Deputy identifies 4 reasons behind the exit of Iraqi merchants and investors' money abroad

by **GirlBye** Wed Dec 02, 2020 2:05 pm

A member of the Economy and Investment Committee in the Iraqi parliament spoke, Wednesday (2-12-2020), about the reasons for the traders and investors taking their money out of Iraq.

A member of the committee, Nada Shaker Jawdat, said in an interview with (Baghdad Today), “The most prominent reasons for traders and investors taking their money out of Iraq, especially the Iraqis, are the lack of security for them, as well as the corruption and extortion they are exposed to, by influential authorities and personalities, among the owners Mafias of corruption.

Jawdat indicated, “Some traders and investors are already involved in corruption and many suspicions, and most of their projects are outside Iraq, so that their true wealth is not revealed, and so that its sources are not found in the event that one of them is convicted of corruption charges, but until now no one has been convicted, and the corrupt are known. Everyone has ”.

According to observers and experts in Iraqi economic affairs, the segment of businessmen in Iraq suffers from weak banking systems, which drives them to resort to banks in neighboring countries in their international commercial dealings, while many citizens do not trust them and save their money in their homes.

Economic expert Abbas Anid Ghanem comments on this issue, saying that "the Iraqi banking systems are far from international standards."

The World Bank reported in 2018 that the three largest banks, namely Al-Rafidain, Al-Rasheed and Al-Iraqiya for state-owned trade, hold about 90 percent of the sector's assets.

The three public banks mainly pay the salaries of eight million Iraqi employees. But the state had to borrow from it due to the collapse in oil prices this year, which raised its domestic debt.

According to the World Bank, less than 5 percent of small and medium-sized enterprises obtained loans from local Iraqi banks, while most merchants and investors resorted to borrowing from family and friends.

Ghanem attributed this to the high value of interest that banks take, especially in investment projects. It ranges from seven to ten percent, while most of the world's advanced banks do not reach more than one percent.

Iraq was ranked 172 out of 190 countries classified in the World Bank's "ease of doing business index" report, just ahead of Afghanistan and war-torn Syria, despite it being the second crude producer in OPEC.

https://iraqakhbar.com/2785716

by **claud39** Thu Dec 03, 2020 11:27 am

The deterioration of banking services in Iraq pushes its traders to resort to banks in neighboring countries

03/12/2020

Deputy identifies 4 reasons behind the exit of Iraqi merchants and investors' money abroad %D8%AA%D8%B1%D8%AF%D9%8A-%D8%A7%D9%84%D8%AE%D8%AF%D9%85%D8%A7%D8%AA-%D8%A7%D9%84%D9%85%D8%B5%D8%B1%D9%81%D9%8A%D8%A9-%D9%81%D9%8A-%D8%A7%D9%84%D8%B9%D8%B1%D8%A7%D9%82-%D9%8A%D8%AF%D9%81%D8%B9-%D8%AA%D8%AC%D8%A7%D8%B1%D9%87%D8%A7-%D9%84%D9%84%D8%AC%D9%88%D8%A1-%D8%A5%D9%84%D9%89-%D8%A8%D9%86%D9%88%D9%83-%D8%AF%D9%88%D9%84-%D8%A7%D9%84%D8%AC%D9%88%D8%A7%D8%B1

Businessmen in Iraq suffer from weak banking systems, which drives them to resort to banks in neighboring countries in their international commercial dealings, while many citizens do not trust them and save their money in their homes.

"The Iraqi banking systems are now far from international standards, as the problems go back decades, and specifically to the 1990s, when the sanctions imposed on Saddam Hussein's regime caused Iraq to be isolated from the world," said Abbas Enid Ghanem, an economist and president of the Bar Association in Diwaniyah.

According to the "French", the widespread looting after the US-led coalition forces invaded the country in 2003, emptying banks of liquidity, and since then more than 70 banks have been established, but the sector in total has not developed.

The World Bank reported in 2018 that the three largest banks, namely Al-Rafidain, Al-Rasheed and Al-Iraqiya for state-owned trade, held about 90 percent of the sector's assets.

The three public banks mainly pay the salaries of eight million Iraqi employees, but the state was forced to borrow from them following the collapse in oil prices this year, which raised its domestic debt.

As for the director of Al-Akhyyar Contracting Group, Adel Al-Salhi, the problem with public banks is that they are satisfied with "loans (to the state) and pay employees' salaries and are not interested in dealing with the trade sector and supporting businessmen. This applies especially to the Rafidain and Rashid banks, and to a lesser extent to the Iraqi Trade Bank, which was established by the US Coalition Provisional Authority under the supervision of the civilian governor Paul Bremer in 2003.

Ghanem explains that “sectarian and partisan quotas in the political system are matters that affected this banking institution,” which almost limited its role in lending to the government. He adds, "Although the Iraqi Trade Bank is the only one that enables merchants to open credits, it does not provide any banking facilities to us (businessmen), and asks us for guarantees with a very high value of up to 110 percent, to provide a letter of guarantee only."

This prompted some contracting companies to resort to banking services outside the country, similar to many companies that have come to rely on banks in Jordan, Turkey and Lebanon to facilitate their dealings.

Al-Salhi stressed that the matter is not only related to financial facilities, but also concerns transparency in transactions and the provision of special employees from within the banks, according to the evaluation and work of the merchant, unlike Iraqi banks, which deal with us as employees in a dry manner.

According to the World Bank, less than 5 percent of small and medium enterprises obtained loans from local Iraqi banks, while most merchants and investors resorted to borrowing from family and friends.

Ghanem attributed this to the high value of interest, which banks take, especially in investment projects, as it "ranges between 7 to 10 per cent, while most of the world's advanced banks do not reach more than one per cent."

Iraq ranked 172nd out of the 190 countries ranked in the World Bank's "Ease of Doing Business Index" report, just ahead of Afghanistan and war-torn Syria, despite being the second crude producer in OPEC.

The problems of the Iraqi banking sector do not stop at companies, as its services are not well received by citizens either, and World Bank figures indicate that only 23 percent of Iraqi families have an account in a financial institution, which is among the lowest in the Arab world, and the owners of these accounts They are especially state employees, whose salaries are distributed to public banks at the end of each month.

https://uabonline.org/%d8%aa%d8%b1%d8%af%d9%8a-%d8%a7%d9%84%d8%ae%d8%af%d9%85%d8%a7%d8%aa-%d8%a7%d9%84%d9%85%d8%b5%d8%b1%d9%81%d9%8a%d8%a9-%d9%81%d9%8a-%d8%a7%d9%84%d8%b9%d8%b1%d8%a7%d9%82-%d9%8a%d8%af%d9%81%d8%b9-%d8%aa/