Allawi: The reform paper is a framework for a new Iraqi economy .. And the massive liquidity crisis is pushing it to the brink of collapse
The Minister of Finance, Ali Allawi, confirmed, on Saturday, October 17, 2020, that there is an increasing political will to conduct the fundamental reforms required for the country to address the massive liquidity crisis that has pushed Iraq to the brink of collapse.
Allawi said that there is more will now than it was five months ago now, I think there is recognition that unless oil prices rise miraculously, this is something we have to deal with and manage, according to the Associated Press.
He added that the reform paper is designed to create a strategic and political framework for a new Iraqi economy. At the end of this period of change and reform, we are supposed to have a restructured and more dynamic economy. This is the aim of it.
“The lack of support from major political elites has undermined similar efforts in the past. The Kazemi government continues to rely on parliament approval for the vision to gain momentum.
Allawi said that at a later time, aspects of the plan outlined in the paper will be incorporated into the 2021 budget, which will require a vote in Parliament. Government support in the electricity and oil sectors will face special scrutiny.
He explained: Part of the public sector financial problem is the huge size of subsidies, and we intend to address this issue directly in the 2021 budget. But the public debate focused on the white paper that aims to reduce public wages from 25 percent of GDP to 12 percent.
“I have said many times before, that the share of oil revenues allocated to salaries in 2004 was 20 percent, and now it is 120 percent,” he stressed, stressing that this is clearly not sustainable.
Allawi said of the draft law, I hope that parliament will approve it, if this does not happen, we have the possibility of other alternatives, but it will be more difficult, and Iraq’s hard currency reserves are $ 53 billion. Source