News, Rumors and Opinions Tuesday 6-9-2020
TNT:
Cutebwoy: Parliamentary Finance: Reducing salaries and activating taxes will not cover the budget deficit 2020
Baghdad / Obelisk: The rapporteur of the Finance Committee in Parliament, Ahmed Al-Saffar, said on Tuesday 9 June 2020, that the procedures for reducing salaries and activating taxes will not cover the deficiency of the state’s general budget, while providing a solution to supplement the budget with money.
Ahmed Al-Saffar said in an interview with Al-Masalla that the monthly deficit is very large, and as the Finance Minister announced that it is 5 trillion dinars, the procedures for reducing salaries and activating taxes will not cover the financial deficit, and are considered within the formula for increasing revenues and reducing spending.
Al-Saffar added that the solution to supplement the budget is by resorting to borrowing, which is an important option, noting that the Ministry of Finance is looking for lenders, both internally and externally, and the best is internal borrowing, because external borrowing is used for investment financing, and salary financing must be internal.
The decision of the Finance Committee indicated that Parliament is in the process of legislating a law that allows the government to borrow until the budget is approved, and borrowing will be on terms both internal or external and Parliament is aware of the amount of the loan and the lender and the interest rate, and the law was read a second reading in the Finance Committee.
Courtesy of Dinar Guru
Footforward [ I do not understand how re-valuing the Dinar to a higher rate helps the Iraqi people...] ...it helps Iraq because they can go international. They can open their boarders and open to world which will have a massive impact on their economy. To the average person in Iraq it will help them with work. But the average person in Iraq will not become rich from this...
Footforward [...cant they also open up international without the RV as well?] not really. They have to have their own international currency for that. The dinar needs to be reinstated to it's true value before that can happen...
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China Ups Ante in War on Cash With Rollout of Digital Currency
June 3, 2020 by SchiffGold
The Chinese government has launched a pilot program for a digital version of the yuan. The virtual currency ups the ante in the war on cash and creates the potential for the government to track and even control consumer spending. It also raises some concern that the Chinese could threaten dollar-dominance.
The digital currency is nothing more than a virtual banknote or coin that exists in a digital wallet on your smartphone instead of a billfold or a purse. The value of the digital currency is backed by the state, just like traditional fiat currency.
The program kicked off in April with a limited rollout in the cities of Shenzhen, Suzhou, Chengdu, and Xiong’an. According to Bloomberg, some of the money was distributed in the form of transport subsidies paid to individuals in Suzhou.
Even with the limited rollout, Chinese digital currency is still a long way from full adoption. People’s Bank of China governor Yi Gang said recently said, “There’s no timetable for an official launch.”
Why is China so eager to roll out digital yuan?
Ultimately, it’s all about control.
The government can easily track digital payments. As Bloomberg put it, digital currency “offers China’s authorities a degree of control never possible with physical money.” Specifically, a digital currency might allow the Chinese government to more closely monitor mobile app purchases, accounting for about 16% of the country’s GDP.
https://schiffgold.com/key-gold-news/china-ups-ante-in-war-on-cash-with-rollout-of-digital-currency/
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KTFA:
Don961: Al-Kazemi's advisor announces the intention to prepare a new salary scale and reveals the value of the deductions from employee allowances
Policy 6/20/2020 22:13 8036 Editor: gf
Baghdad today - Baghdad
The appearance of Mohammed Saleh, the financial advisor to the Prime Minister, Mustafa Al-Kazemi, Monday (8 June 2020) revealed a new salary scale that will be presented within three to four months, while he revealed a surprise regarding the auction of currency selling, which is valued at the Central Bank of Iraq.
"We have lost two thirds of the value of a barrel of Iraqi oil since the end of last year," Saleh said during his hosting of the program (Shortest Roads) presented by Al-Sharqiya News Channel. Welfare, social, drug purchase and payment of internal and external debt services. "
He pointed out that "the Iraqi economy depends on oil, which depends on global supply and demand," noting that "Iraq exports 2.4 million barrels per day, and what came to us as a sales value for the month of May in the current June is only 2.4 billion dollars."
He warned that "in light of that, the monthly deficit reached 4.5 trillion dinars," adding that "the government is able to send a proposed budget before the date set on June 30, but what will be sent will be burdened."
And he added, "The cost of extracting oil is $ 10.5 in Iraq, and we pay a billion dollars on the cost of extracting oil for oil companies from the central and southern fields, and this is one of the days when the barrel of oil was worth more than $ 60."
He continued, "Foreign oil companies take their financial dues as crude oil from Iraq's share of oil exports."
He continued, "There are consultations with the oil companies to reduce the percentage granted to oil companies for the value of each barrel of oil produced, in the coming term there will be an agreement."
He went on to say, "The OPEC + agreement was negotiated by the former oil minister and he said that it was imperative to prevent its collapse."
He also talked about government reforms intended to address the fiscal deficit and said that "the reforms proposed by the government include addressing double pay", noting that "no financial allocations can be canceled for any lawful category."
And he added, "The Cabinet is moving to prepare a new salary scale that can be sent to Parliament for approval within 3-4 months."
He stressed, "There is no government tendency to deduct the salary allocations by 50%. This is a proposal that has been modified. The deduction has been limited to 10%, and implementation will start this month if approved."
And that "there is a financial space for Iraq to borrow internally, externally and internally, because it will be from the government through banks."
While he pointed out that "we have a deficit of 4 trillion dinars per month," he pointed out that "the salaries of last month were arranged from oil revenues and non-oil revenues and from the agreement agreement with China and some open credits."
And on financing the salaries of this month, he explained that it "will be funded through 2 trillion from the Iraqi Commercial Bank, and the rest will be funded through the Rafidain and Rashid banks."
He concluded by saying, "The World Bank has indicated its willingness to lend to Iraq and it wants reforms in exchange for support."
And he talked about the auction of selling foreign currency by saying that "the auction that the central bank undertook, after the change in 2003, committed itself to selling the dollar to control the exchange rate of the dinar or the dollar, and it was supposed to stop after two years of its launch. The central bank finances trade in Iraq because private sector banks cannot To do this, the Rafidain and Rashid banks were supposed to buy the dollar from the central bank, but they were unable to do the job. "
He also touched on the value of what is spent on some basic services without revenue in return, saying, "It is unreasonable to receive imports worth 50 billion dollars while entering annually from customs is only one billion dollars and we lose 3 trillion dinars because of it, and the Ministry of Electricity is spending 14 billion dollars to develop it while the corresponding income Not to exceed 600 million dollars. " LINK
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