A Proposed Approach to restructuring government companies affiliated with the public sector in Iraq

Ali Abdul Rahim al-Aboudi – researcher in political economy

Summary:
The Public companies inherited from the previous regime numbered 176, most losing companies relying on government financing through the budget, except oil companies representing for-profit companies.
The current reality of state-owned enterprises misses the opportunity cost other than the current state-funded reality; state-owned companies can be a good provider of finance through taxes, fees, and operation rather than the high government funding costs.
A contractual budget approach must be adopted, according to which there is a contract between the Government and the local or foreign private sector whereby the Iraqi Government transfers the management of public companies from the ministries to the private sector. The Government creates an environment conducive to the functioning of the private sector in exchange for monitoring the private sector in good governance by the contract’s objectives.
The best practical way of reforming the public sector and state-owned enterprises is by incorporating two public administration methods, public-private-partnership contracts.
The legal cover of the partnership approach is through the enactment of the Law on the Partnership Process between the State and the private sector, both local and foreign, which has been before Parliament since 2019, and which will regulate the partnership process in all its aspects, from partnership to the responsibilities and duties of both the public and private sectors.
A distinction must be made between public productive companies and companies of general gratification.
Put (55%) of the capital of non-sovereign public companies for sale to the private sector, both local and foreign, provided that this percentage is sold to one or two companies as a maximum to maintain the quality of management.
The local private company is entitled to replace the existing workforce (55%), but it is only permitted to return (30%) as a maximum if it is a foreign company.
The new Iraqi Government seeks to lay the main foundations for managing the country following the rules of good governance by dismantling obstacles to achieving this s excessive economic role, especially in the area of public corporate governance s economic role s Government. (Mohamed Shiaa Al-Sudani) to focus on reforming the public sector and supporting the private sector, as included in the draft general budget for the fiscal year 2023, now before Parliament. (b) Article 2 (II) of the draft Public Budget Act stipulates the need to open participation and investment with the private sector, each according to specialization.
Accordingly, this paper seeks possible solutions for the government sector and its public companies, which, instead of being supportive of the general budget, have become a burden on them by introducing a method for restructuring public companies in line with the governance of the State budget.