Weekend UPDATE for October 17-18, 2020
SATURDAY – BANKERS AND TREASURY HAD ANOTHER “POW WOW” THIS MORNING …. ♪♫•*¨IT’S GETTIN’ HOT IN HERE….!!!¨•*♫♪
AFTER WAITING FOR US ALL DAY, BANKERS WENT HOME TODAY DISAPPOINTED…..THAT THEY HAVE TO RETURN EARLY IN THE MORNING…….GEE, I WONDER WHY?????
BANK EXCHANGE “CALL CENTER” EMPLOYEES ARE BOTHERED THEY HAD TO WORK TODAY……..AND TOMORROW 2.
WE’RE GETTING REPORTS THAT BANKING EMPLOYEES ARE BOTHERED ABOUT BEING SHORT-HANDED AND DEALING WITH THOSE WHO ARE NOT COMPLETELY TRAINED.
IT IS BELIEVED THAT SOME BANKS (IF NOT ALL) WILL HAVE A “RANGE” OF RATES FOR THE CUSTOMER BASED ON FUTURE COMMITMENTS WITH BANK PRODUCTS AND SERVICING.
Tishwash: Nawar Al-Saadi: It is not in Iraq’s interest to float its currency
Economist Nawar Al-Saadi said that the floating of the Iraqi dinar is a big mistake during this period, because that will greatly harm the poor and those with limited income.
He added in an interview followed by “Al-Eqtisad News”, that “the financial crisis in Iraq is the result of economic problems and mistakes that have spanned from 40 years until now.”
The dialogue came as follows:
Do you think that the Iraqi financial crisis is very dangerous and will cause social problems if it continues?
The current crisis is the result of economic problems and mistakes that spanned from 40 years until now. Iraq, since 1980, has been suffering from a decline in the economic chart due to the use of the economy to serve the authorities and not to serve the public interest. This has led to the depletion of its financial resources in the purchase of weapons, economic sanctions, and debt repayment, etc.
Therefore, the current situation is not a new thing because the Iraqi economy, with any drop in oil prices, puts the government in front of a difficult test in the possibility of securing the salaries of employees and retirees, the fact that the financial crisis still exists without any government solutions, as the economy now lives on a single source of income In a commodity being manipulated by huge waves in international markets.
As for social problems, the procedures of successive governments have left the fever of deprivation and social injustice due to the failure to realize the importance of managing the economy according to sound scientific and objective patterns. Caused a large social gap in the absence of the middle class and the creation of a large generation of the unemployed who are difficult to contain in the aging public sector which suffers from great slackness. In Iraq annually more than 100 thousand people enter the labor market. The government is now unable to contain a quarter of this number. If there are no radical and quick solutions to remedy the situation, Iraq is on the verge of a serious societal and economic collapse.
What do you think of the reform paper that the Finance Minister started working on?
Frankly, until now, I have not seen the terms of the (white paper) as it was released because it is not yet clearly announced and has not been approved by the House of Representatives yet, but I expect it will be in accordance with the conditions of the World Bank, which always emphasizes reducing salaries, expenditures and public waste.
According to the words of the Minister of Finance, that the white paper will be implemented over a period of three years to reform the financial and economic situation in the country, and that the paper also includes reform points that will be implemented in the long term, and other reform materials that must be applied in the licensing rounds, and the oil agreement with OPEC, given that the global economic situation has I differ from the previous one, but until now this is all talk, and I do not know how serious it is in applying it in light of these internal political conflicts and divisions.
Do you think that the Kurdistan region will abide by the economic agreement on oil and financial revenues?
The problems between Baghdad and Erbil have been for many years, on top of which are the file of managing oil wealth and dividing its revenues, and the disputed areas between the two sides. But last month, a high-ranking delegation from the Kurdistan region arrived in Baghdad to resume discussions with the federal government on the outstanding differences, especially the oil and financial revenues files.
And that the agreement centered mostly on the delivery of crude oil to the region in exchange for sending Baghdad its share of the federal financial budget. So I think this time the negotiations will be positive regarding the economic commitment, as the Kurdistan region has emerged as a major supporter for Al-Kazemi’s assumption of the leadership of the Iraqi government, which may contribute to bridging the gaps between Baghdad and Erbil, and create the atmosphere for reaching agreements, which confirms the success of the recent Sinjar agreement between the two parties and the return Displaced people to their homes.
Why is Iraq unable to activate its industry and are there countries that stand in the way?
It has become clear today to all Iraqis that the file of industry in Iraq is more political than economic, meaning the problem is not in the lack of material or human resources, but there are political problems and interventions from regional countries standing in front of the wheel of industrial sector development, because Iraq was one of the most prominent countries in the region.
Which relied on the food industry, such as dairy products, vegetable oil industry, etc., to achieve its self-sufficiency. Today, the factories of these industries suffer from low production and poor quality when compared to the importer, such as the Iranian and Turkish, who largely filled the local markets, as the volume of imports for these products amounts to billions of dollars annually.
In addition to that, there are also other reasons, including financial corruption in the ministries, weakening industrial production, random importation and the absence of control over product and quality. And also not to shed light in support of industrial professions and crafts, in addition to the low wages for workers in this sector, and do not forget also the wars that the Iraqi street witnessed were responsible for closing the largest factories.
Do you support floating the dinar during the current stage?
The demand to float the dinar is a big mistake, because the poor will pay the price. It is not in the interest of the Iraqi financial system to raise the exchange rate of the dollar, because it will lead to a decrease in the price of the Iraqi dinar and a decrease in purchasing power and will lead to inflation, and that the classes with limited income and salaries will be the first affected by this decision.
In a simple arithmetic process, if $ 100 = 120,000 dinars after the float, it will be = 150,000 dinars at the very least, and therefore if your salary is 600,000 dinars, its real value is 400,000 dinars. Obtaining it or the habit of buying it here leads to a significant increase in inflation, with the rest of the current problems such as facing Corona, unemployment, poor services, security challenges, and debts all lead to a complete economic collapse.
Is corruption or mismanagement behind the failure to end the electricity crisis?
The two are with some corruption and mismanagement, as with every summer crisis in the electricity sector, government promises are poured in and pledges to improve conditions in the following summer. However, what actually happens is the addition of some prosthetic solutions that the Iraqis do not see a trace of, and this confirms that what Iraq is actually suffering is not A shortage of electric power generation, but rather financial and administrative corruption.
Because financial corruption is linked in contracts to the money spent on the electricity sector, commissions, and others, as for administrative corruption in its simplest form, which is that many general managers, technicians and engineers in the ministry are still in office throughout these years despite the great failure in the electricity sector and that the sums spent On this sector (of maintenance and installation of stations) is estimated at 35 billion dollars, in addition to another 30 billion dollars in operational expenditures. These figures are equivalent to the budgets of neighboring countries for two years, such as Jordan and Lebanon.
What is your interpretation of the phenomenon of the presence of millions of employees in the public sector?
Indeed, I could not find an explanation for the phenomenon of mobilizing millions of employees in the public sector, which is sterile and unproductive. Despite the throats of researchers and specialists on this issue, and there was no response until the situation arrived now.
There are more than 6 million and half employees with retirees who receive salaries from the state treasury and consume 65% of the budget. Everyone in this topic is talking about activating the partnership with the private sector, but the issue cannot be solved in this way only, but rather by creating effective economic policies and procedural means to address the problems and needs of society by opening new scientific departments that are compatible with the modern labor market and providing a suitable environment for investment, and most importantly, stability In laws and legislation, and providing security and protection for capital owners.
Why does the state not pay attention to the private sector and its workers by activating social security for them?
There are attempts by some MPs to activate the Social Security Law, but so far nothing has been issued, and the reason behind this is the parties’ struggle among themselves to obtain personal gains more than interest in the public interest. These differences reflected negatively on all the joints of the Iraqi economy, despite the fact that the Social Security Law is very important, because it will ensure the employment of a large segment of the unemployed. It will also guarantee workers in the private sector the pension salary, which will banish the ghost of appointments that has become the dream of all young people in the government sector.
Economically, how would you describe the Iraqi-Kuwaiti relations?
Iraq and Kuwait have a historical opportunity to form very large economic relations in the region due to the presence of many common ties between the two peoples, including affinity, language, nationalism, religion, kinship and borders … and so on, but unfortunately this relationship was not at the level of these ties, and for old and well-known political reasons and unfortunately also the governments could not Iraq after 2003 correcting the course of this relationship, although there was a good step by the government of Kuwait in the conference in support of the Iraqi economy, but soon this relationship worsened due to Kuwait’s role in disrupting work in the port of Faw to support Port Mubarak to be the most dominant of international trade in Region
Therefore, it is very necessary that there be negotiations from the two countries to strengthen the bonds of the economic relationship and achieve the possible benefit for both parties link