MilitiaMan: So the entire solution is to raise the value, as in future value.. imo ~ MM
Samson: The “white paper” … The Iraqi parliament signals a single solution to the salary crisis
7th October, 2020
The Financial Committee of the Iraqi Parliament confirmed, today, Wednesday, that the solution to the Iraqi state employees’ salary crisis is through the approval of the “white reform paper.”
A member of the committee, Naji Al-Saeedi, told Shafaq News, “The white reform paper expresses economic reform in the aspect of fiscal and monetary policy,” indicating that “this paper includes finding real economic resources to consolidate the existing financial resources and reduce unnecessary existing spending.”
Al-Saeedi explained that this “helps in creating additional revenues for the budget and reducing the deficit, which will positively affect the provision of employees’ salaries and secure them during the coming period.”
Al-Saeedi stated that “the white reform paper expresses a future vision for the Iraqi government, in cooperation with the House of Representatives in order to end the employee salaries crisis, as well as other financial and economic crises, and this paper is not part of the solution but rather the entire solution.”
He added that “after the approval of the white reform paper during the coming period, its implementation will be followed up by the Iraqi parliament, and we will see how serious the government is in implementing what was mentioned in this paper, and on the contrary, we will have a position.”
The government of Iraqi Prime Minister Mustafa Al-Kazemi is facing increasing criticism for its inability to secure sufficient liquidity to pay the salaries of state employees, which may expose it to tremendous pressure in the coming months. By the end of a week in October, the government had not yet disbursed employees’ salaries for the month of September.
The Iraqi government is struggling to secure employee salaries and other operating expenses due to the collapse in oil prices due to the Corona pandemic, which has crippled large sectors of the world economy. The country relies on revenues from selling crude to finance 95 percent of state expenditures.
The revenues from oil sales amounted to about $ 3.1 billion in September, while the monthly salaries of state employees in Iraq are about $ 5.5 billion.
“Monetary policy refers to the actions of central banks to achieve macroeconomic policy objectives such as price stability, full employment, and stable economic growth. Fiscal policy refers to the tax and spending policies of the federal government. Fiscal policy decisions are determined by the Congress and the Administration; the Fed plays no role in determining fiscal policy.”
A component of Fiscal policy is this:” President of the Federal Reserve Bank of Richmond: “If people expect inflation to erode the future value of money, they will rationally place a lower value on money today. This principle applies equally well to the price-setting behavior of firms. If a firm expects the general level of prices to rise by 3 percent over the coming year, it will take into account the expected increase in the costs of inputs and the prices of substitutes when setting its own prices today.” LINK