BGG Comments and Dinar Updates 7-23-20

BGG Comments and Dinar Updates 7-23-20

BGG ~ This is probably more accurately translated as “Ghost employees”, a corruption issue for a long time now and one of the big reasons no one wants to just give them money for “salaries”.

It would all go to these corrupt politicians via this sham payroll scam.

The good news – the MoF is going after them in an open, honest, legal fashion.

Minister Of Finance: 300 Thousand “Space” Employees In Iraq

Posted on July 23, 2020 by BGG

Ali Allawi -AFPIraqi Finance Minister Ali Allawi reported that there are about 300,000 “space” employees in Iraq, warning that economic problems may spark a state of insecurity in the country.

And the Financial Times quoted Allawi as saying that radical reform is the only way to avoid a “catastrophe” for the oil-dependent country, noting that all that can be done is to refer to the “catastrophe” facing the country, if the path continues.

Allawi has previously studied at Harvard University, and has taught at the Massachusetts Institute of Technology (MIT).

The Iraqi Minister of Finance, warned of “grave security consequences” in the event that the country’s economy is not radically restructured, at a time when the crisis of the Corona Virus is struck, and its reflection on commercial activities and the damage of the collapse of oil prices to state revenues, indicating inflation spending and a monthly wage bill The value of $ 5 billion for the massive public payroll.

Concerning “space” employees, that is, those who do not exist in the state’s departments, while these influential people receive salaries, Allawi explained that the issues that were buried because of the large and growing oil revenues are now evolving, and this includes payments for an estimated 300,000 “ghost” or fictional employee ” “.

The price of crude oil has fallen to more than half compared to last year 2019, as it dealt a blow to the financial position of the second largest producer in OPEC, “Iraq”.

Allawi believed that the economy, if not radically restructured in a highly coherent and well-implemented medium-term program, could have truly severe security consequences.

According to the Oxford Institute for Energy Studies, Iraq’s revenue from oil exports fell from 6.1 billion dollars in January, to their lowest levels at 1.4 billion dollars last April.

While the collapse of world oil prices has harmed the Iraqi economy before, Allawi says that Baghdad “can no longer” rely on prices to bounce again, arguing that this may spur reforms, confirming that there is “increasing recognition” that the country is moving to an environment with prices Oil is relatively low, and an alternative to restructuring public financial resources should be found to take into account this new normal.

The 73-year-old minister is part of a transitional government appointed to steer Iraq toward new elections, after mass protests against the institution toppled the previous government.

The country’s poverty rate is expected to rise to 31.7 percent this year, from 20 percent in 2018, as the Corona pandemic crisis pushes 4.5 million Iraqis below the poverty line, according to a new joint assessment by the government, the United Nations, the World Bank, and Oxford University.

According to the World Bank, if oil prices remain below $ 30, Iraq will shift from having a fiscal surplus to a deficit equal to more than a quarter of its gross domestic product.

Analysts said the government can take advantage of $ 68 billion in foreign reserves to cover dollar bills, such as imports and debt service, and is expected to borrow $ 18 billion locally and abroad to cover government wages for the next few months.

On the subject of the loan, Allawi said that Iraq has regular and intense discussions with the International Monetary Fund, adding that Baghdad may apply for some budget support, describing the bill of “inflated wages” is to some extent a “legacy of Iraq’s recent violent history”, and that 40 To 45 percent of public sector employees in the vast Iraqi security forces.

Rudaw.net  https://www.rudaw.net/arabic/business/20072020?fbclid=IwAR3oUiUVILmKpwIBAKbkCBVbZkOLUFIrBJfgJuwJrGQlLJ3keXD_TmXZwDA

BGG ~ This is probably more accurately translated as “Ghost employees”, a corruption issue for a long time now and one of the big reasons no one wants to just give them money for “salaries”.

It would all go to these corrupt politicians via this sham payroll scam.

The good news – the MoF is going after them in an open, honest, legal fashion.

The Central Bank Announced The Withdrawal Of The License Of A Brokerage Firm To Buy And Sell Foreign Currencies Because Of Its “Violation Of Instructions”

Posted on July 23, 2020 by BGG

The bank said in a statement received by the (Independent) today that:

(1) “given the violation of the Al-Durr brokerage company for buying and selling foreign currencies, the provisions of the instructions for organizing the work of the brokerage firms and the purchase of foreign currencies, it was decided to withdraw the company’s license.”

The bank added,

(2) “It was also decided to confiscate the letter of guarantee deposited with this bank amounting to 50 million dinars,” calling on the Ministry of Commerce to “cancel the establishment certificate granted to it in addition to removing the company name from the records and providing the Central Bank with a certified liquidation letter.”

The Central Bank of Iraq was established as an independent bank under its law issued on the sixth of March of the year 2004, as an independent body, and is responsible for maintaining price stability and implementing monetary policy, and supervises 10 commercial banks, 26 private banks and 16 Islamic banks, in addition to 19 foreign banks, as well About 6 financial institutions and 31 money transfer companies.   LINK

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