Crisis, the Central Bank of Iraq .. Reshape the nation stations

[audigger]

First leg: economic freedom

For decades there was Keynesian thought based on the effective state intervention in economic life to control the market and address Achtlaladtha and up to the highest run of the energies of productivity, employment and controlling inflation. Go thought Keynesian of premises objective notably the inability of markets itself to control the economy, but Bklv economic and social very high, in other words that the market forces will lead to cases of contraction and prosperity successive take ranges of time is nothing short and affect positively or negatively in all aspects of life, so the role of State became radically to adjust the rhythm of economic activity, accompanied by this vision of historically intense competition between socialist thought and its applications and capitalist thought and the need to seek victory capitalist thought in the face of phenomena fully operational and distributive justice and health and social care and free education in socialist societies.

. Thought اwins big and succeeded in leading capitalist societies towards the welfare state and the emergence of a broad middle class, but in contrast trimmed relatively size business profits.

. On the other hand adopted Milton Friedman and the University of Chicago fierce attack on thought from that markets inherently capable of amendment itself without any need for state intervention, but that state intervention in any form would lead to market distortions. . Sums up the role of the state, according to Friedman in the army and the security and justice (protect the system from external and internal enemies) and public administration.

The Holy Trinity Friedman in privatization and curtail the role of the state and reduce public spending.

. Applied theory Friedman at the hands of Reagan and Thatcher and achieved successes striking at the expense of the majority of the population who have suffered the tyranny of capital and the accumulation of profits are obscene compared to unemployment rates is remarkable previously deteriorating social welfare systems and health. Reinforced this policy under the rule of Bush but the bubble burst in the 2008 crisis. Strengthened thought Friedman in monetary institutions and financial crisis, and applied his theory is wild and catastrophic in many countries such as Chile 1973 and Russia after 1990, Poland and others where the form of the concept of shock and restructuring the general framework of economic policy (for details reviewing Shock Doctrine to Naomi Klein).

Second leg: the occupation of Iraq

. Adopted the United States in its campaign for the occupation of Iraq on the principle of shock and awe to subjugate the Iraqi people, and not, as falsely reported only to overthrow Saddam, leading to the restructuring and the creation of the nation in the new Iraq.

Has deliberately spread chaos in all aspects of life under the title of creative chaos and devoted and encouraged the concepts and values ​​distorted life-like sectarianism, systematic looting, unrestrained freedom, graft, selfishness and lack of interest in public affairs.

. Plunged the country into sectarian war political pillars encouraged such Governing Council and the constitution and the formation of parties, utilizing various tools and instruments, including government agencies.

Not so haphazardly, remember the opinion of Rumsfeld's proposal to construction (read restructuring) from scratch. . Should therefore abandon all community cultural heritage and legacy and achievements throughout history and up to the building from the ground up and point configuration or the creation and launch of new imported values.

The voices of resistance peaceful community is weak in the face of a massive tsunami is unprecedented and still sounds community is fragmented and weak and fights violently by the forces of chaos project.

Third leg: the economic shock

. Was the economic shock, working on the return of the Iraqi economy to the zero point, stall full state sector production and seeking to privatize it, and demobilization large to large segments of workers in the state sector, open up trade (import) without any controls or restrictions, create chaos fiscal and monetary, tax fixed income have been applied mainly to employees.

These actions left the economy in a state of paralysis and chaos, and stop domestic production for lack of necessary production requirements and the lack of ability to compete with a flood of imported goods.

Commercial agency activities flourished and work for the benefit of foreign companies that got all contracts awarded by the occupation authority except little margin for minor work.

There is no longer an economic policy, trade, financial and monetary, but just implementing tools for policy of the occupying power. The economy practically reached the stage of zero and ready for restructuring according to unbridled capitalist perspective.

Fourth leg: Economic Policies

Preoccupied with economic policy in the first year of the occupation (under Bremer's administration) in the treatment of all prior and contemporaneous bottlenecks and consisted mainly in extinguishing the country's foreign debt and replace the old currency and control the exchange rate and provide the necessary liquidity for the activities of the state and society.

Shape the transition to a market economy icon magic of the economic policy of new Fajtsr Central Bank's role to just a source to provide dollar cross currency auction without any serious attention to (sustainable development, operation and economic prosperity) as provided in the law of the bank who left chaos hit in length monetary market and display (see our paper analytical: the current Iraqi monetary crisis: bubble fleeting or the appearance of a deeper economic crisis? May 2012) and shortened fiscal policy in just finance government expenditure.

To our knowledge, did not provide authorities of monetary and fiscal any analytical studies of primary keys in their work, such as exchange rate optimization and its impact on employment and production and trade balance, bank credit, the control of foreign exchange (ironically he instead attention to this aspect has been canceled Control Department of foreign transfers as well as the Department of credits), the impact of government spending on operation and production, the impact of fiscal policy on monetary indicators, the impact of fiscal policy on the distribution of home ......... etc..

This is not surprising as long as the policy of the government lacks any vision development strategy in light of the absolute conviction that the market economy is the key for each crisis and which has been translated into unbridled economic policy.

كانThis is not only a reflection of the theory of Friedman calling to let market forces interact freely to reach equilibrium (unplanned) even if at the expense of the majority of the population. Has sought the occupation authority and later the elected governments to privatize the oil industry and health and other, but had encountered fierce resistance from specialists and people, making it postpone the move. Instead of activating these sectors left in the recession distasteful still exists so far. To meet the broad protests successive governments have not been able to reduce the size of government spending but he left without real planning and thoughtful but went mainly to cover the expenses of the government operational characterized Balanflat. The role of the state has the size and strikingly leader and no longer directed to economic and community life and withdrew mainly to security role.

. All of this was the impact of the strong push from foreign experts and the International Monetary Fund where the thought Friedman dominance and clear. This effect has been translated into binding agreements unknown details with the International Monetary Fund. Reached the severity of impact to note that studies sober for some experts posted on the central bank, with an emphasis that it does not reflect the opinion of the bank! . Which does not rely on policy-making, where adopt other policies aligned with the directives of the Fund.

Fifth leg: Shabibi crisis / central or overall economic policy crisis

Argue that the current crisis is not about the person Shabibi, a prominent economist highly respected and not the bank as much as cadre of economic policy generally.

We understand that an independent central bank, but within the framework of the implementation of the general economic strategy be binding in the general trends of the Central Bank and the Ministry of Finance to achieve the desired objectives.

Independence comes after the adoption of economic strategy for the removal of the bank and its policy for immediate political whims and short-term political interests of the various political blocs and keep him away from the whims of the government affected by political conflicts.

Within this understanding, the central bank is a safety valve for hard currency reserves as a reserve for the country and for the local currency. . The state has stipulated that the central bank not to act in this reserve only within the law, any law central bank law has prevented the government from manipulating this reserve for any purpose whatsoever. Law and be held accountable if the central bank failed to maintain an adequate reserve and increase and if they failed to support the stability of the local currency or meet import needs. . The central bank held accountable if adopted exchange rate of the local currency is overstated (as is the case now ") leads to maximize imports and hinders the growth of gross domestic product.

And accountable government, presumably, if they failed to manage their financial resources in the form in which to achieve sustainable development. And accountable government if painted strategy lead to damage to the value of the local currency as a result of import liberalization and disrupt the gross domestic product.

Focused the government's economic policy, influenced by Western advice, in support of unrestrained economic freedom and the central bank tool her. Blamed the central bank and moral leadership for not opposing directions of the Government and the effects of its policy statement unrestrained economic life and the lives of the people but of the defective questioning their integrity.

Isolating the leadership of the Central Bank is trying to blame the central bank only disliked the government for its economic policy unrestrained and failed and will not do any useful as long as the strategy remain unchanged. There is no doubt that the tightening of controls on the transfer of hard currency will lower the phenomenon of flight of hard currency abroad but just make Triqiei in the absence of a national economic strategy to consolidate sustainable development.

ا What is needed is a sound economic strategy develop the economy and provide prosperity.

The escape to the front is not a solution.

* Iraqi economic

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