The "white paper" .. The Iraqi parliament signals a single solution to the salary crisis

[colts469]

Search 4 DinarA change in the exchange rate and the value of salaries of groups … Fears that the white paper will turn into a “ red ”

 

Edited October 15, 2020 by colts469
Screwed up

[colts469]

A change in the exchange rate and the value of salaries of groups … Fears that the white paper will turn into a “ red ”

 Walter

10 mins ago

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812 Policy 2020/10/15 18:38

Baghdad Today – Follow-up

The economic expert, Abdul Rahman Al-Mashhadani, described, on Thursday (October 15, 2020), the white paper for financial reform that the government submitted to Parliament as “red”, while stressing that it needs eight years to implement it.

Al-Mashhadani said in a televised interview with (Baghdad Today), that “the paper presented by the government to Parliament is a red card, not a white one, and it needs great sacrifices from the Iraqi people from the middle and poor classes, because the reform paper will reduce the salary ceiling and raise the exchange rate, and the poverty rate will rise in Iraq”.

He added, “The paper has many positive aspects, but it is not suitable for the crisis that Iraq is witnessing now, which will continue until the end of next year with the drop in the price of oil,” noting that “it is a master’s thesis, not a government reform program, and it takes 8 years to implement it.”

He pointed out that “if parliament approves this white paper, it is expected that the new parliament, after the elections, will cancel the paper.”

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.

https://baghdadtoday.news/ar/news/134782/%D8%AA%D8%BA%D9%8A%D9%8A%D8%B1-%D8%A8%D8%B3%D8%B9%D8%B1-%D8%A7%D9%84%D8%B5%D8%B1%D9%81-%D9%88%D9%82%D9%8A%D9%85%D8%A9-%D8%B1

[6ly410]

Can the White Paper Deliver on Economic Reform?

Posted by Iraqi Thoughts | Oct 14, 2020 | Economy, Feature

https://1001iraqithoughts.com/2020/10/14/can-the-white-paper-deliver-on-economic-reform/d | 1

 

The Iraqi government’s long-awaited “White Paper” was formally approved by cabinet on October 13 after it was shared with members of parliament, who will now undertake a thorough review. Billed as a blueprint for addressing Iraq’s economic woes, its completion had been a source of tension between parliament and the government. But yesterday’s milestone was only the first step in an arduous journey that Prime Minister Mustafa Al-Kadhimi’s government must undertake if it is to deliver on its bold promises. With time running out, the difficult task of garnering sufficient political buy-in must be accelerated if the 95-page document is to be translated into tangible changes. 

The White Paper lays out a three-year plan for how Iraq’s financial predicament can be reversed. The first half of the document presents the scale of the problem in intricate detail, utlilsing charts and figures to illustrate what is at stake if the country continues on the current downward spiral. This level of detail is not only useful for policymakers, but can also be harnessed to communicate persuasively with the public. 

The second half of the document outlines a series of specific reform measures that the government intends to pursue to advance five key areas: sustainable fiscal stability, macroeconomic reforms, building vital infrastructure, provision of essential services, and creating an administrative and legal environment that is conducive to growth.

The paper sets out a strategy that prioritises the urgent need to “stop the haemorrhaging of the fiscal deficit” that is symptomatic of the massive spending commitments in the public sector. Reining in public expenditure would in turn create a sufficient amount of fiscal space for the government to target the sorts of macroeconomic reforms that are vital to overhauling Iraq’s deep-seated structural problems and resurrecting the non-oil sectors. 

The document offers an ambitious proposition and in total sets out more than 200 actionable reform measures including legislative amendments, digital innovations and major cuts in subsidies. Naturally, the most obvious question to ask is, can the government pull this off, and if so, how? The authors note that once the paper is approved by parliament, the government will prepare a separate action plan that details how it will implement the proposed measures along a defined timeline. This is, of course, easier said than done. Implementation has always been the Achilles heel of reform-minded policymakers and there is little reason to believe that this attempt will be any less problematic.

A key component of implementation is the political will to undertake unpopular actions that will inevitably create some public backlash. For instance, the paper pledges to significantly curtail public sector hiring and aims to slash the public payroll from 25% to 12.5% of GDP within three years. But Kadhimi’s five-month record has shown that he has little inclination to resist popular demands for more government jobs. Since May, protests and sit-ins by unemployed graduates demanding government jobs have multiplied, and on some occasions Kadhimi has personally relented. With few viable options in the private sector for tens of thousands of young people in search of employment, the problem has been compounded by outlandish promises that cannot be honoured in the near-term.

With much fanfare, the government launched the online portal Tawtheef earlier this week, advertised as a major milestone towards helping thousands of ordinary people find employment. The prime minister’s spokesperson claimed that the initiative would serve as a fully automated service that would enable job seekers to find and obtain employment without any human intervention. But there was little effort to clarify that in fact there are no jobs currently available on the system and that the Tawtheef website’s sole function right now is an electronic form where job seekers can submit their personal details and register their general interest. 

The release of the White Paper has further heightened public expectations, and the government will need to be frank and transparent about what it actually plans to achieve in the remaining time it has left before elections. Many of the reform measures proposed in the paper have been attempted by previous governments and have yielded minimal outcomes. For example, the authors aim to cut financial support to state-owned enterprises (SOEs) by 30% for three consecutive years. They propose categorising SOEs into profitable, faltering and unviable entities. Many viable companies would then undergo complete or partial privitisation, while those that cannot be salvaged would be liquidated. Given the huge source of political patronage that SOEs generate, any attempt to break them up would face formidable resistance from vested interests. 

If the government is seriously committed to what it sets out in the White Paper, it will need to devote far more political capital to economic reform than it has in the past. To bring about tangible reform, it is not enough to delegate this task to the technocrats and bureaucrats, no matter how informed they may be. The prime minister’s personal attention will be crucial to generate enough momentum to bring about real change.

[DinarThug]

On 10/13/2020 at 9:39 AM, DWS112 said:

okay...surprise me

 

 

Wtf - He Couldn’t See That Coming ...

 

     

[6ly410]

Thursday، 15 October 2020 06:57 PM

Finance minister says Iraq's leaders willing to make reforms

https://www.thebaghdadpost.com/en/Story/50187/Finance-minister-says-Iraq-s-leaders-willing-to-make-reforms

 

Iraq's finance minister said Thursday there is growing political will to undertake drastic reforms needed for the country to tackle a daunting liquidity crisis, which has pushed Iraq to the brink of collapse.

“There is more will now than there was five months ago,” Finance Minister Ali Allawi told The Associated Press. “Now, I think there is recognition that unless oil prices go up miraculously, this is something we have to cope with and manage.”

Low oil prices have slashed state coffers in the crude-exporting country by nearly half, and over-reliance on oil has limited the government's ability to seek out other income.

A widening month-to-month deficit has cast uncertainty over how future payments will be made for public wages, external debts and essential imports of food and medicine.


Iraq's unsustainable economy, laid bare by fiscal pressures spurred by spiraling oil prices and the coronavirus pandemic, is a long-standing problem that has flummoxed reformists for over a decade.

This week, Prime Minister Mustafa al-Kadhimi's government issued a much-anticipated 95-page “white paper” for economic reform that, if implemented, would prompt a drastic overhaul of the entire system within three to five years.

“It is a paper designed to create a strategic and policy framework for a new Iraqi economy,” said Allawi. "In the end of this period of change and reform ... we are supposed to have a restructured and more dynamic economy, that is the point of it.”

The absence of support from major political elites has undermined similar efforts in the past. Al-Kadhimi's government still depends on an endorsement by Parliament for the vision to gain steam.
“There is less denial, before it was all denial," said Allawi.
With oil prices not expected to rebound in the near-term, only reforms will see Iraq avoid an economic catastrophe, top officials in al-Kadhimi’s government, including Allawi, have repeatedly said. The future of the project faces a major test: Parliament endorsement in the form of a binding resolution or legislation.

Later, aspects of the plan outlined in the paper will be incorporated into the 2021 budget, said Allawi, something that will also require a parliament vote. Government subsidies in the electricity and oil sectors will face particular scrutiny.

In September, Iraq made $3.16 billion in oil exports, which accounts for 90% of state revenue — less than half of the $7 billion needed to pay for salaries, pensions, imports and debts. September salaries were delayed and the payment of October wages depends largely on the government borrowing internally.

A previous bill allowing for $12 billion in internal borrowing has been used up; a new one, asking for $35 billion, faces a parliament vote.

“I hope parliament will approve it,” said Allawi of the bill. “If it doesn’t, we have potential for other alternatives, but it will be more difficult.”


Iraq's dollar reserves stand at $53 billion.

[horsesoldier]

Well groovy for that — the alternative is the oblivion, huh.

[6ly410]

 

 

2020/10/18 09:41

Finance Minister: The reform paper will raise the level of production and reduce consumption rates

https://almasalah.com/ar/news/199227/وزير-المالية-ورقة-الاصلاح-ستعمل-على-رفع-مستوى-الانتاج-وخفض-معدلات-الاستهلاك

 

Baghdad / Al-Masalla: Minister of Finance Ali Allawi said, Sunday, October 18, 2020, that the reform paper identified with a scientific and objective vision the economic and financial problems that have accumulated over decades in the country. 

Allawi said in a statement received by "The Obelisk" that the reform paper identified with a scientific and objective vision the economic and financial problems that have accumulated over decades, and which were not the product of the current stage due to wrong policies that were tired in the past.

He added that these problems and cracks are a real challenge that can be overcome or surpassed by the method of strategic planning based on an objective analysis of the reality and extracting strategic goals as urgent priorities to address these problems.

And he indicated that the reform paper boldly identified the most important productive, economic and financial sectors, expanding the field of investment and upgrading the private sector in the short term to advance them quickly in support of improving income and creating decent job opportunities, which would reduce unemployment and poverty rates in society.

He stressed that it will also work to activate official institutions and civil society organizations to support the wheel of production, raise the level of productivity on which it is highly reliable, and reduce consumption rates.

Earlier, Minister of Finance, Ali Allawi, confirmed, on Saturday, October 17, 2020, that there is an increasing political will to carry out the fundamental reforms required for the country to address the massive liquidity crisis that pushed Iraq to the brink of collapse.

Allawi said that there is more will now than it was five months ago now, I think there is recognition that unless oil prices rise miraculously, this is something we have to deal with and manage, according to the Associated Press.

He added that the reform paper is designed to create a strategic and political framework for a new Iraqi economy. At the end of this period of change and reform, we are supposed to have a restructured and more dynamic economy. This is the aim of it.

The lack of support from major political elites has undermined similar efforts in the past. The Kazemi government continues to rely on parliament approval for the vision to gain momentum.

Allawi said that at a later time, aspects of the plan outlined in the paper will be incorporated into the 2021 budget, which will require a vote in Parliament, and government support in the electricity and oil sectors will face special scrutiny.

It is noteworthy that Al-Kazemi announced, last June, that his government was preparing a "white paper" that includes expected financial reforms.

 

Obelisk

[6ly410]

 

[6ly410]

The White Paper ... Radical reforms to a rentier economy

Sunday 18 October 2020 65

https://alsabaah.iq/33036

 

 

  Baghdad: Hussein Faleh 

 

Economists believe that the white paper presented by the government includes radical reforms to the rentier economy, noting that it has defined a clear economic vision for the government to move towards activating the productive sectors, diversifying the country's non-oil resources and achieving sustainable development, while they called for adding some proposals that would maximize the state’s financial resources.


Economist Safwan Qusay said in a statement to "Al-Sabah": "The process of having a white paper that can be discussed by different parties at the academic level and political parties opens the way for putting touches on this paper."

 

Adopting a new financing approach

He added that "the paper is based on the basis of transferring the Iraqi economy from government funding to thinking of financing through banks and money markets, meaning the adoption of economic development on a new approach to financing, which is moving savings towards Iraqi banks." And he continued: "And then refinancing the private sector in order to be the leader." , As well as liberating part of the idle capital at the level of federal ministries, "noting that" some ministries have losing companies. These companies can be sold through the financial markets and move part of the government capital, and thus there will be new revenues for the Ministry of Finance. " "The long view of this paper is that it tries to reduce government spending or support towards the Ministry of Industry or the Ministry of Agriculture, as there are salaries in some departments of these ministries paid by the Ministry of Finance while these ministries are supposed to be financially independent," indicating that "In practice, there is a gradual reduction in funding at the level of 30 percent annually until these ministries are financially independent. "

 

Smart exchange rate setting

 

Qusay stressed that "the paper needs to be a tool to move the Iraqi economy, in addition to the outlets for selling the currency. It is possible to review the exchange rate," calling for adding some proposals on the paper to mature it, such as determining an intelligent exchange rate that distinguishes between the type of imported goods.

He added that "there are consumer goods that are not supposed to be sold at the official price of the dollar, that is, at the level of 1182, for investment activity or the purchase of goods that could create job opportunities inside Iraq, but without that it is more than an exchange rate depending on the type of imported goods."

He pointed out that "the process of raising the exchange rate will make rapid revenues flowing to the central bank, through which the deficit can be reduced, in addition to the issue of the upper limit of salaries at the level of all groups, in addition to what goes into the issue of salary scale justice and this needs legislation." "The paper is called the white paper. If the Iraqi parliament has a change in its course in another direction, there is nothing wrong with that, but in practice, the partnership between the government and parliament in changing the course of public spending and searching for new resources is the inevitable approach, because Iraq now has no choice not to pass this paper."

He went on to say that "the maturity of the paper is fine, but disabling it means that Iraq will continue to be deficient in financing salaries and social welfare items, because otherwise we will resort to monetary reserves and the economic disasters resulting from this issue