By Zana al-Ali
RAQQA, Syria (North Press) – TheGeneral Finance Board of the Autonomous Administration of North and East Syria (AANES) links financial transparency with proper preparation and implementation of the general budget. Despite using modern techniques to manage the region’s financial situation in line with internationally-adopted systems, the board faces many obstacles to achieve its goal.
Activists and residents in AANES-held areas have repeatedly called for financial transparency and a mechanism for revenue spending.
Last week, North Press conducted an extensive interview with Ahmed Youssef, co-chair of the General Finance Board, regarding many financial issues, including revenue and expenditure figures.
He said, “We have prepared the budget calendar and budget implementation stages, and we have worked on the government finance statistics [GFS] system since putting the 2023 budget. This system is based on the latest global advances in finance.”
The GFS is adopted by the International Monetary Fund and works on unifying the expenditures of all operational activities, so that each activity has a specific code, which primarily fights against misappropriations.
For instance, he said, any spending outside the allocations for the operational activity of maintenance is considered a legal violation and entails financial and administrative penalties. This process helps in controlling public funds and is documented through financial data and monthly reports.
To achieve the desired transparency, the financial official says that they are working on preparing quarterly and annual reports. However, all these measures are not sufficient if these reports are not linked to a supervisory body and financial monitoring.
“The Financial Board has a Monitoring Directorate and we have developed an accounting system and distributed it to all boards. But until today, we have not succeeded in implementing it because the other boards are not cooperative,” Youssef said.
The Financial Board has worked on building competencies through providing courses in management, governmental, tax, and customs accounting. The aim is to “achieve transparency in financial spending and monitor expenditure operations.”
North Press Agency obtained the annual report of the Financial Board for 2022 and the first quarterly report for 2023.
Inflation casts grim shadow
Economists say that it is so hard to reverse inflation. However, Youssef argues that addressing inflation is possible, but doing so in the regions controlled by the AANES is very difficult. “If addressing inflation is generally challenging, it becomes even more complex in the AANES-held areas.”
Addressing inflation has always been done primarily through monetary policy measures. In order to control it, there needs to be responsible management that regulates currency issuance through the presence of a central bank which is absent in AANES.
The financial official further added that the AANES needs to maximize productivity in order to mitigate the impact of inflation on northeast Syria, because inflation originates from areas controlled by the Syrian government.
Despite the influx of foreign currencies through the presence of cross-border NGOs, which creates purchasing power, inflation still persists in AANES-held areas, something the official primarily attributed to the lack of production. Therefore, he said, it is the responsibility of the AANES to address this problem through revitalizing production in its regions.
Youssef expressed regret over the approach followed in AANES areas, where there is too much focus on maximizing consumer spending through the opening of restaurants and purchasing luxury cars and goods. However, the production process remains weak.
“We resort to securing job opportunities, creating disguised unemployment, and increasing salaries to maintain the purchasing value of the salary, but all of which further exacerbate inflation and lack of productivity. In the future, salary increases will play a role in spiking inflation and creating negative effects on society,” according to Youssef.
The General Finance Board in northeastern Syria works to maximize revenues and rationalize expenditures to reduce the waste of public money, which requires large procedural policies and the application of the general budget.