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Grapes of financial wealth in Iraq: between recycling and accumulation

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Grapes of financial wealth in Iraq: between recycling and accumulation

D. Appearance of Mohammed Saleh

Not create financial wealth and achieve sustainable in the economy leads the market in which a pivotal role in the acquisition of a fiscal surplus possible in a centrally severe rentier take the expenses budget not less than 75% of GDP, which is the source of oil revenues, while enjoying the market axes and diversity weak foundation of both productivity and investment capable of absorbing surplus Central and generate a high density of capital accumulation through powerful levers of financial wealth. And he can not achieve that wealth only through strengthening financial centers of capital and the integration of the various forms of capital in the phenomenon of financial capitalism which is based on the generation of profit Altdharba and increase money and maximize accumulation.
Indicators available show that 20% of Iraq's population GRIP 40% of the national income and the bulk of that wealth and accumulations of Finance is from sources of financial speculation and trading high-profit low value-added depth to inequality in the distribution of income and wealth and generated at the same time to use incomplete. As the labor market is still teeming with Iraqi disguised unemployment rate of 28% of the total labor force 8 million Iraqi workers. And noticed that with the severity and intensity of financial capital is the product increases the severity and intensity levels actual unemployment and underemployment and underutilization (underemployment) in proportion to the percentage of acquisitions of financial capitalism on income and wealth Aloutnatin. After losing financial capitalism itself any tendencies towards real investment and income-generating product High use.
In economy purely financial magnified when oil export earnings being spent through the general budget in the investment environment and productivity internal weak, it is expected very country's vulnerability to situations dense flow of capital abroad capital outflow to settle and turns of dollarization cash internal to various forms of dollarization financial and diversification in a broad spectrum of tools in the financial markets in the case of foreign-oriented long-term investment.
Although, recycling and maximize capital accumulation had accompanied foreign trade financing of short-term nature. Financial capital as it benefited from the phenomenon of editing the current account of the balance of payments committed by Iraq pursuant to the provisions of Article 8 of the Convention on the International Monetary Fund in a difficult environment whereby the definition of financial capital flowing abroad and which Adgham in current account operations for the balance. So it is difficult to distinguish between trade finance within the current account or movement of capital abroad in the financial account of the balance of payments.
Monetary policy, which is still its intervention daily in the exchange market to maintain the stability of the Iraqi dinar has become safe passage to financial capital free flow to Hawwadhanh Foreign through trade-based financial freedom of foreign exchange dominated mechanism is too vague and levels and structures complex in the capital market we call movements cluster financial financial cluster movements and according to two different levels:
The first level is the recycling or trading financial wealth in Iraqi dinars and distributed from one owner severe concentration (financial cluster President) to a broad spectrum of smallholders and temporary tenants
(Small cake or workers) who unavailable, has a record tax or trading holds transfers small amounts through money transfer companies that are longer customer bank to enter the auction sale and purchase of foreign currency in the Central Bank of Iraq, as led such behavior to focus 93% of the transfers this pattern of trade cluster, where they accumulate financial transfers these small clusters at the expense of the original owner in outer bank transferee a correspondent bank located, for example, in Amman, Dubai or Beirut or Istanbul .... . In this small clusters gather in one main cluster is the first owner of the actual wealth that began after he turned dinar to the U.S. dollar out of the country. With this you get sub-clusters on the crumbs of revenue while the owner will take substantial financial cluster formation of new business clusters (ie, clusters of financial sub-clusters commercial subsidiary). Vannaqad commercial subsidiary represents at this stage that the vast amount of traders enmeshed in trade consumer in Iraq and they need to finance their trade amounts of money small or medium to meet profit remuneration of the cluster large fiscal whether to proceed business or in the sale of money in cash, and the re-collection or refund with profits Iraqi dinar will be inside Iraq, which is equivalent to the value of the amounts transferred plus financial trading profit or business to maximize the participation of accumulation. With this complete business cycle - recycles financial fiscal surplus ethics investigation and the formation of a new financial cluster top the value of the Iraqi dinar be a prelude to a new financial business cycle.
The second level of the evolution of clusters of Finance is the stage that became subject where all customers bank when entering the latter to auction foreign currency, which requires submission of a document the bank account of dealer per martyrdom tax annual list of commercial certified by one consulates Iraqi trade abroad (bills) with a vacation import issued by the Ministry of Commerce said available. And that this measure, which began in the second quarter of 2012 and adopted auction CBI came out of recognition on the basis of customer information real according to the principle of know your customer kyc that comes for the purposes of action against money laundering and not for the purposes of trade finance or distribute shares in foreign currency traders to finance their trade as perceived lot in common mistakes in our country, especially those who Chost have the picture, that auction CBI has shifted from a means of monetary policy to adjust the levels of liquidity and sterilize surpluses of the Iraqi dinar (ie to maintain a stable exchange rate of the dinar) turned into a financier of private sector trade is fatal mistake, which struck melancholy monetary policy and on the Central Bank in accordance with the understanding Almkhtu for many of those concerned and the central bank may Lamcy commercial banks layman like is funded by private sector trade without understanding monetary policy tools and open market operations in which its role in stabilizing the Iraqi dinar exchange rate.
External conversion activity
And notes that the financial cluster President has entered himself in this time more clearly to the conversion activity outside the window of the Central Bank Representative and auction of foreign currency alongside the main financial and clusters younger then younger than real traders who practice foreign exchange activity. But striking that monopoly financially taking shows here and there to keep foreign currency because of a difference exchange rate which averaged about 4% for increased seven months, which sparked the conflict between the owners of financial wealth (Grapes of wealth) and between (clusters commercial), according to detail level first. A conflict without a doubt to maximize the economic surplus resulting from the different exchange rates.
Regardless of this and that, and because of regional conditions surrounding Iraq and know that customers banks who benefit from auction of foreign currency are Iraqis exclusively and not as rumored at the time of entering foreigners to the auction through the banks as required Find Iraqi trader real reasons related to combating money laundering in Under exchange system adopted and defend a fixed exchange rate and stable. Were demands office, money laundering and the Central Bank that encloses merchant adapter list buy certified (bill) shows the value of the imported goods and nationality and personal merchant importer and which should correspond to the information base merchant all whether to cite the tax or in a document bank account.
Foreign currency auction ..
I made bunches of financial wealth in this stage to buy or lists bills to enter the foreign currency auction distinguished from other small business clusters. Fncod money president who represents the trade money class basis had to be to submit a list of purchase or invoice for a single commodity seem strange amount he knows himself that he did not give these quantities of the commodity authorized in the bill or list purchase, but is merely an exercise to function monopoly in the sale of money into clusters trade Small transferred out of the country after the intervention in various items of what is authorized in the bill cluster President wealth. When investigating the content of the list of original purchase or invoice authorized'll find in front of nothing of goods flowing into the country. But the real thing that the financial cluster per President has funded dozens of small business clusters, something that can not be detected and can not know and matched with a list of purchase or bill the large cluster of financial wealth. And is the mechanism certainly be offset by the collection of financial Iraqi dinar added him profit margins for financial cluster-free supply of goods but will certainly match Thoilath financial flows from the center of commodity trading was not involved in the auction of foreign currency, a pattern referred to in the first level.
This paradox comes because of the dominance of the main clusters of financial wealth (financial capital) and its superiority on small business clusters (commercial capital). Thus, the dealer money achieves surplus and Trakmath via invoice phantom authorized by turning later to the commercial invoices partial but real or bunches business generated outside the country and base information is known but is charged for it again in Iraqi dinars inside Iraq in bunches small financial to coalesce cycle wealth بعنقود great for someone one or a few wealthy people again and they money. With this achieved enormous and continuous accumulations of wealth funded financial trade because they have easy entrance and leverage strong liquid within the banking system to enter the foreign currency auction. And then holds the banks its Cdolab in recycling trade money and turn it into a trade finance through the cluster chain research topic.
The mechanism of formation of clusters of Finance - commercial and re-docking property again in the concentrations of the financial capital of Iraq through the mechanism of an auction CBI are movements do not provide adequate disclosure and transparency necessary for rival money and foreign trade to and from the Iraqi market, which came as part of financial liberalization and trade of Iraq after year 2003. also claim that the flow of trade to Iraq represents a small fraction of the flow of money abroad is weak but belief dictated the ambiguity of the movement of such phenomenon interpretation difficult financial clusters. As out bunches of money according to the mechanism mentioned above order does not match mathematically with the flow of trade entering the market within the invoice or purchase list of authorized and approved by the clusters of financial capitalism or the main cluster of financial wealth. Vaharktan different according to disclosure rules despite our firm belief that 75% of those financial outflows match trade inflows and the remaining difference is either to finance trade in services (trade unforeseen) or settle Kadkharat pour in foreign repositories of wealth outside of Iraq. And these partial Whatever size called today the phenomenon of capital flight, a phenomenon that has not identified purchase invoices held by financial wealth and cluster which disclose in front of banks to get foreign currency from the central bank auction. We did not know until the moment that the laws of Iraq allows or does not allow the free movement of capital abroad.
Liberal financial
Legislation window are the other is clear in this matter when assessing the level of liberal financial in Iraq and you are complete freedom really or limited freedom of movement or move after canceled CBI Oversight Service (control) on foreign exchange and canceled control procedures of foreign transfers all since more than five years ago. And that this ambiguity taking line and the mystery that surrounds the interpretation problematic current economic system in Iraq and the level of Abralith vague and degree of transmission of a centralized economy to a free market economy!!
The way out of the controversial liberal foreign exchange in Iraq and marked at the levels mentioned above. In time sees a lot that trade financing in foreign currency for the benefit of the national market in the conditions the current economic situation of Iraq, where the source of the flow of foreign currency inflows are oil export earnings are concentrated reserves the Central Bank or cover currency, which requires that takes trade finance another type, if McCann there believing in keep the main role of the capitalist state and made available to the foreign currency with free market disciplined, would lead us into the adoption of the proposals is consistent with the scenario of coexistence between the dominant state capitalism and financial capitalism and civil creating harmony for the benefit of the national economy according to the following proposals:
First establish a follow-up of foreign trade to the private sector, funded through the open market operations of the Central Bank foreign currency holds the body mentioned follow up the implementation import licenses of those who received funding in foreign currency from government sources such as the Central or operations or other state institutions financial so relay goods entering through ports and customs checks standardization of quality control and others.
Secondly The CBI sale of any amounts banking sector wants to buy for the purposes of its business, including to Aatqata what came in above.
Third start applying trade financing mechanisms through open letters of credit or documentary collection and activities granted import license on the condition that banks preparations available and the capabilities to conduct this type of trade finance, which lacks at the present time.
Fourthly buy banks foreign currency for itself for its purposes, provided disclosure of its operations.
V. extent that clear when that Iraqi legal system provides the legal basis in the interpretation of capital inflows into Iraq, especially foreign investment is direct in Iraq, which is in real activity based on the Investment Law No. 13 of 2006, the laws of the Republic did not disclose its position on the issue of capital national money flowing to overseas, especially after the abolition of restrictions on external switch, which was imposed by the Central Bank Law No. 64 of 1976 repealed. As the Central Bank of Iraq itself was not the other and clear in its position on Article 14 of the Convention on the International Monetary Fund, which left for the temporary suspension of countries to the free movement of capital abroad subject to consultation with the fund itself and to prolong ID. Based on the issue of liberalization of the financial account or the balance of payments capital. While imposing the Fund Convention Liberation full current account of the balance based on the provisions of Article 8 of the Convention Fund. Based on the foregoing, we have to explain state procedures on the subject of freedom of movement of the Iraqi capital out of Iraq and ceilings permitted and non-permitted, if any, per person per natural and moral.
Finally must create an information base for natural and legal persons with transfers continuing as part of the work of the Anti-Money Laundering whether the funds sold through an auction foreign currency to the central bank (as a market central) or transferred from outside the auction within the database comprehensive information to see movement foreign remittances.
 deputy central bank governor


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