KTFA Members "News and Views" Friday 11-27-2020

KTFA:

Don961:  The economic reform movement is "the most serious" ... Iraq seeks to "sell things" at about $ 5 billion to "citizens": there is no alternative to solving the financial crisis!

2020-11-27

He noted: “The Ministry of Finance seeks to offer bonds worth 3-5 billion dollars to citizens in dinars and dollars, and we expect private and government banks to buy them.” Indicating: “The exchange rate of the dinar against the dollar will be fixed when issuing bonds, in order to avoid any losses in Buying bonds by banks and citizens.

He adds that the matter depends on knowing the extent of the global companies ’response, and whether there will be an impact on the global market and the interests of the producers in the event that it is adopted as a broader selling policy, and therefore the results are governed and not the idea alone, and we must wait for the next fiscal year and follow the experience carefully.   LINK

Godlover:  Holy guacamole  ....imo. Now these articles excite me!!!! 
I would say that not only will their exchange rate fixed (repaired) but their currency will become a fixed exchange rate imo.

Definition :A fixed exchange rate is a regime applied by a government or central bank that ties the country's official currency exchange rate to another country's currency or the price of gold . The purpose of a fixed exchange rate system is to keep a currency's value within a narrow band. The 2021 budget is exciting me even more.....IMO!!!

Kenster:  IMO IF THIS ARTICLE DOESN'T LIGHT YOUR FIRE..... ALL I CAN SAY IS YOUR WOOD IS WET!!!!

Edna:  Yeah I concur, This is not a "drive by article" bonds mean commitment IMO, this is promising stuff here.

Iobey777:  YES!!! Line it up with the other articles we have seen this past week and it certainly looks like they are finally ready to go into the Progressive lane and turn the New Rate loose! 

Don961:  Difference in numbers between two official authorities in Iraq that “hide” sums sufficient for salaries for 7 months ... and draw attention to 3 financial “scandals”

2020-11-27  Yes Iraq: Baghdad

The huge difference, up to doubling, in the data and accounts of the Central Bank and the Ministry of Planning about the value of imports entering Iraq during the year 2019 caused important questions among economic experts.

 The economic expert, Nabil Al-Marsoumi, said, "The value of commodity imports for the year 2019, according to the Central Bank of Iraq data, is $ 49.417 billion, of which $ 10.867 billion is government imports."

He added, "While the value of merchandise imports for the year 2019, according to Ministry of Planning data, will decrease to 20.9 billion dollars, of which 2.770 billion dollars are government imports."

 He pointed out that "the difference between the two total figures for the total import is $ 28.517 billion, although the data sources came from two Iraqi sides, only a few kilometers away spatially."

 He indicated that “this difference has two important consequences:

First: The merchandise imports for the private sector, which were published by the Ministry of Planning, were based on the data of the General Authority for Customs in 2019 amounting to about $ 18.1 billion, which represents the value of imported goods that entered Iraq through the border outlets except for the Kurdistan region, and this greatly explains the reason for the low customs revenues In Iraq, especially since about half of the imports are exempt from customs tariffs.

 Second: The big difference in the data, which amounts to 28.517 billion dollars, means that there are large quantities of imports that have entered Iraq informally through the unofficial crossings, or that the difference is due to the value of goods imported through Kurdistan ports. Is there a big money laundering in Iraq? By falsifying import lists for the purpose of smuggling US dollars abroad.

And the $ 29 billion, when divided by 5 billion, which is the sums required to provide salary funds per month. It turns out that the 29 billion is sufficient to provide salaries for more than 7 months. While these amounts are lost between customs exemptions, smuggling from informal outlets or money laundering, Iraq goes to borrow billions of dollars. To secure salaries.   LINK

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Don961:  “Billions in the street": a plan that makes Iraq earn 60 billion in a few weeks ... saves the treasury from "prospective bankruptcy"!

2020-11-26  Yes Iraq - Baghdad

The Iraqi engineer, Mazen Al-Saad, called, on Thursday, November 26, 2020, the Iraqi government to reconsider many projects that could be provided by providing $ 60 billion within 6 months.

Al-Saad said in a televised statement that “the government is able to connect the two-story bridge to several areas, make it a special road for large buses and licensed taxis, put gates at its entrance, and impose a levy on bus and taxi drivers, which can save large sums of money to solve the financial crisis they are suffering from.” Country ”.

He added that "the government is able to obtain large sums of money from public garages, whose money is currently going to unknown destinations. If this project was reconsidered, it would be able to solve this issue, this matter would have contributed to alleviating the burden of the financial crisis."

He added that "the tax file and job specification, through which a soldier, teacher, or any other profession cannot practice the profession of taxi driver, and it will contribute greatly to organizing the work of the state and supplying its treasury with the money it imposes in exchange for providing services," indicating that "these measures will help the government provide 60 A million dollars within 6 months.

Earlier, the Iraqi government officially adopted the economic reform program prepared by the emergency cell for financial reform, which is known as the "white paper". To maximize the state's resources and end the economic crisis.

And the Iraqi government website published a summary of the objectives and themes of the White Paper for Economic Reform, in which it stated:

(The White Paper) is a comprehensive roadmap that aims to reform the Iraqi economy and address the serious challenges facing it, which have accumulated over the past years due to wrong policies, mismanagement, corruption, and the absence of planning in addition to the almost total dependence on oil as a primary source of state revenue.

Iraqi Deputy Prime Minister and Minister of Finance Ali Allawi said that "the white paper aims to restore balance to the Iraqi economy, and put it on a path that allows the state to take appropriate steps in the future to develop it into a diversified, dynamic economy that creates opportunities for citizens to live a decent life."

Although the current financial crisis that Iraq is going through is linked to the sharp decline in oil prices and the repercussions of the Corona pandemic, the (White Paper) clearly indicated, supported by figures and facts from specialized international sources, that the roots of the crisis go back decades.

The White Paper reviewed a series of factors that distorted the Iraqi economy and undermined its ability to provide a decent life for large segments of Iraqis, and led to its failure to keep pace with the economic developments that the world witnessed, including:

The state’s role in the economy expanded

Perhaps one of the main reasons that led to the deterioration of the Iraqi economy, which was identified by the "white paper" is the expansion of the role of the Iraqi state in the economy.

For decades, the Iraqi economy was exposed to a series of shocks that led to the creation of an economy directed by the state, starting with the nationalization policies of vital sectors in the seventies of the last century. Then wasting opportunities to change this trend since 2003 and the failure of the new political system in Iraq to build a free and diverse economy in accordance with the principles of the Iraqi constitution.

The expansion of the role of the state, especially the increase in the number of workers in the public sector of various kinds, the expenses of their salaries and the salaries of retirees, came at the expense of spending on and investing in the basic infrastructure in the country.

For example, from 2004 to 2020, state expenditures on salaries of employees and retirees increased by 400% in real terms, and the total number of workers in the public sector more than tripled.

Between 2006 and 2018, average public sector salary payments increased by 134%, more than the increase in labor productivity, which rose only by 12%, or the cost of living, which rose by 28% during this period.

Over the past 17 years, the salary expenditures of the employees, who today number 4 and a half million employees, and the retirees, who number two and a half million retirees, have become the most growing expenditures in the successive Iraqi budgets during this period.

Decline of the private sector

The expansion of the state’s role, in addition to the complex administrative system and the weakness of successive governments in imposing the rule of law, in addition to the militarization of society and the growing influence of non-governmental actors in public institutions, led to the decline of the Iraqi private sector, with the exception of a number of small and medium companies operating in the oil and telecommunications sectors in addition to Very small companies operating in the fields of trade, retail, transport, construction, hospitality and textiles, with almost complete absence of these companies in the field of manufacturing goods for sale.

Most of the largest companies in the private sector depend on providing services to the state and on government contracts.

Collapse of oil imports and the Corona pandemic

The White Paper also identified other factors that led to the deteriorating economic situation that Iraq is going through, most notably the collapse of oil imports and the Corona pandemic, mismanagement, lack of planning and weakness of financial institutions in Iraq, especially the Ministry of Finance, the absence of modern coherent systems for managing imports, and the weakness of the system Banker, and the absence of automation in government procedures, in addition to the destruction of infrastructure and the costs of the war against these terrorist gangs by ISIS.

Two strategic goals

The White Paper seeks to achieve two strategic objectives. The first is to initiate an immediate reform program to address the budget deficit to provide the time and financial spaces for implementing reform plans in the medium term.

While the second goal seeks to put the economy and the budget on a sustainable path, after which Iraq can finally decide and choose the economic direction. Thus, immediate reforms and reforms in the medium term need between 3 to 5 years to implement.

Axes of reform

The (white paper) identified reforms in the following areas:

The first axis: achieving sustainable financial stability and providing an opportunity to achieve other structural reforms

The most prominent trends of this axis:

Reducing the primary budget deficit from 20% to 3% of GDP and reducing salary expenditures from 25% to 12.5%

Collecting electricity wages from all users according to the real fuel price in global markets

Activating the program to recover stolen and stolen money

Increase customs and tax revenues

Reform the retirement fund and gradually stop financing it from the budget

Financial management systems reform

Study the current exchange rate of the dollar against the dinar

The second axis: achieving strategic economic reforms and providing sustainable job opportunities

The most prominent trends of this axis:

Rehabilitation of the banking system through the development of private banks, reform of government banks, and the introduction and activation of the (basic banking system) in Rafidain and Rasheed banks

Accelerate the development of electronic banking services

Opening specialized markets such as the commodity market and the currency exchange market

Activating the sectors driving the economy, such as agriculture, oil and gas

Realizing an effective increase in the private sector’s contribution to economic activity through activating the private sector support fund and simplifying procedures

Providing job opportunities in the private sector and supporting small and medium enterprises

Adopting a national strategy for education and training that links educational outcomes with the future need for the labor market

The third axis: improving the basic infrastructure

The most prominent trends of this axis:

Increasing the effectiveness of the performance of the various joints of the electric power system in Iraq

Developing digital infrastructure, by introducing advanced technology (fourth generation) at the beginning of next year, and preparing for the introduction of (fifth generation) technology

Modernizing the legal and regulatory framework for the transport sector to achieve increased financing for infrastructure projects in it by moving towards attracting investments and building partnerships between the public and private sectors.

Development of industrial cities and free zones in Iraq

The fourth axis: Providing basic services and protecting vulnerable segments during and after the reform process

The most prominent trends of this axis:

Providing potable water, irrigation and completing sanitation networks

Begin building 1,000 new schools within the period of the reform plan

Completely redrawing the social protection system, and unifying the different types of support

Establishing a unified and financially sustainable pension system for all Iraqis working in the public, private, cooperative and mixed sectors

Completing the health insurance bill and implementing it, in a way that guarantees basic health services for all citizens

The fifth axis: developing governance and legal systems to enable institutions and individuals to implement reforms

The reform program defines the completion of the National Information Center project to automate the process of providing service to citizens, especially the procedures for obtaining citizenship, passports, retirement and social security as a priority. The White Paper on Economic Reform

The most prominent trends of this axis:

Review and amend instructions for implementing government contracts

Cooperating with criminal investigation organizations to reduce the large sums that are smuggled out of Iraq

Introducing an electronic governance system in the field of government contracting and tax and customs collection

Completing the National Information Center project to automate the process of providing service to citizens, especially the procedures for obtaining citizenship, passports, retirement and social security

The application of the electronic signature and electronic transactions law and the phasing out of paper transactions

A detailed implementation plan will be launched later that includes the required procedures, the concerned parties for implementation, timelines and mechanisms to follow up the implementation of the White Paper.  link

Purifiers:  WHAT!!!!!!! Electronic signature!!!!!!!???  THAT IS "A" MOST "MODERN" DIGITAL TECHNOLOGY... IMO  Woohooooooo

Clare:  MOST EXCELLENT...........IT IS VERY EXCITING!! IMO