"العراق والخليج الفارسي" [و‎‎٣‎١‎٠] (٨٦٢/٦٢٢)

PUBLIC FINANCE 481
were spent on medical services, nearly 10 lakhs (£74,194) on educa
tion, 52 lakhs (£391,875) on irrigation, and 7 lakhs (£53,720) on
agriculture. It was not until the financial year 1923/4 that the budget
showed a surplus (85 lakhs), and there was a surplus in each of the
following years until 1928/9, when a deficit again appeared. The
accumulated balance was mostly spent by 1930 in payment of Iraq’s
share of the Ottoman debt (p. 485) and in railway reconstruction
(p. 581).
Two separate budgets are now presented to Parliament annually,
the ordinary budget of revenue and expenditure, and a special budget
for capital expenditure. Both are scrutinized by the Finance Com
mittee of the Chamber, which frequently succeeds in obtaining
alterations, mainly to reduce expenditure. After the money has been
spent the accounts are scrutinized by the Comptroller and Auditor-
General, who is independent of the executive and responsible direct
to Parliament that only the authorized expenditure has been made.
The revenue and expenditure for the years 1938/9 and 1939/40 are
shown on page 482 under main headings; the special budgets from
I 934/5 to I 939 / 4 ° on P a g e 4^3 give the sums received from oil
royalties and their disposal on capital works.
The budget machinery is thus sound enough. But although over
the whole period of the State’s existence expenditure and revenue
have been approximately balanced, and although there is no burden
of a national debt, the financial position of Iraq is by no means
absolutely secure. In the first place the standard of living and con
sequently the actual spending power of a very large part of the
population are low, with the result that revenue derived from direct
taxation, as for instance on incomes, or land, or produce, is incon
siderable in normal times, and that from indirect taxation, even from
customs duties, is not much. Thus in 1931/2 income tax only brought
in a revenue of £104,409 (p. 484). On the other hand, inflated ideas
of expenditure were inherited from the period of false prosperity
which began during the war and lasted for some years after 1918,
when the British spent large sums of money in the country. The
present war has also brought considerable expenditure by British
and American interests, but this apparent prosperity must be only
temporary. In normal times the independent status of a country
with a small population of small means such as Iraq can be very
costly. Between the two wars the greatest efforts had to be made to
balance the budget. Officials, especially British, were reduced in
number, salaries were cut drastically, and taxation was raised to a