Dinar Daily
Would you like to react to this message? Create an account in a few clicks or log in to continue.

Get Daily Updates of the NEWS & GURUS in your EMAIL

Enter your email address:

Iraq: An Attempt for Economic Reform DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

Iraq: An Attempt for Economic Reform

Go down

Iraq: An Attempt for Economic Reform Empty Iraq: An Attempt for Economic Reform

Post by GirlBye Tue Oct 20, 2020 1:13 pm

Mustafa Al-Kazemi's government took the initiative to launch an attempt at economic reform, in a period of deteriorating crude oil prices in light of the "Covid-19" closures that reduced the demand for oil, and then the prices deteriorated from their levels, which ranged between about 60 and 70 dollars, before the outbreak of "Covid-19" Since the start of the summer, it has stabilized at an average of between 40 and 45 dollars per barrel of "Brent". This deterioration in the price of oil, which constitutes about 90 percent of the Iraqi budget resources, resulted in the government not committing to paying employees and retirees pensions for the month of September, due to the lack of funds in the treasury.

The number of those who did not receive their pensions for the past month is estimated at 6 million, which created a crisis in the country, precisely because the indications indicate the difficulty of improving oil prices in the foreseeable future; This means that salaries may be withheld for this large number of residents and their families again before the end of the year.

The Iraqi Council of Ministers formed an emergency cell for financial reform on May 22, 2020. The committee met more than 20 times between May and August. The committee is headed by Prime Minister Mustafa Al-Kazemi, and its meetings were moderated by the economist and Minister of Finance, Dr. Ali Abdul-Amir Allawi. The committee issued a "white paper" through which the government presented its recommendations aimed at "crystallizing a common basis upon which to be agreed and approved, followed by the presentation of the necessary legislation and implementation procedures accordingly." This is after the possibility of introducing some amendments to it, and then adopting the paper as a future economic policy.

The "paper" has placed the burden of the economic imbalance in the country since the occupation of 2003 on the public sector and on all the industrial companies that were established in the pre-occupation period. The "paper" explained at length the negative effects of these companies, and held them responsible for inefficiency and the lack of competitiveness of their prices, and for the accumulation of manpower in them without the need for this number of workers and employees.

These are factors that the public sector can easily accuse of. Obviously, there are impurities in the government factories; However, when listing the faults of government industries, it was necessary to refer to corruption and sectarian quotas. It was also necessary to list the enormity of cross-border smuggling operations, and the extent of damage from the influence of the political class in the arbitrary appointment of the beneficiaries. This, of course, is not to mention the "aliens" who receive pensions without working time or carry out any work, and the political official who appointed them receives part of their salary. The phenomenon of "aliens" became common - as is well known - during the reign of Nuri al-Maliki.

The "paper" focused on the inability to compete with public sector companies, and this has some validity. However, the "paper" overlooked some of the causes of this problem during the past two decades. Then it gave the impression that it was defending the policies of the governments of the occupation era, despite the wrong economic policies of the governments of the occupation period, as stated by some of those responsible for preparing the "paper".

This type of discussion gave the impression that the "paper" aimed to attack the economic policies of the previous regime, and overlooked the policies and mistakes of the post-2003 governments. Of course, this is despite the "paper" attempting to present a new economic policy for the country.

It goes without saying that the economic policies of the post-2003 governments mainly depended on corruption and sectarian quotas, as well as the basic needs of the Iraqi people were not provided. It was in order to put forward a future economic policy that provides a comprehensive and balanced review of the contemporary Iraqi economy. This does not mean turning a blind eye to the problems that afflicted the public sector during the previous regime. But this does not mean at all that the reason for the failure of the Iraqi economy now is to manage only the public sector factories, these factories and companies that were looted and stolen during the first days of the occupation, not to mention the corruption of the subsequent period. It would have been possible - at least - to come up with new ideas about how to benefit from these huge investments that have long benefited the country. Of course, there is the possibility of privatizing these factories by offering their shares on the stock exchange, or reconfiguring their ownership as joint companies between the public and private sectors.

It is worth noting that the "paper" defended the role of the private sector and private companies. However, it did not mention, soon or far, the destructive role of the corruption and monopoly whales who terrorized the private sector during the past two decades, and were prevented from establishing productive industrial companies or their natural and sustainable growth.

 Nor did the "paper" mention the importance of the emergence of the joint sector, and the role it could play in the country's economies.
If there was a defect in the Iraqi economy during the past two decades, it is the failure of successive governments to take initiatives to support the establishment of a "productive economic sector"; Private or public. 

We are not talking about the numerous import and export companies that have been established here.
The "paper" was also unsuccessful in discussing the electricity crisis in the country. It placed the entire burden of the problem on the consumer, and the relatively cheap price paid by the Iraqi consumer. Despite the correctness of saying that the electricity bill is still low in Iraq; This is not an excuse that the electricity is cut off for several hours a day for successive years. Successive annual budgets since 2003 have allocated about $ 55 billion to increase electric power. What happened to this huge money? Here again emerges the problem of corruption that the "paper" overlooked.

The problem also arises of the state’s failure after 2003 to plan and implement the country's basic projects. Here, we also remind you of the failure to implement projects to supply Basra with potable water. Inaction here, too, is due to negligence, corruption and lack of experience among officials. The same applies to the issue of generators. The "paper" neglects the role of generator owners. Whereas, a large number of them are members of Parliament, and how some people's representatives were pressuring the Electricity Corporation to cut off electrical power to their area, so that the consumer would be forced to use the generators owned by the deputies. The "paper" also did not mention why the phenomenon of private generators is a new phenomenon in Iraq that emerged after 2003?

The "paper" considered that Iraq's continued dependence on oil rents as the main financial resource, or planning relying on the high price of oil, are two things that have their caveats and danger. This is true, and it must be lent due importance. However, we did not find in the "paper" a full explanation of what governments did before and after 2003 in the field of reducing dependence on oil, increasing the role of sustainable alternative energies or developing the gas sector.

An Iraqi writer specializing in energy matters
VIP NewsHound
VIP NewsHound

Posts : 1481
Join date : 2018-07-09
Location : So Cal

View user profile

Back to top Go down

Back to top

- Similar topics

Permissions in this forum:
You cannot reply to topics in this forum