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a. Dr. Abdul-Karim Jaber al-Issawi Hnjar *: Barter economically and commercially option to cope with the financial crisis in Iraq **

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a. Dr. Abdul-Karim Jaber al-Issawi Hnjar *: Barter economically and commercially option to cope with the financial crisis in Iraq **

Some might imagine that the countries of the world in light of economic globalization abandoned once and for all the issue of government control over the various economic policies (trade, monetary and financial). Certainly not true in absolute terms, there are many exceptions to the principles, rules and foundations in which it operates multiple international institutions parties concerned the movement of money and international trade capital such as the International Monetary Fund and the World Trade Organization, as well as the existence of social public institutions enjoy a degree of autonomy within the economic systems of capitalism It works to prevent monopolies When you touch these institutions that there would cause harm to domestic consumers from monopolistic practices of the companies producing the goods and services that the consumer wants Bagtnaiha. Accordingly, the developed legal legislation to limit monopoly. For example, the body overseeing the monopoly and acquisitions in the UK The Monopolies And Mergers Commission (MMC) [1] to regulate competition between companies and reduce the monopoly to protect the public interest, as well as assisting in the negotiations between the parties concerned to establish fair conditions between consumers and producers in terms of pricing. Therefore resort such bodies to regulate prices imposed by the monopoly established to reduce the impact of prices on consumers started. The aim of such an intervention to make the facility behave price and productivity policy as if they were competing facility, and this does not happen without government oversight and intervention of the competent public bodies.

We wanted to offer this quick to emphasize that the Western governments intervention in economic life is still in place and take different forms. We would like as follows expansion in the subject within the current Iraqi context of the financial crisis of the state. We will focus on the privatization of government administration pattern of international trade of commodity barter.

Style trade barter format has a long history not this domain appropriate to display differs from the cash trade, which is the exchange of goods for money (cash), in which case the seller accept the money because he knows that it is possible to use this money directly for the purchase of needed goods locally from the partner party or party third.

The style of barter trade (Trade-barter) in the modern era, which represents about 10% of world trade, it has been adopted on a large scale after World War I until after the crisis of the Great Depression (1929-1931) expanded adopted after World War II by all European countries (East and West) alike, because its currency were not transferable or acceptance internationally until 1958, the year the US balance of payments showed a deficit for the first time. As a result, Western European countries began to achieve a surplus in the trade balance with the United States after the success of the project (Marshall) for rebuilding, and coincided with the confidence in the dollar as the currency of bars in system loss (Bretton Woods) and the problem of international liquidity associated with constantly deficit in the US balance of payments.

All of these global economic and financial problems were encouraged to increase the importance of barter trade, which is often associated with the issue of the political economy of development, especially in the era of the Soviet Union (the former), since more than (15-20%) of trade between European countries (East and West) It was based on barter trade, and that nearly 60% of trade between the least developed countries and the Soviet Union (former) were commercial swaps.

Two is no different on the vulnerability of the Iraqi economy to a range of economic and financial problems, particularly the repercussions of the federal budget deficit, which is expected to last until after 2016 because of the following:

The continuing decline in the price of a barrel of crude oil after the agreement between Iran and the group (5 +1) and caused him to increase oil supply in the consuming markets, as well as the smuggling of oil and other reasons operations. As well as from non-OPEC countries are expected to agree on a reduction of production levels for reasons of regional conflicts taking place in the Middle East, which produces more than 70% of world oil production in the world.
The continuation of the payment of compensation to Kuwait on the basis of UN Security Council Resolution No. 687 to compensate the persons, institutions and governments and international organizations affected by the Iraqi invasion of Kuwait on August 2 1990 process.
Recourse to external borrowing and to rely on the commitment to the principle of condition (conditionality) and monitor the performance of the monetary policy for Iraq, and reducing the role of the public sector, and begin to impose specific taxes on the areas of consumption goods and services, such as taxes on telecommunications services, and the removal of subsidies on petroleum products, and start the entry into force policies Government austerity in many economic and social sectors (production and service).
Military spending rising for the Liberation of Iraq's provinces, which fell to the Daash terrorist, which is measured by the size of the general budget, and of course the ratio may reach more than 10%, this represents an enormous burden on the Iraqi economy in the event of continued long war. The question that arises is: why not Iraq resorted to this method, barter trade are temporary and urgent, especially since Iraq this method may adopt a pre-entry crude oil, a major component of Iraqi exports structure, specifically the post-revolution of 1958 the first pattern: trade agreements with General principles (open agreements), including the agreements that Iraq held with the socialist countries (previously) and the Arab countries of Tunisia and Morocco, as well as Indonesia's third and Aldnamark.alnmt: with the selection of values ​​of exports and imports trade agreements, Iraq has held such agreements with India and Pakistan, Albania and Finland. Among the most prominent agreements in this period include:
And Iraq had a number of bilateral agreements that explicitly referred to this method of trade, as it was guaranteed to get them on imports, especially of arms and military equipment, as well as imports stemming from the need to accelerate industrialization. The focus of most bilateral agreements in various patterns with a group of socialist countries (previously), and they represent an opportunity for the marketing of crude oil after the nationalization decision in 1972 and pressed the need for hard currency.
After the correction in crude oil prices in 1973, oil contributed to the development taking barter trade, where resorted many industrial consumers of crude oil to trade industrial goods and military equipment in exchange for crude oil. Then it reversed the equation when you encounter many of the major oil-producing countries during the eighties of the last century financial problems during periods of excess oil, which paid to the oil supply in the oil market as a way to ease the pressure of the shortage of hard currency.
Fourth Style: trade agreements with quantification of exports and imports, Iraq has held this kind of agreements with both China and East Germany (the former).
The second mode: with relative identification of exports and imports trade agreements, including the existence of a balance between exports values ​​with imports by (100%), as is the case in the agreement with China, and (25%) with both Romania and Hungary as a minimum for purchases of Iraqi products compared to the value of exports to Iraq, and amounted to 50% with Vietnam and North Korea.
In general it took the trade agreements in that period the following types:
The agreement with the Soviet Union (former) in / 6/1972 and they include the purchase of crude oil and imported goods exchanged for 100%.
The agreement with Poland on 11/16/1972 been identified as 60% of Iraq's imports of crude oil to pay.
Agreement with Bulgaria on 08.09.1972, which included emphasis on the Bulgarian side make a deal for the purchase of Iraqi crude oil for a period of three years and pay 60% of the value of goods exported to Iraq.
Long-term commercial agreement with Romania on 09.12.1975 and included the payment of 25 percent of Iraq's imports of crude oil.
Agreement between Iraq and Czechoslovakia (formerly) on 12.18.1973, has been agreement included a set of common principles in the concluded agreements with the socialist countries, in addition to confirmation, and according to the laws prevailing in both countries is permissible to conduct barter of goods between the two deals.
Trade agreement between Iraq and Germany Democracy (formerly) on 11.17.1972 and included the use of Iraqi crude oil to ease the pressure on the foreign currency assets, as provided for the payment of Iraqi crude oil barter payments by (90%) and (10%) and other Iraqi goods. This rapid review of the most important bilateral agreements held by Iraq in the past the importance of barter commodity in an environment of financial distress and the need to disclose the discharge of crude oil in exchange for goods of military and civilian equipment, without resorting to the use of hard currencies. Today, Iraq is experiencing the same economic climate that prevailed in the past, and perhaps the most dangerous of them because of the low crude oil price and bayonets against Daash circle. Therefore, we believe it is appropriate to return to this kind of traditional commercial exchange methods, This is especially made ​​an emergency landing to cross the current financial crisis Khanqh.oogira can be summed up the benefits of using this type of trade is as follows: First: The suit barter trade of goods subject to large fluctuations in prices , and this applies to the sale of a barrel of crude oil price currently. Second, consideration could be given to barter as a kind of censorship, indirect, on the foreign exchange to meet the imbalance in the balance of payments and reducing the depletion of cash reserves Alajunba.thaltha: Work to reduce the priority use of cash foreign imports of luxury goods and consumer non-essential priority of the conversion to the use of foreign exchange in the purchase of capital goods and service Aldenalforeig .raava: avoid deterioration in the terms of trade.
Fifth: the establishment of long-term contracts to ensure permanent drainage of goods in major exports such as crude oil structure along the lines of what was done by the Gulf States in holding long-term agreements for the sale of crude oil to buyers of key oil in Asia.

We hope to have opened the door for expansion in the discussion of the financial crisis of the Iraqi state from a different perspective and propose effective solutions to this crisis.

(*) International Development Professor, Faculty of Administration and Economics / University of Qadisiyah

(**) I extend my thanks and appreciation to colleagues in the Editorial Board on their observations valuable and useful as I wish all colleagues in the network more success and progress.

Copyright network of Iraqi economists. Permission to quote and re-deployment, provided reference to the source. 05/09/2015

[1] since April 2014 changed the name of this body to be the Competition and Markets Authority

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