The crowd and the allocation of economic and banking resources efficiently for the purposes of production and development of the main requirements to achieve high and scalable growth rates to continue and this requires the presence of banking and financial system developed, and therefore, the reform of the financial and banking sector is working to create a banking and financial systems intact and able to compete at the same time enhance the overall stability and speed in the pace of economic growth. Perhaps that the main objectives of the reform include:
* Repair and upgrade of payments, clearing and settlement systems, which in turn contribute to facilitate payments.
* The development of financial markets and strengthen their capacity in the field of management of monetary policy.
2. Description of the Iraqi economy to perform:
Can be described economic performance in Iraq in several lines, degradation of economic performance at the macro level, starting from the early eighties and the internal and external levels is due to the following:
* For external level (the deterioration of economic performance due to Iraq's involvement in a long war-term with Iran, which led to the depletion of all reserves of foreign assets and entry in contributed to the increase in debt, added to the freezing of assets among global banks from the impact of the economic blockade of agreements by the United Nations due to the entry of Kuwait.
* At the internal level (mainly includes the deterioration of terms of trade and the reduction of regional markets, accompanied by an intermediate financial policies led to the degradation and increase the fiscal deficit and current account deficit of the balance of payments with the growing internal debt. In addition to the external debt and return of foreign reserves and the accumulation of Debates foreign payments as a result.
The deterioration of macroeconomic conditions in Iraq have helped to double the financial and banking system, making financial and banking systems is efficient in the allocation and mobilization of resources, and that the banking sector in Iraq is still a heavy structural imbalances reflected by the lack of competition and concentration contributions in the market, and can be diagnosed and structural weaknesses in the banking system as follows:
* Stay away from credit-oriented.
* Non-performing loans.
* Double the efficiency of payment systems.
* Weak disclosure and oversight.
* Weakness of the use of technology in the financial and banking business.
And reform of the financial and banking sector and edit it to be:
* State-owned, privatization and restructuring projects reform policy.
* Stabilization policy.
* Structural policies.
* Economic reform policy.
* Price adjustment and liberalization policy.
* Reform of the external sector and trade liberalization policy.
* Tax reform and the reform of public spending and budget policy.
In the area of tax reform and spending and the budget it must be pointed out the importance of the general budget of the main channel for economic reform, public The budget in modern public finance has become one of the most important economic documents state-owned because they provide information on the impact of government policies on the use of resources on employment and economic growth and income distribution within the level economy, also used the general budget to achieve the goal of full employment, and used as a means to achieve economic stability, and the general budget strategy based on the achievement of the foregoing. On aggregate demand change in the appropriate direction Mstkhaddmta taxes and expenses and must comply size budget and composition with the economic conditions of the country in order to achieve some desired goals and to avoid the effects of others desired, and here it must be pointed to the need for tax reform, spending and the budget to check the latest of economic goals contribute one way or another in the liberalization and reform of the financial, monetary and banking system (the effects of direct and indirect).
* Weakness of the general budget of factors:
- Overhead in the Iraqi government's budget is the administrative expenses of the first prize and transformative in second place, and therefore, the administrative expenses indicate a defect in the economic performance of the government.
- The dominance of indirect taxes on the tax structure in Iraq, which indicates to bear all segments of society and without exception the tax burden represented by the high prices of various commodities.
- The current situation of the Iraqi counterweight which focused on administrative expenses and in particular the salaries of employees who Atgulwn shoulders Almoisntin events at the expense of improving and productive change in the economic structure in feeding inflationary spiral has contributed to the trend, and thus not achieved the desired improvement in the living conditions of the citizens.
- Focus on the production side in all government ministries for work on the current in-kind and increase the volume of production in order to control the problems of inflation and unemployment Almtvshitan in Iraq.
- The introduction of an effective control system during the implementation of the general expansion joints and zero tolerance in this regard because it is the application of ways and means and methods of effective control that it would contribute to the reduction of administrative and financial corruption in Iraq.
- Encouraging the private sector, and work on coordination by the Iraqi government because the expertise and government efficiency are not eligible to work in some areas, which is the necessity and vitality of the community and that its components may be available in the private sector, and therefore, it requires certain modifications in the general budget, which must be characterized by the direction of encourage and support the private sector.
- Radical reform of the budget system is based on the restructuring of economic, financial, accounting and administrative related systems (public budget) takes it upon himself to preparation and drafting its goal plan basically Events reform integrated aspects to take into consideration the aspects and factors of environmental, political, social, administrative and accounting affecting the budget
- The only way to reduce the budget deficit in Iraq is expanding and diversifying the sources of public non-oil revenues and control government spending and reduce the pressure on the public budget factors.
- Restoring the balance of the state budget for the benefit of the investment program at the expense of operating expenses and this requires a robust private sector, as well as the flow of domestic and foreign investment into the arteries of the national economy.
* Financial and banking reforms:
As we talked about the government cycle using financial instruments (spending and taxes) due to their role in achieving some economic targets and contribute late in the process of economic reform, the financial and banking sector reform policies are also contributing to analyzed by the Iraqi economy and move it, reform of the financial system and banking in Iraq means create a financial system that is based on the factors and the market mechanism and is capable of meeting the requirements of a more liberal economy and the private sector-oriented and includes:
- Liberalization of interest rates and the gradual elimination on the allocation of credit and the trend towards factors and the market mechanism to finance budget deficits and move on to the use of third-party tools directly monetary policy rates.
- The restructuring of banks' portfolios and strengthen the legal and regulatory measures, which oversees the banking and financial sector activities and censor the form in which it is in line with international standards.
To achieve these goals must be:
* Rehabilitation of commercial banks in Iraq and in particular the Rafidain and Rasheed as one of the largest State-owned banks.
* The adoption of modern banking technology in order to speed up the privatization process and the mobilization of resources and increase the efficiency of the banking business.
* Increased financial and banking sectors capabilities through training and the development of high operational efficiency to be able to keep pace with the rapid and sophisticated in the field of financial and banking industry changes in order to be ready to meet the requirements of globalization and the provision.
* Integration of small banks with each other in order to establish the overall banks or what is known (banks Universal Banking), which helps to create a banking and financial system that is efficient and considered the merger and acquisitions fundamental means of some banks in order to expand its business and profitability and achieve economies of scale and create a capable financial institutions competition and the occupation of space and suitable place in the world of banking industry in light of the Basel Committee / 2 requirements.
* Paper submitted to the seminar held by the Euphrates Center for Development and Strategic Studies in collaboration with the Economic Committee in the holy city of Karbala entitled: (development of the banking sector in Iraq Karbala model)
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