Economic Remarks on the Iraqi Draft Constitution

8/23/2005 8:14:11 PM

It is noted that the primary text of the Iraqi Draft Constitution (according to what was published in the “Al Sabah” newspaper), which is supposed to be submitted to the National Assembly tomorrow Monday, only consists of very limited and ambiguous sections on economic issues, especially regarding the Cabinet’s duties in the field of economic administration and towards the economic rights of citizens and the protection of their interests.

This could be interpreted in the saying that the Constitution should not impose restrictions on the economic policy in a way to affect its flexibility and effectiveness. However, the issue is not about restraining policy as much as it is related to setting the economic administration prerogatives at a proper and correct place. It is rather related to providing the national State with the power to organize the economy, direct the national reserves in favor of the people, and to set up the appropriate international cooperation rules for the country.

The following is noted in the text:

  1. It does not provide the people, represented by the central government institutions, with control over natural resources, but it only refers to these resources with respect to their relation with the provinces’ affairs. The text tackles the natural resources as if they were a mere financial revenue, disregarding the protection of the environment, the proper economic administration, and the general and common national interest. The prerogatives of the provinces are defined in an ambiguous expression stating “that these prerogatives should not be in opposition with the Constitution of the Union”. The text does not include any other clear constitutional article related to the matter.
  2. In the third chapter, article (6/a), the text points out to the responsibility of the government in preparing the general budget and the development strategies. It is an ambiguous text that does not assert that the budget should include the general financial policy of the country and a well-defined framework for the provinces’ budgets, districts and government institutions, which have a distinct commercial aspect or have the right to levy taxes from citizens. Budget planning and development strategies are regular practices of commercial projects and of the government as well. However, what distinguishes the government in this respect is its power to generally control financial and economic policies, according to the country’s circumstances. If the Cabinet is not capable to control (within clear limits) the budgets of the provinces and others, it will no longer have a financial policy and an ability to manage the economy in favor of the public interest. It seems that all these issues have been passed on to article (6/b), which addresses the responsibility of the Cabinet in issuing regulations and instructions in order to implement laws.
  3. The text does not point out to the responsibility of the Cabinet in putting forth trade and labor policies, as well as the policies related to capital transfer and economic environment organization. This opens the door wide for contradicting policies inside a single country and for harmful competition between provinces, which can cause damage to everybody. Such competition will also negatively affect the weak classes of the society in particular, since the absence of common national policies can lead to a competition that goes down to the weakest social rights, the worst labor systems, and the least social guarantees.
  4. Article (6/a) of the second chapter addresses the independence of the Central Bank. This is connected to the relation between financial policy and monetary policy. This issue is also part of an economic philosophy that is not subject to consensus or general consent. Thus, it is an article that is not liable to be constitutional. For ease of reference, the Bank of England, which is the country’s Central Bank, did not become independent until 1998. In fact, such a policy does not serve Iraq at the present stage.
  5. In the third chapter, articles (17/a), (17/b), and 22, we find a strong focus on the ability of the legislative authority to influence and monitor the economic policy. The National Assembly doesn’t have the right to propose to the Cabinet an increase in the total spending amounts except “when necessary”. It only has the right to “look into loans and projects that the Iraqi government intends to achieve and which entail it to spend amounts from the State’s treasury”. In other words, it doesn’t have the right to refuse, and this is a very serious issue, in light of the possible proposal of oil contracts and concessions, and others. The National Assembly can surely give the Cabinet a vote of no confidence, or rather refuse to approve such an agreement. However, this is a difficult matter. Thus, identifying the role of the legislative authority will serve to speed up the signing of foreign contracts affecting the economic sovereignty.
  6. The text disregards the responsibility of the State towards the economic and social situations, including poverty, unemployment, social security, human development, and public services. The most striking example is entrusting education tasks to the family in the first place, instead of insisting on compulsory education, in addition to insufficient depiction of poverty and other matters, as well as the issue of oppressed women’s rights, which has been tackled by many.

Moreover, the text in its present form is not suitable to be considered as the Constitution of a modern state.

Kamel Abbas Mahdi is a Professor on Middle East Economy in Exeter University, UK.