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

[DWS112]

The Minister of Finance reveals a possible date for the payment of salaries of employees for October

11/1/2020

 

 

 

The Minister of Finance, Ali Abdul Amir Allawi, confirmed, on Sunday, that the salaries of employees in October may be paid after two weeks if the deficit financing law has not passed, while he indicated that the majority of employees are not covered by the proposed deduction.

Allawi said in an interview carried by the Iraqi News Agency, "The financial crisis that the country is going through is not a newborn today, and reducing Iraq's share of oil exports has an impact on revenues."

 

He added that "options to maximize revenues quickly and in the short term in order to bridge the deficit are almost impossible," stressing that "the current government faced the crisis without financial liquidity."

 

 

 

Allawi pointed out that "the salaries of employees for the month of October may be paid after two weeks if the deficit financing law has not passed," considering that

 👉 "if the parliament votes on the deficit financing law, salaries will be released directly."👈

 

He pointed out that "the 41 trillion amount contained in the deficit financing law will secure salaries until the first two months of next year," noting that "the majority of employees are not included in the proposed deduction, but rather include allocations for specific groups . "

 

 

He added that "the 2021 budget does not include job grades, but there is the possibility of investing in the degrees of deletion and creation," revealing "a tendency to collect the retirement of workers in the private sector with the national retirement with unifying the years of retirement and deductions. "

[gregp]

THANKS DW.

Deficit financing law = RV. 

[Calijim]

Whatever happened to the big phrases “ soon in the coming days” 🤣🤣🤣🤣🤣🤣🙈🙈🙈🙊🙉🐫🐪

[horsesoldier]

3 hours ago, Calijim said:

Whatever happened to the big phrases “ soon in the coming days” 🤣🤣🤣🤣🤣🤣🙈🙈🙈🙊🙉🐫🐪

 

Those phrases are, ' wait for it ' . . .  " in the near future " 

[Dinarrock]

7 hours ago, gregp said:

THANKS DW.

Deficit financing law = RV. 

Hi Greg thanks for chiming in but can you explain why this law equals RV for us? Thanks so much!

[yota691]

Video: Between the mini-budget and the white paper ... is it a treatment for the economic crisis?

Sumerian special

2020-11-04 | 07:31

 

Source:

Sumerian

 

439 Views

 

 

With the continued objection to the exact amount for borrowing, however, the Parliamentary Finance Committee recognized that the total revenues were not sufficient to fully meet the government spending, noting that what the government provided was not a law for borrowing but rather a mini-financial budget, relative to the articles of this law.
 

Other deputies praised the white paper presented by the government, and said that it would be the safest road map to address the economic crisis for the post-2000 era ... but Parliament is waiting for its implementation.

Parliamentarians believe that the main problem does not lie in the delay in salaries of employees, but rather in the economic plan pursued by Iraq during these circumstances, which calls for state institutions to reschedule their priorities and concerns, for the next stage.

[6ly410]

 

Can the White Paper save Iraq from its dark days?

A finance reform blueprint is trumpeted by Iraq’s PM Mustafa Al-Kadhimi, but his government seems too weak to deliver, writes Salah Nasrawi

 

http://english.ahram.org.eg/NewsContent/50/1203/389956/AlAhram-Weekly/World/Can--the-White-Paper--save-Iraq-from--its-dark-day.aspx

 

Tuesday 3 Nov 2020

 

 

Even without the Covid-19 pandemic, the battered Iraqi economy would be in dire straits. Low energy prices, financial mismanagement, and endemic corruption have all pushed the oil-rich nation to the brink.

In terms of its devastating effects on most Iraqis, the country›s current economic predicament is at its most dire since the oil boom in the 1970s that ushered in a period of financial resources for development.

Due to financial constraints, the Iraqi government has not been able to pay civil servants on time for months, threatening cuts in the earnings of millions of employees and creating a vicious cycle of recession and worsening living conditions.

Iraq’s economic crunch also coincides with lingering political turmoil, popular protests, continuing security deterioration, weak governance, and longstanding rent-seeking on the part of elites.

With new Prime Minister Mustafa Al-Kadhimi taking office in May amid a national crisis and promises of reform, the question has been whether his government will truly change course for the better or whether Iraq will continue with business as usual.

Last month, Al-Kadhimi unveiled a plan for legislative and administrative reforms to the nation’s finance system, setting out a roadmap to overhaul the Iraqi economy and address decades-old financial challenges.

The plan, billed as the White Paper, outlines a strategy for the government to tackle its balance of payments crises through massive spending cuts in the public sector and increasing revenues.

The strategy identifies two overarching strategic objectives: a short-term one to deal with the current budget deficit and a medium term one to put the government’s finances on a sustainable path.

The paper anticipates that the short and medium-term objectives and associated reforms will require between three to five years to implement, after which Iraqis can choose the economic direction of their country.

Iraq’s Finance Minister Ali Allawi, a former World Bank employee and a businessman believed to be the mastermind behind the plan, declared that the strategy had strong backing from the International Monetary Fund (IMF) and the G7 group of nations.

Representatives of the IMF, other multinational financial institutions, and G7 governments met in London last month with their counterparts in Al-Kadhimi’s government to launch the Iraq Economic Contact Group (IECG). 

The initiative signals the involvement of Al-Kadhimi’s international backers in Iraq’s economic restructuring drive, which builds on financial support from the IMF, western governments, and probably also multinational commercial banks. 

Iraq’s financial malaise is not new, and it largely goes back to the flawed economic policies of the governments that came to power following the collapse of the regime of former dictator Saddam Hussein in the US-led invasion of the country in 2003.

Iraq’s economy, one of the most successful in the Middle East before it was adversely affected by Saddam’s wars and regional instability, was severely damaged by successive governments in the post-invasion era because of flawed policies and a system of bad management, sectarian rent-seeking, cronyism, and unbridled corruption.

That system has unraveled in recent years, fueling an economic collapse that has been exacerbated by a plunge in oil prices, over-spending, inefficiency, and the theft of public resources by Iraq’s ruling oligarchs.

Millions of Iraqis took to the streets for months starting on 1 October last year to express their anger at high unemployment and dire public services and demanding that those involved in the endemic graft be brought to justice.

Capitulating to the protestors, the newly installed Al-Kadhimi government promised a package of reforms that included improving the country’s dysfunctional financial system and generating more revenues from non-oil resources.

Yet, six months after Al-Kadhimi assumed office, the country seems to be at a crunch point financially, with the government cutting most public spending and warning that it will not be able to pay the salaries of millions of public-sector workers.

To tackle the salary problems, Al-Kadhimi is now suggesting that the Iraqi parliament allows the government to borrow billions of dollars from state-owned commercial banks funded by the Central Bank of Iraq.

In June, parliament approved a bill that allows the government to raise $5 billion of external borrowing and 15 trillion Iraqi dinars of internal borrowing to address the financial deficits in the country.

Lawmakers say the government is seeking some 36 trillion Iraqi dinars, about $35 billion, more to meet the deficit in the 2020 budget and to pay for salaries, pensions, and essential services such as healthcare and subsidies.

Critics say the country’s debt is already too high and that its government cannot be trusted to manage more. They also warn that such intensive borrowing could lead to the collapse of the country’s financial system. 

They believe that Iraq’s current economic problems go beyond the state budget crisis and the decline in oil prices and that they undermine the government’s ability to prop up an economy battered by inefficacy, corruption, political turmoil, and now the new coronavirus.

All the forecasts indicate that Iraq’s economy is in bad shape and that it is getting worse. It needs a drastic structural overhaul, critics say, in order to avoid economic collapse and consequent political chaos.

However, Al-Kadhimi’s government hopes that its new white paper will help to remedy Iraq’s financial meltdown and set out the conditions for the country’s economic revival.

In addition to achieving sustainable financial stability through a set of measures to reduce the deficit and reform spending, the paper aims at increasing the effectiveness and improving the performance of Iraq’s economic sectors.

While it identifies main areas of reform, the paper lacks details about implementing the strategy and the timeline required to carry out a process it says may well require between three and five years to implement, however.

But the main problem with the plan is that it draws heavily on the standard recommendations of the IMF and the World Bank for restructuring ailing economies in developing nations as preconditions for lending.

Among the objectives the paper sets out that are in line with the requirements of the two institutions are fiscal regulation, currency devaluation, restructuring the banking system, and privatisation.

Such IMF-recommended programmes usually mean cutting government spending, capping real wages, and imposing strict austerity measures through reducing subsidies and a freeze on state employment.

Ahead of the parliament’s endorsement of the white paper, the government opened talks with the IMF to discuss financing by the Fund under its rapid financing instrument (RFI) emergency credits.

There has been no word from the IMF on progress in the talks, but relations between the Fund and Iraq have not always been good because of controversial IMF conditions and financial policy advice.

In 2017, the IMF halted a $5.34 billion loan to Iraq as a result of disagreements over the federal budget and the Fund’s proposals for the Kurdistan Regional Government›s (KRG) share of the loan that the Iraqi government considered to be too interventionist regarding sovereign financing plans

Fears about IMF conditions for new loans are endemic, and many critics believe that IMF and World Bank-driven reforms have often been counterproductive, in Iraq’s case making the situation worse instead of better.

Examples include cutting salaries and devaluing the Iraqi dinar, both policies which could be devastating in a nation that relies largely on oil revenues, rents, and imports of foodstuffs from abroad.

Iraq’s economic outlook could be bleak, but the measures foreseen in the new white paper, a disguise for IMF-driven financial reforms, are likely to deepen Iraq’s social and political problems. 

Given the deadlock in the country’s political process, sectarian divisions, and continuing instability, the paper will most likely meet resistance from Iraq’s ruling elites, parliament, civil society, and public, each for certain reasons.

Disastrous as Iraq’s situation now seems, the country needs political stability and fundamental changes in its dysfunctional governance before it embarks on large-scale changes to turn this rentier state into a development-based economy.

In war strategies, this is called “escaping forward” – in other words, when a situation is desperate, attack instead of retreating. But in the Al-Kadhimi government’s case, it seems to be too powerless to advance while unable to find a way out.

*A version of this article appears in print in the 5 November, 2020 edition of Al-A

 

[6ly410]

Nawabaa: We have no choice but to advise the government, but the one you call has no life

Policy

2020-11-04 | 6:20

 

 

https://www.alsumaria.tv/news/سياسة/363383/نائبة-بح-صوتنا-من-تقديم-النصائح-للحكومة-لكن-لا-حيا

 

A member of the Parliamentary Economic and Investment Committee, Nada Shaker Jawdat, affirmed that the absence of financial and economic reform put the government in this narrow place, while she indicated that we have heard our voice in providing advice to the government and directing it to the doors of providing money, but there is no life for the one you call.

 

Jawdat said in an interview with Alsumaria News, "The government is submitting borrowing requests only, and we have not seen any actual measures from them in the aspect of economic and financial reform, and this is evidence of its inability to address the financial crisis, although our voice has hinted from the abundance of advice that we have provided to the government and the doors that we have made." We directed the government to it to deal with the financial crisis, but there is no life for whomever calls, "noting that" the financial crisis exists and it cannot be denied, but the government has many doors to provide money, such as border outlets, ports, taxes, currency auctions, communications, mobile phone companies and other doors. "

 

 

Jawdat added, "The new borrowing law is for the end of the current year, and we are surprised to demand an amount of 41 trillion dinars at a time when what the government spent in nine months was 56 trillion dinars. Therefore, Parliament cannot enter such a tunnel because it will go to the country into the unknown, because Iraq's debt It is very large and we do not need to dump the country in more debt, "pointing out that" the absence of financial and economic reform put the government in this narrow place, and in the event that there was complementarity in work between the two authorities, we would not have reached this situation by throwing accusations and trying to evade responsibility by trying The link between the law of borrowing and paying salaries, the price of which is paid by the simple citizen.

 

She stressed, "The House of Representatives is currently working on amending the borrowing law, in order to put numbers that are consistent with the government's actual need to pay salaries and major expenses only

[yota691]

 

The Iraqi government intends to approve the 2021 budget at the end of this month

 2020-11-04 13:27

Shafaq News / A source in the  Iraqi Ministry of Finance revealed , on Wednesday, the ministry's intention to send the draft federal budget bill for the next year 2021 to the Council of Ministers for approval at the end of this month. 

The source told Shafaq News that the Ministry of Finance will send the draft general budget law for 2021 to the Council of Ministers within the next two weeks, indicating that "the Council will vote on the budget law at the end of this November."

The source explained, "The budget will focus on addressing the financial crisis by reducing unnecessary expenditures and providing the needs of the Ministry of Health to confront the Corona pandemic."

The Parliamentary Finance Committee announced, at an earlier time, that the Iraqi government had begun preparing the draft general budget law for 2021, and indicated that oil prices would determine the fiscal deficit in the budget.

It is noteworthy that the sending of the federal budget for the past year 2020 by the government to the Iraqi parliament was delayed due to the October protests, which led to the resignation of the previous government headed by Adel Abdul Mahdi and its transformation into a caretaker government whose powers are not to send the draft fiscal budget law to Parliament.

[cws]

Intends to pass the budget by the end of the month sounds stellar.

 What they actually do is a whole different ballgame. 
 

 

[yota691]

{Digitization} the reform paper

Thursday 05th November 2020 26

 

 

Dr.. Basem Brahimi

 

In order for any plan or strategy to succeed, we must be able to measure its effect on the ground, in other words it is necessary to "digitize" the plan or strategy in order for the speech to be based on scientific evidence, but if we do not have numerical indicators to measure the application, then that Will lead to controversy about the success of

Lack thereof. 

As it becomes then based on diligence and subjective impression, and this matter is subject to difference, which applies to a large extent to most of the previous strategies, if not most of them, as we find that they included in their chapters non-measurable goals or measurable goals, but without announcing "their digitization." That is, it remained open to the ceiling and ultimately depends on the description.

This matter is considered a major reason for the failure of the previous plans to succeed and the inability to follow up or monitor them to determine the extent of success and failure in implementation, especially with no specific body to monitor implementation that has the ability to account and announce the results to the public. 

Therefore, what raises concerns today is that the white paper announced by the government will be implemented and that we reach the same previous results that the previous plans have reached, and this matter calls for us to emphasize the importance of "digitizing", that is, specifying specific numbers for its goals that are set according to realistic data that take into account potential changes. Over the years of the plan. 

And then assisting in the implementation process and later evaluating the extent of each party's success in reaching the special goals

 Out.

In this context, we reaffirm a proposal that we previously presented that includes the Economic Committee in the Council of Ministers to follow up on the implementation of the paper, as it is a higher body than a ministry as well as it includes economic ministries and entities not associated with a ministry, of an economic nature. Its meetings are to be evaluated achievement and requirements

 Success. 

But if the paper remains with general non-digital goals and no higher body has been identified to follow it up, then this will reduce the chances of success and evaluation together, that this paper is an important opportunity to reform the Iraqi economy and cross it to safety in the midst of the current crisis; So we feel obligated to provide any idea that could contribute to

 Its success.

[yota691]

Khatti: Parliament will oblige the government to present a reform paper for 2021

 

Hassan Khalati

money and business Economy News - Baghdad MP Hassan Khati said that Parliament will require the government to present a reform paper during the year 2021 to reform the economy. He added that the amount required from the Iraqi government is very large, amounting to 41 trillion dinars, and it is difficult to pass this amount. He confirmed that Parliament would support the government with salaries.

Number of observations 99   Date added 11/08/2020

[yota691]

 

The "white paper" indicates a major imbalance in the work of governmental and private banks in Iraq

 

 

 2020-11-10 03:42

Shafaq News / The "white paper" on economic reform published by the Ministry of Finance on its official website indicated a defect in the work of government and private banks in Iraq, indicating that government banks have a monopoly of 82% of total loans and 86% of total deposits.

The paper, which was reviewed by Shafaq News Agency, indicated that "public companies stand a major obstacle to the development of the private sector, which is of great importance, especially the financial sector," indicating that "public sector banks monopolize 82% of total loans and 86% of total deposits in Iraq."

And she added, "This percentage is like a total monopoly for the public sector in loans, deposits and commercial finance operations," noting that "the private sector makes most of its deposits and loans with government banks, which does not allow the development of private banks."

She pointed out that "because of this imbalance, the deposits base of the private sector banks amounting to about 10.8 trillion Iraqi dinars has not developed, which is approximately 14% of the total deposits and concurrently with the stray loan base of 7.3 trillion Iraqis, or about 18% of the total loans." "In such a case, the financial situation cannot give enough liquidity to the private banks to provide the necessary capital for the development of the private sector."

She pointed out that "the budget has become the only means by which the state strengthens its role in the economy and society, as the salaries of employees and retirees are constantly increasing, which consecutively consumed increasing proportions of oil revenues, while the share of investment in non-oil infrastructure was constantly decreasing."

 

[yota691]

The White Paper and the Future of the Economy

Wednesday 11 November 2020 2

 

Ali Suhail

 

The white paper issued by the Iraqi government shed light on many of the challenges facing the Iraqi economy and the implications for the economic future of Iraq, if the situation continues as it is, but this difficult reality should not reduce the potential of the Iraqi economy, on top of which is an untapped youth force. .

The population of Iraq is more than 40 million, and the average age of the Iraqi individual is 21 years, which makes Iraq one of the smallest countries in the world. This class is not only a force that can be trained and invested for production, and this makes Iraq an attractive market for international companies to serve them as consumers.

It is not possible to rely on the public sector in Iraq only to absorb this young class, and from that the government must aim to empower this class to work in the private sector and encourage them towards entrepreneurship and turn them into a creative energy in supporting this sector, in most cases this approach requires the government Long-term planning and appointment of consultants to develop plans to implement these goals, but the difficult reality forces us to move quickly, and the opportunity may be conducive to reproducing steps that have succeeded in other countries after they have been modified to meet the needs of Iraq. Here are proposals that can be applied in this regard: Here is an imperative to build programs Professional training for new fields:The modern economy needs non-recognized majors such as software engineering, data, science and financial technology, and it is possible for the government to partner with international education platforms to offer its programs at very low prices, or to pay after employment, it is also possible to develop educational programs and initiatives to support with Large technology companies, as part of the big contracts are usually programs to develop local capabilities, there are many of these programs around Africa, for example the 4afrika program from Microsoft.

Creating free zones We can follow the footsteps of Dubai and other cities in the Gulf that have established successful free zones, which are usually characterized by facilities around company registration and investment in them, in addition to that, they can make these areas as gatherings of specialized energies and make them sources of innovation and creativity, similar to many similar areas. around the world.

Protecting the rights of investors: Investing in small companies brings great risks to investors globally, and the environment in Iraq poses additional challenges. The government must consider establishing legal provisions and facilities that help protect the rights of investors.

Financial risk reduction tools: The government may start establishing investment funds in Iraqi companies, but to encourage private investment, the government should think more about providing tools to reduce investment risks and provide guarantees to investors. This is by providing investors with tax exemptions or providing support investments. There are many of these programs. In the United Kingdom, the most common one is a program known as EIS / SEIS, which provides investors with guarantees of 75% of private investment in the form of tax exemptions. Setting laws that regulate the work of investment funds: One of the most important sources of investment globally are private financial funds. Today, Iraq does not have clear laws to regulate the work of these funds, and this represents an obstacle to encouraging private, regulated investment.