Iraqi News Wednesday Afternoon 3-2-22
Iraqi News Wednesday Afternoon 3-2-22
TLM724 Administrator BondLady’s Corner
The Devaluation Of The Dinar .. Did Not Save The Iraqi Industry
Posted On2022-03-02 By Sotaliraq The percentages of contribution of the different sectors to the country’s GDP are one of the most prominent testimonies to the extent of success and failure of these sectors. The failure of the industrial sector in Iraq is clearly visible after its stability under 3%, according to figures that can be described as “optimistic” by the Ministry of Planning.
The contribution of the industrial sector to the GDP in 2019 amounted to nearly $3 billion out of a total GDP of $222 billion, which makes the industry’s contribution to the GDP less than 1.5 percent.
By excluding the year 2020, which is a year outside the possibility of comparison due to the closure of Corona, the industry’s contribution to the GDP appears to be 2.8 billion dollars, despite the increase in the price of the dollar and the devaluation of the Iraqi dinar, which the Ministry of Finance at the time justified as a step that will revitalize the local industry and make it more competitive compared to commodities. Imported, but the contribution of the industry has decreased 10%.
The devaluation of the dinar did not save the industry!
Economic researcher Manar Al-Obaidi says in a press clarification, “Although one of the objectives mentioned in changing the exchange rate is to increase the contribution of the industrial sector to the GDP, by comparing the figures achieved in 2021 with previous years, we find that there is no real increase in the domestic product, but rather a decline.” In the value of the industrial sector’s contribution to the GDP, from 2.95 trillion dinars in 2019 at current prices, compared to 2.8 trillion dinars in 2021.”
He added, "This means that no growth has been achieved in this sector despite the change in the exchange rate," noting that "a change in the exchange rate alone cannot increase the contribution of the industrial sector to the domestic product. Rather, it should have been accompanied by a set of reforms, including providing fuel to factories. Facilitating the procedures for registering factories and industrial projects and setting a strategic plan for distributing the geographical area offactories across Iraq.
He explained that "the Ministry of Finance failed in this goal, which it considered one of the most important goals in supporting the industrial sector and the domestic product."
The contribution of the industry has not yet risen
In the latest census of the Iraqi Ministry of Planning, it revealed that the contribution of the industrial sector to the country’s GDP amounted to 3% during the year 2020, which is a low level compared to its contribution before the siege, which amounted to 12%, which means that the contribution of the industrial sector in Iraq has declined 75% since the siege .
And the Central Bureau of Statistics of the Ministry said in a report that “the industry in Iraq has witnessed fluctuation and instability since the beginning of its development in the seventies, between rise and decline to witness progress in the period between 1989 and 1990 to reach 12%.”
He added that "the industry witnessed a significant decline during the years of the economic embargo imposed on Iraq in August 1990 until 2003, as the industry's contribution to local production amounted to less than 2% in 1997."
He pointed out that "the industrial sector has not witnessed a significant development in its contribution to the gross domestic product within the activity of manufacturing industries, since that date due to the almost total dependence on oil production."
As for the period of the Corona pandemic, the report stated, “The percentage of GDP increased by 1% in light of the drop in global oil prices, to reach 3% in 2020.”
While the industry's contribution to the GDP in 2003 reached 2%, it has been at this level for 18 years and has never progressed.
The number of factories affiliated with public sector companies in Iraq is about 227, of which only 140 are operating, according to data from the Ministry of Industry and Minerals, and 87 others are suspended.
As for the number of fully established industrial projects, it amounts to 20,415 projects, and only 2,248 projects are operating, which means that 90% of industrial projects are suspended.
The low contribution of the industry to the GDP explains the reason why oil is the dominant one in the GDP, as it reached during 2020 57 percent, while the activity of wholesale and retail trade and hotels came second in terms of contributing to the GDP by 8.05 percent. LINK
Representatives Close The Door To Reducing The Dollar By Transferring It To The 2023 Budget
Posted On2022-03-02 By Sotaliraq Baghdad/ Firas Adnan Representatives closed the door to amending the dollar exchange rate during the current year, and talked about the possibility of putting it in the 2023 budget, stressing that the economic situation in Iraq will not witness improvement unless oil reaches $120 a barrel, and they also indicated that official institutions do not have a clear vision to deal with the situation. financial and economic.
Representative Abbas Al-Zamili said, "Finance Minister Ali Abdel Amir Allawi presented the government's vision regarding the economic situation and answered questions and inquiries in this regard."
Al-Zamili continued, "Part of Allawi's answers were not convincing to the deputies, especially the issues of the difference in the deficit and the reimbursement of expenses for certain segments, including farmers, as ruling expenses and addressing unemployment."
He pointed out that "what the minister spoke reflects the lack of a clear vision among the concerned executive authorities regarding addressing the current or previous economic and financial situation."
Al-Zamili spoke of "there is a problem related to significant overlaps in the issue of oil and non-oil revenues."
He stressed, "There is an intention in the House of Representatives to address the issue of the dollar exchange rate, and although we cannot be certain that we will work to reduce it and return it to what it was, but we will deal with the repercussions that occurred after raising it."
Al-Zamili stressed, "Current indicators indicate that the current year will not witness the passage of the budget law, and therefore we will rely on last year's budget regarding revenues and expenditures and its estimates, and this means that the exchange rate will remain as it is."
He pointed out, "The exchange rate change is related to a purely governmental decision, as happened last year through coordination with the Central Bank of Iraq, which is an independent body."
Al-Zamili expects, "The issue of the exchange rate will be raised during the 2023 budget, but it will eventually be subject to international oil prices and the revenues it achieves for Iraq."
For his part, Representative Sherif Suleiman stated, "The deputies heard from the Minister of Finance a full explanation of the economic situation that Iraq is going through." Suleiman added, "The House of Representatives will continue to follow up on government measures related to addressing the repercussions of the exchange rate crisis."
He pointed out, "What was important for us was the minister's explicit answer about the economic situation in Iraq, and there are serious steps that will be taken in the future to avoid the repercussions of raising the price of the dollar."
Suleiman agrees with Al-Zamili, that "there is a tendency among the deputies to restore and reduce the exchange rate, even if it is gradually, but this will not be done according to the current indicators, except in the next year's budget that is responsible for presenting the new government."
In addition, Representative Jamal Cougar stated, "The Minister of Finance briefed the deputies on the full reasons that called for raising the dollar exchange rate, the most important of which is its impact on the budget, the positives, the repercussions, and the proposed solutions to the negativity." Cougar continued, "Allawi clearly informed the representatives of the impossibility of returning to the old exchange rate, and the issue is not being raised at the present time."
He stressed, "The Minister of Finance stated that what is being circulated regarding the surplus is incorrect, because the average oil prices during 2021 were $71 per barrel, and the total that was obtained from oil and non-oil resources amounted to 89 trillion dinars."
Cougar pointed out that "what was spent during the past year amounted to 111 trillion, and therefore the revenues did not reach the levels that the country needs, according to what the Minister of Finance said."
He finds, "The situation in Iraq will remain fragile if the price of a barrel of oil does not reach $120 for a whole year, because the oil sector is expensive, and each barrel requires 10 to 13 dollars to produce."
He stated, "If Iraq sold during 2022 at a net price of $90 a barrel, then the oil resources, as the dominant one, would be 155 trillion dinars, at a time when last year's budget was described as austerity, with expenditures of 130 trillion dinars."
Cougar concluded, "Talking about a current affluence in oil prices is incorrect and a fantasy, as Iraq is still unable to cover its expenses."
The Minister of Finance, Ali Abdul-Amir Allawi, had defended yesterday before Parliament the decision to change the exchange rate, stressing that it had achieved a number of important economic goals and had helped secure the salaries of employees and retirees and the social welfare network. LINK
The Difference Is 250 Dinars.. The Exchange Rates Of The Dollar In The Local Markets
Economie| 09:09 - 02/03/2022 Baghdad - Mawazine News, today, Wednesday, the dollar exchange rates decreased slightly in the local markets.
And the selling prices of the dollar were 147,250 dinars per 100 dollars, while the purchase prices of the dollar were 147,000 dinars per 100 dollars. https://www.mawazin.net/Details.aspx?jimare=186104
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