In Dinar Guru Updates, TNT 

Tishwash: The specter of bankruptcy hangs over Baghdad

In an article published yesterday, Iraqi Prime Minister Mustafa Al-Kazemi revealed his assumption of his duties “in the shadow of an empty treasury, imperfect sovereignty and a loose weapon outside the framework of the state”, stressing that the Iraqi reality “is not envied after 17 years of change … our country is intended to become An arena for the struggle of others, and the security of our citizens is threatened, not only from the continued ISIS and its sleeper cells, but also from the fugitive weapon.

” Al-Kazemi said, “Restoring the prestige of the state requires that the power of any party not be above the constitution and the law, and that the arms become in the hands of the state and its armed forces.” Referring to the economic crisis that the country is underneath, which revealed the fragility of the economy, by saying:

“The crisis includes all state institutions and their fabric And impede its economic revival, as it did not take place in the last period to promote vital sectors such as industry, investment, food security and others, “calling on political and parliamentary blocs to” support the new government by voting on candidates for vacant ministries. ”

Many questions were posed by political sources after Al-Kazemi published his article, especially that it was a “bankruptcy declaration” according to the expression of some, at a time when people familiar with the financial and monetary reality rejected this “description”. 

These, they told Al-Akhbar, they distinguish between “the storage available at the Ministry of Finance, and the storage available at the Central Bank,” noting that former President Adel Abdul-Mahdi received the “storage” from his predecessor Haider al-Abadi and has approximately 20 trillion Iraqi dinars ( Approximately $ 1.6 billion).

Abdul-Mahdi, in his attempt to accommodate the demanding demonstrations that started last October 1, launched a number of reform packages that cost this “storage” approximately 15 trillion dinars (1. Approximately $ 2 billion); Accordingly, Al-Kazemi received approximately five trillion dinars (approximately $ 400 million), and this does not suffice the public sector salaries for one month, prompting the current government to go to the International Monetary Fund to borrow and secure liquidity of five billion dollars in the next few months.

Today, Al-Kazemi’s major challenge is securing public sector salaries. If the government can secure it (about 6.5 billion dollars a month), this means preserving the existing political system, not just the political process.

These concerns are attributed to the decline in oil prices globally, and the income has fallen to below 1.5 billion dollars a month. According to the information, Al-Kazemi’s government reduced its operating expenses, and adopted a policy closer to being a “financial emergency”.

The priority is to secure salaries, and this is what I announced yesterday by securing the salaries of this month without any deduction, provided that the budget is approved monthly, not annually, as usual.

To that, the Iraqi parliament announced yesterday the purchase of 1.363 million tons of local wheat since the beginning of the harvest season in the twentieth of last month, at a time when the Ministry of Agriculture expects that the local production will reach six million tons, in the current season, between April and May .

And last March, Baghdad announced its need to import 1 million tons of wheat this year to “boost the stockpile, in anticipation of problems in supply chains due to efforts to combat the Corona pandemic across the world,” noting that last year, during the government of Abdul-Mahdi, Iraq achieved self-sufficiency in wheat and wheat production.   link