TNT, Fleming and Currency365 Saturday 12-5-2020
TNT:
Speedy: Given the effect of new rates on the Forex, I have always thought the RV would happen Sunday, Monday, rather than any other day.
SwampyJack: Speedy.... I agree with you !! I used to trade Forex and watched rates change all the time, so they can pop those changes in a flash on anyway..
Speedy: Swampy, yes they can, but these rate changes are massive, hence my point.
EdwardK: The @IraqiGovt will implement measures to address the budget deficit to create a fiscal space for the process of carrying the wider reforms outlined in the White Paper for Economic Reform: For more on the White Paper: https://bit.ly/38Gq8et #WhitePaper #EconomicReformhttps://twitter.com/i/status/1335207544877301761
Shybaby: The White Paper for Economic Reforms prepared by the Crisis Cell for Financial and Fiscal Reform.
Dec 5, 2020
The Iraqi government has formally adopted the White Paper for Economic Reforms prepared by the Crisis Cell for Financial and Fiscal Reform.
The White Paper seeks to put Iraq’s economy on a path that allows the state to take appropriate steps in the future to develop it into a diversified, dynamic economy. Dr. Ali Allawi, Deputy Prime Minister and Minister of Finance
The White Paper is a comprehensive programme that sets out a clear roadmap to reform the Iraqi economy and address the accumulated, decades-old serious challenges that confront it.
Iraq’s Deputy Prime Minister and Minister of Finance, Dr. Ali Allawi said that the White Paper seeks to put Iraq’s economy 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.
And although the current severe fiscal crisis that Iraq is going through is related to the recent sharp decline in oil prices and to the repercussions of the Coronavirus pandemic, the White Paper makes it clear that the causes of Iraq’s economic and financial woes date back several decades.
The White Paper identifies the expansion of the role of the state as a key cause of the crisis.
The roots of the crisis
The White Paper provides a detailed outline of the factors that have distorted the Iraqi economy, undermined its capacity to provide a decent life for large number of Iraqis, and its failure to keep pace with the economic developments that the world has witnessed.
The expansion of the role of the state
The White Paper identifies the expansion of the role of the state and emergence of a command economy in Iraq as a key cause of the crisis.
From the nationalisation of vital economic sectors in 1970s, to the commandeering of all economic levers by the state to support the war effort in the 1980s, through the period of sanctions imposed on Iraq in the 1990s, these shocks, as well as the absence of strategic planning, mismanagement, maladministration, patronage and misguided political ideology, all led to an expansion of the role of the state in all aspects of economic life in Iraq.
The Iraqi economy continued to be directed by the state after the events of 2003 because of the failure of the new political system to create a free and diversified modern economy as outlined in Iraq’s Constitution, and instead continued to rely on the state as the almost only driver of economic activity in the country.
The expansion of the role of the state, and the associated increase in the number of those employed in the public sector and the cost to Iraqi exchequer of their salaries and pensions, came at the expense of the government’s ability to invest in basic infrastructure in Iraq.
To illustrate the point, the White Paper points out that from 2004 to 2020, state expenditure on the salaries of civil servants and on public sector pensions increased by 400% in real terms, as the total number of public sector workers during the same period increased by threefold.
The cost of salaries and pensions of public sector workers is expected to be around 122% of Iraq’s oil revenue in 2020. The White Paper for Economic Reforms
And between 2006 and 2018, average public sector salaries increased by 134%, more than the increase in labour productivity, which rose by only 12%, or the cost of living, which rose by 28% during the same period.
Over the past 17 years, government spending on the salaries of state employees, and on public sector pensions became the fastest growing expenditure item in Iraq’s successive federal budgets during this period.
There are currently around 4,500,000 public sector employees and 2,500,000 pensioners.
Decline of the private sector
The expansion of the state’s role, in addition to the complex administrative system and the state’s weakness in imposing the rule of law, the militarisation of society, and the 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-sized companies operating in the oil and telecommunications sectors, and very small companies operating in the fields of trade, retail, transport, construction, hospitality and textiles, there is almost a complete absence of private sector companies in manufacturing.
In addition, most of the larger private sector companies depend on providing services to the state and on government contracts.
The White Paper also identified other factors that led to the deteriorating economic situation in Iraq is, most notably:
The collapse of oil revenues
The impact of Covid-19
Mismanagement and lack of planning
The weakness of financial institutions
The absence of modern coherent systems for managing state revenues
An ineffective and outdated banking sector
Complex and antiquated government procedures
Destruction of infrastructure and the costs of the war against Daesh terrorists
Two strategic goals
The White Paper identifies two overarching strategic objectives. The first is to initiate an immediate reform programme to address the budget deficit to create a fiscal space to give time for the process of implementing the other wider reforms over the medium term.
The second objective is to put the economy and the federal budget on a sustainable path, after which Iraqis can decide and choose the economic direction of the country.
The White Paper anticipates that the short and medium-term objectives and associated reforms will require between 3 to 5 years to implement.
The reform pillars
The White Paper identified five key pillars for the reform programmes:
1- Achieving sustainable financial stability
Key reforms include:
Reducing the deficit from 20% to 3% of GDP and expenditure on salaries from 25% to 12.5% of the federal budget
Collecting electricity tariffs from all users based on the real price of fuel on global markets
Recovering and returning Iraq’s smuggled and stolen money
Increasing revenues from customs and taxes
Reforming Iraq’s Pensions Fund and move to gradually end federal budget support
Reforming financial management systems
Reviewing the current exchange rate of the dollar against the dinar
2- Implementing strategic reforms and creating sustainable job opportunities
Key reforms include:
Modernising and rehabilitating the financial sector
Modernising and rehabilitating the banking system, supporting the development of private banks, reforming government banks and introducing and activating the Core Banking System in Al-Rafidain and Rasheed Banks
Expediting the development of e-banking services
Establishing new trading markets, such as a commodity market and a currency exchange market (Forex)
Supporting the sectors that drive the economy, such as agriculture, oil and gas
Introducing a private sector support fund, simplifying procedures, and providing other non-financial aid
Creating 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 labour market
3- Improving basic infrastructure
Building Iraq’s digital infrastructure is a key aim of the White Paper.
Key reforms include:
Increasing the effectiveness and improving the performance of all parts of Iraq’s electricity sector
Developing Iraq’s digital infrastructure, including the introduction of advanced technology (4G) at the beginning of next year, and preparing for the introduction of (5G) technology
Modernising the legal and regulatory framework of the transport sector, and encourage private investment in transport
Developing industrial cities and free zones in Iraq
4- Providing basic services and protecting vulnerable groups during and after the reform process
The reforms aim at establishing a unified and financially sustainable pension system for all Iraqis whether they are working in the public, private, cooperative or mixed sector. The White Paper for Economic Reforms
Key reforms include:
Improving water supply for both drinking and irrigation and complete sanitation projects and networks
Building 1,000 new schools during the period of the reform programme
Reforming the social security system
Establishing a unified and financially sustainable pension system for all Iraqis whether they are working in the public, private, cooperative or mixed sector
Completing and implementing the draft health insurance law to ensure that all Iraqis have access to essential health services
5- Improving governance and introducing changes to the legal framework to enable institutions and individuals to implement reforms
Reviewing and amending the official guidance in relation to government contracts
Introducing e-governance systems to strengthen oversight of government contracting and the collection of taxes and customs
Working with specialist investigative international organisations to return the large sums of money smuggled out of Iraq
Introducing an electronic governance system in the field of government contracting and tax and customs collection
Completing the project establishing the National Information Centre to facilitate the introduction of government e-services to citizens, and automate the procedures for obtaining key documents such nationality and passports and accessing pensions and social security
Introducing electronic signature and transactions throughout the public administration system and phasing out paper transactions
A detailed implementation plan of White Paper will be published later to outline the required process, identify key stakeholders and establish timelines and monitoring mechanisms.
The White Paper for Economic Reforms: vision and key objectives (gds.gov.iq)
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Tishwash: Trust is a rare asset for Iraqi banks
Many financial institutions are short on deposits and have risky credits
DIWANIYAH: The bustling streets of Iraq’s biggest cities are lined with private and public banks that promise investment and credit. But businesses barely use them and individuals do not trust them.
“Iraqi banks today are still so far away from global standards,” said Abbas Anid Ghanem, an Iraqi economist and lawyer based in the southern city of Diwaniyah.
The problems date back decades, Ghanem said.
In the 1990s, Iraq was isolated from the outside world by crippling sanctions on then-dictator Saddam Hussein that blocked financial transactions with the country.
Following the US-led invasion in 2003, widespread looting saw bank vaults emptied of any cash, even as businesses from around the world were flying into Iraq to sniff out reconstruction deals.
More than 70 banks have popped up since, but the sector as a whole remains underdeveloped.The three largest — Al-Rafidain, Al-Rasheed and the Trade Bank of Iraq (TBI) — are state-owned and hold about 90 percent of the entire sector’s assets, the World Bank said in 2018. The first two suffer from “capital deficiencies and asset quality problems,” the World Bank said, meaning they are short on deposits and have risky credits.
TBI was established in a 2003 decree issued by the Coalition Provisional Authority, which managed Iraq post-invasion.
“TBI was meant to help Iraq develop and rebuild, but it was affected by sectarian power-sharing and financial corruption,” said Ghanem.
Now, the bank is the Iraqi government’s main conduit for international transactions but provides few loan options or other services.
The top trio have been used mainly for paying salaries and pensions to eight million Iraqis.
But after collapsing oil prices this year drained state coffers, the government had to borrow from state-owned banks for those wages, increasing its domestic debt. Of the 60 private banks in Iraq, most are domestic and operate primarily as exchange houses.
Iraqi businessmen say that the banks’ unappealing profiles are hampering the development of the private sector.
“Iraq’s public banks don’t have the mechanisms for global transactions and don’t seek to draw in entrepreneurs,” real estate developer Adel Salhi said.
“TBI is the only one that allows investors to open lines of credit, but it does not offer professional services and it demands enormous guarantees — sometimes as high as 110 percent to deliver a letter of guarantee,” he said.
Salhi and his Al-Akhiar group have opted to use a foreign bank, like many other Iraqis who turn to Jordan, Turkey, Iran or Lebanon to facilitate their transactions.
Most companies in Iraq still operate in cash: only 26 percent use the formal banking system, the World Bank said. All but 2 percent pay their employees in hard currency and nearly half even pay their suppliers that way.
Less than five percent of Iraq’s small and medium-sized businesses have a domestic bank loan, with most borrowing from family and friends instead.
Ghanem said that is because business loans come with exorbitant interest rates up to 10 percent.
Despite being OPEC’s second-largest crude producer, Iraq is also ranked 172 out of 190 in the World Bank’s “Doing Business” report — barely ahead of Afghanistan or war-ravaged Syria.
For individuals, too, banks are a bane. There is little public trust in financial institutions, with many Iraqis still smarting over the looting of public banks in 2003 that cost them their life savings. link
Fleming Saturday RV Update:
Our military intel contact is still busy but managed to get out that there was a major threshold reached about 9 pm EST tonight Fri 4 Dec in Spec Op Forces arrests under JSOC direction (Joint Special Operations Command) across the country though they will need through Sun 6 Dec to get enough Deep State swamp leaders detained;
Trump has already been re-elected by a majority of real, non-fraudulent votes and as such will protect us and our RV funds post-RV & will implement NESARA & GESARA fully after our exchanges have completed by Christmas.
As of about the same time tonight 9 pm EST Fri 4 Dec he said his info is that major tranches of funds were released and filling T3-4A accounts globally from bond transactions and SKR fulfillment—these funds will not be accessible till we in 4B start next week; he said WE ARE WINNING THIS WAR and the Deep State blocks are BEING REMOVED!
He said the RV is still a key tool to take down the Deep State globally and prayers are appreciated that this be done ASAP.
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Iraq Judiciary Court Begin Investigation of Currency Auctions
Currency365: Dec 5, 2020