Devaluation of the dinar

[rockfl9]

Written like a true engineer/problem solver this article gets it almost right.

It is true that by artificially keeping the exchange rate high the MOF/CBI has held commodity prices low and held inflation down. Looks good on paper but as we see now has long term consequences.

But this has resulted in almost total dependence on imports stifling  the Iraqi private sector.  If they let the exchange rate decline imports prices will rise and some Iraqi's may produce items locally, resulting in gradual self sufficiency. 

BUT the real ruling class in the country are the rich importers .  They use dollars to import, resell at a profit , take the dinar to the CBI for dollars and do it over again. The overhead is low margins are good .  Generally they do not want to compete with locally created products. Also they are skimming off dollars in the process.

The problem must be solved thru education  and training.  but that would take government foresight like our STEM program.  Today the typical Iraqi trains for a government position  which usually doesn't have a private counterpart. 

As the engineer in the article says it is a chicken and egg problem. The GOI must kick things off by finding products that will solve the problem and make  that a national priority.  To do that they will have to attract outside talent and pay them to provide the necessary expertise .  SA, UAE and Kuwait did that 20-30 years ago and now they have flourishing private industries.