More Iraqi News Tuesday PM 12-15-20
More Iraqi News Tuesday PM 12-15-20
TLM724 Administrator BondLady’s Corner
3 Reasons For The Rise In The Dollar And The Government's Warning Against This Step
Time: 12/15/2020 15:11:52 Read: 4,121 times {Baghdad: Al Furat News} Economic analyst Aras Hussain Dartash confirmed that the high price of the US dollar against the Iraqi dinar in the markets of the Kurdistan region and Iraq is due to several reasons.
The dollar fell today to 1278 dinars to the dollar, after the exchange rate jumped yesterday to more than 1300 dinars.
Dartash said in a press statement, today, Tuesday, that the rise in the price of the dollar in the markets is due to several reasons, adding that the first reason is rumors Suspect , as there is a type of which are just rumors from some officials and politicians and perhaps they are basically non-economic, about the government's intention to reduce the value of the dinar Iraqi against the dollar, stressing that it belongs to the Ministry of Finance and the Central Bank, but so far we do not know is this correct or not? There is no official position on the part of the government or the central bank.
”He added,“ The second reason is that usually in the last month of the year the central bank conducts clearing operations in order to close and organize final accounts, and during this period a smaller amount of the dollar is offered through the currency windows and may stop The central bank announced the introduction of the dollar on the market for several days.
He pointed out that "the third reason is that there is talk that Iraq may face problems against the background of regional conflicts or the conflict between the United States and Iran, which raises investor concerns and pushes them to keep a larger amount of the dollar.
As for the government's intention to actually reduce the price of the dinar against the dollar," he said Daratash that he is said to be in the government 's intention to have the dollar exchange rate against the dinar to the 135 000 or 150 thousand dinars for each $ 100, expressing his belief that there was anything like that for as long as there is nothing official yet.
he pointed out that in the case decided The government has reduced the exchange rate of the dinar against the dollar, the prices of goods and goods will rise, and the purchasing power of the Iraqi dinar will decrease, pointing out that the loss in this case will affect people with limited income, and in the first and last the citizen is the loser, whether he is from low-income or not, stressing that people with They will be affected by this limited income more than others. LINK
Member In Parliamentary Finance: The Government Secretly Printed 10 Trillion Dinars ... And Reveals The Reason
Time: 12/15/2020 12:39:12 Read: 9,828 times {Baghdad: Al Furat News} A member of the Parliamentary Finance Committee said, "The federal government has secretly printed tens of trillions of dinars," he said.
Jamal Cougar stated in a press statement, that "since mid-2020 until now, the government has twice submitted a borrowing bill to the House of Representatives, and the House approved them, and most of these loans were secured according to what the government announced by issuing financial bonds and selling them to the Central Bank, which should be The central bank reserves are currently much less than they were before mid-2020, but this reserve has not decreased. "
Cougar explained that "through analyzing this, it becomes clear to us that the government has secretly printed tens of trillions of Iraqi dinars to pay salaries and cover expenses that were approved under the law on borrowing, which constitutes a great danger to the value of the Iraqi currency."
It is noteworthy that the government is facing difficulty in securing the salaries of its employees due to the financial crisis caused by the deterioration of oil prices and the outbreak of the Corona pandemic, as it resorted to borrowing 12 trillion dinars to distribute salaries until the end of this year under the Fiscal Deficit Financing Law approved by Parliament on November 12, which was resolved As an alternative to the 2020 budget, where no agreement has been reached regarding the passage of the law, amid assurances from the Prime Minister, Mustafa Al-Kazemi, that he will face a problem in providing salaries as of the beginning of 2021. LINK
Parliamentary Finance: We Will Face Serious Consequences And A Legal Vacuum In The Budget Delay
Time: 12/15/2020 16:33:28 Read: 1,690 times {Baghdad: Al Furat News} The Parliamentary Finance Committee warned of "serious consequences" as a result of the government's delay in sending the draft federal budget bill for 2021 to the House of Representatives.
The Minister of Planning, Khaled Battal, revealed today that the budget was not included in the agenda of the cabinet session today, Tuesday, while likening the budget to "the patient," as he described it.
A member of the Finance Committee, Sherwan Mirza, said in a press statement, "It is too late for the government to send the budget bill for next year as soon as possible to the Parliamentary Finance Committee."
Mirza added, "The federal government was supposed to send the draft federal budget bill for the next year 2021 within a maximum period of mid-October," noting that "failure to send the bill and delaying its approval and with our entry into the new year will enter the country into a legal vacuum." .
Regarding the consequences of the delay in approving the draft law, a member of the Finance Committee affirmed that "entering the country in a legal vacuum has serious consequences because the federal government does not have any powers to disburse several financial dues 12/1 for salaries and the operating budget," indicating that "this leads to a halt." All investment and strategic projects across the country. " LINK
The Iraqi Dinar Collapses ... The First Sign Of The Al-Kazemi Government Borrowing! ... And Experts Warn Of The 1990s Scenario
The Baghdad Post Tuesday, December 15, 2020 02:18 PM Despite the billions of dollars of oil revenues that Iraq gained annually, the value of the dinar is witnessing a continuous decline against the US dollar . Several internal and external reasons contributed to the decline of the dinar's price against the dollar.
In the context of searching for solutions to the salary financing crisis that Iraq has been suffering since March 2020, and until now due to the drop in oil prices, a member of the Parliamentary Finance Committee, MP Muhammad Sahib Al-Darraji and other specialists called for the reduction of the value of the Iraqi dinar against the US dollar , and they marketed their calls as a solution The current financial crisis, and a way to advance the productive sectors, and the development of the Iraqi economy
In this context, the economic expert at the Center for the Development of the Iraqi Economy, Imad Shihab, attributes the reason for the decline in the price of the Iraqi dinar against the US dollar to a number of reasons: "Most notably the increase in demand for the dollar. instead of dinars, which negatively affected the reality of the economy in the country."
Shehab added in a statement that "the smuggling of hard currency (dollars) to Syria and Iran, which suffer from economic sanctions, as well as the tendency of Iraqi merchants and businessmen to save dollars instead of the Iraqi dinar, which contributed greatly to the exacerbation of the crisis." And this demand has risen, according to a statement by the Governor of the Central Bank of Iraq, Sinan al-Shabibi Suspect , to nearly 50 percent since the beginning of this year.
For his part, the economist at the Center for the Development of the Iraqi Economy, Imad Shihab, stresses "the necessity to address the crisis through the central bank’s approach, a monetary policy that restores the balance of the dinar’s price against the dollar in auctions (the daily sale of dollars). by the Central Bank of Iraq), by reviving the market in a currency. The dollar, in order to fix the dinar price within certain limits. "
This confirmation comes in light of accusations made by economists against the Central Bank of Iraq of not following a sound monetary policy and not using its monetary tools properly, stressing that the bank has an abundance of foreign currency that the bank can use at the optimal time, as evidenced by the fact that its foreign currency reserves reach about $ 60 billion.
Parties benefiting
from his side, Professor of Economics at Baghdad University Karim Jaber Damad reveals about the party benefiting from the worsening dollar crisis in a dialogue with DW: “Syria and Iran are the most prominent countries benefiting from the decline of the dinar against the dollar,” indicating that “the international economic and financial sanctions imposed on These two countries led to a decline in their local currencies, which negatively affected the Iraqi economy.
The economic expert called for the need to set a tight monetary policy by the Central Bank and the Iraqi Ministry of Finance, "Otherwise, the dollar will continue to rise to reach record numbers, and this would burden the Iraqi citizen." The effects of the rise in the dollar are getting more severe as Iraq relies completely on imports to cover its most basic needs in various fields, in light of the lack of many of its domestic industries during the past two decades.
The US dollar is the beneficiary of the deterioration of the Iraqi dinar
Fears of a return to the past
The past of the recent economic collapse is still present when the Iraqi currency collapsed after the Kuwait war in the early 1990s and the ensuing economic sanctions, the first of which was the collapse of the Iraqi dinar, so that the dollar was equal to about three thousand dinars, after the Iraqi dinar was equal to three US dollars in the seventies and eighties. These concerns were evident in the opinions of Iraqi citizens interviewed by DW.
“My monthly salary is no longer sufficient to support my family’s daily sustenance due to the depreciation of the Iraqi dinar against the dollar, and the rise in foodstuff prices and other basic life requirements,” said Jamal Bashir Ahmed, an employee at a government department in Baghdad, who receives his salary in local currency.
In this context, we present to you the justifications and risks of depreciating the value of the Iraqi dinar:
First: In the area of facing the crisis of paying salaries:
Reducing the value of the Iraqi dinar means that the Iraqi Central Bank raises the selling prices of the dollar at the window of currency sale With the aim of increasing the state's revenues in dinars, and providing additional financial resources to the treasury, to alleviate the crisis of paying salaries, and if we impose the decision to raise the price of the dollar against the dinar by (25%), this will lead to an increase in the dollar exchange rate from ($ 100 = 119000 dinars). The current official ”) to ($ 100 = 148,750 dinars“ 25% increase ”); This will increase the state's revenues from selling the dollar by (25%).
According to data from the Central Bank of Iraq on July 1, 2020, the Central Bank of Iraq sold (249.5) million dollars at a price of ($ 1 = 1190 dinars) with revenues of (296.310) billion dinars ([2]).
In the event that the dollar exchange rate increased by (25%), the monthly revenues will increase by (296.5 billion dinars multiplied by 25% multiplied by 22 days) = 1.630 trillion dinars per month, which is a relatively small amount compared to the size of monthly salaries and necessary operating expenses that exceeds 7.5 trillion dinars per month. It amounts to (21.7%) of the volume of monthly salaries and necessary operating expenses ([3]).
The application of such a measure will eliminate the general economic stability that the Central Bank of Iraq has succeeded in building and maintaining since 2004, and large waves of inflation (high general price level) exceeding the supposed devaluation of the dinar (25%), under the effects of the collapse Confidence in the Iraqi dinar and the two financial monetary systems as a whole, and the tendency of individuals and companies to give up the dinar and buy dollars for various uses.
The value of Iraq's imports of foreign goods reached (45.736) billion dollars in 2018 ((4)), and if we know that most consumer and durable goods in the Iraqi market are foreign goods imported in US dollars, then we can expect their prices to rise after raising the dollar exchange rate against the dinar. High proportions; Because of consumer expectations and the roles of speculators and traders, including food, medicine, clothing, construction materials, fuel, chemicals, and other essential commodities.
And raising the assumed US dollar exchange rate by (25%) will lead to a decrease in the purchasing power of the Iraqi dinar by a rate that may exceed (25%); Consequently, the quantity of goods and services purchased by government employees and workers in the private sector will decrease; Because of the high prices of goods and services caused by the rise in the dollar The lower purchasing power of the dinar.
dollar count
We conclude from the foregoing that the decision to reduce the value of the Iraqi dinar carries serious economic and social risks, including: ending the state of economic stability, entering into deep inflationary waves, declining living standards, and the entry of large segments of the population below the level of poverty that reached 23.5% in Iraq.
In 2019 ([5]); Because of the decrease in the amount of goods and services that they can obtain in exchange for the purchasing value of their salaries and wages, a decision that bears the residents the price for the failure of governments to build the economy and its development during previous years by impoverishing them, reducing their living standards.
Second: In the field of advancing productive sectors: The advocates of raising the exchange rates count Reducing the value of the Iraqi dinar on the possibility of producing many foreign goods locally, by raising their prices in the Iraqi market; With the aim of helping Iraqi producers produce them, forgetting the state of great collapse in the real Iraqi production sectors; Because of the commodity dumping phenomenon that Iraq is exposed to Since 2003, one of the world's largest exporters, including China, Turkey, and Iran, as these countries enjoy great competitive advantages based on wide production bases that have reduced production costs thanks to government support, and the decline in their currencies and production costs;
This would constitute a barrier to any attempt to advance agricultural and industrial production in Iraq, unless it controls the border crossings, and an Iraqi customs tariff law is implemented that provides protection for national production, by imposing tax and customs restrictions that prevent the entry of goods that can be produced locally, or raise their prices above their production costs in Iraq, and it must be noted that the devaluation of the Iraqi currency - for the purpose of export - can be an option for economic development after reviving the mentioned economic sectors and enabling them to produce With the aim of replacing imports, and then qualifying them for the stage of production for export. LINK
Parliamentary Finance: Changing The Exchange Rate Of The Dinar Must Be Through The Central Bank
The Baghdad Post Tuesday, December 15, 2020 08:38 AM A member of the Parliamentary Finance Committee , Mohamed Al-Darraji, said that any change in the exchange rate of the dinar must be through the central bank , so that the state and the citizen benefit, not through currency dealers.
Al-Darraji wrote, in a tweet in the popular dialect on the Twitter platform for social communication, “ The central bank’s sales yesterday are $ 230 million, the difference in the selling price between the bank and the market is 110 dinars per dollar, meaning the profit is 25 billion dinars in one day! Any change in the exchange rate must be through the bank. Central so that the state and the citizen benefit from it, not through currency dealers so that they and those behind them benefit. LINK
Parliamentary Finance Reveals The Government's Desire To Reduce The Exchange Of The Dinar Against The Dollar, And The Reason ??
Time: 12/15/2020 16:40:30 Read: 3,679 times {Baghdad: Al Furat News} The Parliamentary Financial Committee revealed, on Tuesday, the government's desire to reduce the exchange rate of the Iraqi dinar against the US dollar.
Committee member Jamal Cougar told {Euphrates News} that "there is a government approach that the central bank may not be satisfied with, and it seems that the policy has changed with the change of its portfolios," pointing out that "the government wants the Iraqi dinar to drop against the dollar so that it can through it reduce the level of the deficit."
He added that "the deficit will be reduced through four paths, two paths of which the citizen will be affected and the government will benefit from them and the other will benefit both parties," noting that "there is an interrogation presented to the governor of the Central Bank by Faleh Al-Sari, and the signatures for this matter have been collected."
He pointed out that "the political blocs are divided with the support of the central bank and others want to keep it as a sober institution and confront us with the outside world and that there are warnings we have received from official bodies that the central bank, if its files are not reviewed, may fall under threat." LINK
Economist: Raising The Dollar Exchange Rate Is An Expected Government Action
Tuesday 15, December 2020 09:24 | Economical Views: 379 Baghdad / NINA / Economic expert, Abdul-Hassan Al-Shammari, affirmed that: raising the dollar exchange rate is an expected government action.
He told the Iraqi National News Agency ( NINA ) that the continuous rise in the exchange rate of the dollar is negative in light of the financial and economic crisis that the country is witnessing.
Al-Shammari added: The exchange rate of the dollar was supposed to be raised in the currency auction and not in the local market, which could not bear this. Yesterday, the dollar exchange market reached more than 130 thousand dinars per 100 dollars. / End 3 https://ninanews.com/Website/News/Details?key=876281
Representative Finance: The policy of the central bank behind the high exchange rate of the dollar
Editing date: 12/15/2020 19:01 • 12 times read [Baghdad-Where] The Parliamentary Finance Committee, on Tuesday, attributed the high exchange rate of the dollar in the markets to the floundering policy of the Central Bank.
A member of the committee, Abdul Hadi Al-Saadawi, said that "the rise in the dollar’s exchange rate is not according to a governmental approach and an economic policy, but as a result of confusion in the management of the central bank," noting that "the committee called for measures to be put in place to control the sale of the dollar."
He added that "some parties have monopolized the sale of the dollar, and this matter must be resolved and not allowed to monopolize the sale," noting that "the high selling prices of the dollar returns to the confusion of the central bank’s policy, and the rise will continue if the same policy remains."
The dollar exchange rate for the past two days witnessed an unprecedented rise, as the exchange rate reached 131 thousand dinars against 100 dollars. http://www.alliraqnews.com/modules/news/article.php?storyid=105231
The Rise In The Exchange Rate Of The Dollar ... Is Expected Within The Paragraphs Of The White Paper
An economist for / NINA / Monday 14, December 2020 20:07 | Economical Views: 812 Baghdad / NINA / Economic expert Hazem Hadi confirmed that: The rise in the exchange rate of the dollar is expected within the paragraphs of the white paper.
He told the Iraqi National News Agency ( NINA ) that: The continuous rise in the exchange rate of the dollar is expected after receiving a paragraph on the white paper related to studying the exchange rate of the dollar against the dinar. The dollar exchange market today reached more than 130 thousand dinars per 100 dollars. / End 3 https://ninanews.com/Website/News/Details?key=876226
Economic Specialist For Nina: The Reform Paper Is Part Of A Political Game That Does Not Exist On The Ground
Tuesday 15, December 2020 18:40 | Economical Views: 41 Baquba / Nina / Economic specialist Jamal Shaker warned of the collapse of the Iraqi currency against the dollar in the coming days due to the manipulation of the influential parties / he did not name them / the currency auction outlets and their control in the market.
He told the correspondent of the Iraqi National News Agency / NINA / today that the smuggling of hard currency outside the country and the control of the influential authorities in the outlets of the currency auction led to a rise in the exchange rate of the dollar, which is the only cover for importing Iraq, which caused the collapse of the country's economy and the rise of commercial goods, especially the basic ones that affect the lives of the affected citizen. Only because of mismanagement and corruption.
He added that the government reform paper is part of a political game that does not exist on the ground, and that the political conflict and the exacerbation of the disagreement between the region and the center will increase the burdens and the economic crisis. https://ninanews.com/Website/News/Details?Key=876401
Ministry Of Planning: 50 Trillion Dinars, The Value Of Salaries In The 2021 Budget
Money and business Economy News – Baghdad Planning Minister Khaled Battal revealed that the general budget for next year has not been included on the agenda of the cabinet session today, Tuesday.
"The price of oil was set at 42 dollars in the general budget for the next year," Battal said in a statement reported by the official news agency "INA" and seen by "Al-Iqtisad News."
He added that "the salaries of employees and their allocations in the general budget for the next year amounted to 50 trillion dinars."
He pointed out that the Minister of Finance had informed him of sending the budget to the General Secretariat for the next year, likely "to conclude discussion of it within the next four days."
He indicated that "an agreement was reached with the World Bank regarding the investment aspect of the budget." Number of observations 81 Date of addendum 12/15/2020 https://economy-news.net/content.php?id=23149
Iraq Crises .. This Is What Biden Must Do
Time: 12/15/2020 12:52:57 Read: 2,509 times {International: The Euphrates News} The American Foreign Policy magazine revealed that the first foreign problem that the new US president, Joe Biden, must confront as soon as he takes office on January 20, is the severe economic crisis in Iraq.
The magazine stated in its report that Iraq is heading to financial collapse, and in its current fragile state, this collapse is likely to lead to the collapse of its dilapidated political system, "according to the magazine.
Over the past two decades, corruption has created a two-headed problem for Iraq, the first of which is that successive weak governments have allowed all A large political party, run by one or more ministries, has given rise to massive networks of cronyism and corruption that absorb oil revenues and pass them on to their followers in the form of jobs, contracts, and perks.
The second problem is that the effective spread of graft has stifled what the little private sector had in Iraq. Which means that there are not many alternatives to public sector jobs, which made people rely heavily on the government for their livelihood, whether with jobs or pensions.
According to the magazine, the number of workers in the public sector has increased threefold since 2004, and the salaries paid by the government have increased by 400% than they were 15 years ago, and the result is that Baghdad needs $ 5 billion a month to pay direct salaries and pensions, in addition to two billion Another dollar to cover basic services and operating costs.
Since the outbreak of the Corona epidemic and the collapse of oil prices, which provide about 90 percent of government revenues, the monthly income of Iraq has decreased between 2.5 and 3.5 billion dollars, and this means that Baghdad suffers from a monthly deficit of between 3.5 and 4.5 billion dollars.
Because of all this, Iraq's hard currency reserves began to run out, and with the summer of next year, Iraq's reserves of currency will seriously decrease, making the country unable to fulfill its obligations such as paying salaries.
The magazine pointed out that the financial crisis will almost certainly lead to the outbreak of large-scale demonstrations in the streets, with Iraqis again demanding a change of government and it will be difficult for the government to maintain order if salaries are not paid.
The magazine confirmed that during the first six months of the Biden administration and with the spread of the pandemic and a huge economic crisis at home, he will not be able to make Iraq's problems a top priority, but it indicated that acting sooner will be cheaper.
She explained that the coming Iraq crisis is a liquidity crisis, as it will need money to prevent the collapse of its financial system, which will be the first (domino) to fall, and that if the United States is willing to pledge a large amount, perhaps $ 1 billion, it will be possible to assemble a package larger than 5 to 5 $ 10 billion to Iraq with other countries.
But she said that, at the current exchange rate in Iraq, even $ 10 billion will last barely three months. That is why giving money to Iraq must be accompanied by strong conditions such as: austerity measures to encourage savings, large cuts in government spending, strict anti-corruption measures, and the integration of individuals They are fully armed in the Iraqi army as individuals, not armed and therefore they are accountable to the Iraqi government. LINK
The Iraqi Economic Meltdown May Be Biden's First Foreign Policy Headache
Reports Economy News – Baghdad The last thing US President-elect Joe Biden wants is a new Iraqi crisis. Unfortunately, it would be the first foreign-political problem he would face.
Iraq is on the verge of economic collapse, and in its fragile state of government, it is likely that this financial collapse will be accompanied by the collapse of its dilapidated political system, which may lead to fueling another round of civil war.
Over the past two decades, corruption in Iraq has created a problem with two sides. Weak, complicit, and totalitarian governments mean that every major political party will run one or more ministries. These parties run bureaucratic ministries not out of the country's interest but with the aim of creating a massive patronage network - corruption machines that absorb oil revenues from the government treasury and pass them on to their constituencies in the form of jobs, contracts, and other benefits. The phenomenon of rampant graft has strangled what was owned by Iraq from the small private sector, which means that there are not many alternatives to public employment.
As a result, the state has become the largest employer in Iraq, and a large proportion of the country's population lives on its imports, either directly in the form of salaries and pensions, or indirectly in the authority of contracts or providing goods and services to employees in government institutions. Even small companies in Iraq depend on the government in the end because many of their clients - especially in the major governorates - take their salaries from the government in one way or another. Moreover, the Iraqi government continues to provide a monthly “food basket” through a public distribution system, which remains an important component of the daily life of the poor and toiling class in Iraq.
It is not surprising that the increase in public sector jobs since 2004 has increased by three times, and the government pays salaries that are 400% higher than it paid 15 years ago. Thus, the government and its oil revenues became the main engine of the economy and the main supplier to Iraqis.
The result is that Baghdad needs $ 5 billion a month to cover monthly salaries and pensions, in addition to $ 2 billion to cover basic services and operational expenses, many of which contribute indirectly to support the population. However, with the advent of the Corona pandemic, which coincided with the collapse of oil prices (which represents 90% of the government’s imports), the monthly revenues for Iraq ranged between (2.5 - 3.5) billion dollars, and this means a monthly deficit faced by the Baghdad government ranging between (3.5 - 4.5). Billion dollar.
Iraq is currently consuming its money to cover this deficit. Last October, Iraqi Finance Minister Ali Allawi said, "The central bank's reserves amount to $ 53 billion." Since then, the Iraqi Council of Representatives approved a law to finance the fiscal deficit to cover the salaries of employees for three months - October, second and December of 2020. This brings the total of Iraq's debts to $ 80 billion, according to government sources and the annual draft budget, as the government allocated $ 12 billion of Annual principal and loan repayment budget - all of which further exacerbate the government's capital shortfall.
According to government officials, the central bank's reserves will deplete if the government pays its dues. For this reason, it is forced to print money in order to pay off the loans that will go to cover employee salaries and operating expenses, which increases the risk of inflation. For this reason, the Baghdad government may soon be forced to depreciate the dinar instead, and this, in turn, also carries significant economic and political risks. The devaluation of the dinar without being accompanied by economic reforms - which the political forces in Iraq refuse to consider - will restrict imports, undermine savings and increase hardship.
What's more, a devaluation is likely to cause more inflation as well. Evaporation of hard currency means that Iraq will not be able to pay for imports of goods and foodstuffs. Iraq is an importer of almost everything except oil. If the flow of hard currency decreases and the value of the dinar decreases, most goods will become scarce and their prices will rise. If the government continues to withdraw the remaining funds in the central bank, the value of the dinar will decrease with it within six months, once the currency is devalued.
Some Iraqi government officials hope that the expected increase in oil prices during the spring season will save them. However, according to many statements of oil traders and analysts, they expect an increase in prices of between 10-15%, which is a very small percentage to eliminate the looming Iraq crisis. Even this percentage may diminish if Iraq, Iran and Libya follow the example of Saudi Arabia and Russia with the process of increasing production to protect their market share.
If Iraq were to become unable to secure salaries and minimal operating expenses, this would have dire consequences. The Iraqi Prime Minister, Mustafa Al-Kazemi, sounded the alarm at a press conference on November 17, saying, "We will face the problem of paying salaries in the first month, I warn you from now."
As a technocratic figure without the power of a political base, Al-Kazemi was unable to push political parties to address the financial crisis, let alone solve it. Although the government issued the "White Paper for Reform" on October 17, it did not implement its provisions. As a result, there were no efforts to cut salaries, reduce the number of state employees, or get rid of hundreds of thousands of space job ranks for fear of angering important Iraqi political leaders.
Upon taking power, Al-Kazemi had widespread support: from Iraqi citizens, thousands of protesters, the Shiite religious establishment in Iraq, moderate Shiite parties, many Sunni parties as well as the Kurds. He was seen as an intelligent man, out of the political arena, influential, and on good terms with the American side. However, there are growing concerns that Al-Kazemi will not be able to repair the broken Iraqi system.
The economic crisis that will result from the money running out may be the nail in his coffin. It is very possible that Al-Kazemi will lose his credibility completely, and many political parties will try to make him a scapegoat to avoid the inevitable popular reaction. Meanwhile, political forces close to Iran - who opposed Al-Kazemi - will try to exploit the chaos to reassert their influence in the Iraqi government.
It is almost certain that the financial crisis in Iraq will lead to the outbreak of large-scale demonstrations in the streets again, as Iraqis will again demand a change of government. It will be difficult for the next government to maintain order if it does not pay salaries and its prime minister lacks power. Armed groups and clans, including armed factions close to Iran, will try to fill the void and take on the role of the Iraqi security forces. These groups will fight with each other over control of land and income-generating resources such as oil, ports, border crossings, large companies, agricultural land, and private property.
In such a situation, armed conflict and land grabbing would become common again. With the exception of some areas that have strong security, such as the Kurdistan Region. However, even the region will not be safe from internal economic problems unless it can expand its resource base, because it is also financially dependent on Baghdad. Kirkuk and its oil fields may be one of the Kurds' most visible targets, but this will only ignite the conflict between Erbil and Baghdad, not to mention the Shiite factions that will resist such a move.
As was the case in the two periods (2005-2007) and (2014-2017), another round of civil conflict in Iraq will take place and will attract neighboring countries with it. Iraq, simply put, is extremely important to all of them, and they can be expected to intervene in order to secure their interests.
Turkey will feel threatened by Kurdish gains, especially if Kurdistan manages to capture Kirkuk. Ankara will feel the duty and obligation under the slogan of protecting Turkmen in Kirkuk and preventing the Kurds from reviving the dream of independence. Iran will work to restore its dominant influence in Baghdad. Tehran cannot sacrifice revenues from trade with Iraq (which amount to $ 12 billion) in addition to opportunities for smuggling and access to global financial markets.
The Saudis may respond to the increase in Iranian influence by supporting Sunni groups and Arab tribes with financial funding and weapons to protect themselves. Especially since Riyadh cannot rely on the presence of a large number of American forces to deal with the problem, as happened in 2006. Iraq can easily slide into a civil war between internal groups and regional intervention and make the Iraqis struggle with each other.
Given the gravity of the situation and the importance of Iraq in the region and the international oil market, the United States and the international community cannot stand idly by. Of course, during the first six months of his administration, and with the presence of a widespread epidemic and economic crisis in his country, the new American President Biden will not be able to bear the costs of making Iraq a top priority for him, but sooner action will be less expensive and avoid facing difficult choices at a later time, When Iraq collapses.
If the United States wants to show some leadership, it is possible that the allies will participate with it as well. International financial institutions such as the World Bank, the International Monetary Fund, the Gulf states, and even some European countries and East Asian countries may participate.
The next crisis in Iraq is a liquidity crisis. Iraq will need money to prevent the collapse of its financial system, which will be the first domino to fall after it. If the United States pledged to secure a specific amount of money, perhaps one billion dollars, then it would be possible to collect a financial package of 5 to 10 billion dollars by America's allies.
The idea of providing a billion-dollar emergency budget to support Iraq may seem impossible at the moment. But it should not be impossible. Because it does not come out of the pockets of American citizens in the form of increased taxes. America is supposed to have learned two important lessons in the past twelve years in this part of the world.
First, what happens in the Middle East will not just stay there. Second, the value of an ounce of prevention of risk is equal to the value of a pound of treatment - as illustrated by Washington's tragic policies in Iraq, Syria and Libya.
Of course, and given the high rate of financial burning in Iraq, the amount of 10 billion dollars will not run state affairs for only three months. For this reason, the funds must be accompanied by strong conditions attached: austerity measures to encourage savings, significant cuts in government spending, strict anti-corruption measures, the integration of Hashd members fully with the Iraqi army as individuals and not as factions, and thus obey only government orders. In addition to subsequent financial relief promises as incentives if there is a good commitment by Iraq to these measures.
This international relief package will have essential collateral benefits. In Iraq, the only way to support a political agenda and build a foundation to see the light later is through resources. Al-Kazemi has repeatedly demonstrated his right intentions and sound ideas but lacks the political and military strength to implement them. Putting billions of dollars at his disposal, but under strict conditions, would give him the necessary resources to build this popular support and use it to undermine the current parties, militias and the thief regime.
These measures are what Iraq needs in the long term as well. The more Al-Kazemi blames the international community for forcing Iraq to take these measures, the more Iraqis understand that obeying these measures will save them, otherwise the entire system will collapse, leading to a greater ability to implement what he always hopes and what the US government always hopes for his ability to act.
When Biden was vice president, he won the dubious mission of running Iraq. Considering President Obama's past policies, it can be said that he was the worst job ever. But when he takes office and becomes president, addressing the problems of Iraq may not be one of his priorities or within his desires, but the Baghdad crises represent an opportunity to make Iraq - and America's interests there - on the right path in a way that he could not have been in the previous time when Biden was responsible for the Iraqi file. . Translated by: Rudaw
Source: https://foreignpolicy.com/2020/12/14/iraqs-economic-collapse-could-be-bidens-first-foreign-policy-headache/
Number of observations 133 Date of addendum 12/15/2020 https://economy-news.net/content.php?id=23153
Talabani: We Are Ready To Hand Over All The Region’s Revenues To The Federal Government
Money and business Economy News _ Baghdad The Vice President of the Kurdistan Regional Government, Qubad Talabani, confirmed, on Tuesday, the delivery of all oil and non-oil revenues of the Kurdistan Region to the federal government, indicating the readiness to agree with Baghdad, and that they are awaiting the Iraqi government’s response to answer the amount that will be allocated to the Kurdistan Region.
Talabani said in an interview with media outlets and his followers, Al-Iktissad News, that “we went to Baghdad since last Wednesday to implement the Deficit Financing Law, and this law was passed in Parliament without the participation of the Kurds, and despite our observations on the law, we came to implement it, and with this goal we held Several meetings, "noting that" this law requires the Kurdistan Region to hand over its oil and non-oil revenues, and we are ready for that, "adding:" We are now waiting for the federal government's response about the amount that it will give to the Kurdistan Region in exchange for handing over its oil and non-oil revenues, and our dialogue continues. Continuing. "
Talabani called on all parties to calm down, adding: "We are here to receive the dues of the Kurdistan Region and its employees, and he is assured that we will reach a successful outcome."
He pointed out that they saw and heard various statements by personalities who had talked about that the dialogue between the Kurdistan Region and Baghdad had failed or stopped, "I want to assure citizens that the dialogue is continuing and will continue until a conclusion is reached."
He added, "The delegation went to Baghdad to demand the rights of citizens in the Kurdistan Region and its employees, and we did not come to give people charity to us, there is a law that has been passed and its content is clear, and we came to implement it."
He continued, "We will remain in Baghdad until we reach a successful result for the citizens of the Kurdistan Region, and the current political situation has made the situation worse," calling on citizens to calm until a successful outcome is reached.
Last Saturday, Prime Minister Mustafa Al-Kazemi and Parliament Speaker Muhammad al-Halbousi discussed with the negotiating delegation for the Kurdistan Region headed by the Deputy Prime Minister of the region, Qubad Talabani, the mechanisms for implementing the fiscal deficit law "in a manner that takes into account justice in the distribution of financial allocations to all regions of Iraq."
Since last Wednesday, a delegation from the Kurdistan Region headed by the Deputy Prime Minister, Qubad Talabani, has visited Baghdad. Number of observations: 174, date of addendum, 12/15/2020
https://economy-news.net/content.php?id=23154
Qubad Tabani Confirms The Continuation Of Dialogues In Baghdad To Solve The Outstanding Problems With Erbil
The Baghdad Post Tuesday, December 15, 2020 07:57 AM Qubad Talabani, Vice President of the Kurdistan Regional Government
Deputy Prime Minister of the Kurdistan Regional Government, Qubad Talabani, confirmed the continuation of dialogues in Baghdad to solve the outstanding problems.
Talabani said in a statement that the dialogues and meetings will continue, stressing the Kurdistan Regional Government's readiness to adhere to the law on financing the fiscal deficit and solve problems by guaranteeing the region's benefits and employees' salaries, describing the news that talks about the failure of the talks as news that has nothing to do with the truth.
He added: The region’s delegation does not demand more than the right of the Kurdistan region, and our arrival to Baghdad aims to implement the law on financing the fiscal deficit, despite the observations on it, and it was voted upon after the withdrawal of the Kurdish representatives from the session, explaining that the law requires the region to deliver oil and non-oil imports.
He indicated that the Kurdistan Regional Government’s delegation is waiting for the federal government’s response, in exchange for handing over its oil and non-oil revenues, stressing that the discussions are continuing, and will continue until a positive result is reached, indicating that the political atmosphere in Iraq is complex and that the political parties are under electoral pressure, and we demand more patience from Everyone to bypass it. LINK
The Stock Market Index Fell In The Tuesday Session
Iraqi Stock Exchange «Economy News» Market Economy News – Baghdad 9 losing companies pressured the performance of the stock exchange index in Tuesday's session.
The index decreased by 0.23 %, after the shares of 9 companies advanced by the shares of the Middle East Bank Company decreased by 8.33 % and the shares of the Islamic Al- Attaa Bank Company by 7.14 %.
On the other hand, the shares of 8 companies advanced by the shares of Al Mamoura Real Estate Company by 10.00 % and the shares of Dar Al Salam Insurance Company by 8.33 %.
The session also witnessed the circulation of 1.05 billion shares, a value of 1.09 billion dinars. Foreign investors sold 64 million shares at a value of 128 million dinars, after executing 45 deals on shares of five companies. Number of observations 123 Date of addendum 12/15/2020 https://economy-news.net/content.php?id=23156
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