Read the law on emergency support for food security and development

 
03/29/2022

Samir Al-Nusairi*

The House of Representatives is discussing these days a law sent by the government entitled (Emergency Support for Food Security and Development). The main provisions of the proposed law.

From a competent economic and financial point of view, I am with the government preparing a strategy for food security in emergency and normal circumstances, and that this law is presented in accordance with its articles, and it is looking at quick solutions due to the circumstances of the expectations of the economic crisis and the rise in prices due to the Russian-Ukrainian war, in particular Article (2) / Third, which includes financing the finance account for this purpose, from internal and external borrowing, with no more than 10 trillion dinars, and certainly what is meant by internal borrowing is to re-discount the treasury transfers issued by the finance by the central bank, and this means loading the public finance with new burdens and debts that are added to the total of the previous internal debt.Note that despite the good central bank reserves, but without looking at the total internal debt in 2020 and 2021, which amounts to about 30 trillion dinars, and the previous debt for the years (2016-2019), which is supposed to be repaid from the savings achieved from the rise in oil prices in 2021, which is expected to reach In 2022, it will be about 30 trillion dinars, if the average oil price for the 2022 budget is calculated, up to (70-80) dollars per barrel.

Therefore, we do not support the adoption of this paragraph in financing the account, despite the fact that the leaks indicate that it was deleted from the proposed law during discussions in the House of Representatives. On the other hand, I believe that solutions that include programs, plans, policies and financial allocations for food and drug support and poverty reduction for vulnerable groups and for all citizens in the next general budget instead of urgent and emergency solutions, activating commercial, agricultural and industrial policies, following up and controlling the commercial market, and benefiting from the financial reserve from the savings achieved in Oil sales and not resorting to borrowing. So that the Central Bank can use the applications of its monetary policies and safe investments in order to enhance and raise its foreign reserves, which are needed by economic stability in unclear and unknown economic and political conditions in the future, because the Central Bank is the strategic mainstay for economic stability, financial sustainability and the protection of public funds and private.

What confirms the safety and success of the Bank’s strategy for the years (2016-2020) and (2021-2023) is the achievements in financing activity and the activation of its financing initiative to finance small, medium and housing projects within the objectives of initiatives in revitalizing the economic cycle and supporting the implementation of its objectives contained in Law 56 of 2004 and its amendments .

Therefore, the Central Bank is currently working on expanding the microfinance project in cooperation between banks and international bodies with experience in this field

, as well as activating pooled Islamic financing for government and private banks. In addition to this, the expansion of the implementation of community initiatives from the Fund to enable the effective national experience in integrating the banking sector into society and achieving The purpose of the banks is social, economic and humanitarian.

* Economic and banking consultant

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