Iraq Economic News and Points To Ponder Wednesday AM 10-9-24
Deputy: The US Federal Reserve Is Besieging Iraqi Liquidity Through The Dollar
Today Information / Baghdad.. Representative for the State of Law, Firas Al-Muslimaoui, confirmed today, Tuesday, that the Federal Bank’s measures were the main reason behind the continued lack of financial liquidity, calling on the Ministry of Finance to find alternatives.
Al-Muslimaoui told the Maalouma Agency, “Iraq is not poor and has many resources, but there is a problem in delivering the money for selling oil, which arrives after three months through the Federal Bank.”
He added, "The means of delivering the dollar and its restriction by the Federal Bank cast a shadow over the creation of liquidity in the Ministry of Finance," noting that "the external liquidity issue requires a high-level government effort in order to solve this issue and increase the quantities of dollars flowing into Iraq."
He stressed the necessity of "shifting to agreements similar to the Chinese accounting agreements providing services in exchange for oil to dispense with the dollar," stressing that
"the US Federal Bank is still exercising its conditions on Iraq to put pressure on the parallel market."
Speculators
The first 10/08/2024 The editor-in-chief wrote: Iraqi law explicitly criminalizes speculation operations that lead to influencing the exchange rate of the local currency and punishes those who commit them.
Article 44 of the Money Laundering Law of 2015 stipulates that these people are punished with one year imprisonment and a fine of one million dinars.
Although the reform packages undertaken by the government since its first days were successful, and despite the Central Bank's many sales of hard currency, the activity of speculative gangs contributed to maintaining the same large difference between the official price and the parallel market price.
We know that this confusion in the exchange rate variation is primarily due to the arbitrary monetary policy pursued by the former regime, especially during the siege, which made the Iraqi banking system a ruin and distanced it from the systems followed internationally.
However, the monetary policies that followed the change in 2003 also did not provide successful solutions.
They did not succeed in building a banking system that would provide services recognized in all countries of the world, which destroyed the virtual role of banks in building the country’s economy.
In this context specifically comes the directive of Prime Minister Muhammad Shia Al-Sudani yesterday regarding the necessity of pursuing speculators who exploit the political and security crises that the region is going through, and not to be lenient or lenient with them.
This directive complements the packages of directives related to monetary policy that the current government has initiated since its formation, most notably the government incentive program for the use of electronic payment tools, because the lack of knowledge of many citizens in using credit cards also contributes to the exacerbation of this crisis. https://alsabaah.iq/103769-.html
Privatization And Partnership, Which Is More Beneficial?
Economical 10/07/2024 Yasser Al-Metwally Which is more beneficial, privatization or partnership?
Privatization is a method within the capitalist system that aims to convert capital assets owned by the state into private ownership as a tool for treating loss-making government companies.
As a reminder, in the period after the change, specifically during the era of Iyad Allawi’s government in the year (2005), a privatization body was formed that included experienced businessmen and government officials with special and high levels, headed by a well-known businessman and with the membership of ministerial undersecretaries.
At that time, I was assigned to work as a media advisor to the Authority, and I accompanied its activities until the end.
The goal of forming this body is due to the fact that there are more than (190) companies, most of whose factories were loss-making, including companies that went bankrupt without any production, and among them were companies that did not meet their expenses and the salaries of their employees.
The body conducted statistics and surveys of companies and classified them according to their production capabilities and suitability for work.
But with the change of governments, the authority was neglected, abandoned, and abolished.
The opinions of economists are divided between supporters and opponents of privatization, and
given the large costs and burdens that these companies pose on the budget, attempts have been made to support these companies with the aim of activating them, but to no avail.
Experts agree in the end that Partnership is the ideal way to revitalize troubled companies, introduce them into the business market, and make them productive.
Partnership is a new method that enters into the attempts of those in charge of economic reform to address and recover losing companies, as partnership is considered a type of partial privatization in all cases.
What is meant by partnership is the partnership of the public sector and the private sector, provided that Handing over the management of companies to the private sector while keeping ownership constant for the state, based on the recognition that the mentality of the private sector focuses on profitability in order to maintain production with high efficiency without wasting productive resources.
It seems that the prevailing trend now is to adopt the partnership method in order to achieve the following goals (which are calculated from Advantages of partnership: foremost of which is maintaining ownership of capital assets without compromising them, as well as benefiting from the expertise of the private sector to make companies successful and make them profitable, thus eliminating the burden of large losses that they were incurring.
There may be several reasons behind the failure of public companies, the most important of which is corruption and public administrations’ lack of interest in losses because financing is guaranteed.
The most prominent reason is uncontrolled openness, which led to making public companies unable to compete due to high production costs and was a peg upon which some failed administrations relied.
Therefore, it is clear from the above analysis that the partnership is economically more beneficial, and this is what most economists around the world agree on, although it is not without flaws.
The question remains: What are the challenges facing the partnership in Iraq?
The first challenge is the opposition of public company administrations to concessions to the private sector, and therefore its reasons and motives are of a privileged nature.
Moreover, the culture of the totalitarian regime is still entrenched in the minds of many, which makes us really need time to achieve an equal partnership preceded by binding laws and procedures that do not allow the applicable laws to object to the new management of companies.
We need to create efficient management by applying the conditions and controls of governance in a way that paves the way for a successful partnership. So we need time, and the important thing is to start. https://alsabaah.iq/103683-.html
The Governor Of The Central Bank Of Iraq Chairs A Bank Lending Meeting
October 08, 2024 His Excellency the Governor of the Central Bank of Iraq, Mr. Ali Mohsen Al-Alaq, chaired the first meeting of the Supreme Executive Committee for the National Banking Lending Strategy in Iraq, which was formed pursuant to Diwani Order No. 51 of 2024, in the presence of undersecretaries of ministries, organizations and concerned authorities.
During the meeting, the importance of the role of the banking sector and government and private institutions was discussed, and their role in implementing this strategy and implementing the main themes and sub-objectives of the national bank lending strategy were discussed.
His Excellency the Governor stressed that the national bank lending strategy aims to
revitalize and stimulate the Iraqi economy as well as
achieving growth in all fields, to which this strategy will
contribute through the establishment and expansion of small, medium and large enterprises,
stressing the importance of the cooperation of relevant authorities in the success of this mission,
which It is considered a priority at the national level in providing job opportunities for young people and investing in their energies and capabilities in a way that achieves economic growth in the economic sectors.
It is noteworthy that the Central Bank of Iraq launched, on May 25, 2024, the national strategy for bank lending in Iraq for the years 2024-2029, in the presence of a number of officials and representatives of diplomatic missions and international organizations, and the axes of what was stated in the strategy and the mechanisms for working on it were identified, each according to his specialty. Central Bank of Iraq Media office October 8, 2024 https://cbi.iq/news/view/2685
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