Blondie

  In Uncategorized 

Article quote: “Finance Minister Hoshyar Zebari, on Monday, the inability to staff the distribution of salaries in the month of April, in the event of continued low oil prices, while noting that there are other options to avoid that… He added that ‘there are seven million people are paid salaries of Iraq’s total population of 36 million’… He said Zebari, that ‘other option is how to raise the Iraqi dinar exchange rate, and although it chooses the risk and could have repercussions, but we thought of not granting full salaries…
Zebari is saying that without immediate revenues, the GOI can’t pay full government salaries by April and oil revenues alone won’t cut it.
Also, raising the exchange rate is an important option.
They’re also considering only paying employees a portion of their salaries at that time, the unpaid amount would be an IOU (again, ‘kicking the can down the road’ and not solving the real problem). …he says nearly 20% of the citizens in Iraq work for the government!

The WB/IMF had a loan prerequisite of cutting government payrolls. Clearly, nepotism (family, in-laws, friends (who do nothing) are on the payroll) and corruption is a problem.
IMHO, there’s an *urgent* need to jump-start the private sector. …there would be more jobs than they have “work-capable” people to do them…
It’s then possible that people from neighboring countries might RUN to Iraq for work. All these jobs create income taxes and thus, tons of revenue to the GOI.
Iraq could go from a ‘liquidity crisis’ to being flush with cash in practically no time at all. Therefore, exploding the private sector becomes the lynch-pin in the plan — without it, the whole plan fails.
As Zebari stated, at current oil prices, Iraq would likely become insolvent waiting for oil prices to go up.
Revaluing the currency in order to jump-start the whole process is (imho) one of the key first steps.
Eliminating ISIS is also necessary and Iraq has also made enormous strides in that effort as of late.