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The Ministry of Finance: completes the reform paper and finalizes the budget (2021-2023).


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In the document ... important figures in the law on financing the fiscal deficit that reached Parliament today
  
{Baghdad: Al Furat News} A copy of the fiscal deficit financing law that reached Parliament today, Sunday, revealed important figures.

According to a document from the draft law, the Euphrates News Agency obtained a copy of it. The federal budget revenues for the last four months of this year were estimated at 19 trillion and 719 billion and 483 million and 139 thousand dinars.
The export of crude oil was calculated - during this period - on the basis of an average price of 40.51 dollars per barrel and an export rate of 3 million 332 thousand and 73 barrels, including 250 thousand barrels for the quantities of oil produced from the Kurdistan region, based on the price of 1182 dinars per dollar.
The transcript indicates that Kuwait's compensation estimates are 531 billion 584 million and 494 thousand dinars.
As for the estimates of the remaining licensing contracts for foreign oil companies, 5 trillion, 6 billion and 282 million dinars.
 The Parliamentary Finance Committee announced today, Sunday, that the Council of Ministers has sent a bill to bridge the fiscal deficit to Parliament, indicating that "the law stipulates that Iraq needs to borrow 41 trillion dinars for the last four months of this year.
" It will enable the government to bridge the fiscal deficit by resorting to borrowing, "noting that" the bill to bridge the fiscal deficit will be a substitute for the 2020 budget. "
It is reported that the Speaker of the House of Parliament Muhammad al-Halbousi said in the parliament session yesterday that" if no governmental request for legislation reaches the House of Representatives. A law that strengthens the government’s budget to fulfill its obligations before citizens. A letter amending a borrowing law did not want it.
He added that "the House of Representatives returned the budget law and it was withdrawn, on the same day, to make amendments to it," noting that "the parliament is waiting for the government to send to the parliament a draft law that enhances government revenues to enable it to fulfill its obligations before citizens."
Ammar Al-Masoudi

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The Ministry of Finance: completes the reform paper and finalizes the budget (2021-2023).   October 6, 2020     60 And brother of Baghdad Th

The Minister of Finance reveals a possible date for the payment of salaries of employees for October 11/1/2020  

He pointed out that: Through the authority, the currency window is canceled, alternative policies are found, and budgets are prepared for several years in line with the plans set at the national level

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The reform paper and the transformation of the rentier economy into a productive one

 
 Baghdad: Hussein Faleh
 

Specialists in economic affairs called for the necessity to present an integrated reform paper to the House of Representatives to save the Iraqi economy, which is gradually declining as a result of the increase in the financial deficit in the balance of government spending, due to the almost total dependence on oil revenues, warning of dangerous consequences that the financial crisis may leave on the future of the country, in If no radical solutions are found, to get out of the current crisis.
Economist Safwan Qusay said in a statement to Al-Sabah: "The government, through the statements of the Prime Minister and the Minister of Finance, is determined to present a reform paper that includes various sectors, especially after the country was hit by a stifling financial crisis recently, which is considered one of the most serious crises."

 
Investing resources
He added, "That the Iraqi economy remains hostage to oil revenues is a grave mistake, which prompted the government to think about finding alternatives and investing resources to diversify financial revenues," stressing the need for the economic paper to include various economic sectors to gradually transform the Iraqi economy from rentier to productive. It should start with fighting corruption, reducing unnecessary spending for some institutions, activating the private sector completely and completely, and giving it the most prominent role in moving the wheel of the economy, as well as controlling the border outlets in terms of collecting fees and taxes, and opening the way for investment companies to work in Iraq and overcome the difficulties facing them.
He continued, that this may create a large economic resource, which makes the state not depend on oil as a main source to finance the budget, "stressing that the government may be serious in achieving reforms, but that they should be touched on the ground. He stressed" the importance of developing economic plans and visions that would guarantee them. " By activating the economic sectors and supporting the private sector. "
 
Maximize resources
For his part, a member of the Finance Committee, MP Abd Al-Hadi Al-Saadawi, stressed the need for the government to present a comprehensive reform paper to advance the Iraqi economy and maximize resources. Al-Saadawi said in a statement to Al-Sabah: “The Finance Committee hosted Finance Minister Ali Allawi and inquired about the reasons for not presenting The reform paper goes to parliament, "pointing out that" the minister promised to present a reform draft to Parliament in mid-October
 Present".
He added, "The paper will be a road map for the Iraqi economy in order to maximize resources, expressing his hope that the reform paper will witness practical steps to advance and develop the economy and find alternatives to oil as a source of state revenue."
He pointed out that "the House of Representatives obligated the government not to resort to borrowing without submitting a comprehensive reform paper, but it has not yet been submitted to the House of Representatives."
He continued, "When presented to the House of Representatives, it will be discussed, studied, and its objectives are known, and will it achieve its results according to the current data or not?"
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 2020-10-11 06:37
 

Shafaq News / On Sunday, the Cabinet Secretariat sent a draft law on financing the fiscal deficit to the House of Representatives, related to internal and external borrowing

A government source told Shafaq News Agency, "We hope that the Presidency of the Council will discuss the law and approve it as soon as possible."

Last month, the government approved the draft fiscal budget bill and sent it to Parliament, before withdrawing it again to make amendments to it, to be replaced by the Deficit Financing Act to Parliament.

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Parliament Finance comments on the news that the reform paper includes a reduction in the salaries of employees and the value of the dinar

 

 

3,872 Economie 2020/10/12 19:14 ht

Baghdad Today - Special Member of the Finance Committee in the House of Representatives, Representative Shirwan Mirza, confirmed, Monday, October 12, 2020, that his committee is waiting for the comprehensive reform paper for the Iraqi economy prepared by the Ministry of Finance, to study it well. Mirza said in an interview with (Baghdad Today), "The committee is still waiting for the reform paper prepared by the Ministry of Finance and promised to send it to the House of Representatives, in order to study it well, discuss its content and find out the extent of its benefit to reduce the damage of the financial crisis that the country is going through." He added that "the talk about converting the exchange rate and adjusting the salary scale of employees as two options among the solutions presented in the reform paper that will be presented by the Finance Ministry is just a talk in the media that the Finance Committee has not seen yet." Earlier, the economist, Nabil Al-Marsoumi, explained, on Monday (October 12, 2020), the percentage of employee salaries reduction according to the white reform paper, which the Minister of Finance, Ali Allawi, will present to Parliament. Al-Marsoumi said in a post on his Facebook page, followed by (Baghdad Today), that "the white paper that the Finance Minister will present to Parliament in order to reform the economic situation in Iraq and address the financial crisis that the country is going through, clarifies the reduction of salaries and employee wages from 25% To 12.5% of GDP within a period of three years. " He added that "the white paper, which derives its theoretical origins from the school (neoclassical), aims to use the fiscal and monetary policies to address the deficit in the balance of payments and the general budget." The economist considered that "it would have been preferable for the reduction of salaries to be calculated on the basis of their percentage of operating expenditures or public expenditures and not through their ratio to the gross domestic product, which is an inaccurate judgment and estimation criterion, as well as that the payment of salaries is through the general budget and not through Gross domestic product". And that, "Assuming that the base year on which the reduction was made is the year 2019, when the gross domestic product in Iraq reached 263 trillion dinars, the salary and wage expenditures would be up to 65.750 trillion dinars, which would be reduced within three years (from 2021 to 2023) by half, that is, to 32.875 trillion dinars. " Al-Marsoumi indicated that "this process takes place through 3 stages, the first: the absolute reduction of salaries at specific rates starting from the year 2021, secondly, by setting an upper limit for salaries, and the third by including taxes on salaries and all allocations, including profits, incentives, and others."

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 2020-10-13 06:41
 

Shafaq News / Today, Tuesday, a parliamentary source said that the government reform paper had reached the Iraqi Parliament.

The source informed Shafaq News Agency; The reform paper that Prime Minister Mustafa Al-Kazemi describes as the "white paper" has reached Parliament for a vote.

 

Yesterday, Shafaq News Agency published a copy of the white paper that included government reforms at the level of economy and services, after Al-Kazemi presented it during his meeting with the political blocs.

 

Click to view the complete "White Paper" details 

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1 hour ago, King Bean said:

Thanks Yota. 97 pages. Let's hope there is monetary reform in there some where. :bagofmoney:


Let’s hope that 97 pages comes PLENTY of pictures: these fools need all the help they can get.

Probably won’t matter.  Reading all 97 pages will take 6 months to get through: what With calls for cafeteria breaks, delays, postponements because they wouldn’t want their heads to implode from too much info.

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The Minister of Finance, Ali Allawi, confirmed, on Tuesday, that Iraq is facing dangerous repercussions, noting that the White Paper is a reform road map, while noting that oil revenues are insufficient to cover salaries and retirement requirements.

Allawi said during a press conference held today with the government spokesman Ahmed Mulla Talal, and that Alsumaria News followed him, "The white paper is a reform program for financial and economic affairs in Iraq Noting that "the main purpose of the white paper is to move the current economic compass axis to a better future situation that keeps pace with developments in the world."
 
 
 
 
He added that "the white paper is directed at the economic and financial side," noting that "one of the main axes of the white paper is to reform the situation in the provinces."
 
He stressed, "We are facing dangerous repercussions and the white paper is a reform road map," noting that "the border crossings are linked to the import movement and will not be as important as oil."
 
He continued, "Import Iraq It is estimated at 60 billion dollars a year, "pointing out that"Iraq He has international and regional obligations related to trade agreements. "
 
 
Allawi stressed that "controlling the ports is important and we have started in a serious way to implement the automation system," explaining that "oil revenues are insufficient to cover salaries and retirement requirements, and we will work to diversify revenues."
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Urgent statements from the Minister of Finance regarding salaries
30 minutes ago
00 2 minutes

The eighth day electronic newspaper

Finance Minister Ali Allawi expected the salary crisis to continue, while he presented a number of reasons.

Allawi said in a televised interview that he followed on the eighth day, "They are forced to face the problem of salaries" monthly "as oil revenues are no longer sufficient and cannot cover half of the salaries value.

He added that "the amount rounded up from the previous government exceeded a trillion dinars a little, meaning that the current government did not receive only a very small amount of the previous one, and therefore the government came in the month of May and it is loaded with financial burdens, especially how to secure salaries."

He pointed out that "if borrowing exceeds certain figures, it will have negative repercussions on the economic situation of the country, especially with regard to material prices and paves the way for inflation, and it must be with a certain limit, not that the borrowing be endless."

 

He stressed that "the current government requested an open ceiling for borrowing this year to pay salaries and urgent expenditures, and the House of Representatives stipulated that the internal borrowing does not exceed $ 15 billion and the external $ 5 billion, and according to the indicators, it is unrealistic because it is not sufficient as the borrowed funds have been spent within 3 months and the crisis has returned."

And that "the salaries of employees are not the problem and it is reasonable, but allocations amounting to 400% of the value of the salary in some ministries and the allocations must be reconsidered because it is the problem and not salaries."

The minister, Ali Allawi, said that “the employee’s productivity is very low, reaching 0% in some departments,” indicating that “there must be a return to the state from the services provided by the employee and this does not exist, and non-productive employees must also be transferred to productive projects for investment. "Their efforts and we will present a project to transfer them from another place."

He continued, “The Ministry of Finance paid the salaries of September after reviewing the financial engineering, and we are now at a crossroads. There must be financing to bridge the salary deficit and there are 3 solutions. The first is to increase imports and this is linked to the value of oil exports and it is not encouraging because it does not exceed the $ 15 billion until the end Year ”.

He added, "In return, we need financing of at least 58 trillion dinars to cover the ruling expenses. The second solution is to reduce expenditures and the third is to find a way to finance the deficit."

Regarding customs funds, the minister replied by saying that "the issue is related to imports, and it has been very less due to the Corona crisis," indicating that "there is a large part of Iraq's internal imports that are exempt from fees and what is entered through investment is also exempt, and this means that no resources are achieved for these two reasons."

He continued, "The percentage of resources that enter through customs does not exceed 15% of the value of what is imposed due to the above reasons," saying, "What we expect does not exceed the 4 billion dollars annually, and therefore customs will not be a major source of state funding."

"As for taxes, their base is very narrow, and those who pay most are the employees," he said, noting that "70% of the private sector is unorganized and cannot be collected because most projects are small and there is no culture of paying taxes."

Regarding what is being raised about an expected change in the exchange rate, the minister stressed that “changing the exchange rate of the dinar against the dollar must be done in agreement with the Central Bank and the International Monetary Fund. Presenting numbers is currently a sensitive issue. Reducing the value of the dinar will have positives and negatives and will help us financially in the first period. But we must contain its implications, especially inflation. "

He warned that "reducing the value of the dinar will create real competition and activate the industrial and agricultural sectors in Iraq," adding that "in 2014 and 2015 there was a drop in oil prices, but the revenues that Iraq used to get covered expenses on salaries."

He pointed out that "the year 2020 witnessed an ill-considered increase in the value of what is paid for salaries if it doubled to the level of half from the previous year, and rose from 40 billion dollars annually to 65 billion."

Iraqi source

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19 minutes ago, yota691 said:

Regarding what is being raised about an expected change in the exchange rate,

 

the minister stressed that “changing the exchange rate of the dinar against the dollar must be done in agreement with the Central Bank and the International Monetary Fund. Presenting numbers is currently a sensitive issue. Reducing the value of the dinar will have positives and negatives and will help us financially in the first period. But we must contain its implications, especially inflation. "

He warned that "reducing the value of the dinar will create real competition and activate the industrial and agricultural sectors in Iraq," adding that "in 2014 and 2015 there was a drop in oil prices, but the revenues that Iraq used to get covered expenses on salaries."

Edited by DWS112
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Home / political / urgent Iraqi government sets the time limit for the reform'alorqh white '

The eighth day electronic newspaper

Spokesman for Prime Minister Ahmed Mulla Talal: The White Paper is considered a developmental policy for wrongful policies during the past decades

Mulla Talal: The time limit for the white paper extends from three to five years to implement it

Mulla Talal: The white paper is a basis for future governments

Mulla Talal: The task of the current government is to prepare for early elections

 

Minister of Finance: The main purpose of the white paper is to transfer the current economic compass axis to a future situation that is better in line with developments in the world

Minister of Finance: The White Paper is a reform program for financial and economic affairs in Iraq

Minister of Finance: The white paper is addressed to the economic and financial side

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Al-Sudani: Imposing a tax on the currency auction and reducing the salaries of officials save one trillion dinars per month
  
{Baghdad: Al-Furat News} A member of the committee monitoring the implementation of the parliamentary government program, Muhammad Shi`a al-Sudani, said Tuesday that "imposing a tax on the currency auction of the Central Bank of Iraq and reducing the salaries of officials will save one trillion dinars a month."

Al-Sudani stated to the "Al-Daleel}" program broadcast by the Al-Furat satellite channel this evening, that "reducing the salaries of employees to 50% in these circumstances is considered suicide, and solutions should not be based on the employee whose salary meets his living needs."
And between "we own billions of dinars from other sectors, the most prominent of which is the window for selling the currency, and even if a tax of 10% is imposed on it, it will save more than 450 billion dinars per month, in addition to reducing the salaries of senior employees and officials, it will also save more than 600 billion dinars."
He stressed, "Paying taxes and collecting telecommunications debts, which are monthly revenues. The solutions should not be based on the employee or reducing job opportunities for young people."
Al-Sudani stressed, "Supporting the government in this reform paper has tasks and duties, and if it needs support, then we will support it."

Raghad Daham

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Parliamentary Finance: The White Paper included the government's vision in general terms

Tuesday 13th October 2020 - 22:15

Parliamentary Finance: The White Paper included the government's vision in general terms

 
Baghdad - conscious
The Parliamentary Finance Committee confirmed that the white paper presented to the House of Representatives includes the government's vision in general terms, while it warned against the bankruptcy of the country in the event of continuing borrowing without real reforms.
A member of the Parliamentary Finance Committee, Representative Abd al-Hadi Mohan, said that the "The Tenth" program, which is presented on the Iraqi News Channel, which was followed by the Iraqi News Agency (INA), today, Tuesday, said that the white paper does not differ much from the economic plans of previous governments, stressing that the plan is medium and includes the government's vision in lines General.
He added that the government, through the white paper, wants to address some of the goals, indicating that the paper included general concepts and is more like a master's and doctoral thesis and is not an economic plan.
He indicated that the economic paper at the Financial Committee is more important and realistic than the governmental paper.
He warned against continuing to borrow without real reforms, noting that the government will declare its bankruptcy during next December if the current borrowing law is passed.
And he indicated that there is an increase in the operating budget of 6 trillion dinars per month.
For his part, a member of the Finance Committee, Representative Jamal Cougar, confirmed that the figures announced by the government regarding the actual need are exaggerated.
Couger said to the "The Tenth" program: The Finance Committee is not against the borrowing law and the reform paper, but against continuing borrowing without the existence of real economic reforms, stressing that the committee will vote on the current borrowing law, but it is not according to the numbers and the mechanism that the government wants.
He added that the more borrowing without reforms, the more likely the Iraqi economy will collapse, indicating that the collapse of the economy means the collapse of the entire political process.
He continued, that there are various resources that can be used instead of resorting to borrowing, pointing out that the government needs to make critical decisions about reforms.
In addition, the head of the Parliamentary Work Committee, head of the Parliamentary Wrada Bloc, Representative Hussein Arab, stated to the "El Tenth" program: that the Parliamentary Finance Committee had provided solutions to the current crisis, pointing out that Abdul Mahdi's government did not listen to the advice of the Financial Committee.
He continued: We in the Work Committee presented several proposals that the government did not implement, stressing that it is not possible to accept the appointment of young people without financial cover.
He pointed out that the House of Representatives asked the government to plan for immediate reform and not postponed for five years, indicating that the next government is not obligated to implement the white paper.
He stressed the need for the government to listen to the proposals of the Finance Committee, adding: We will not allow any party seeking to bankrupt the country and zero in on the monetary reserves.
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Finance Minister: The white paper will be a road map for subsequent budgets

Tuesday 13th October 2020 - 17:29

Finance Minister: The white paper will be a road map for subsequent budgets

Baghdad - conscious
Today, Tuesday, Minister of Finance, Ali Abdul Amir Allawi, confirmed that the white paper will be a road map for subsequent budgets, indicating that one of the main axes of the paper is reforming the reality in the provinces.
"The white paper is a reform program for financial and economic affairs in Iraq," Allawi said during the joint weekly press conference with the spokesman for the Prime Minister and attended by the correspondent of the Iraqi News Agency (INA), indicating that "the government is facing dangerous repercussions and the white paper is a reform road map."
He added, "The main purpose of the white paper is to transfer the current economic compass axis to a better future position that keeps pace with developments in the world."
He added that "the white paper will be a road map for subsequent budgets," noting that "oil revenues are insufficient to cover salary and retirement requirements, and we will work to diversify revenues."
With regard to the border crossings, Allawi commented, "The border crossings are linked to the import movement and will not be as important as oil, as it is estimated that Iraq imports 60 billion dollars a year."
And he added that "Iraq has international and regional obligations related to trade agreements," noting that "controlling the ports is important and we have started in a serious way to implement the automation system."
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Minister of Finance: $ 60 billion is the annual volume of Iraqi imports

Minister of Finance: $ 60 billion is the annual volume of Iraqi imports
Deputy Prime Minister and Minister of Finance Ali Allawi
 14 October 2020 10:26 AM

Mubasher: The Iraqi Deputy Prime Minister and Minister of Finance, Ali Allawi, said that Iraq is facing serious repercussions. As oil revenues are insufficient to cover state expenditures, including salaries for employees and retirees, in the public sector.

Allawi added, during a press conference held by the spokesman for the Prime Minister, Ahmed Mulla Talal, to provide a summary of the white paper for economic and financial reform approved by the Council of Ministers in its session yesterday, that although the income from the border outlets is very important, it is related to the volume of import, whose value is now estimated. With 60 billion dollars annually.

The Minister of Finance pointed out that the Iraqi government is working to adopt modern automation systems at border crossings and customs procedures, and next year several border outlets will begin to adopt these systems, which will support efforts to end violations and fight corruption.

The Deputy Prime Minister indicated that there are many exceptions to the customs tariff, but the Iraqi government is continuing its efforts to deal with exemptions from customs tariffs to maximize the state's income.

The Minister of Finance noted that the 2020 budget was submitted to the House of Representatives and it was withdrawn and amended, noting that the current oil revenues are not sufficient to cover the requirements of salaries and retirement, noting that there is an indication in the white paper indicating that salaries represented 20% of oil revenues in 2005 but will arrive in the current year 2020 to 120%.

Allawi stressed that the paradigm shift has become the crazy jump in the costs of the salaries and entitlement item, taking a large part of oil revenues in financial years, and this is what pays to address the budget doors.

The minister revealed that it is supposed to collect from 10 to 12% at border ports, as the customs rate in Iraq, and it is supposed to bring in revenues of 6 to 7 billion dollars, but now only one billion dollars is being collected, indicating that 40% of Iraq's import is government.

The Minister of Finance confirmed that there is coordination of the Ministry of Finance and the Central Bank, expecting during the cooperation to find ways to cover the financial deficit, pointing out that there is a state finance project presented to the House of Representatives whose approval may be at the end of the year and through it is possible to overcome the repercussions of the financial distress.

Allawi added, "The electricity sector is costing the state huge sums, directly or indirectly, exceeding 12 trillion dinars, the percentage of bill payments is minimal, the rationalization and organization of the support process is one of the points in the white paper so that it is thoughtful and directed and has an economic basis and has a return on the source of support." .

For his part, the spokesman for the Council of Ministers, Ahmed Malal Talal, confirmed that the fourth generation service will be operational from 2021 in order to improve internet service and improve service to citizens, stressing that it is one of the most important conditions with telecom companies to renew their licenses.

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Parliamentary Finance: The White Paper includes 5 stages, and we will discuss it with the Ministries of Finance and Planning
  
{Baghdad: Al Furat News} The Parliamentary Finance Committee described the "white paper" that it received yesterday and prepared by the government with the aim of financial and economic reform throughout the country.

"The committee discussed the white paper, and there will be a session with the ministries of finance and planning to reach unified solutions to get out of the current financial crisis," the committee's rapporteur, Ahmed Al-Saffar, said in a press statement today.
He added, "This paper differs from what was presented by previous governments, as it was a condition of Parliament in approving borrowing and financial reforms, and if not applied on the ground, the Iraqi economic and financial reality is going to unknown."
Al-Saffar stressed, "The paper includes a good reading of the financial situation and the reasons in which Iraq faced these crises and their stages, and it is reasonable in achieving stability in revenues and expenditures, reform and controlling public money, and this is very important because there is mismanagement in it."
And that "this paper includes five stages, and aims to restructure the financial and economic sector in Iraq, as the first stage focuses on achieving financial stability and getting out of the current crisis by rationalizing expenditures, enhancing revenues, improving cash flow and reforming the administration, which is called the stabilization stage."
He explained that "the second stage, which adopts macroeconomic reforms according to strategic principles, consists of 6 paragraphs, the first of which concerns the productive sectors that include: (rehabilitation of the financial and banking sectors, the insurance sector and the stock market), and the second targets the sectors that drive the economy such as: (agriculture, oil and gas) The third focuses on the private sector (through support and simplification of procedures and the provision of job opportunities in this sector), the fourth is to structure self-financed public companies, the fifth is on public works, and the last paragraph of the second phase talks about human development.
Al-Saffar continued, "The third stage of the economic and financial reform paper in Iraq talks about improving basic infrastructure such as: (electric power, transportation, free zones, and industrial cities), and the fourth stage includes providing basic services and directing social care, while the fifth and final stage includes governance. And the legal and administrative environment to enable institutions and individuals to implement the mentioned reforms.
He stressed, "This reform paper is an excellent and comprehensive paper, because it relied on sources and data and includes a comprehensive view of the economy, and set a time period for its completion from 3 to 5 years, and it is like a reform economic development plan to restructure the financial and economic sector," indicating that "if The appropriate environment was provided and the government was able to implement and implement this paper; The country's economic situation will change, and it will emerge from the state of financial crises, ”noting that“ submitting this reform paper is a (justification) for passing the fiscal deficit law, because one of the conditions for approval is to present the reform paper. ”
He pointed out that "the financial deficit project sent by the government to the House of Representatives and transferred to the Parliamentary Finance Committee is a mini-budget, planned for the remaining four months of the year, and it is also financing some of the obligations from the past months, such as contracts of licenses, debts, interest and other things."
He pointed out that "the mini-budget includes 38 items, and includes many paragraphs within the operational budget and an investment budget for more than 72 items that include stalled and completed projects at high rates and financing the provinces, and this budget project needs approximately 41 trillion dinars to finance the deficit of the remaining four months, meaning the existence of A monthly deficit of nearly 10 trillion dinars, after accounting for expenses and revenues. "
Ammar Al-Masoudi

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The real crisis has not yet emerged

Thursday 15 October 2020 9

The real crisis has not yet emerged

 
Dr.. Basem Brahimi
Heavy days passed for workers in the public sector after their salaries were delayed for the month of September, and at the time when the Ministry of Finance announced that it would not be able to secure the salaries of employees without completing the oil revenues with the support of local borrowing, the Parliament stood in front of this request, citing its refusal that the Finance did not Be able to accomplish the reform that it promised, and that continuing to adopt internal borrowing will lead to the collapse of the public finances that are heavily indebted 
originally.
In fact, the questions for both sides are numerous. To the Ministry of Finance, we say we know that the crisis is stifling, and solutions in the short term are difficult. But what is your reform vision in the medium and long term? And why was the "white paper" so late?
Will you come up with solutions that the early adopters did not come up with ?, As for Parliament, we say how you used to pass past budgets when you know that they burden the state without including any reform projects? Without borrowing? And what would be your response if his successor asked to borrow? 
Also?.
For both sides, I say that you are in one compound, and this requires sitting down and disclosing a roadmap that envisages the current crisis and its potential effects for the next year at the very least by developing different scenarios that deal with all possibilities. The financial crisis in Iraq is mainly dependent on oil prices and it remains at this level during the foreseeable term And for a number of reasons related to the side of global demand and expectations of the continuation of the downturn, in addition to that, important challenges related to the high level of unemployment, poverty and the decline in economic growth rates require excluding the short-term vision adopted by all successive governments to achieve rapid political gains and adopt a long-term vision with gains. 
Economical.
The current crisis is the tip of the iceberg that hides nine tenths of it under the water. The real crisis has not yet appeared, but it is closer than we all imagined, and therefore we must recover from the oil cushion and go towards achieving economic diversification and adopting a strategy for comprehensive reform, otherwise the delay in This would result in greater costs that can now be avoided.
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A white paper, black numbers and a threatened dinar ... the dilemma of salaries, borrowing, and harsh solutions

October 14, 2020
The deficit faced by the government per month reaches 10 trillion dinars (Facebook)

The promised white paper from the government was the basic condition for the House of Representatives to approve the borrowing law aimed at financing the fiscal deficit resulting from the collapse in global oil prices and the outbreak of the Corona virus, and recently, the government unveiled the paper when it sent it to the House.

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The white paper carried two main objectives, the first is radical to stop the budget hemorrhage and deficit, and the second puts the economy and the budget on a sustainable path.

The White Paper divided its priorities into five axes, the first is to achieve sustainable financial stability, the second is to achieve macro reforms aimed at providing economic alternatives based on productive sectors, the third is to improve the basic infrastructure to expand and diversify the economy, and the fourth is to provide basic services and rationalize social care while giving priority to segments. The poor and their protection during the reform process, the fifth axis is the development of governance, the legal and administrative environment, with the aim of reforming the basic institutions in the implementation of reforms.

Also read:  Amazing details revealed by the "white paper": Salary expenditures rose by 400%

The paper carried two main objectives, the first is fundamental to stop the bleeding and deficit of the budget, and the second puts the economy and the budget on a sustainable path. And the negative effects of the non-competitive exchange rate of the dinar, especially against the exchange rates of the currencies of the country's trading partners.

The paper talked about the roots of the problem represented by high salary expenditures, low revenues, non-productive sectors such as government companies, and exchange doors that it considered to be obstacles to the country's economy, such as the ration card.

The central dilemma: the staff

The white paper revealed huge numbers, as employee salary expenditures rose from 2004 to 2020 by 400%, with the total number of employees increasing by 3 times, and average public sector wage payments increased by 143% between 2006 and 2018, but the aforementioned increase was not matched by productivity increases. At work (only 12%) or at a cost of living of 28%.

The effects of the Corona pandemic have hit oil prices. According to the expectations of economists about the return of the balance in supply and demand for oil, the average price of Brent crude will be $ 44 a barrel in the last quarter of 2002, and $ 49 a barrel in 2021.

According to these calculations, the salary payments for employees and retirees will represent about 122% of the expected oil revenues in 2020, while it reached 88% during the worst previous crises in 2016.

In this context, Finance Minister Ali Allawi said in a joint press conference that “the percentage of state employees’ salaries in 2005 represented 20% of the total oil revenues of Iraq, ”but that spending on salaries witnessed a growth of about 60% between 2014 and 2020, according to the White Paper numbers. .

Because of this rise and the large allocations not related to job performance, such as health care, allowances, and pensions, "a public job that is based on an educational system that prepares graduates to work in the public sector and not productive jobs has become the way most people take to obtain social status and financial security."

Reducing salary expenditures

The large gap between necessary expenditures and expected revenues will lead to a huge deficit in the budget, as mentioned in the White Paper that seeks to reduce it by 3%. Trillions of dinars. "

But the Minister of Finance indicated in a televised statement that "the salaries of employees are not the problem, and they are reasonable. Rather, allocations amounting to 400% of the value of the salary in some ministries and must be reviewed."

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The reporter of the Finance Committee said that the deficit facing the government in one month amounts to 10 trillion dinars

Allawi asserts that the government will “have to face the monthly salary problem due to insufficient oil revenues to cover“ half the value of salaries. ”On this basis, the White Paper proposed“ reducing the percentage of the salary and wage bill to GDP from 25% to 12.5% within 3 years ” .

 

Thus, the measures to reduce expenditures will cause economic suffering for large segments of people, as the same paper recalls, especially since poverty rates among the population rose to more than 31% after imposing a curfew to control the Corona pandemic.

To achieve the reduction without harming the poor classes, Al-Saffar assumes that "the gap between the lowest salary and the highest salary of state employees will be reduced to the lowest possible", since those who earn less than 600 or 700 thousand dinars are included under the poverty line, according to his calculations.

Economic barriers: public companies

The white paper identified several reasons that led to economic failure and heavy dependence on rent, among them the weakness of the industrial sector, the fact that most public companies were "losing money" and depend on the state for their funding, in addition to indirect subsidies such as fuel and electricity subsidies, at a time when the density of very small and small companies decreased. The average rate per thousand people is much higher, compared to what it is in the Middle East, North Africa and emerging and developing countries.

Statistics of the paper indicate that “labor productivity in Iraq by the year 2018 has reached a quarter of the high levels of 1979 and less than half of 1970, and has increased by only about 2% since 2004.” Therefore, the paper proposes to restructure self-financed public companies by enacting a law for this and converting them into private companies and subsidiary companies And treating job placement in it, "where the number of employees in companies reaches 600,000 affiliates.

Ration card

The ration card system, which allocated a quota for each family, regardless of the average per capita income, caused major distortions in the economy, according to the paper, and added much greater economic costs than the direct costs estimated at about 2.4 trillion Iraqi dinars.

It also caused the levels of service provided to the consumer to decline to poor levels while allowing greater opportunities for corruption and graft along the supply and distribution chain, which calls for reform of the ration card system and compensating those covered by the social protection network affected by the reform with monthly amounts according to the plan approved by the emergency cell.

Services

The white paper believes that huge burdens are imposed on the state budget through its ownership of the service sectors, the most important of which is the water and electricity sector, fully fixing prices and providing support to finance these services, thus increasing the poor services provided in light of the increase in demand for them.

The paper refers to rentier expansion that "led to the distortion of the economy and society" and the creation of an unbalanced social situation due to the state's provision of services for free and semi-free. The paper says that "citizens assume that the government should provide them as acquired rights, and because of its free services, the quality of services has become poor at best. Conditions, and the Minister of Finance says that "the electricity sector is costing the state 12 trillion dinars," so the paper mentions the need to collect revenues for all electricity uses based on the real fuel price in the global market.

the retirement

Pension salaries - an important part of public salaries - are divided into two parts: the first is the direct expenditures from the general budget due to emergency policies that were implemented after 2003 and cover retirees before 2006 and their families and families of martyrs and political prisoners, and the second type, the expenses of the retirement fund that is managed from Before the board of directors of the fund includes civil servants and security forces.

The paper expected that the retirement fund would suffer a large deficit during 2025, and included in its supposed reforms the restructuring of the retirement fund, the preparation of a comprehensive retirement law draft, and ensuring that workers in the public, private, cooperative and mixed sectors cover all retirement benefits.

Suggested solutions: ports

Amid the decline in global oil prices and the OPEC + agreement that limited production, there has been much talk about maximizing the state's non-oil revenues, including the revenues of border crossings that are not comprehensively controlled by the state.

But Finance Minister Ali Allawi confirms that the revenues of the border crossings will not meet the need resulting from the drop in oil prices and not its importance, and although Iraq's imports amount to $ 60 billion per year, according to Allawi, what weakens the revenues in terms of customs and taxes are the exceptions granted to some types of imports, while Specialists propose to impose a tax on currency auction sales by the central bank.

Borrowing, Floating, and Currency Auction

With the dependence on externally accumulated debts and the limited space for international support that requires the implementation of major reforms, and the many obstacles that have been mentioned, indirect monetary financing by the Central Bank of Iraq remains the only remaining source, as the white paper confirms, and the bank can provide financing for a period of approximately 12 months.

The paper notes, however, warning of a dangerous decline in the central bank’s reserves, if imports of goods and services continue to be financed within 9 months, which will ultimately lead to a real crisis in the value of the Iraqi dinar, accompanied by the possibility of a collapse in its value.

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The Finance Committee rapporteur said that more than $ 400 billion in Iraqi funds are frozen in foreign banks

The Minister of Finance said in a televised statement that the increase in borrowing beyond certain numbers will have "negative repercussions on the economic situation, especially with regard to material prices and paves the way for inflation."

Also read:  Economic interpretation of the currency sell window

However, the White Paper in the meantime, stresses studying the current exchange rate of the dollar against the dinar and the requirements for financial and monetary stability, which economists considered a sign of floating the currency and finding a suitable alternative to the currency window.

In the same context, specialists and officials are likely to witness a rise in the dollar exchange rate for the next three months to 200 thousand Iraqi dinars per 100 dollars. (124 thousand now).

According to the announced figures, the central bank’s reserves decreased 8.6 trillion dinars in just 8 months, as the paper indicated that the bank’s reserves are estimated in August 2020 about 71.3 trillion Iraqi dinars compared to 79.9 trillion dinars at the end of December 2019.

In turn, a member of the House of Representatives, Muhammad Shiaa al-Sudani pointed out that imposing a tax on currency auction and reducing the salaries of officials would save one trillion dinars per month, while the reporter of the Parliamentary Finance Committee, Ahmed Al-Saffar, confirms that "the rate of selling the dollar through the currency window in the Central Bank reaches more than 250 Million dollars per day. "

Al-Saffar also proposes, in an interview with "Ultra Iraq", to move towards "more than $ 400 billion in Iraqi funds frozen in foreign banks."

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Not if you get more purchasing power...

 

The White Paper ... talk about the possibility of reducing salaries by 30%

 

2,515 Economie 2020/10/14 19:21 Baghdad Today -

Follow-up The economic expert, Abdul Rahman Al-Mashhadani, spoke today, Wednesday, about the segment that will sacrifice in the event of the implementation of the government white paper for economic reform, while it is likely that the paper will not be passed in full in Parliament. Al-Mashhadani said, in a televised interview that she followed (Baghdad Today), that "the white paper for economic reform included positive aspects such as maximizing revenues and reducing dependence on oil, steps that we have always advocated in the eras of previous governments." Al-Mashhadani added, "Previous governments and over the past years are thinking about temporary solutions with the emergence of problems, and solutions disappear as soon as the problem goes away or recedes," noting that "the economic program prepared by the current government needs 5 years to implement it." He continued, "The task of implementing the reform paper will fall on the shoulders of state employees, because the Minister of Finance indicated that the salaries of employees will decrease by 30% during the next three years, and this means that the employees will bear the mistakes of previous policies and sacrifice in order to implement the reforms." The economic expert pointed out that "the white paper is the task of the Finance Committee in the House of Representatives, and it will decide to pass the paper or object, with my expectation that it will object to some aspects, and it may not be passed in its full form." And the agency (Baghdad Today), Tuesday (10/13/2020), published the terms of the “white paper” submitted by the government to the House of Representatives. The introduction to the `` white paper '', submitted by the government of Prime Minister Mustafa Al-Kazemi to Parliament, and which (Baghdad today) has obtained its full version: “This white paper includes the final report of the emergency cell for financial reform, with the aim of managing the financial situation. In light of the current financial crisis, and developing the necessary solutions to achieve financial reform and improve the management of financial institutions, the cell has undertaken the development of the economic reform program stipulated in the Domestic and Foreign Borrowing Law No. (5) of 2020, with the aim of restructuring the Iraqi economy to face the next challenges.

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Hi Yota -- you are still doing a "great" job as usual -  just wanted to say hi - I  come to read a bit and visit but choose to not  be an active participant - things have changed a bit here too I see -  I noticed a lot of new names and  wow many guests - Take care - ❤️

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