Clear procrastination in managing the country’s financial and economic file.
The failure to wrap the dollar rope around the neck of the Iraqi dinar through an American policy that besieged the country’s economy and began to interfere in the smallest details of financial movement and demand statements of financial transactions that require the exchange of dollars because the movement of Iraqi trade was confined to a number of foreign banks.
Finance Will Suffer.. What Does The Drop In The Price Of A Barrel Of Iraqi Oil To $70 Mean?
Economy Economic expert Nabil Al-Marsoumi revealed, today, Saturday, September 7, 2024, the impact of the decline in the price of a barrel of Iraqi oil to $70.
Al-Marsoumi said in a tweet followed by Sumaria News that the drop in oil prices to $70, with the decline in Iraqi oil exports to 3.3 million barrels per day, will lead to a decline in monthly oil revenues to 9 trillion dinars, of which 1 trillion dinars will go to cover the expenses of oil licensing companies,
leaving 8 trillion dinars, which is only enough to finance salaries in their various forms, which amount to 7.5 trillion dinars per month, while half a trillion dinars will be allocated to finance the ration card items, while the rest of the operational and investment expenses will be financed from scarce non-oil revenues and from internal and external borrowing.
He added that taxes and fees will rise, debts will increase, and the foreign reserves in the Central Bank of Iraq will begin to descend because it is the first and last line of defense in light of the absence of any sovereign fund in Iraq, pointing out that the Ministry of Finance will suffer even in financing salaries during the next two months, and therefore it is expected that salaries will be delayed and may be reduced if the price of a barrel remains in the seventies for 6 months.
Employee Salaries Will Be Delayed And May Be Reduced.. Iraq Enters The Danger Zone Due To Oil – Urgent
Economist Nabil Al-Marsoumi expected, today, Saturday (September 7, 2024), that employees’ salaries would be delayed during the next two months, while he expected that salaries would be reduced if oil prices continued to decline for a period of 6 months.
Al-Marsoumi wrote a post on his personal account on the Facebook platform, which was followed by Baghdad Today, that “the drop in oil prices to $70 with the decline in Iraqi oil exports to 3.3 million barrels per day will lead to a decline in monthly oil revenues to 9 trillion dinars, of which one trillion dinars will go to cover the expenses of oil licensing companies, leaving 8 trillion dinars, which is only enough to finance salaries in their various forms, which amount to 7.5 trillion dinars per month, while half a trillion dinars will be allocated to finance the items of the ration card.”
He added, “The rest of the operational and investment expenses are being financed from scarce non-oil revenues and from domestic and foreign borrowing. Taxes and fees will rise, debts will increase, and the downward path of foreign reserves in the Central Bank of Iraq will begin because it is the first and last line of defense in light of the absence of any sovereign fund in Iraq.
The Ministry of Finance will suffer even in financing salaries during the next two months, and therefore it is expected that salaries will be delayed and may be reduced if the price of a barrel remains in the seventies for 6 months.”
On Wednesday, September 4, 2024, economic expert Mustafa Hantoush warned of the danger of the decline in oil prices in the global market on Iraq’s budget .
Hantoush told Baghdad Today, “Iraq depends entirely on oil sales revenues to finance its budget, and certainly a decrease in those prices will have a major and dangerous impact on securing budget funds, especially in light of the significant increase in the size of the operating budget, which constitutes more than (75)% of the budget .”
He explained that “according to information, Iraqi oil is sold at less than global prices, and for this reason the budget relies on numbers lower than the price of oil sold, in anticipation of any emergency event that may reduce those prices, especially since the world is facing incidents that may lead to new declines, and this certainly has a major impact on the budget situation .”
Hantoush urged “the relevant government agencies to move quickly to find solutions to confront such an emergency, as this matter may affect the possibility of providing sufficient funds to support and finance the budget .”
Oil prices fell, continuing their losses after falling more than 4% to hover around their lowest levels since December, amid expectations that the political conflict that halted exports from Libya’s main ports may be resolved and concerns about slowing global demand growth .
Informed sources say that “the price of a barrel of Iraqi oil fell today in the global markets to reach $69 per barrel, noting that its estimated price in the three-year budget was fixed at $70 per barrel,” noting that “Iraqi oil is sold at its monthly price, not daily .”
Parliamentarian Warns: Iraq Will Enter A Civil War In This Case
Member of Parliament for Kirkuk Governorate, Wasfi Al-Asi, believes that Iraq will enter into a civil war if all decisions of the dissolved Revolutionary Command Council are cancelled.
It is noteworthy that the Iraqi Council of Representatives issued a law in August 2007 stipulating the cancellation of the decisions of the dissolved Revolutionary Command Council No. (172) of 1989 and its amendment and Decision (1177) of 1975, while it cancelled dozens of laws that conflict with modern legislation.
The draft law to cancel the decisions of the dissolved Revolutionary Command Council includes a number of articles related to cancelling the decisions of the Revolutionary Command Council issued in the 1970s.
Al-Asi said, “The decisions of the Revolutionary Command Council that are to be cancelled in the House of Representatives are more than 9 decisions,” indicating that “they have nothing to do with the issue of taking lands from the Kurds and Turkmen and are absolutely in the interest of the Arabs.”
Al-Asi pointed out that these were decisions “in the period before 1979, that is, during the time of Ahmed Hassan al-Bakr, and at a time when there was no intention to Arabize or take the rights of others,” describing them as “decisions of public benefit issued by the Revolutionary Command Council to expand cities and urban development, and in which there is a public interest.”
Al-Asi pointed out that “most of the neighborhoods in Kirkuk and the rest of the governorates depend on this decision, otherwise this expansion would not have happened, as oil and military facilities, infrastructure and power stations were established, and if we cancel some of the decisions, the Kirkuk Great Water Project is supposed to be removed.”
The representative of Kirkuk province confirmed that he is not against lifting the injustice against any citizen in Kirkuk, adding that “the interest of the state in every era is a supreme interest and is better than the interest of the citizen, and that the effects of these laws begin with the Agrarian Reform Law of 1970 No. 117, which is taking the lands of the landowners who are called feudal lords and distributing them to the farmers.”
Al-Asi warned that “if these decisions are cancelled, all of Iraq will enter into a cycle of civil war,” noting that “hundreds of farmers live and work on these lands.”
If the bill is passed, the lands seized during the rule of the Baath regime headed by Saddam Hussein in Kirkuk and other areas will be returned to their original owners, especially Resolution No. 369 regarding the lands of Kirkuk and Tuz Khurmatu.
Iraq’s Losses Amount To $19 Billion Due To The Suspension Of Oil Exports.. Crisis In Restarting The Pipeline
The spokesman for the Kurdistan Oil Industry Corporation (APICOR), Miles Caggins, confirmed that no agreement has been reached yet regarding the re-operation of the pipeline between Iraq and Turkey, and the resumption of crude oil exports from the Kurdistan Region to global markets. The financial losses incurred by Iraq as a result of the suspension of oil exports were estimated at $19 billion.
In his remarks, Caggins explained that talks between officials from the Kurdistan Regional Government, the federal government and the Turkish side have not yet led to the resumption of exports, noting that many international oil companies have suspended their production in light of the current crisis.
He added that APICOR members want to hold discussions on amendments to the contracts signed, which should include guarantees for late payments and guarantees for how future payments will occur.
These statements indicate the depth of the crisis facing the oil sector in Iraq, which needs an urgent solution to ensure the resumption of oil activities and mitigate the major economic damage inflicted on the country.
