A deputy presents a road map to solve the financial crisis in Iraq

by **Ponee** Fri Dec 18, 2020 12:29 pm

Baghdad – Mawazine News

a member of the House of Representatives, Muhammad Sahib al-Darraji, on Wednesday presented a road map for solving the financial crisis in the country.

Darraji said, in a statement received by / Mawazine News / a copy of it, that “given the economic and financial situation in Iraq reaching the bottleneck stage, there must be solutions applicable to the near and far ranges, and through some professional experiences gained in the areas of government executive and legislative legislative work With accumulated experience from working in the private sector and touching the economic and service situation of the Iraqis at different levels, I would like here to present a short-term road map to contribute to solving the financial crisis and protecting the country’s economy must be followed by medium and long-term measures to reform the Iraqi economy and find a clearly defined economic doctrine for Iraq that changes the form of spending The country’s financial resources are commensurate with the societal nature and global ruling conditions of energy prices and the diversity of means of production. ”

He added, “This plan is summed up as follows: –
First: The general budget

1 – A simple construction and installation budget must be submitted and approved for the remainder of 2020 that clarifies the ruling real revenues and expenditures and what relates to these two items only and the ways of filling the resulting deficit and without touching on any other items.

2 – Building a budget for the year 2021 on a sectoral basis and on a fixed oil price for the operational budget and a mobile for the investment budget, directing the budget for salaries, purchasing the ration and medicines, sterilizing water and the educational process only and listing items that encourage dependence on investment and the private sector to address other sectors so that these provisions govern all budget law Laws to other and restrict them in favor of financing unfunded sectors.

3 – Providing the final accounts for the past years and validating them to know the deficiencies in financing certain sectors in exchange for wasting in other sectors in order to create an economic balance between the service and productive sectors.

Second: – The cash block:
Withdraw the cash mass stored with the community and try to invest it in an investment through the following: –
1 – Raise the interest rate for cash deposits in banks even if the monetary authority is forced to support the banks.
2 – Establishing projects in which the state contributes a certain percentage and the rest is offered for subscription, especially in projects of city centers (dawn town) and major industrial projects such as petrochemicals (Nebras).
3 – Offering some of the winning companies (or that could win by changing the management tactic) for subscription like air navigation company, airlines, cement, fertilizers, and others.
4- Selling oil coupons locally. At the prevailing price now and buying it a year later at the prevailing price then.
5 – Building confidence between the state and the citizen by committing to pay interest and profits.

Third: – Oil licenses
1 – Negotiating to postpone the oil companies’ dues or pay them in kind outside OPEC’s share.
2 – Evaluating company spending and reducing it to a minimum.
3 – Re-negotiation in consensual ways with oil companies to improve contract terms for the state when the oil prices drop.

Fourth: – Legislative measures
1 – Revoking the Coalition Provisional Authority’s decision to ban the export of raw materials and the export of some materials such as gravel, sand, and others.
2- Requiring the government to start licensing rounds to invest some mineral resources, such as phosphates, and others.
3 – Preparing a new salary scale that takes into account the economic situation and achieves social justice and encourages the employee to leave the job with a set of privileges outside the framework of the job.
4- Prepare a special bill to reduce all allocations granted under previous laws by a certain percentage.
5 – Amending some transitional justice laws and laws that have concessions that are no longer needed.

Fifth: – Governance and automation
1 – The Ministry of Finance issues the e-dinar for the purpose of collecting government revenues and fees and what distinguishes them from being non-negotiable in the market as cash and thus we have reduced corruption in this aspect as well as the state’s knowledge of the value of those imports quickly, to be issued by a government bank It is not done through private companies.
2 – Encouraging and organizing electronic payment, obligating banks and institutions to electronic payment, and encouraging sales outlets in the private sector to use electronic payment devices without commissions and ensuring that their accounts are fed by the national exchange in the Central Bank daily.
3 – The necessity of automating the ports and customs and linking them to any process of transferring the dollar or opening bank credits for the purposes of importing and controlling the border outlets and preventing militias and gangs from controlling them.

Sixth: – Monetary policy
A – The exchange rate
1 – Begin to gradually reduce the Iraqi dinar price to reach 1500 dinars against the dollar until the end of the year 2020 and review the economic situation.
2 – And then start another reduction up to 1,800 within 6 months.
3 – Then we study the possibility of deleting the zeros, so we will end with a fixed price of 2 Iraqi dinars per dollar.
B – Methods to address potential inflation and the effects of reducing the value of the Iraqi dinar so that this procedure is accompanied by the following steps: –
1 – Increasing nominal salaries for grades five to nine and increasing social protection net salaries by 12% to reduce the impact of potential inflation on the
fragile classes .
2 – Amending the currency selling mechanism to maintain the hard currency inside the country and that the dollar and other foreign currencies are sold and traded directly in the currency markets or through the stock market in order to get a real price of the Iraqi dinar against the US dollar and that the guarantor of the prices is the value of the available reserve The Central Bank of Iraq has hard currency.
3- Government projects pricing in the investment budget in dollars and financing the exchange units budget for the investment budget in dollars.
4- Setting an import platform, stopping some imports, controlling customs outlets, supporting the tax system, and exempting the local product from income tax for a period of two years.
5 – The state imports commercial foodstuffs into the market and injects it into the ration program in the event of high prices.
6 – Supporting fuel for public transport, factories and irrigation projects, and giving high relative importance to the food industries.
7 – Pumping a hard currency to the exchange markets to maintain the price level of the Iraqi dinar, which prevents price fluctuation due to possible speculation.
8 – Activating the role of economic security and entering the relevant government agencies to control the cash rhythm in the currency market and the food market.

Seventh: – State property
1 – Liquidate the unexploited government assets from real estate, buildings, vehicles, furniture, etc. by selling or entering into investment partnerships
2 – Selling lands that were overtaken by those who exceeded them at the same price to give a justification for their recovery from those who do not pay (and vice versa it cannot be recovered and take out those who exceeded)

Eighth: – The private sector
1 – Raise the credit limit of government banks to give loans.
2 – Activating the central bank loan initiative and easing guarantees for industrial, construction and agricultural projects, while controlling payments and linking them to completion rates and opening credits to move the private sector.
3- Finding ways through joint financing or external borrowing to finance government-funded projects and completing projects with
high percentages .
4- Reducing the restrictions of letters of guarantee and their expenses for ongoing unpaid advances due.
5 – Displaying productive projects for the purpose of investing them by the implementing agencies in exchange for completing them and entering the service.
6- Moving the housing fund and real estate bank loans to move the construction sector, which withdraws unemployment, being the largest
employer.
7 – Increasing taxes on imported commercial products and reducing them from imported raw materials to encourage the national product.

07/15/2020

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