The Activities of Local Authorities in the Development of Economic Activity of the Population in the Republic of Iraq

Journal of Environmental Treatment Techniques

2019, Special Issue on Environment, Management and Economy, Pages: 989-992

J. Environ. Treat. Tech.

ISSN: 2309-1185

Journal web link: http://www.jett.dormaj.com

The Activities of Local Authorities in the

Development of Economic Activity of the

Population in the Republic of Iraq

1,2

Evgeny B. Sultanov *, Jaafar Haser Abdulrida

Faculty of Law, Kazan Federal University, Kazan, Russia

Al-basarh University, Republic of Iraq

Received: 13/09/2019

Accepted: 23/11/2019

Published: 20/12/2019

Abstract

The existence and development of municipal legal relations is not possible in the absence of an economic basis, although

legislation does not directly require this. The exercise of municipal authority on the one hand, the closest proximity to the source of

power (the population of the municipality), and with the other standing position compared with other levels of government. These

conditions, combined with the extinct elements (including legal consciousness) of the command economy, predetermine the

understanding of local self-government as a “subordinate” (dependent) level of power. And, as a result, financial, and economic

inequality. Whereas the very nature of local self-government implies significant economic independence. One of the main problems

facing the municipalities in Iraq is the lack or shortage of municipal property and the inefficient management of the municipal

economy. Therefore, it is very important to correctly determine the co-financial and economic foundations of local self-government,

as well as a clear legal consolidation of all their elements and mechanisms of interaction between them.

Keywords: Proactive budgeting, Local government, Economic fundamentals, Municipal property, Iraqi lawmaker, Local government

being presented to the Iraqi Council of Representatives since

Introduction

2009. To date, not a single federal law has been issued

The effectiveness of local self-government is largely

regulating the procedure for granting local executive

authorities their executive powers without applying to federal

authorities or transferring municipal powers and property, in

accordance with the grounds for the formation of municipal

systems, despite the provisions of article 106 of the Iraqi

Constitution formation of a body for the fair distribution of

federal revenues. The concept and elements of the economic

basis of local self-government are analyzed in the context of

various laws on local self-government. Law enforcement

practice, statistical information of the Ministry of Justice and

the Ministry of Finance of Iraq are also being studied (2, 15).

The lack of legislation results in insufficient financial and

economic support for municipalities. The current situation

has led to many unresolved problems at the provincial and

municipal levels, including problems related to: municipal

ownership of land, the formation of local budgets and the

creation of a stable regulatory framework necessary for the

economic activities of municipalities (3, 12).

determined by the material and financial resources available

to municipalities and constituting in their entirety the

economic basis of local self-government. Only if there is an

appropriate financial and material base, local self-

government bodies can effectively carry out local

management and solve problems associated with ensuring the

livelihoods of the population at the local level. As an

institution of municipal law, the economic basis of local self-

government is a set of legal norms that consolidate and

regulate social relations related to the formation and

management of municipal property, funds from local

budgets, as well as the exercise of property rights of

municipalities )1, 16).

The financial and economic foundations of local

governments in Iraq are formulated in accordance with Law

No. 21 of 2008 on the Provinces and Law No. 13 of 2006 on

Investments, where they should have been regulated by the

Financial Management Act and other federal laws, however,

the political problems that arose in Iraq did not allow for

voting and approval in the Iraqi parliament, despite the bill

2 Methods

The methodological basis of the research is constituted

by the general scientific dialectic methods of cognition,

scientific methods of analysis and scientific forecasting,

Corresponding author: Evgeny B. Sultanov, Kazan Federal

University. Email: Syltanov2007@yandex.ru.

Journal of Environmental Treatment Techniques

2019, Special Issue on Environment, Management and Economy, Pages: 989-992

synthesis and deduction, systemic methods, as well as special

methods of studying legal phenomena - historical-legal,

comparative-legal, structural-functional, etc.

The legislator allowed the provinces to create public

institutions of an administrative and economic nature in

agreement with the federal authorities.

Subsequently, the foundations of a public economic

institution were clarified, which is confirmed by the Law on

Trade in Iraq and the Law on Companies, which was

amended and supplemented by Order No. 21 of 1997

concerning the organization, functioning, and privatization of

public economic institutions (6,20,21,22).

The legislative authority of Iraq did not prevent the

municipality from creating commercial and industrial

institutions but vested the federal authorities with this

jurisdiction in coordination with the provinces and regions,

which is provided for by the provisions of Section 7 of the

Provincial Law. In accordance with the above text,

municipalities in cooperation with state bodies have the right

to create public institutions that are legal entities and bear

financial responsibility in taking into account their interests,

institutions may be industrial and cultural in nature. The

legislator is obliged to balance his income and expenses, and

also to take into account the opinion of state authorities

before creating such institutions.

We also find that the legislator authorized the

municipality to pursue public interests of a technical nature,

to carry out this activity it is allowed to manage in the form

of direct operation or as a public institution on the basis of

concession or granting rights (11, 17, 18). If the Iraqi

legislator does not determine the body responsible for

creating the state institution at the municipal level, then it is

the elected council or mayor, and the term “municipality” is

used. Article 51 of municipal law No. 165 provides that the

municipality considers municipal interests in the production

of building materials, industrial, consumer, commercial or

residential products. The local council has the right to create

local economic institutions in accordance with Section 7 of

the Provincial Law, which, however, does not mention the

need to create a balance between the revenues and expenses

of the institution, so the organization of this process is based

on regulatory documents.

However, we believe that the Ministry of Municipalities

and local authorities are committed to the development of

municipalities by exempting some of the services provided

daily, such as the household waste disposal process,

entrusting data and other operations to the private sector so

that to burden the municipality with human, material and

financial difficulties and in return receiving quality services

from private institutions and institutions of this type, and we

support this trend. Since 2003, the Iraqi economy clearly

shifted from a directed economy to a free economy based on

the clear provisions of Articles 25 and 26 of the 2005

Constitution of the Republic of Iraq. Article 25 of the

Constitution states: “The state guarantees the reform of the

Iraqi economy in accordance with modern economic

requirements, so as to ensure the full investment of its

resources, diversification of sources, promotion and

development of the private sector”. In addition, article 26 of

the Constitution states that “the state encourages investment

in various sectors of the economy, which is regulated by

law”.

Results and Discussion

One of the main problems facing municipalities in Iraq is

the lack or shortage of municipal property and the inefficient

management of the municipal economy, contrary to the

amendments to the Provinces Act in 2008 and the adoption of

the Investments Act in 2006, which provides for Provincial

Investment Authority needed to solve these problems (4).

However, the formation of local economic foundations in

Iraq continues to depend on civil, commercial, and tax laws.

Since 1958, the preparation of economic activity

programs in local areas was carried out by adopting and

implementing the so-called rural and economic development

programs, supplemented in 1970 by local municipal

programs; these programs represented tremendous efforts to

restore rural areas but the funding mechanism was

characterized by excessive centralization (5, 19). Municipal

development plans relate to sectors that affect the daily lives

of citizens, such as water supply, sanitation, medical centers

and others, and thus complement the investments provided by

government bodies. We also note that the Iraqi legislator has

provided local governments with the role of an engine in

economic development, but since 2003, municipalities have

become more independent in managing their own financial

resources, while remaining in the care of the province.

In 2013, the Provincial Law was amended and

supplemented, and a provincial coordinating body was

formed, which took over the transfer of powers from the

Federal Ministry to provincial municipalities, and health,

education and agriculture were transferred to municipalities

in all provinces, part of the financial resources allocated to

local authorities at the expense of federal taxes and fees, to

the extent established by law. However, it was not put into

practice, so the existing texts and rules did not find actual

application.

Laws issued in 1958 marked the beginning of the opening

of opportunities for local authorities to intervene in the

economic sphere, and the first law that allowed local

authorities to intervene in the economic sphere was Law No.

159 of 1969. The legal nature of the implementation of

economic activity by local authorities is exercised through

the creation of state institutions specifically designed for this

role, regulated by legislation relating to these bodies, which,

of course, is based on an important constitutional principle.

The Iraqi legislator enshrines the right of local authorities to

intervene in the economic sphere in accordance with the 2005

Constitution, which is provided for in Articles 22 and 28,

which provide external funding from the government and

enshrine economic choices guaranteed by municipal law and

the Provincial Law of 1969 and 2008.

The role of local communities in economic development

is to improve the lives of citizens, as well as counteract the

economic and financial crises that they may face when

participating in this economic sphere in this economic

environment, which is formed and accompanied by a legal

aspect in exercising their right to develop the economy and

investments.

Journal of Environmental Treatment Techniques

2019, Special Issue on Environment, Management and Economy, Pages: 989-992

These constitutional provisions aimed at encouraging the

private sector were adopted and enacted by revising Law No.

above-mentioned national institutions that contributed to the

development of investments at the local level, in fact, the

administrative and technical procedures carried out in the

promotion process are slow projects, which prompted Iraqi

lawmakers to resolve this issue through the provisions of the

first amendment to the Law on Investments and the second

amendment to Law No. 21 of 2008 on Provinces, where the

governor was authorized to decide on the granting of

concession licenses for land owned by the state for the

implementation of investment projects. And then the Iraqi

lawmaker distinguished the local council, which contributes

to the support and promotion of domestic investment by

some of its powers, including (7).

13 of 2006 on Investments, in addition to certain relevant

legislative acts, such as the Law on Competition and

Prevention of the Monopoly, Law on protection of the

domestic product” etc (8, 14). The main purpose of

investment law legislation is to promote and develop the

process of economic development in local areas, to provide

technical and scientific experience, develop human resources

and create jobs for Iraqis. This economic growth is achieved

by encouraging investments in various sectors in accordance

with local priorities, developing existing municipal projects

at various economic levels and providing incentives and

loans to investors in order to ensure their long-term

commitment to the country's economic development.

However, the most notable achievement of this law is the

removal of restrictions on non-Iraqi citizens in order to allow

them to carry out their investment and trade activities in Iraq.

This was achieved by providing each investor with the

opportunity to invest in various sectors. In accordance with

the principle of administrative decentralization and the

promotion of domestic and international investment, the

National Investment Authority and investment authorities in

all the provinces of Iraq have been established under the Iraq

Investment Law.

The main purpose of their creation was to facilitate the

process of obtaining all necessary permits in the process of

obtaining an investment license and to contribute to the

creation of sustainable and successful investment projects. It

should be noted that the Law on Investments approved

investment projects worth more than $250 million by order of

the Council of Ministers, regardless of which investment

authority grants the license (Article 7/B of the Law on

Investments). It should also be noted that Article 4/II of the

Investment Regulation No.2 of 2009 defines the projects

included in the terms of reference of the National Investment

Directorate, namely strategic investment projects in addition

to federal projects, and in addition, projects within the

competence investment authorities in the provinces. In

accordance with Law No. 13 of 2006 on Investments, the

National Investment Authority and investment authorities in

the provinces were formed, the law allows regions and

provinces that are not part of the regions to form investment

bodies in local regions authorized to grant investment

licenses and carry out investment planning in coordination

with the National (Federal) Investment Agency (9, 13).

It is impossible to implement an investment program

outside a region or province, whatever the nature (national or

local), local authorities are the first goal of the investment

process, as they interact and coordinate with ministries of

other sectors and investment agencies, such as the National

Agency on tourism development, the Ministry of Agriculture,

as well as a committee to assist in the search and promotion

of investments and property control. The committee is

headed by the governor, and also includes the chairman of

the municipal council for the investment project and

executive directors in the provinces (10).



Preparation of plans and identification of industrial

zones and areas of activity.



Promotion of investment financing in the province.

Consultations with economists in order to ensure

proper conditions for domestic investment.

Local governments should support and encourage private

enterprises established by private individuals in local areas,

for example, in industry, trade, and construction. Such

activities may be prohibited by law in order to preserve

sufficient funds necessary for the creation of similar projects

but they benefit the population in small municipalities (11).

In accordance with Federal Law No. 11 of 2010 on the

Protection of Agricultural Production, local governments,

based on the interests of the local population, must carry out

special measures to implement production projects in their

territories in the light industry, such as the creation of dairy

factories, fish lakes, seafood processing, and preparation of

anything that can be considered the main raw material in the

field of agricultural production.

It should be noted that the local authorities in Iraqi

Kurdistan, in accordance with Article 2 of the Law of the

Ministry of Trade and Industry of Kurdistan No. 9 of 2010,

carry out economic and commercial activities by taking

measures guaranteeing the protection of consumer rights and

preparing the legislation necessary to protect them in

coordination with federal authorities in relation to price

control in domestic markets, regulation of the competitive

and antitrust environment and other harmful business

practices, and performing control over the activities of

foreign companies.

Summary

We have identified the following main problems in order

to improve the efficiency of local administrations:

. Municipalities do not have real independence for the

optimal fulfillment of their tasks, as well as the large

volume of tasks and powers performed by them.

. Despite the large size of ownership of municipalities, they

do not have sufficient incentives for the effective

management of this property.

. Municipalities are officially a form of local government

but they do not actually rely on the local community, its

economic and social potential, and are mainly under the

control of the federal authorities.

It should be noted that despite the powers granted to the

governor in the field of investment promotion until 2006 and

the majority of investment projects that went through the

These obstacles negatively affected the activities of

municipalities, especially in the field of investments, the

creation of housing projects, the creation of favorable

Journal of Environmental Treatment Techniques

2019, Special Issue on Environment, Management and Economy, Pages: 989-992

conditions for small and medium-sized businesses, and the

removal of administrative barriers. Despite the existence of a

housing fund in all the provinces of Iraq, this, however, did

not contribute to the necessary solution to the housing

problem in the municipalities, due to the complex procedures

and requirements for obtaining loans for the construction of

residential buildings.

5. A decentralized system and its application in Iraq. Baghdad.

010.

Iraq Chronicle No.: 3689: dated: September 29. 1997.

Federal Law No. 21 of 2008, Article 2. "On Provinces”.

Iraq Chronicle, Journal of Law, No. 5, Basra, dated: March 17.

007.

Kalil VB. Actual issues of state administration. Textbook. Iman.

P.F. - Baghdad: Justitsinform. 2013.

In our opinion, the development and creation of an

economic basis for local authorities in Iraq in order to fulfill

their tasks related to the local population can be carried out

using various mechanisms, such as increasing revenues in

local budgets and determining the cost ratio in accordance

with the population density criterion in municipalities and the

amount of financial resources of each province, in

accordance with the Iraqi Constitution of 2005 and Federal

Law No. 21 of 2008 on Provinces that are not part of the

regions. The unification of commercial and civil legislation,

as well as the taxation of economic activity, should be carried

out in accordance with the law on the economic and financial

foundations of local authorities in Iraq.

10. Hassan AH. Investment and financing of local government in

Iraq. Journal of Law, Basra. 2011;5.

1. Federal Law No. 11 of March 13, “On the protection of

agricultural products”. 2010.

2. Sharif HJ. Local government activities in agriculture, Palm

Research Center. University of Basra.2009:125-126.

3. Ameen AM, Ahmed MF, Hafez MAA. The Impact of

Management Accounting and How It Can Be Implemented into

the Organizational Culture. Dutch Journal of Finance and

Management. 2018;2(1):02.

14. Fujo MH, Dida MA. Centralized Admission System for

Advanced Level Private Schools: Case of Kilimanjaro Region,

Tanzania. Journal of Information Systems Engineering

Management. 2019;4(1).

5. Saidi SS, Siew NM. Assessing Students’ Understanding of the

Measures of Central Tendency and Attitude towards Statistics in

Rural Secondary Schools. International Electronic Journal of

Conclusions

The recent experience in Iraq after 2005 indicates the

Mathematics

Education.

2019;14(1):73-86.

https://doi.org/10.12973/iejme/3968.

emergence of many financial problems associated with

administrative experience and unstable working conditions,

and local authorities, as a rule, are unable to perform their

duties in the best way. However, in general, evaluating the

activities of local authorities after 2005, we can talk about the

difference from their activities in the last decade, when the

possibilities of self-government were far from their use to the

full extent. Therefore, it is necessary to adopt legislation

aimed at ensuring the economic and social development of

local areas, and in order to strengthen the economic potential

of local authoritiesand solve their problems, enact legislation

related to the transfer of powers to provinces.

6. Baykalova ED, Artyna MK, Dorzhu NS, Ochur TK, Mongush

DS. Morphological interference in the process of mastering

English speech in conditions of interaction of Tuvan, Russian

and English as a foreign language. Opción. 2018;34(85-2):35-60.

7. Mohamed HS, Ahmed SA. Reviewing of Synthesis and

Computational Studies of Pyrazolo Pyrimidine Derivatives.

Journal of Chemical Reviews. 2019 Jul 1;1(3. pp. 154-251):183-

232.

8. Javahershenas R, Khalafy J, Prager RH. The Application of

Arylglyoxals in the Synthesis of Pyrrolo [2, 3-d] pyrimidines

via Multicomponent Reactions. Journal of Chemical Reviews.

019 Jul 1;1(3. pp. 154-251):233-42.

9. Foda A, Mosallam H, El-Khateeb A, Fakih M. Cinnamomum

zeylanicum Extract as Green Corrosion Inhibitor for Carbon

Steel in Hydrochloric Acid Solutions. Progress in Chemical and

Biochemical Research. 2019 Aug 1;2(3, pp. 83-120.):120-33.

0. Shyam T, Ajit A, Jangid R. Optimized Rhodium Dissolution

Process Using Aqua Regia. Advanced Journal of Chemistry,

Section A: Theoretical, Engineering and Applied Chemistry.

Acknowledgments

The work is performed according to the Russian

Government Program of Competitive Growth of Kazan

Federal University.

019 Aug 21;3(2):159-64.

1. Chandurkar PW, Shinde TA, Akarte AM, Raichurkar PP. Effect

of Trimethoprim Inclusion Complexation with Cyclodextrins

on its Antimicrobial Activity. Chemical Methodologies. 2019

Mar 1;3(2. pp. 145-275):211-25.

2. Vijayshekar P, Hemanth Sriram Y, Raju M, Karunakar Rao K.

Transition metals as efficient catalysts for transesterification of

Beta keto Esters under Solvent-free conditions. Asian Journal

of Green Chemistry. 2018 Apr 1;2(2. pp. 85-170):132-43.

References

Kutafin OE, & Fadeev VI. Municipal law of the Russian

Federation: textbook. М. 2008.

Shugrina ES. Economic basis of local government: legal analysis

and enforcement. 2018;2(3).

Al-Sharifi MK. Local Administration and its Application in Iraq.

Baghdad. 2013.

Al-Khalayle MA. Local funding for local units in Iraq. Basra.

009.