries in the world.
Alaa Makki, an Iraqiya List MP, said, "We support rebuilding the economic infrastructure of Iraq, and know that the rebuilding is late and that this bill aims to address this issue. But the bill is too general and not detailed."
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Najiba Najib, an MP with the Kurdistan Alliance in Iraqi Parliament, told Rudaw, "The bill is made up of eight articles. It is not clear what the projects are, and when they will be executed, for how long and how much the interest is on the loans. These are all unanswered questions."
The answers from Maliki and the delegation that accompanied him to parliament did not convince all Iraqi MPs. Thirty-five MPs directed questions at Maliki and his ministers were not satisfied with the answers.
"The budget of Iraq cannot develop the economic infrastructure. Iraq needs $400 to $600 billion for investment. We can only allocate $250 billion a year and this will delay the investment projects in the economic infrastructure of Iraq," said Maliki.
Makki said that his party will not approve the bill in its current form. "We demanded auditing and blueprints of the projects, but they refused to give them to us," he said.
The proposed loans would come from international companies and be long-term.
Repayment would start six years after the financed projects began.
According to the information obtained by Rudaw, $5 billion each would be allocated for water, health, agricultural and education projects; $10 billion for transportation projects; $2 billion each for scientific fields and housing projects; $3 billion for military plans and the borders; and $500 million for sports and youth centers.
Regarding the necessity of these projects, Shakir Darraji, a State of Law Coalition MP, said, “Seventy percent of the Iraqi budget is spent on executive operations, so we need this loan to put Iraq on a healthy road of investment."
This bill was first put forward in 2009 and proposed $71 billion in loans. At the time, it was rejected by Iraqi Parliament.
Regarding the execution of these projects, Darraji said, "A joint committee made up of members from all groups and the concerned ministries will undertake this mission. The projects will be given to foreign companies with the utmost transparency."
When it comes to this bill, the Shia appear to be united by supporting it. The Iraqiya List has rejected it but the Kurds have not yet made up their minds.
"Our decision will depend on the level of clarity in this bill," said Najib.
Burhan Muhammad Faraj, an MP from the Kurdistan Alliance, told Rudaw, "The Kurdistan Region can accept this bill, given that the Iraqi central government agrees with the Kurdistan Regional Government (KRG) on how to manage these projects."
The National Alliance has accepted the bill and is trying to gather more support for it. "Some members of the Kurdistan Alliance support the bill and no doubt there will be more discussions regarding agreement on the projects," said Darraji.
He added, "All aspects of this bill have been clarified and questions answered. If the Kurdistan Alliance has more concerns about preventing corruption, then corruption will be limited and detailed auditing will take place."
Besides having an enormous budget, the projects the bill covers are not outlined in detail and no specific information is given regarding their execution, including locations.
This has raised fears about the potential marginalization of the Kurdistan Region by being given less of its share in these projects.
Members of the State of Law Coalition are taking this bill seriously and believe that Maliki's political weight will lead to its success.
"We have no other option but to pass this bill," said Darraji.
In a meeting on Saturday, Maliki announced that there would be no further discussion in parliament about the bill. However, the haste with which the bill was presented and is to be voted on is seen as early propaganda for the election.
"Why is it propaganda? This government has less than two years in office while the completion of these projects requires two years," said Darraji. "Our government is a joint government. If it is election propaganda, then it is propaganda for all of the government."
Political observers believe that Maliki is using the relative political tranquility in Iraq by going to parliament. Hashim Kindy, a university lecturer, believes that the timing is intentional, especially after Maliki’s rapprochement with his deputy Saleh Mutlaq and house speaker Osama al-Nujaifi.
"This timing is a message to the political arena and voters to show that he is not afraid of going to parliament," said Kindy.