KTFA:

Samson:   Shocking numbers ... two tranches that drain 1.5 trillion dinars a month

30th October, 2020

The Parliamentary Finance Committee revealed, on Friday, large numbers of fictitious and double-tax employees who drain the state treasury an amount of 1.5 trillion dinars per month.

The committee's reporter, Ahmed Al-Saffar, told Shafaq News Agency, that "the space employees and double salaries, according to government estimates, number 150,000," pointing out that "these work in ministries, government departments and state institutions in general." "These aliens and double salaries are costing the state up to one trillion and 500 billion dinars a month," he added.

Al-Saffar called on the government to "rely on the use of electronic programs and biometric statistics to detect these and recover the money that was disbursed to the state treasury."

Al-Saffar said, "The aliens and double-salaries cost the state budget huge sums amounting to a quarter of the public expenditures in the monthly operating budget that is spent as salaries for employees, retirees and social welfare."

Iraq has been suffering from a stifling financial crisis since the beginning of this year due to a significant decline in oil prices, as the government struggles to secure employee salaries, which amount to about $ 4 billion.  

The number of employees in Iraq has increased at a tremendous rate since the overthrow of the former regime, as the number currently swallows 6.5 million employees, up from 850,000 before 2003. Observers say that the widespread cronyism and corruption in Iraq were behind the skyrocketing number of employees in the country until the state became unable to secure their salaries.  LINK

DeepWoodz:  Imo....this is the main source of the lag in paying salaries. The corruption in Iraq has had 17 years to only get worse and worse. If I was Kadhimi, I would not pay salaries at all until each position was verified as legitimate. Same goes for retirements and martyrs. 

Maybe that’s what’s happening. Parliament sure gets worked up about it and I think because they are the cause of most of it. Even so, I don’t think they will have most of this sorted till long after the rate changes. 

Samson:  Deputy: Big paradoxes in the government's borrowing request and the actual sums it needs

09:03 - 01/11/2020

The deputy of the coalition of Iraqis, Asaad Yassin, confirmed that there are great paradoxes in the government's borrowing request and the actual amounts it needs, pointing out that the government bears the parliament the mistakes it commits, which is something that cannot be accepted.

Yassin said to / the information /, that "the estimates of the Parliamentary Finance Committee regarding salaries and necessary expenditures confirm the need for Iraq to 5-6 trillion dinars, while the government is demanding access to more than 40 trillion dinars."

He added that "Iraq needs more than 15 trillion only during the remaining three months of this year, and therefore there are many question marks about the government's request for this amount."

And that "the government is procrastinating and concluding in the file of the financial crisis and the sums it needs, as it holds the House of Representatives the results of its mistakes, which is unacceptable as it must not demand large sums other than what it needs according to the law." 

LINK

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Samson:  An Iraqi ministry returns 9 billion dinars to the state treasury from double wages

31st October, 2020
A parliamentary committee announced, on Saturday, that the Ministry of Labor and Social Affairs will return 9 billion Iraqi dinars to the state treasury from double wages and employees.

A member of the Parliamentary Work Committee, Fadel Al-Fatlawi, told Shafaq News, "The ministry continues the process of recovering money and returning it to the state treasury by revealing the fictitious names, double salaries, and employees who receive social aid salaries."

Al-Fatlawi added, "Most of the employees who receive the salaries of social assistance are the category of contracts and wages, given that most of them have not received their salaries from the ministries and departments in which they work for months due to the failure to pass the General Budget Law.

Al-Fatlawi stated, "The Ministry of Labor has taken legal measures against violators to recover the money and return it to the state treasury," stressing that "the ministry was able to return more than 9 billion dinars to the treasury from double salaries and employees." LINK

Samson:  The integrity of the Kurdistan Region recovers more than 11 billion dinars for the public treasury

1st November 2020

The Integrity Commission in the Kurdistan Region announced on Sunday that it had recovered more than 11 billion dinars for the public treasury, noting that this amount is government loans that have not been paid by companies operating in Sulaymaniyah Governorate.

In a statement received by Shafaq News Agency, the authority said that after the follow-up of the Sulaymaniyah Investigation Directorate for corporate loans, it recovered an amount (11,121,991,800) to the public treasury.

The spokesman for the Kurdistan Regional Government, Jotiar Adel, said last May that, according to the decisions issued by Prime Minister Masrour Barzani, the government will not condone anyone who owes financial debts to the government and citizens, and that it is going to recover it.   LINK

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Samson:  Ex-Nineveh governor arrested as Iraqi government reins in corruption
27th October, 2020

Iraq’s anti-corruption commission announced last week that it had arrested the former governor of Nineveh province, Nawfel Akoub, who was accused of embezzling millions of dollars from government coffers, including aid for people displaced by the Islamic State.

Akoub’s case highlights the efforts of Iraqi Prime Minister Mustafa al-Kadhimi to rein in corruption amid resistance from entrenched parties and elites, popular street demonstrations and violence from foreign-backed militias.  “The only way to tackle corruption in Iraq is by scratching the surface,” said Michael Knights, a senior fellow at the Washington Institute for Near East Policy. “There is no silver bullet. You can be doing the most that is possible to do and you’re still just scratching the surface.” A major boat accident near Mosul is what initially sank Akoub. In March of 2019, a ferryboat capsized in the Tigris River that killed more than 100 people. As the governor of the region, Akoub was accused of negligence. A request by then-Prime Minister Adel Abdul Mahdi to immediately dismiss the governor was approved by Iraq’s parliament. 

Akoub was eventually slapped with US sanctions last year on corruption charges. He escaped to the semi-autonomous northern Kurdistan region, where he lived as a fugitive. In March 2020, the Iraqi judiciary demanded that authorities in the region arrest the former governor. Akoub was arrested in Mosul while paying bail for another case. Akoub and other officials were charged with misappropriating about $64 million of public funds. That money was meant for reconstruction of his former province, which had been left in ruins by more than two years of Islamic State rule, followed by fierce fighting with Iraqi-led forces to retake the area. Part of the money was allocated to rebuild two hospitals in Mosul as well as to support people who had lost their homes in the conflict. 

Corruption is rampant across the country. Iraq ranks among the world’s worst offenders when it comes to corruption, according to Transparency International’s annual Corruption Perception Index.  Since 2003, the year the US-led invasion ousted Saddam Hussein, tens of billions of dollars of public funds have reportedly gone missing.

In October 2019, as corruption and other allegations of government mismanagement boiled over, tens of thousands of Iraqis marched in Baghdad and other cities to protest the country’s rampant misdealings, unemployment and poor services. More than 500 people were killed during the demonstrations, which lasted for months.  Since his appointment in May, Iraqi Prime Minister Mustafa al-Kadhimi seemed focused on gutting the system. The former journalist and political activist rode into office as a supporter of the protesters' demands and has  pressured institutions to rein in corruption, oftentimes by purging those in power.

In July, Kadhimi sent federal forces to replace senior officials at key border ports. This included replacing eight customs officials at Basra’s Umm Qasr Port, an important checkpoint for the oil industry. The group was replaced with a garrison that rotates every few weeks so that it doesn’t set roots and become easy to manipulate.  One month later, Kadhimi formed a special committee, reporting directly to his office, to investigate cases of corruption and exceptional crimes.  In September, three senior Iraqi financial officials were arrested on corruption charges, including Bahaa Abdul-Hussein, the director of the Qi Card company. With branches across the country, the company is responsible for distributing salaries to employees and retirees. In recent years, the company has been accused of mismanaging salary and pension distributions.  Also arrested were Agricultural Bank Director Adel Khadr and the head of Baghdad’s Investment Commission, Shaker al-Zamili.

The idea of tackling corruption by going after selected big players such as Akoub and senior customs and government officials could be seen as an attempt to make sure that everyone else operates more carefully. But critics of Kadhimi’s efforts say the prime minister has provided no road map or clear path for fighting systemic corruption. As one source told Al-Monitor, forming a special task force is nothing significant in Iraq because the country has a committee for everything.

Others accuse the prime minister of playing it safe by only targeting individuals who lack significant political backing or hold ties to armed militias. To enforce corruption successfully, the source said, Kadhimi needs a blanket approach that hits all sectors equally.  And time is running out. On Sunday, the protests reignited as thousands again took to Iraq's streets to mark one year since the mass anti-government protests began. 

There is also the possibility that Kadhimi will not remain prime minister after the country goes to an early vote, possibly in 2021; he is not directly elected by the Iraqi people, but rather by the parliament. Many lawmakers may not like the anti-corruption efforts that have often targeted their circles.  “This sort of stuff has to be persistently kept up or it doesn’t become permanent,” Knights said. “

And it’s very uncertain whether Kadhimi will still be there by the second half of 2022 and so his guys are focusing on doing as much as they can as quick as they can and hoping that it will set in motion momentum that will keep going even if they are not reappointed.”  LINK

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Don961:  Report: The White Paper Affirms That Iraq Needs A Change In Its Economic Policy

The Iraqi economy is floundering in an actual bind

On November 1, 2020

The Independent / - The Iraqi economy is floundering in an actual deadlock, amid warnings of facing bankruptcy, while taking any reform measures means imposing a harsh reality on the majority of citizens.

A press report titled "The White Paper: When Structural Adjustment Knocks the Door of Iraq," and the Independent continued on Sunday, reviewed the possible results of some of the measures recommended by the White Paper, including reducing the salaries of employees and reducing the value of the national currency.

The report, published by the "Washington" Institute for Studies, is likely that the options proposed by the White Paper will face "political resistance" and "popular discontent."

Next is the text of the report

The Iraqi government recently issued a white paper detailing economic and financial reforms aimed at pulling the country out of its current economic woes. The Economic Reform White Paper - developed by the Emergency Cell for Financial and Economic Reform, set up in May to manage the country's economic reforms - generally proposes reforms that are in line with the requirements of the World Bank and the International Monetary Fund for developing countries. While experts agree that these draconian measures are necessary, they will be difficult to implement and will likely encounter objection from the Iraqi people.

By issuing the White Paper, the current Iraqi government took a new and unusual step in the country's political history. Half of the detailed 96-page document is a diagnosis of Iraq's economic problems and their roots. As the Iraqi Deputy Prime Minister and Finance Minister Ali Allawi tweeted on October 18, “The reform paper diagnosed with a scientific and objective vision the economic and financial problems that pose real challenges that can be overcome by a strategic planning method based on an objective analysis of reality and extracting strategic goals as urgent priorities.”

By detailing the roots of these economic and financial crises, the White Paper brings the current crisis gripping the country back to the 1970s. The report describes how for half a century the state has relied on the country's growing oil revenues only to "expand the public sector" and "directly and indirectly control the economy." During this period, Iraq witnessed the emergence of a rentier state. These problems continued during the 21st century due to the CPA's failure to implement “shock therapy” programs, leaving the country vulnerable to economic and financial systems characterized by a controlled economy, a rentier state, a ruling sectarian system, and a high degree of state intervention in the joints of the country.

In response to the country's turbulent economic past, the White Paper aims to establish a balance in the Iraqi economy by allowing the state to diversify it while creating economic opportunities for citizens. The necessity for diversification is justified by relying on the International Monetary Fund's report for the year 2019, which warned that “in the absence of any changes to the policy, the growing budget deficit will neutralize resources from essential investments to rebuild the country and improve public services, while undermining reserves and posing risks Threatening sustainability in the medium term. However, the objectives outlined in the paper cannot be easily achieved since implementing reforms will require drastic measures.

In 2003, Ali Allawi, who was then the Minister of Trade in the Provisional Government and who is considered the architect of the current White Paper, stated that “We suffered because of socialist and Marxist economic theories and then cronyism. Now we are faced with the possibility of applying free market fundamentalism. ” This type of fundamentalism is clearly evident in the white paper. Its recommendations are very similar to the structural adjustment programs that the International Monetary Fund and the World Bank impose on low and middle income countries. These programs often force governments to reduce government expenditures on basic needs such as education, health care, the environment and subsidize the prices of basic commodities such as food grains. In addition, these programs oblige governments to devalue their national currencies and increase exports, which leads to a decline in actual wages and support for export-oriented foreign investments. It is assumed that all these changes will take place in a free and open financial market.

However, implementing such policy changes will likely be difficult in Iraq. In this case, halving the wage rate, cessation of subsidies, devaluation and borrowing are the main pillars of the white paper. But none of these missions will be simple and many will not gain popular support.

With regard to borrowing, the Iraqi government is seeking to borrow $ 35 billion to finance its operations. But the Iraqi parliament does not allow the government to borrow from abroad, so domestic borrowing is the only option. But in a country torn apart by war, domestic sources of funding are scant. 

Likewise, improving efficiency and spending in Iraq's public sectors - particularly through devaluation and cutting subsidies - will not be easy. For example, electricity, one of the most prominent areas of public spending in Iraq, is a complex economic, technical and geopolitical problem in the country. The IMF report 19/248 had “recommended that priority spending measures should be given to contain the growth in wages and reduce subsidies given to the electricity sector.”

However, these measures are inconsistent with existing practices. In Iraq, there is a presumption that the state will provide and support energy resources.

As former Iraqi Electricity Minister Luay Al-Khatib said: “The electricity sector in Iraq suffers from a set of problems. The country's complex bureaucracy often impedes progress by focusing on ineffective, short-term, technical solutions rather than longer-term macro-institutional reforms. There is also a chronic deficit in managing fuel raw materials, coinciding with a deficit in managing other energy portfolios and the broader business value chain. The sector is vulnerable to the conflicting agendas of a large group of Iraqi political actors that prevent the development of a unified national vision for its management, which plunges the sector into mismanagement and renders corruption rampant in it.

Given the complex nature of these problems in Iraq, these reforms are likely to encounter political resistance. The White Paper was released at a time when Iraqis are discussing the process and results of the general elections scheduled for next year in June 2021. At such a time, it is difficult to expect any political bloc to publicly adhere to similar harsh measures suggested by the White Paper. Critics also point out that it is not the caretaker government's duty to institute medium-term economic reforms that will continue until 2023, that is, during the years of the next government's term.

Most of these measures will likely not be supported by the Iraqi people. Focusing on wage cuts is a double-edged sword, as public sector salaries are the only part of government expenditures that end up in the local market and are traded among small and medium-sized companies. Thus, it is an important benefit to the common people. The Iraqi government should proceed with a gradual and cautious reduction of public sector wages; Cutting wages by half and devaluing the Iraqi currency will be the cause of widespread poverty, a problem that basically paralyzes the country.

Moreover, devaluation of the Iraqi currency may be difficult in the current global economy. From the point of view of the state, it is logical to suggest a devaluation of the Iraqi dinar. Allawi had hinted that a weaker dinar might enhance the competitiveness of Iraqi goods, thus providing support for sectors such as agriculture and industry. In this context, Allawi pointed out that “all countries that export to Iraq, such as Turkey, Iran, China and Saudi Arabia, have devalued their currencies. We cannot compete if we keep the value of the dinar constant and stable.

However, the devaluation of the dinar will help improve Iraqi exports only if it falls to a level even lower than the currencies of trading partners, which are already low. The Iranian rial fell against the dollar, and the Turkish lira is following a similar descending path. A devaluation of the dinar below these currencies would be bad and possibly dangerous.

Accordingly, the Iraqi economy is in real trouble: Experts have warned that Iraq will face bankruptcy in the absence of any drastic steps, but similar steps are likely to result in great suffering for the majority of the Iraqi people. Critics stressed that the country should focus on cutting its large security and defense budget.

The security problems in Iraq also represent a dilemma. In regions experiencing unrest, the Iraqi government is employing young people in the security sectors as a way to secure jobs for them, which further inflates the security budget. Those working in the security sector do not contribute to the economy, while the enormous jobs in this sector constitute an incubating environment for corruption, "ghost" employees, and double wages. In the case of the Popular Mobilization Forces, which are allocated $ 2 billion in the annual budget, their security contribution is conditional.

In light of allocating a total annual budget of $ 8 billion to the Ministry of Defense, critics considered that this sector also needs reform, especially since the injection of funds to overcome the country's security challenges - a method favored by politicians around the world - did not contribute to solving security problems. Iraqi.

Finally, the White Paper is an indication that Iraq needs a radical change not only in its economic policy but also in other areas of governance. While all Iraqis theoretically agree on the need for change, very few agree on the practical nature of what change should be. Despite this, the country has no easy choice, even if its various parties can agree on a way to achieve this. It is unlikely that the price of oil will increase anytime soon, and thus the budget problems are unlikely to be solved. Since the current bleak outlooks have convinced the Iraqi political class of the need to support the White Paper, much will depend on government decisions in managing its implementation.  LINK

Samson:  Iraq intends to import robots to combat explosives

11/01/2020 08:30:06

The General Directorate of Explosives Control at the Ministry of Interior has held talks with a European country to supply it with modern equipment.

The Director General of the Directorate, Major General Sabah Hassan Al-Shibli, said in a press statement that "the discussions included providing the Directorate with robotic devices to combat explosives with the latest available ones in the developed countries of the world," noting "its contribution to maintaining security and stability in the country."

He promised his directorate, which was established in 2005 and affiliated to the Ministry's Agency for Police Affairs, "an important detail in the ministry, as it was established in a simple way to expand after that," indicating that "the directorate was activated after the occupation of ISIS criminal gangs in a number of provinces years ago, similar to the rest of the other security joints." 

Al-Shibli added, "The focus of its work in the fight against terrorism has focused on dismantling the booby-trapped wheels, the role and the foreign bodies in addition to the explosive devices."   LINK