Tishwash: Parliamentary Finance: The salaries of last month will be spent within hours, and the salaries of the current month at the end
A member of the Parliamentary Finance Committee, Ahmed Mazhar Al-Jubouri, announced that last month’s salaries will be spent in the coming hours and that the salaries of the current month will be spent at the end.
Al-Jubouri said in a statement that the Euphrates News Agency received a copy, that “it was agreed during our meeting yesterday with the prime minister and some officials to pass the borrowing law in the amount agreed upon within the committee and passed by Parliament.”
Al-Jubouri added, “The government must present its plans to maximize next year’s resources and not rely on a single resource that is rapidly affected by any international developments.”
He stressed, “The delay in salaries is an incorrect negative case, and we will never accept delaying it again.” link
Tishwash: How Does The “Iraqi Economy” Emerge From The Bottleneck?
Iraq is facing a severe financial crisis that has cast a shadow over all the facilities of economic life, and led to the inability of the Iraqi government to pay the salaries of more than 5 million employees for permanent staff, for more than twenty days.
The current crisis has also caused the government’s inability to pay debts owed to foreign and investment companies, and international debts estimated at billions of dollars.
What are the causes of the economic crisis in Iraq?
The decline in oil prices is the main factor behind the financial and economic crises that the State of Iraq is going through.
The oil sector contributes about 75% of Iraq’s GDP, and represents about 95% of revenues.
Oil prices have fallen since mid-2014 until now from more than $ 100 a barrel to less than $ 40 a barrel.
For many years, the State of Iraq has relied on oil as the main source of income, and although this contributed to making Iraq an old high-income country, in many ways it made its institutions and social and economic outcomes resemble those of a fragile, low-income country.
Oil revenues have eroded the country’s economic competitiveness, reduced the need for taxation, weakened the bond of accountability between citizens and the state, and fueled corruption. According to a World Bank report.
Iraq has the fifth largest oil reserves in the world.
Iraq is expected to record its worst annual growth performance since the fall of Saddam Hussein’s regime, according to World Bank projections.
Among the main factors that caused the events of the economic crisis in Iraq was the weak contribution of the main sectors such as agriculture and industry to the Iraqi economy.
In addition to the increase in financial expenditures, especially the military ones, and the increase in the expenses of the war against ISIS, the large budget deficit increased to 19.5 billion dollars in 2019, and to 57 billion dollars in 2020 (equivalent to 70.6 trillion Iraqi dinars)
The dominance of the public sector over the economy also caused weak production, in addition to the decline in the tradable goods sector, and the negative effects of the non-competitive exchange rate of the Iraqi dinar.
How to solve the economic crises of the Iraqi society?
Dr. Thamer Al-Ani, Director of the Economic Relations Department of the League of Arab States, believes that reforming the economic situation in the State of Iraq requires reducing spending, enhancing non-oil revenues, increasing the contribution of non-oil sectors to the GDP, in addition to stimulating and supporting the private sector.
Al-Ani stressed the need to improve the investment climate to achieve economic development and attract foreign investments.
He indicated the need for the government to take strict measures to combat corruption and tax evasion by social strata capable of paying them. As the ratio of tax revenues to public revenues in Iraq in 2019 is only about 10.8%, in addition to the reduction of the Iraqi dinar exchange rate against the Turkish dollar.
“Diversification of economic activity through reform and private sector development is crucial to reducing the successive challenges that Iraq faces,” said Saruj Kumar Jha, Regional Director of the Levant Department at the World Bank.
The rate of participation in the workforce in Iraq is about 42%.
Kumar stressed the need to exploit the export potential of Iraq to help diversify economic activity away from oil production, and the trend towards trade and integration.
Iraq has a geographical location that qualifies it to be a regional center for logistics services, in addition to the advancement of the agricultural sector. link