Kamal al-Basri proposes "industrial dinar" to move the production wheel​​​​​​​

[yota691]

Kamal al-Basri proposes "industrial dinar" to move the production wheel

Sunday 01 September 2019 73

 

Baghdad / Hussein Thaghb 

 

A member of the Supreme Committee for Administrative Reform in the Secretariat of the Council of Ministers d. Kamal Al-Basri is a new model to support the private industrial sector through the industrial dinar, providing subsidized funding to industrial plants to start a phase of actual production in a phased manner, and contribute to address the problem of unemployment. 

 

He added that "the problem of unemployment is troubling everyone and threatens social peace and political stability, which requires quick solutions, and that the Iraqi economy's increasing dependence on oil, requires to diversify sources of income on the basis of economic advantage of projects and achieve greater economic and social effects."

 

Feasibility

He said: The proposal "is based on the adoption of economic feasibility, which exceeds the cost of government subsidy proposed, which seeks to address unemployment and diversify sources of income through the window of the private industrial sector, which requires the government to allocate a financial amount ($) with the Industrial Bank, according to which one dollar is spent For 600 dinars (instead of 1,200 dinars). "

He pointed out that "the purpose is to operate a specific percentage of pre-constructed plants, which have been suspended for many years, which are approved in accordance with standards set by the Directorate of Industrial Development in the Ministry of Industry (for example, goods are necessary and needed by the family), pointing out that" privatization can be saved from the revenues generated from Protection of the domestic product or through federal budget allocations. "

 

Factory owners

"To overcome the waste of public money, the industrial bank should supervise the management of the whole process in cooperation with the owners of the factories (including verifying the exact amount of the disbursement to import the necessary equipment and materials).

He pointed out that "for the purpose of analyzing the macroeconomic effects of subsidies, several assumptions were made. $ 420 million) as shown in table (1).

 

Total salaries

He pointed out that "the second assumption is useful in the case of the assumption that each plant needs 6 workers, the total number of employees (25,200) workers and calculated that the wage of the worker is equal to ($ 400), the total salaries ($ 10.080.000) and this liquidity reduces government support In addition, the operation of these plants requires the use of local goods and services, the economic multiplier will provide another value and sufficient justification for the economic feasibility of this government subsidy, assuming that these factories are not exempt from government taxes and fees (as shown in Table 1). Government revenue is about 93 million 

Dollars. "

 

The real value

He noted that "given the table No. (2) we find that the value of imported goods will be around (28 million dinars), while if manufactured locally (without subsidies) will be sold prices (30 million dinars), and in the case of production locally and government support The sale price will be around JD15 million, so subsidies will be useful in lowering price levels and raising the real value of the citizen's income.

"The amount needed for subsidies is $ 420 million, and since the owners of the factories get the facilities of the Industrial Bank according to (600 dinars per dollar), the cost of subsidies is half to 210 million dollars. As the government recovers $ 93 million in fees and taxes," Basri said. The cost of subsidies falls to $ 116 million, taking into account that the subsidy creates 25 thousand jobs and the value of wages realized up to $ 120, which itself exceeds the cost of real support, not to mention if we calculate the impact of the economic multiplier estimated at 10 percent (per dollar spent on the Iraqi market Values of local goods and services that It will be used by laboratories and the impact of wages paid in the market

 Iraq.

 

Economic returns

Al-Basri said, "In addition to the progress of economic returns there is another benefit manifested by contributing to lower prices and then economic inflation and thus the high value of salaries and wages, and table No. 2 shows a comparison between the prices of a commodity in the market (in Iraqi dinar) in the following cases: Import (equal to 28 In the case of domestic manufacturing and without subsidies (equal to 30 thousand and in the case of local manufacturing and government support (15 thousand)). "In this proposal adopted support through the policy of raising the value of the Iraqi dinar and thus the adoption of monetary policy, similarly can support Private Sector Tools Financial policy of fees and taxes. "

[6ly410]

[nannab]

 Sounds good to us and the sooner the better.

Thank you Yota  

[pacmen]

6 minutes ago, 6ly410 said:

I like this part....Better than Nothing....with One dollar equal 600 dinar (instead 1200 dinar) That put the Exchange rate  @ .0012....00085 + .000425=.00127ish