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Don961:  A “shocking” financial disclosure: “insufficient” oil imports for Iraqi salaries … The crisis continues until the end of 2020, and we await an “official declaration of bankruptcy”!

2020-10-13  Yes Iraq – Baghdad

The Minister of Finance, Ali Abdul Amir Allawi, stressed, on Tuesday, that the main purpose of the white paper is to move the current economic compass axis to a better future situation that keeps pace with developments in the world.

Allawi said in a press conference, that “the white paper is a reform program for financial and economic affairs in Iraq,” noting that “the main purpose of the white paper is to transfer the current economic compass axis to a better future situation that keeps pace with developments in the world.”

Allawi added that “the white paper is directed to the economic and financial side, and one of the main axes of the white paper is to reform the situation in the provinces.”

Allawi said, “We are facing dangerous repercussions and the white paper is a road map for reform,” indicating that “the border crossings are linked to the import movement and will not be as important as oil.”

He explained that “Iraq’s import is estimated at $ 60 billion a year, and that Iraq has international and regional obligations related to trade agreements,” indicating that “controlling the ports is important and we have started in a serious way to implement the automation system.”

The Minister of Finance continued that “the white paper will be a road map for subsequent budgets,” noting that “oil revenues are insufficient to cover salaries and retirement requirements,” while the minister stressed “working to diversify revenues.”

For its part, the Finance Committee in the Iraqi Parliament commented, Tuesday (October 13, 2020), regarding the “white paper” that the government sent to the House of Representatives, confirming that it will study the paper very carefully.

In statements to its members, the committee said, “The coming days will witness extensive meetings and discussions between the competent parliamentary committees to study the paragraphs of the white paper very carefully, in order to prevent any negative results that may lead to some of the articles of the paper, and we support any reform step.”

And they added that “the parliamentary committees will work to amend or add paragraphs in the white paper according to the powers that Parliament has, and that will be in coordination with the competent executive authorities responsible for this financial reform paper.”

The issue of delaying the salaries of Iraqi employees for the month of September for more than 50 days revealed the size of the financial crisis that Iraq is going through, which sources expected to continue until the end of this year in light of the escalating accusations between the government and the House of Representatives (Parliament) about standing behind the crisis.

Observers are likely to continue the crisis of delay in salaries of employees unless parliament votes on the borrowing law due to the government’s inability to secure the required monthly sums, while they indicated that the Iraqi government’s revenues from all state resources amounted to about $ 2.4 billion last September, while the salaries of employees And other operating expenses per month, about 5 billion dollars.

While the debate continues over the possibility of securing employee salaries for the remaining three months of 2020, the Iraqi government is trying to pass a law for internal borrowing, enabling it to pay salaries on time, but Parliament says that this law “will make Iraq bankrupt within six months,” which puts Baghdad between Two difficult choices, either to borrow internally, or the possibility that employees will not be paid in the future.

It is noteworthy that the Iraqi government secures the salaries of its employees from oil revenues, whose prices have fluctuated a lot after the spread of the Corona virus and the closure measures imposed by most countries on their economies to confront the Corona pandemic that affected the labor market and investment and decreased demand for oil derivatives and other main sources of funding for Iraq.  LINK