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Iraq is facing the most difficult year financially and gambling in a dangerous game by endorsing "scary balancing"

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Rocky


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Iraq is facing the most difficult year financially and gambling in a dangerous game by endorsing "scary balancing"




November 10, 2015 0



Iraq did not find him only large loans which convinced the International Monetary and Financial Fund and other international granting them to face the most difficult financial year, which brought together the country's accumulated problems months ago and more years ago, surprised by the Iraqi government.

Government Abadi, represented by the Ministry finances and recognize that 2016 will be the year the most difficult financially, but at the same time did not take action that would put the solutions that could mitigate the impact of the accumulated pressures embodied in the form of a double shock for Iraq, which fought economically in charge of terrorism on the one hand and suffering declining revenues on the other.

Vemoazinh 2016 approved by the government in the eighteenth of October, and arrived at the House of Representatives days before the pending vote on the deficit ratio which stood at 26.5 percent of the total expenditure of 113.5 trillion Iraqi dinars, or that the scheme deficit has approximately 29.5 trillion dinars as Total revenue of 84 trillion only.

This problem of the budget is divided into two parts, the first of respect to the probability of the inability of Iraq to achieve total revenue of $ 84 trillion and the second primarily linked helplessness of 29.5 trillion, which will enter its coverage of Iraq mechanisms in the financial maze do not know the end.

Speaking on the first part of the problem, this budget was based on crude oil sales revenues by 83 percent of the total projected income any 69.7 trillion dinars out of 84 trillion, a figure that is difficult to access it with no reassurance that oil prices in the global market would be consistent with price set by Iraq in its budget of US $ to 45, as well as lack of knowledge of whether the specific export ceiling 3.6 million barrels per day in the budget would be possible at the time.

The rest of the revenue provided for in the budget, amounting to (14.3 trillion dinars and to be covered from non-oil revenues may be is also not possible in case things were not as planned by the government, especially as it relies on taxes and fees and other subject to change between on revenue and the last.

The second part of the budget and of the planned deficit him it stems from the mechanisms to obtain sufficient funds to cover this deficit are at most a loans and international bonds may provide for Iraq what he wants over the next year, but the worsening of problems in the years subsequent It is interesting that the budget suggested the issuance of Iraq International bonds which officially retracted.

All of these reasons and put the Iraqi government's actions against the major question and concern of economists who do not seem reassured that the next year will pass in peace with all the other problems facing Iraq starting Bmadilth security through political Bozmth and the end of many others.

Other oil states such as Venezuela, for example, although the other circumstances better than Iraq, but did not enter itself in the swirling undesirable consequences, and even been taken into account plans described globally daring to avoid fluctuations in the mood of the global oil market by reducing the price fixed at $ 40, not 45, as well as not to resort to foreign loans as Iraq did.

He says Bassam on behalf of an economic researcher, "the Iraqi government venture but a gamble in a dangerous game of unpredictable consequences attitudes, optimism can not lead to positive results as soon as optimism without that there is Answer each question for the consequences of each step the government decides to take."

And adds the name of the "Select oil price is high and the high ceiling for export and to develop is uncertain of non-oil revenue numbers and rely on all large loans scary indicators of what will be the economic situation of Iraq if there is no clear line of the government towards access to adequate resources to pay for all these amounts set out in the budget ".

The show as the fear of the inability of the Iraqi government from the repayment of loans that are trying to make use of them to fill the budget leads to larger deficits in subsequent budgets of the country's deficit, which means the crisis deepens gradually moved from year to year.

International parties also entered on-line expressing concern that the Iraqi government mechanisms for the payment of the budget like the United States of America that have expressed these concerns openly Finance Minister Hoshyar Zebari, in the words of US Assistant Secretary of State for Financial Finance and International Development Ambassador Lisa Kubiski during the International Conference of the World Bank and the IMF deficit International in Lima, capital of Peru.

However, the major international institutions such as the IMF and other banks and institutions believe that Iraq will not suffer from a liquidity crisis, although it was officially dropped from the issuance of international bonds because of the lack of contentment donors to this what drove her to impose high interest rates almost to strangle Iraq for many years.

The IMF is the rest of Iraq to grant a loan did not reveal its value after but it will fold emergency funding, which was approved by the Fund in July, and the $ 1.24 billion.

He says Masood Ahmed Director, Middle East and Central Asia Department of the Fund said that "the fund may give Iraq a large loan in 2016 to help him achieve financial stability, at a time when Baghdad suffer because of falling oil prices and the war being waged against Daash".

He adds Ahmed said "Baghdad is not currently in danger of running out of cash because they can postpone investment projects and rely on the financing of the central bank if necessary, but the government needs to develop a clear and comprehensive plan to reform the finances and the program of the International Monetary Fund could help in that."

Ahmed also hopes to build what he called a record of the application of policies to be the basis of another program funding from the International Monetary Fund later than 2016.

Iraq is counting on such a large loan and other loans referred to in the budget deficit coverage but also go beyond it in reliable in the face of any possible emergency.

It seems that the pressures imposed by the need to pay for the war against terrorism and operating expenses driven by popular protests in the country, as well as dues oil companies operating in the country which provides the most important supplier, are all factors that make Iraq risks in approving the budget seen by some scary, financial problems may be the lesser of which of other problems, particularly that related to security or Panevlat out for protests, for example, control of, or failure to oil companies to perform their work.

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