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Prof. Abdul-Hussain Al-Anbuge *: The government’s reformist exit from the ration card dilemma DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

Prof. Abdul-Hussain Al-Anbuge *: The government’s reformist exit from the ration card dilemma

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Prof. Abdul-Hussain Al-Anbuge *: The government’s reformist exit from the ration card dilemma Empty Prof. Abdul-Hussain Al-Anbuge *: The government’s reformist exit from the ration card dilemma

Post by claud39 on Fri Jul 17, 2020 10:48 am

Prof. Abdul-Hussain Al-Anbuge *: The government’s reformist exit from the ration card dilemma




7/15/2020



Prof. Abdul-Hussain Al-Anbuge *: The government’s reformist exit from the ration card dilemma Abdulhussain-image-new1A





In the year 1997, the ration card system was applied in accordance with the decision of the United Nations for Oil for Food and Medicine (986), a decision that takes two dimensions. The first is a human phenomenon after the Iraqi people suffer from the effects of the unjust blockade that punished the people without the regime after the invasion of Kuwait, and the second inside it prevented Iraq from adopting the dependence strategy On the self after the various economic sectors started and under pressure of the need to develop the inherited technological system and the dismantling of technological packages in machines and equipment and the maintenance and operation of them outside their productive life, in addition to operating the productive sector, agriculture and industry to the fullest capacity according to the method of compensating the imports that were suspended due to the blockade of the local product and for fear of reaching Iraq is a stage of self-sufficiency that resembles the Iranian experience in facing the siege (the resisting economy), and accordingly, the application of the ration card system came to eliminate this trend under a humanitarian banner, so the Iraqi economy turned it into a sick man lying in the hospital, giving food and wateringMedicine.




After 2003, the new system inherited the burdens of that, in addition to changing the human behavior towards the ration card, so it became worshiped as a penetration into the social heritage and it became a popular demand that is unavoidable, even if it represents the destruction of the local productive base and the creation of lazy people, as the state bears great costs in managing import operations The storage and distribution of ration card materials, as this activity acquired most of the tasks of the Ministry of Commerce since the application of the ration card system until now, and the ration card record was full of problems that the citizen suffers from starting with a ration card and the adjustments that are made to it and ending with failure to fulfill the prescribed items In it (quantity and quality), and that varied from one governorate to another, from one region to another, and from one agent to another, which made it vulnerable to criticism.

Official figures indicate that the per capita share of the ration card allocations is estimated at ($ 14) in 2009, whereas according to the Ministry of Commerce, only ($ 7) of these allocations will reach the individual, which indicates the prevalence of mismanagement, inefficiency and the presence of cases. Financial and administrative corruption. Whereas, most of the Iraqi people still depend on the ration card vocabulary to provide the minimum level of sufficiency of basic materials, which will require the government to continue in the near and medium term to support the ration card, but the status of managing the implementation of the ration card must be reformed, by enabling the private sector To take a major role in this proposed mechanism.




With the following in mind:


[*]Not to affect the entry of the poor classes.


[*]Not to lead to high food prices and scarce supplies.


[*]Take into consideration enabling the private sector to take over the food trade.


[*]To provide a clear schedule for the state’s exit from the ration card system (Exit Strategy).


[*]To be easy to apply and clear.









[*]


More than one option can be offered in order to identify the advantages and disadvantages of each and give more space to the decision-maker.




First: The first option:

Paying financial compensation for the ration card items.

This is done according to the following mechanism:



[*]Approval of the ration cards currently in effect as a basis for determining the monetary entitlements until an update is made in light of the expected results of the census.


[*]Cash is paid according to one of the following two principles:

  • On the basis of the per capita share of the estimated annual allocations in the state budget to support the ration card. It is the easiest to calculate, but it does not protect the citizen from the possible increases in the prevailing prices, which means the decrease in the true value of monetary compensation.
  • On the basis of the per capita share of the ration card material (sample) calculated at the prevailing local prices, by observing the record price of the ration card material per month, which is a method of social impact that protects the citizen from high prices, and it is incumbent upon the Ministry of Finance to take it into account when estimating support allocations The ration card for each fiscal year.





[*]The Ministry of Commerce shall issue (electronic payment cards) in a contract with a company specialized in the names of (household heads) installed in the ration cards in two installments during the fiscal year according to the following:


[*]


(Individual's share according to one of the two bases (A) or (B) * number of individuals in the card * 6 months) = amount of compensation per card



[*]Pay to individuals in the first month of the year through electronic payment outlets that have a wide spread in residential areas, after concluding a service contract with a specialized company.


[*]


 




Advantages of this option :



[*]Eliminate the administrative burden of importing and distributing materials and the accompanying cases of financial corruption and manipulation of state funds.


[*]The responsibility will fall on the private sector to take the lead in the commercial sector, and this sector’s contribution to GDP will increase, which will reflect positively in the reforms.


[*]It will give the Ministry of Commerce an opportunity to get rid of the job (the monopolist big trader) and set out to exercise its tasks in drawing up trade and control policies and consolidating the foundations of economic openness in a way that helps direct the private sector in the right direction.


[*]





Disadvantages of this option are:



[*]There may be an increase in the prices of food supplies in the beginning, and this depends on the degree of response of the private commercial sector and its ability to replace the Ministry of Commerce in importing these materials and feeding the commodity supply from them, where the greater its capacity, the higher the price will be less and for a shorter period and vice versa and will be for banking, security and administrative facilities The government provides the private sector with an active role in reducing the impact of the potential decrease in supply, and the measure may be preceded by an increase in demand for the purpose of storage, but the initiation of proposals and promoting it during an appropriate period will mitigate this effect.


[*]A disturbance in the exchange rate of the dinar against the dollar at the beginning, as a time gap may occur between the increase in the monetary mass as a result of compensation and the ability of the central bank to meet the demand for the dollar by the private sector with the intent to import.

[*]This option may face popular discontent if it is depicted on the basis of the state's abandonment of the ration card as it represents the minimum food security for many poor families, and this case may be used as a political card by different parties, especially in the absence of culture and banking customs, and this effect has receded in Recent years as a result of the decline in the importance of the ration card in the family budget.


[*]The banking system that neglected the reform and engaged in reaping the profits from the currency auction for a decade and a half in the performance of its role in this option will not be able to effectively and successfully with regard to opening documentary credits and finding correspondent banks, which causes confusion in the mechanism, and this requires an accelerated step in the banking reform.


Second: The second option:
“Maintaining the ration card and partially implementing it through the private sector”
This option includes the government partly giving up the implementation of the ration card, that is, sharing work between the Ministry of Trade and the private sector through the following:

  • The Ministry of Trade continues to manage import operations of ration card materials and their delivery to border ports or outlets.


  • Contracting with private sector companies (Iraqi or foreign) according to the legal principles of the contract and the bidding documents are detailed for the implementation of all subsequent operations related to transport, storage, packaging and distribution.


  • Distribution is through current authorized agents and they are linked to the company contracted administratively and technically and not to the Ministry of Trade.


  • The Ministry of Commerce provides logistical support to the companies contracted with regarding information and update cards (write-off and addition) during the period of contract implementation.


  • The Standardization and Quality Control Department takes samples to check the quality, and the Ministry of Commerce monitors companies' compliance with the terms of the contract in terms of quantity and quality.


  • Banking and administrative facilities are given to the companies contracted with.




 
Advantages of this option

[*]Speeds the process of implementing the ration card and delivery to the citizen.


[*]The role of the Ministry of Trade remains in the import process, especially for strategic food items such as grains (wheat, rice, and baby milk) and to maintain strategic storage for them.

[*]

 
Disadvantages of this option

[*]Maintaining the business duality between the Ministry of Trade and the private sector means preserving potential cases of corruption in the various parts of the process, especially in import.


[*]It does not give wider flexibility to the private sector to start a free business and adopt competition standards.


[*]The potential problems in the lack of distributed materials or changing their quality remain attached to the government’s peg because the responsibility remains shared and the private sector finds an opportunity to prevaricate and purchase the receivables of government employees.

[*]

 
Third: The third option:
              “Keeping the ration card fully implemented by the private sector”
This means that the Ministry of Trade is completely removed from the implementation of the ration card in the near or medium term until a complete abandonment of the ration card subsidy is given up and this heavy legacy is disposed of in the future.
In order to overcome the defects mentioned in the previous two options, this option can be applied through the following:

[*]In light of the updated data provided by the Ministry of Commerce, it is possible to determine the number of families and the number of individuals who benefit from the ration card and according to the governorates, and it is concluded that contracting with solid companies in the private sector (local or foreign) to implement the ration card in full in terms of import, transport, storage, packaging and distribution. Without the intervention of the Ministry of Commerce to implement.


[*]A higher committee shall be formed in the Prime Minister (from the relevant authorities) to announce a tender round for the implementation of the ration card and to approve all instructions in the contract once.


[*]It is not allowed to contract with one company to implement the ration card for more than one governorate or (an area within the regions of Baghdad)


[*]The Ministry of Commerce rents the largest part of its stores in the governorates to companies contracted with, in order to facilitate the process of finding stores.


[*]Distribution is through existing agents and they are exclusively associated with the contracted companies.


[*]Each family’s share is filled in a single package or basket to ensure the quality is not tampered with.


[*]The role of the Ministry of Commerce in providing data on (write-offs and additions) and on documentation of imports and quotas distributed is reduced.


[*]The Ministry of Commerce undertakes the perpetuation of strategic storage of basic materials (flour, rice, sugar, oil, infant formula) and sale to citizens at prevailing prices through malls' wings rented for this purpose or by activating the cooperative sector in order to replenish the storage before its expiration, as well as The fact that this warehouse will balance the cases of lack of commodity supply and prevent the occurrence of large price increases.


[*]The Ministry of Commerce can be entrusted with the task of controlling the quality and quantity of materials and the extent of commitment to implementing the terms of contracts concluded with companies, and consulting firms can be used for this purpose.


[*]Giving administrative, banking and insurance facilities for the companies contracted with.

[*]

 
 
Advantages of this option:
It overcomes the defects of other options and activates the role of the private sector in the commercial sector.
- In the future, the private sector will be able to secure the trade process in case the government withdraws from the support card.
Disadvantages of this option are:
An excess of Ministry of Trade employees can be urged to retire and find job opportunities in private sector companies.
 
Recommendations:

[*]We recommend adopting the first option, which is the best and easiest, provided that the Ministry of Trade remains responsible for maintaining the strategic storage and exercising the role of the commodity and price equivalent of the market, and flour can be kept exclusively on the grounds that local production can cover the demand and is the body that handles receiving it from farmers at subsidized prices Thus, this support can be passed on to consumers through support for (bread) as (support for living) takes place in the Egyptian experience, and this means reducing the government's role in narrowing the rings and enabling the private sector to manufacture flour and zero flour as well as grinding barley and inserting it in the mixture because of its benefits Great healthy.


[*]Selling government mills to the private sector, or entering into partnership contracts with the private sector, liquidating the state grain manufacturing company and making this activity exclusively in the hands of the private sector. The Ministry of Commerce can exercise oversight as well as a standardization and quality control device for quality control.


[*]Some segments of the senior state employees, merchants, and contractors are excluded from the distribution system, so no electronic payment cards are issued to them, and a class differentiation in payment amounts can be created so that it is greater for those under the poverty line, less for the middle classes, and zero for the high entry layer, according to accurate data in the targeting field.


[*]Maintaining (support for living or baking) includes all segments of society because of the symbolism of citizenship and the fact that the product is mostly local.


[*]Payment cards for ration card amounts can be combined with other payment cards, especially those related to social welfare, retirees or even employees, according to regulations prepared for this purpose.


[*]The necessity of answering questions that represent the maturity of the current critical stage in 2020 in terms of economic stagnation and the Corona pandemic and the lack of necessary funding, namely:

[*]

Q / How much can we provide real financing and not just allocations for the ration card for the year 2020?
A / There is no funding according to the available indicators, because public revenues are not sufficient to cover half of the total salaries in the current situation.
Q / What can we do?
A / We leave the ration card and only support flour and any other basic local food security (such as dates) because we are in the stage of providing subsistence.
[*]The state is responsible for organizing the charitable and symbiotic effort, as there are many charitable organizations and events, owners of Husseini processions, centers of worship, holy shrines, and religious references that undertake a great charitable effort to distribute hundreds of thousands of charitable food baskets, as



[*]
follows:



[*]

  • Making use of the poverty line data to define the targeting areas and direct the charitable effort to target them according to a time and spatial framework that guarantees inclusion and non-repetition in the preparation of areas from more than one side, or the lack of access and lack of preparation for some areas from any side, i.e. division of work between the regions and between the charitable bodies.


  • Providing logistical and security facilities for transporting and storing food baskets and finding smoothness in reaching the targeted areas.


  • Provide the necessary bags and cartons for retail.


  • Providing transportation means using the fleet of the Ministry of Commerce and the Ministry of Transport at the disposal of charitable organizations.


  • An assignment cell composed of the Prime Minister, the Ministry of Commerce, the Ministry of Transport, and the Ministry of Planning, the Central Statistical Organization, the Trade Union, and the Free Professions Syndicate handles the provision of all information and logistical services, controls the distribution mechanisms, identifies areas of need, and organizes representatives of the reference, thresholds, and charitable organizations.


  • A donation fund is established to attract small donors, supporting shortages of charitable causes in some regions or governorates.


  • Creating a charitable media cell that accompanies and covers these activities, while transmitting complaints and impressions of the targeted authorities to charitable and supportive government agencies.




 
(*) Economist
 
Copyright reserved for the Iraqi Economist Network. Republishing is permitted provided that the source is indicated. July 15, 2020
To download a PDF file, click on the following link




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claud39
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