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Sovereign Fund and the problem of the Iraqi economy 2023.08.30 - 23:14 Thamer Al-Ani Baghdad - people Savings and investment funds currently account for the largest percentage of sovereign wealth funds, according to the classifications of funds registered at the International Institute of Sovereign Funds, followed by development funds in second place. Sovereign wealth funds contribute to diversifying the economies of the countries that own them by converting the financial or cash surpluses of those countries into assets with economic return and using them in investment fields (stocks, bonds, real estate...etc). Iraq has previous experience in establishing a sovereign wealth fund, through the establishment of the Iraqi Fund for Foreign Development, which was established under Law No. 77 of 1974, but after that the work of this fund was limited to managing Iraq’s financial contributions to regional and international organizations and bodies, and there was also an attempt To establish two sovereign funds for Iraq in 2018, but they remained without practical implementation. In terms of the source of revenue, the economies of countries are divided into 3 sections; Economics with diversified revenue sources, and economies with a single revenue source “one-basket economies” and what is between them Section III. Iraq falls within the second group, as Iraq is considered one of the rentier countries, due to its almost total dependence on revenues from the sale of crude oil, as oil revenues constitute about more than “90 percent” of the total revenues of the general budget, and they also contribute about “45-60 percent.” percent of the gross domestic product. This led to a major structural imbalance in the sources of financing the general budget, and as a result of unwise policies, and the difficult circumstances that Iraq witnessed, this imbalance deepened. To apply to all economic indicators, until crude oil revenues became indicative of the level of general revenues of the state, and more generally indicative of the level of activity of the national economy. Depleted natural resources are a double-edged sword. Because it depends on the nature of the management and use of these resources, these resources may appear in a country with a sound economic thought and are used as a basis for the advancement and development of its national economy and its financial sustainability, which requires allocating the surplus or a certain percentage of the revenues of these resources in the development and development of other economic sectors through the Wealth Fund Sovereign, and these same resources may be available to a country that is unable to adopt and apply an economic thought that helps it exploit these resources in a way that enables it to develop its economic sectors and sustain its finances and revenues, which leads to waste of these resources. With the huge revenues that crude oil generated in Iraq after 2003, these revenues were not properly exploited, and successive governments were unable to develop and diversify their sources of public revenues, and they remained dependent on depleted rent revenue. Therefore, some oil countries, such as Saudi Arabia, the UAE, Kuwait, and Qatar, realized the great danger they might face if they were unable to diversify their sources of public revenues, and given that oil is a depleted commodity, and in order to achieve the principle of optimal exploitation of resources, most countries tended to devise a method for managing oil revenues, through Establishing sovereign funds to achieve national goals; And financed either by foreign exchange reserves, exports of natural resources, or surplus public revenues of the state. It should be noted that the Saudi Public Investment Fund rose to the sixth position in the world among sovereign wealth funds, according to the latest statistics from 2023 “SWF Institute”, and the fund’s assets increased from $ 690 billion to $ 776.7 billion. It is noteworthy that the Norwegian Wealth Fund sits on the top of sovereign funds with total assets of $1.47 trillion, followed by the Chinese Cooperative Investment Fund, with total assets of $1.35 trillion, and in third place in the world came the Chinese Sovereign Wealth Fund “SAFE” with net assets of $1.019 trillion. While the Abu Dhabi Investment Authority Fund was the fourth in the world and the first in the Arab world, with assets amounting to $853 billion, followed by the Kuwaiti Wealth Fund with net assets of $803 billion, then the Qatari Investment Authority Fund with $475 billion. The importance of these funds lies in their consideration as a tool of financial policy to achieve financial stability and reduce the possibility of resorting to borrowing. They are also an important tool in investing the state’s financial surpluses, in addition to considering them as a precautionary tool against the effects resulting from the fluctuations of the global oil market, and preserving the future of future generations. . Accordingly, and based on the need to use the country's resources in the best way, so the time has come to establish the Iraq Sovereign Fund, or to activate alternatives that may play the same role, to take advantage of the financial surplus in oil prices, which is expected to provide a large financial surplus.

The Central Bank calls for the establishment of a sovereign fund "after the financial abundance" 2022-07-12 05:53 Shafaq News/ The Central Bank of Iraq called for the establishment of a sovereign fund, after the financial abundance, while it was considered that the currency auction is a channel to provide hard currency for the imports of foreign traders. The Deputy Governor of the Bank, Ammar Khalaf, said in an interview with Shafak News Agency, "We call for the necessity of establishing a sovereign fund, especially to benefit from the financial abundance of the state." He added that "the decision to establish such a fund remains affiliated with the Iraqi government and the Ministry of Finance in the first place," noting that "it is possible for the central bank to contribute to the management of this fund." On the other hand, Khalaf considered that "the currency auction is a channel for providing foreign currency for traders to cover their imports of foreign goods, in addition to covering travelers' expenses through banks and exchange companies." Iraq is one of the countries that benefited most from the rise in oil prices globally during the past months, and the reason is that most of Iraq's financial resources come from oil. Iraq's oil revenues amounted to 11.4 billion dollars last May, and last June 11.5 billion dollars.