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Iraqi News Tuesday AM 10-27-20

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Accumulating Economic Crises .. Will Bankruptcy Be Declared In Iraq?

Pratha News Agency97 2020-10-27   Researcher Shatha Khalil   Iraq is facing a combination of severe shocks afflicting its economy, as the collapse in oil prices has greatly reduced the state’s fiscal budget revenues, the health crisis caused by COVID-19 and the lockdown measures necessary to contain the epidemic have dealt a severe blow to economic activities, especially services sectors such as transport and trade. Religious tourism, growing resentment over poor service provision, and rising corruption.

All these conditions are reflected in a large way on the citizen, and directly today, the fear of stopping salaries, extreme poverty, unemployment and stagnation … one crisis after another, not to mention the political instability that has become clear and unable to alleviate these crises.

The Iraqi economy is characterized by its bounties that wasted its revenues, absent investments and infrastructure, and made the country from bad to worse, with great dependence on oil revenues, that is, an economy that is not diversified.

As for the private sector, the state’s large presence in economic and commercial activities makes it difficult to create the jobs required in the private sector for a predominantly young population. Moreover, rampant corruption, weak governance and the effects of service delivery have caused widespread protests through weakening the overall framework for Iraq.

And the deficit problem, which has become a big gap in the public financial budget and bridging this gap through local currency bonds, which weakens the balance sheet of the Central Bank of Iraq and creates pressure on it, and the current account deficit is estimated at 18.8% of GDP in 2020, CBI can also withdraw reserves Foreign currency to less than 3 months of imports by 2022 exacerbating the country’s vulnerability to external shocks.

The Central Bureau of Statistics announced that the Iraqi per capita gross domestic product for the first quarter of this year reached 1100 dollars.

The apparatus of the Ministry of Planning said in its statistics that “the average per capita share of GDP at current prices for the first half of the current year 2020 amounted to one million and 341 thousand dinars, or the equivalent of $ 1,100, compared to the first quarter of 2019 when it reached one million and 707 thousand dinars or what Equivalent to $ 1,300, down 12.3%.

And that “the average per capita GDP at current prices for the first half of this year also decreased from the average per capita GDP for the fourth quarter of 2019, which amounted to $ 1,400, at a rate of 21.4%.”

A United Nations study revealed, in 2018, that Iraq ranks 108 in the world and 10th out of 122 Arab countries, in the ranking of countries globally in terms of the level of per capita income of gross domestic product in dollars annually.

Experts, specialists and even some politicians diagnose the causes that have become clear, but the deficit has become greater than the ability to treat; The country and its economy are still suffering from a complex and highly complex crisis, and it is not easy to deal with it within the current political process, due to the unprecedented financial and administrative corruption in the whole world.

And some statistics were monitored to shed light on what the citizen suffers, so the number of those registered below the poverty line was less than 5 dollars a day, that is, around 35% of the people, 6% used drugs and hashish, and 9% were children under 15 years of age.

As for the financial sector, the total Iraqi debt reached 140 billion dollars for 29 countries, in addition to the debts of the International Monetary Fund, 6 Western oil companies, and the debts of the Paris Club.

This is if we know that our oil sales during the period 2006 and 2014 and the period of high oil prices amounted to one trillion dollars, and did not contribute to solving any problem, as the rate of waste reached 450 billion dollars.

The Corona pandemic and the oil price shock clearly revealed how much the Iraqis have lost in the last two decades, and the impact has been great on all sectors, as the educational system, which was classified at one time closest to the summit among its peers in the Middle East and North Africa, is now close to the bottom.

And the labor force participation rate in Iraq stumbles at 42%, in addition to Iraq registering one of the lowest female labor force participation rates in the world. Iraq now faces low levels of human capital, a worsening business climate, and one of the highest poverty rates among the upper-middle-income countries.

In spite of all the facts that we have presented, which leads us to pessimism, but there must be a glimmer of hope, as the World Bank presented a report in which he said, “The diversification of economic activity through reform and the development of the private sector is crucial to reducing the successive challenges that Iraq faces.

This economic memorandum includes a roadmap to help Iraq and its people reconsider the existing economic model, build a stronger and more diversified economy to eliminate unemployment, and rebuild the social contract.

The World Bank confirms its partnership in helping Iraq to move on the path of reform to consolidate peace and stability, and to provide an opportunity for all Iraqis to achieve their highest aspirations and hopes.

And that Iraq’s oil wealth has enabled it, over several decades, to rise to the ranks of high-income countries, but in many ways it has made its institutions and social and economic outcomes resemble those of a fragile, low-income country.

Oil revenues have eroded the country’s economic competitiveness, reduced the need for taxation, weakened the bond of accountability between citizens and the state, and fueled corruption.

The new report identifies the main paths that Iraq can adopt to achieve sustainable growth after a thorough study of the complex political economy conditions in the country. The report stresses that Iraq should give priority to refocusing the political process on development, and raising the level of transparency in managing oil wealth and public resources.

The report also highlights the urgent need for Iraq to rebuild trust between citizens and the government by enhancing citizen participation and government accountability in providing priority services and infrastructure, meeting youth employment needs, and addressing social and economic inequalities.

Despite the political and economic challenges that Iraq is currently facing, there are three areas of focus that can help achieve economic diversification, growth, and stability:

The first; Maintaining peace can in itself be a powerful engine of growth. The average per capita GDP in Iraq in 2018 was one-fifth less than the level that would have been achieved had it not been for the conflict that began in 2014, while the GDP of the non-oil sector was less by a third.

In countries experiencing a vicious cycle of violence and fragility, coordinated policies by a broad coalition of actors are critical to maintaining “paths to peace” and creating a positive cycle. The report concluded that in the short term, Iraq must focus on reforms that expand social safety nets for the poor and most needy groups, improve the provision of basic services such as education and health, and ensure improved transparency in the work of government institutions.

The second; Exploiting the export potential of Iraq to help diversify economic activity away from oil production and toward trade and integration. Iraq has a geographical location that qualifies it to be a regional center for logistics services, but Iraq’s performance in terms of logistics services lags far behind the performance of its counterparts to the point that it has become a regional bottleneck.

And third, the advancement of the agricultural sector in Iraq to become a fundamental pillar of a more diversified economy led by the private sector. The agricultural production, food industries and related services sectors, including logistics, finance, manufacturing, and technology have great potential for expansion and job creation.

The agri-food sector is not subject to the same level of government oversight that other sectors face, and therefore it is in a position to develop new methods of work and adopt the latest technologies to maximize its competitiveness.

This new Iraq economic memo builds on two previous reports from 2006 and 2012 in which the World Bank emphasized the need for Iraq to move from conflict to rehabilitation, from state dominance to market orientation, and from dependence on oil to diversifying the economy, and from isolation to regional and global integration. .

The report builds on these recommendations by (1) conducting an adequate analysis of the underlying vulnerability and political economy challenges facing Iraq and their implications for the diversified growth model; (2) Analyzing the characteristics of growth in Iraq and the potential for diversification of economic activity and the desired benefits from it, (3) Assessing Iraq’s potential for trade and regional integration in order to achieve growth; And (4) reviewing the conditions of the agricultural sector in Iraq and its potential to support diversification of economic activity.

And mobilize the material and human energies of Iraq and push them to create sustainable development and eliminate the roots of underdevelopment in Iraq, and the interest in education and health and the elimination of illiteracy and interest in scientific research and building an advanced industry supported by national agriculture and a service sector suitable for this development and rebuilding the human being on national foundations far from sectarianism

Dollar Exchange Rates In The Iraqi Market

Pratha News Agency83 2020-10-27   The exchange rates of the dollar stabilized in the main stock markets and local markets on Tuesday (October 27, 2020).

Al-Kifah Stock Exchange recorded 124,800 dinars against 100 US dollars, while the exchange rate of the dollar for Sunday recorded 124,850 dinars per 100 dollars.   Selling price: 125,250 dinars per $ 100. Purchase price: 124,250 dinars per $ 100.

Parliamentary Finance Holds An Important Meeting On The Financing Deficit Bill

Time: 10/27/2020 12:29:03 Read: 3,315 times   {Baghdad: Al Furat News} The First Deputy Speaker of Parliament, Hassan Al-Kaabi chaired an important meeting of the Finance Committee to discuss the draft law on financing the fiscal deficit.   The House of Representatives is scheduled to hold its regular session this evening, Tuesday.

And the reporter of the Parliamentary Finance Committee, Ahmed Al-Saffar, said today that “after examining the draft of the fiscal deficit law in the appendix of current expenditures, which includes 38 items, we found that some items can be postponed to the 2021 budget to reduce the loan amount that exceeds 41 trillion dinars,” stressing that “it is impossible to agree. It shall be approved by the House of Representatives or the Parliamentary Finance Committee. ”

And, he stated, “Seven items out of the 38 that are obligatory to spend during the next four months, including employee salaries, pensions, indebtedness and debt benefits, ration card, medicines and a social protection network,” explaining that they are necessary items that the loan should cover, and the remaining items of expenditures. The current budget is transferred to the 2021 budget, to solve the salary problem as soon as possible by approving the fiscal deficit bill.

He continued, “In the case of providing salaries, the government is obligated to pay the debts resulting from the delay in salaries of employees, and in my estimation, if the government is serious, it will decide in the first week of November the distribution of the salaries of the month of October, and after a week they start distributing the salaries of the next month, that is, the payment of salaries.” Successively, because the government has no argument in the event that the specified loan amount for the next four months is approved.   LINK

Saleh Told “Al-Eqtisad News”: Iraq Desperately Needs An International Financial Alliance

Financial advisor, Dr. Mazhar Muhammad Saleh  Money   and business   Economy News – Baghdad   The financial advisor to the Prime Minister, Mazhar Muhammad Saleh, revealed that Iraq desperately needs an international financial and economic alliance to help it in the current financial crisis.

In Britain, during Al-Kazemi’s visit, he announced the formation of the Economic Contact Group for Iraq, which is a financial alliance that includes the Group of Seven, the International Monetary Fund, the World Bank, the Central Bank of Iraq, the Ministry of Finance and the Parliamentary Finance Committee.

Saleh said in his speech to “Al-Eqtisad News”, ” Iraq, due to the Corona pandemic, the crisis of its oil resources, and its harmful repercussions on the national economy, is in dire need of an international financial and economic alliance from the great countries, similar to the statement of the Tokyo Summit of the Seven Big Countries in May 2016, which supported Iraq economically in May 2016.” Confronting its economic crisis and fighting ISIS terrorism . ”

He added that the former financial alliance form at the Tokyo Conference in 2016 to support Iraq financially and economically to cope with the budget deficit and the balance of payments due to the deterioration 2014-2017 oil prices and the day of Iraq signed an agreement to prepare credit with the International Monetary Fund SBA Fund to provide amount of loan 5.2 billion dollars as well as pledged to the World Bank 3 billion dollars to support the budget, then the Kuwait Conference for the Reconstruction of Iraq was held. In addition to the grants provided by the European Union and others through the United Nations for the reconstruction of areas liberated from terrorism . ”

Number of observations 253 Date of addendum 10/27/2020

Parliament Votes On The Various Districts Of Nineveh And Postpones The Districts Of Kirkuk

Pratha News Agency95 2020-10-27   The House of Representatives voted, late yesterday, on the multiple electoral districts for Nineveh Governorate, while it decided to postpone the vote on Kirkuk districts.

A parliamentary source said, “The House of Representatives voted during its session held today on the various constituencies of Nineveh Governorate, and decided to postpone the vote on the various districts of Kirkuk governorate to a session next Wednesday.”

Today, Tuesday, parliament held a session headed by Muhammad al-Halbousi, with the presence of 172 deputies.

Al-Nasiri: Overcoming Our Economic Crisis Depends On Urgent And Strategic Remedies And Sincere Intentions To Stimulate The Productive Sectors And Diversify Sources Of Revenue

Money   and business   Economy News _ Baghdad   The economic and banking expert, Samir al-Nasiri, explained that in light of the current situation and the midst of the popular movement, economic and financial crises, the challenges of falling oil prices and instability and the implications of the Corona delinquency that our beloved country is going through, the Iraqi economy, through study, analysis, capabilities, and available factors, can overcome the imbalances And the deviations, and poor performance in the economic structure and the achievement of balanced and varied economic and structural reforms of the economy, with the premise of overcoming the objective and subjective economic conditions in the country.

Waad Al-Nusiri, in an interview with Al-Eqtisad News, motivates, encourages and supports the private sector according to the vision of the private sector development strategy (2014-2030), which is based on the provisions of Article 25 of the Constitution which states (the development of a vibrant and prosperous national private sector that is locally initiated, regionally competitive and integrated globally.

In order to achieve economic diversification, sustainable development and job creation (in the necessary and appropriate step), pointing out the need to leave the rentier economy based on 93% of oil revenues and to develop other vital economic sectors, agricultural, industrial, and tourism through, restructuring state-owned industries and a gradual shift towards the sector

The private sector, and encouraging partnerships with local and foreign investors as well as, reviewing the legislative environment for the work of the industry, providing the infrastructure to secure the requirements of the work environment, and expanding the establishment of industrial zones.

And Al-Nusairi indicated the advancement of agricultural production and livestock, the provision of effective supplies and treatments for fields and farms, maintenance of irrigation and drainage projects, support for agricultural products intended for export, improvement of the quality of seeds and the state’s guarantee of prices, as well as providing support for small and medium enterprises and granting soft loans, ensuring the elements of resilience and economic advancement.

He stressed that the country’s suffering from its stifling economic and financial crises for the above reasons has not gone through it since the 1990s and the imposition of the economic blockade at that time as a result of the lack of sincere and real intentions for economic reform, the loss of the methodology and the structural imbalance in the economy as well as mismanagement of public money and the failure to approve the general budget for the year 2o2o, Not to mention disposing of the country’s money without rational economic and financial planning.

Al-Nusairi indicated that the reports issued by the World Bank, the most recent of which is the recent report on the advancement of the Iraqi economy from fragility, indicate that Iraq and some oil-producing countries will suffer from the oil rent and the fluctuation of its prices, down and up, which will fail all the countries’ development plans for the coming years without taking the initiative to develop their other resources.

And diversify sources of revenue. And since the country has the elements of resilience and economic advancement, which is represented by the fact that it has the fourth oil reserves in the world in addition to a workforce estimated at more than 10 million people who are able to work, and experts in economics and money who have academic and executive experiences, they can overcome the crisis and exit well, by providing A suitable work environment and ensuring an encouraging investment climate to attract private capital and contribute to economic development.

And stimulating the productive sectors in agriculture, industry and tourism, and reviewing the structure and presentation of the public budget.

Al-Nusiri concluded his speech by referring to the deficiency of the legislative environment for managing the economy and the laws that regulate economic work, which calls for reviewing and making fundamental adjustments for all of them in line with the new economic management situation, to reduce unemployment that has risen to more than 30 percent and the poverty rate that exceeded 30 percent, which are two indicators.

Two negative indications of the aggravation of the Iraqi economy crisis.    Number of observations 81   Date of addendum 10/27/2020

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