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Iraqi Prime Minister discusses economic reform efforts with a representative of the World Bank missionBy yota691
Iraqi Prime Minister discusses economic reform efforts with a representative of the World Bank mission
Iraqi Prime Minister, Mustafa Al-Kazemi, during his meeting with the Special Representative of the World Bank Mission in Iraq, Ramzi Numan May 12, 2020 03:35 PM Mubasher: The Iraqi Prime Minister, Mustafa Al-Kazemi, received today, Tuesday, the Special Representative of the World Bank Mission in Iraq, Ramzi Numan .
Ways have been discussed to coordinate work between the Iraqi government and international institutions to overcome the economic crisis, according to a statement of the Information Office of the Prime Minister.
Al-Kazemi also discussed with the Special Representative of the World Bank Mission in Iraq work to launch economic reform efforts, which would encourage investment and reconstruction, enhance the service reality, and provide job opportunities .
The former Iraqi Minister of Planning, Nuri Sabah Al-Dulaimi, received on April 28 last , the representative of the World Bank in Iraq, Ramzi Numan, and his accompanying delegation.
During the meeting, a number of issues of common concern were discussed, and ways of strengthening national efforts facing the emerging epidemic of the Corona Virus pandemic.
Noaman affirmed that the World Bank is ready to provide possible support and restructure the loans granted to Iraq, in a way that contributes to protecting the vulnerable sectors of society.
Analysis .. The world is approaching the fourth wave of debt
February 09, 2020 03:07 PM
Mubasher - Ahmed Shawky : Amidst the World Bank warning of a massive wave of debt escalating all over the world, it is not clear who will be affected the most.
But if the countries most vulnerable to the brunt of the debt wave, from the UK to India, do not act soon, they may face severe economic damage, according to Kyushik Paseo, a former World Bank economist, through an analysis published by Project Syndicate.
Over the past decade, the global economy has seen a steady accumulation of debt, now reaching 230 percent of global GDP, with the fact that the last three debt waves have caused a major economic recession around the world.
The catastrophic past of debt
The first debt wave was in the early 1980s, after 10 years of low borrowing costs that enabled governments to expand their balance sheets considerably, interest rates began to rise, making debt service increasingly unsustainable.
Mexico was the first victim, as the US government and the International Monetary Fund were informed in 1982 that they could no longer pay their debts.
This had a domino effect, as 16 Latin American countries and 11 least developed countries outside the region eventually rescheduled their debt.
In the 1990s, interest rates were again low, raising global debt again.
The crash came in 1997, when the fast-growing but financially vulnerable East Asian economies - including Indonesia, Malaysia, South Korea and Thailand - experienced a sharp slowdown in growth and their currency rates plunged, thus extending effects to all parts of the world.
But emerging economies are not alone vulnerable to such meltdowns, as demonstrated by the 2008 US mortgage crisis.
By the time everyone discovered what the mortgage crisis meant, American investment bank Lehman Brothers had collapsed, causing the worst crises and recessions since the Great Depression.
The fourth wave of debt
The World Bank recently warned that the fourth debt wave may exceed in its first three waves, as emerging economies whose debt-to-GDP ratio reached a record low of 170 percent are particularly vulnerable.
As in previous cases, the debt crisis increases due to lower interest rates, while anxiety will start as soon as interest starts to rise.
The reality is that the mechanisms of such crises are not well understood, but research conducted by "Stephen Morris" and "Mortar Song Shin" in 1998 about the mysterious origins of currency crises, and how they are transmitted to other economies, shows that a "financial tsunami" can make the situation go beyond a source the crisis.
How the source of the financial crisis could fade has been illustrated in the delightful short story "Ranam Kurtva" by the famous Indian writer, Shibram Chakraborti.
In this story, the desperate Chipram asks an old school friend, Harsha, to lend him 500 rupees ($ 7) on Wednesday with a promise to pay the deposit the following Saturday.
But Chibram is wasting money, so when he comes on Saturday, he has no choice but to ask another school friend, Jopar, for a loan of 500 rupees, to pay it back next Wednesday.
Chipram uses the money to pay off his debts to Harsha, but when he comes on Wednesday he has no way to pay off Jopar’s debt, so he reminds Harsha that he paid off his debts on time and therefore borrowed from him again.
This becomes customary as Shibram repeatedly borrows from a friend to pay off his debts to the other, and Shibram then clashes with Harsha and Jobar one day.
After a moment of anxiety, Chipram proposes an idea that every Wednesday Harsha should give “Jopar” 500 rupees, and every Saturday the latter must give the same amount to the first.
Shepram assures his former friends at school that this will save him a lot of time and change nothing for them, and he will disappear in the crowds of the city "Kolkata" in India.
The UK and India are a model of the crisis
So who are the potential "Harsha" and "Jobar" in today's debt spree? According to the World Bank, they could be any country with domestic vulnerabilities, a large fiscal balance sheet, and a heavily indebted population.
There are many countries that fit this description and run the risk of becoming the channel that carries the fourth debt wave of the global economy.
Among the advanced economies, the UK is a clear candidate, and in 2019 Britain barely avoided recession, recording the weakest pace of growth in any period not seen since the 1945 recession.
Britain's conservatives have also promised big increases in commercial investment, and this is unlikely, but instead it will be a debt wave.
Among emerging economies, India is particularly vulnerable, as in the 1980s the Indian economy was somewhat protected, and consequently the debt wave had little impact at that time.
At the time of the East Asia crisis in 1997, India had just begun to open up and thus experienced some slowdown in growth.
By the time of the debt wave in 2008, the country had become globally integrated and severely affected, but its economy was strong and growing at almost 10 percent annually, and recovered within a year.
But India’s economy today faces one of the deepest crises of the past 30 years, with growth slowing sharply and unemployment at the highest level in 45 years, almost no export growth over the past six years, and per capita consumption in the agricultural sector over the past five years.
Add to this a highly polarized political environment, and therefore it is no wonder that investor confidence is rapidly declining.
It is not too late for countries to build "walls" to protect against the debt tsunami, while while India's political problems will take time to resolve, the new budget may be an opportunity to take precautionary action.
The fiscal deficit must be controlled in the medium term, but the government will be prudent in adopting an expansionary fiscal policy now, with funds directed to support infrastructure and investment, and if managed properly, could boost demand without increasing inflationary pressures and strengthening the economy in order to cope with the debt wave.
Deep differences stand in the way of approving the draft budget 2018 House of Representatives "Internet" Economy News Baghdad:
Large differences within the political blocs on the draft budget bill 2018, which will affect the economic policy of the government during the current year, according to specialists, expecting not to pass the budget in the coming days because of the intensity of the dispute between the decision-makers in the House of Representatives.
The Ministry of Finance instructed all ministries during the past month to cover their needs through the use of the approved exchange mechanism, which is 112 to face the non-adoption of the draft budget for 2018.
The parliamentary economic committee said that the non-adoption of the budget caused by the delay of the Council of Ministers to send a draft budget law and synchronized with the beginning of the legislative holiday.
The committee member, Najeeb Najib, said in a statement to "Economy News" that the reason for delaying the Council of Ministers to send the budget law to the House of Representatives, is the high oil prices have estimated the price of a barrel of $ 43 and now sold at $ 58, which prompted the government to reduce the deficit to 13 Trillion dinars after it was 23 trillion dinars.
Najib expressed her displeasure at the adoption of 12.6 percent of the province of the budget of 2018, saying at the same time that it was in accordance with the formula of "overwhelming".
She added that 12.6 percent is not enough to pay salaries in general, because the region needs 889 billion dinars a month to pay, while the ratio will provide 450 billion dinars only.
And on the losses resulting from the delayed adoption of the budget, the member of the Economic Committee, the losses are not large because the origin of investment expenditures set up for the establishment of service projects do not constitute more than 25% of the budget, most of which loans and some of them ratified in 2017.
Noting that the sovereign expenditure took a large part of the budget of 2018 to reach 45%, as well as the availability of degrees of employment but not able to cope with unemployment.
On the other hand, the Dean of the Faculty of Management and Economics, Mitham Laibi, in a statement to "Economy News" that "losses caused by delaying the adoption of the budget, will be based on the salary and salaries, because it is the first component of the budget, which weakens the investment side.
He added that the delay caused by the president of the conflict between the political blocs for the purposes of electoral propaganda and try each of them to review "political muscles."
"All political arguments have nothing to do with any economic fundamentals aimed at developing the Iraqi economy," he said.
The federal budget estimated at 108 trillion dinars, with a deficit of 13 trillion dinars, and saw the reduction of the share of the Kurdistan region from 17% to 12.67%.
"The first loser of the postponement of the budget is the Iraqi people, and the postponement of their ratification is a delay for the investment side and a semi-disruption of the operational side," said the head of the Iraqi Economists Association, Abdul Hussein al-Yasiri.
He explained that it is not losses by the delay is the management of the investment side and that the budget is a law on the basis of time limits, every day delay this law is lost investment opportunity on the Iraqi economy.
While more than 4 million people are employed by the private sector, many of whom depend on the budget for their work.
Views 217 Date Added 06/01/2018
Thursday, May 19, 2016, Posted at: 13:08(GMT+7) PM calls for effective use of WB loans Relevant agencies must get well prepared for receiving the remainder of the World Bank's International Development Association (IDA-17) fund allocated for Vietnam in the 2014-2017 period, according to Prime Minister Nguyen Xuan Phuc.
The Prime Minister also urged all bodies to devise measures to ensure the effective use of official development assistance (ODA) and other preferential loans.
The two IDA-funded projects on strengthening the management of land and building a land database, and improving teachers’ effectiveness will remain unchanged in terms of scale, according to hime conclusion.
The Government leader assigned the Ministry of Planning and Investment to be in charge and work with the Ministries of Natural Resources and Environment, and Education and Training, to submit the projects for approval.
Relevant agencies are to complete necessary documents before May 20 to receive WB-funded projects in the fiscal year of 2016 in line with the Government’s Decree No.38/ND-CP dated April 23, 2013 on management and use of ODA and preferential loans.
The PM gave the green light to the State Bank of Vietnam to technically negotiate with the World Bank on IDA projects in the 2016 fiscal year.
He requested the Ministry of Planning and Investment to review the list of projects to be disbursed in the next fiscal year to ensure effective use of the loans.
The Ministry of Finance will cooperate with the Ministry of Planning and Investment in making reports to the Government on the safe limits of ODA and preferential loans, which does not affect the public debt ceiling.
Even amid conflict and fluctuations in oil prices, as home to the world’s third-largest oil reserves, Iraq has the sort of wealth from natural resources that make it possible for its government to invest in the country’s infrastructure. Iraq spent more than US$51 billion on public procurement in 2014, well over 20% of the country’s GDP. Harnessing this revenue to develop the economy, however, requires an efficient system of government contracting.
Public procurement in Iraq has been effected by decades of sanctions, war, and instability—conditions that have created a system characterized by inefficiency, corruption, and delays. Procurement is a bottleneck that prevents budgetary expenditure; according to the World Bank’s 2014 Public Investment Management Report, often the process is stuck at 50%–60% of its capacity.
Another assessment in 2012 showed widespread corruption in public contracting weakening investors’ perceptions of doing business in Iraq, and thus hurting its prospects of increased foreign investment. Simply put, Iraq’s outdated procurement system, combined with its post-conflict low absorptive capacity, is significantly increasing the cost of public investment and also diminishing its returns.
The Bank’s Middle East and North Africa (MENA) procurement team has worked with the Government of Iraq to address this. The Bank’s regional public procurement strategy promotes building capacity in a way that moves beyond small-scale, short-term training, towards comprehensive programs that look for more sustainable solutions. In Iraq, the Bank is trying to help the country build a future generation of civil servants with the skills needed to manage procurement with efficiency and integrity.
With a grant from the Iraq Trust Fund, the Public Contracts Directorate (PCD) in Iraq’s Ministry of Planning forged strategic partnerships with six public universities located in different regions of Iraq. The idea behind these partnerships is to develop a supply of professionals who enter the civil service properly prepared to apply the principles of economy, efficiency, and competition within the public contracting process.
The program is diverse in its geographic scope and multi-disciplinary approach, reflecting the multi-stakeholder nature of public procurement. The PCD enlisted the help of faculties of law, engineering, public administration and business to establish procurement education programs across academic fields.
The Bank and PCD first needed to make sure, however, that academics in Iraq responsible for teaching the new procurement curriculum had the relevant content for it. Iraq asked the World Bank for help in learning how to develop programs for its procurement workforce. With the Bank’s assistance, the PCD struck up a partnership with Université Paris Ouest Nanterre La Défense in France.
In October 2014, a group of 18 Iraqi professors and administrators from the universities of Baghdad, Salah Aldeen, and the Technical University of Sulaimaniya, Kufa and Basrah, attended an intensive two-week diploma program at Nanterre. “The students of Iraq are the future of our country,” Fareed Yasseen, Iraq’s Ambassador to France, said of the partnership. “We need to develop training models like this to provide our students with the modern skills necessary to succeed in government and beyond."
Some of these Iraqi universities have already adapted their curriculum and integrated procurement into existing academic programs. These include Angham Ezzulddin Ali Alsaffar, Professor of Civil Engineering at Baghdad University, who said the training course in Nanterre was proving useful for her and her students. Another university teacher, Ahmed Saydok, Director of Continuous Education at Salahaddin University in Erbil, had spearheaded the launch of new summer courses. “The bottom line is that the students are the raw material,” he said. “You can mold them as you want.”
This program did not emerge in a vacuum: It arose from prolonged engagement with the Bank, which sought to solutions to fit Iraq’s specific context. When discussions first began, its government agreed to build the skills of procurement personnel. “We set the building blocks in a program that was rolled out over three years,” said Hamed Ahmed, Manager of Monitoring and Coordination at the PCD.
In 2013, a procurement needs assessment was conducted. One of its key points was the vast scale of the needs—there were thousands of government officials and stakeholders involved in procurement on a regular basis with little training on how to do so. But the ability to reach them was limited.
This capacity building program aims to address exactly that: By working with university teachers and students, the initiative is forward-looking, seeking to equip a future Iraq with procurement skills. It implicitly recognizes Iraq will need massive investment in infrastructure for water, transport and energy, and, therefore, a public sector capable of managing and executing this.