Long live Iraq and Iraqis difficult situations since 2003 , on the political and economic levels, as was the goal of the Coalition Provisional ruling authority on the economic level , the transition to a market economy, but faced significant challenges, spelled the appearance of Mohammed Saleh adviser and economist Prime Minister Wahid al - Abadi, was the first and foremost terrorism , which form the biggest challenge to the Iraqi state, and challenge the other is the financial crisis, because of the rentier economy of Iraq , which is based in the budget on oil by 93%, and this in itself is a challenge, which puts the country in the event of a warning and exceptional case, as the oil drop from $ 105 a barrel in Nhi Of 2013 - the beginning of 2014, to the level of $ 30, means that Iraq loses 65% of the value of revenues.
Saleh confirms that the financial situation is still difficult and is difficult to do the following:
- weak cash flows; due to lack of achievement, and the lack of oil resources.
- The weakness of the tax system in Iraq , which "enjoy tax holiday."
- Iraqi monetary system was based on the so - called coverage of partial, and therefore, the foreign assets constitute a simple cash cost a fraction source in Iraqi dinars, while the monetary system was adopted after 2003 that all the Iraqi dinar covered foreign currency rate and a half times, and is therefore itself a currency tough; either gets the dinar or the dollar is a matter of neutral, and the problem remains the value of the Iraqi dinar, as it is still the central bank defends them in normal conditions for the reasons:
- precautions to defend the value of the dinar by the board of the Central Bank, which is the only body that keeps the value of Dinar presence of certain lines that can not be exceeded.
- the purchasing power of the dinar linked to the purchasing power of income, any cut or discount on entry directly affects the purchasing power.
Because of a rentier economy, and the adoption of the private sector on foreign currency resources in the state, and the lack of exports from Iraq; Iraqi society turned into a consumer society, since there is a productive private sector, and figures imports very large consumer goods, and here must maintain the stability of the value of the currency, and this is subject to currency flows.
Central Bank reserves of currency
Salih stressed that the bank of the Iraqi Center was relieved of its reserves, and the situation is stable, indicating that the "bailout" which dropped daily, weekly, monthly and quarterly through a meeting of the Council of Ministers, scrutinize and examine the economic situation, and examine the budget revenues to maintain sustainability Finance, must be flow to meet the requirements prioritized, and on top of that the fight against terrorism, then the employees ' salaries , there are
more than 4 million government employees and 3.7 million pensioners, is added to them two million Iraqis are registered, under what is known as a network of social benefit and receive salaries XUE LBP lift them out of poverty. According to the system, the dependency of each one is responsible for four people , which means that all the Iraqi people receive salaries from the state directly and indirectly.
The Ministry of Planning raise the alarm , which began threatening the body of the Iraqi state and the future of development in a country that forced his government to borrow for the third year in a row to secure the $ 42 billion a year to cover its operating budget. Which include sub - budgets for revenue operation and expenses, which is a comprehensive detailed plan and control planning tool and standard for performance evaluation, and works of the Iraqi state for its part to support the private sector to work again in the local market, and requires that legitimize his work to contribute to economic development.
According to the Ministry of Planning said « The only negative here is that we are rentier states that depend one resource governed by a global market, which leads us to the constant danger».
Saleh revealed that « the new state called 2030 strategy included many solutions able to get rid of the adoption of citizens in the full form of the job in the public sector, and the trend towards the private sector with sufficient guarantees provide them to live even when leaving work or retirement file».
Adopt 2018 fiscal consolidation budget by reducing the deficit and the accumulation of debt, by reducing unnecessary expenses, and coincides with the tightening of the Iraqi prime minister, Haider al - Abadi to reduce the operating expenses of the three presidencies, and this is a great sign of Ebadi to start the reform of the pyramid, to maintain financial sustainability .
Saleh confirms the existence of important sectoral budget Aklvan states a hard number, but they are susceptible to maximize their resources, the two sectors of customs and electricity, so the government is constantly in activating laws and regulations on taxes , electronic collection and consumer protection.
Saleh pointed out that «the 2018 will see the opening of the Market Council , which includes representatives from the public and private sectors to reach the market economy, rather than the oscillation between two different economies, socialist and free them».
And he demanded that the Vice - Chairman of the Committee on Economy and Investment parliamentary Nora Albjara to develop the private sector and the enactment of laws to protect employees and «actually begin the application of the five - year development plan».
She said that «functional body is now suffering the slack and reached saturation explosion, as the state employs a third of its population in the government sector and think about where the individual does not exist that unemployed if you do not find a government job, even if there are laws that protect it in the private sector and gives him the same privileges of in the public sector, the government asked for the job. »
She said «It is time to change the culture of government function and legislation of the Social Security Act , which guarantees workers in the public sector pension, and will soon reach equality between the two functions, but the most important way to develop the private sector , which is still hesitant to work locally, and the number of operational opportunities are still substandard »
And the private sector Ismail Abdul Hussein representative , who served as Deputy Minister of Labor and Social Affairs said: «we have developed with the study of experts that would end the youth orientation towards government jobs and turns them into the private sector, and we are currently in the process of holding a series of meetings with various ministries , officials and the House of Representatives , to enact a law that allows us to work within the law on a new approach applied in a number of countries and succeeded dramatically ». He explained that the plan provides for the «establish a body or another name for the operation of the unemployed through lending operations group, ie , for example , every 50 young people granted a loan on and start a company to be under the supervision of the developer which approved the investment law, which it determine the feasibility in detail all of the study.»
Abdul - Hussein pointed out that «public companies proved its failure, but in the event of the establishment of private companies will be successful, because they rely the foundations of profit and loss and is not guaranteed a salary end of each month , whether worked or not.» He concluded that «all young people get a loan for their project does not exceed the duration of 7 years, and must be within the feasibility study of the project to repay the loan during this period.
The benefit to the developer who is a feasibility study and design of the project, it must be placed no more than 15 percent of the capital of the project, to be the payment of the amount of the developer through the project and profits during the term of the loan. »
The private sector is
moving all eyes towards the private sector and its role in the Iraqi economic system change contributes to economic growth and stability, and the diversity of the country 's resources, and out of the rentier economy into a diversified economy , ie maximizing non - oil revenues, and in this context , it has set up many institutions have taken a number of measures and programs for shift towards the private sector and the gradual liquidation of the enterprises of the public sector without hurting the labor force through which involve them in small and medium projects received government support.
But most of these programs remained a dead letter because of the lack of realism was being recipes ready to shift towards the private sector is far from economic reality in Iraq and its requirements, in addition to the state bureaucracy that hinder development.
A good example of the success of the private sector in Iraq carried out by MAS Holding Group set up four plants to produce electricity, and factories for the production of cement and iron smelting.
He said the economic and banking adviser Samir Nasiri: In order to strengthen the role of the private sector , the government must take the first place the establishment of a Higher Council for the private sector is composed of representatives of the private sector and the government and assume management and supervision, audit and evaluation of programs and policies designed to industry decisions required to achieve the central economic objectives in partnership and cooperation between the private sectors and the year.
This means the involvement of the private sector a greater role in economic decision - making and leadership of the market industry through the following:
* Improved business environment in Iraq and the provision of encouraging investment climate to attract national and foreign capital and encourage the achievement of partnerships between the public and private sector.
* Work on the creation of a new legislative environment based on its terms of reference to Article 25 of the Permanent Constitution, strategies and laws on economic reform and the development of the private sector to ensure its activation and leadership of the market in the future.
* Sustain the partnership, dialogue and cooperation and activated between the private and government sectors.
* Policies, mechanisms and strategies in the implementation of the follow - up to resolve the transition to the programmed stages of time - to - market economy.
* Work to provide additional sources of financing of the general budget of the State to adopt resource development and diversification towards raising the proportion of other resources in the non - oil GDP.
* Cooperation to ensure the implementation of the central plans in the provision of infrastructure to encourage and develop the private sector in industry, trade, agriculture, tourism and mineral resources, energy and services, and the development of small and medium - sized enterprises, comprehensive and sustainable development Pmaahakq
* Activating the role of specialized banks and private banks to provide soft loans to the national private sector.
* Coordination and cooperation with the ministries of financial and statistical institutions involved in building a statistical base and financial information and ensure transparency.
* Actively participate with the government in the implementation of the restructuring of public companies and facilitate partnerships with the private sector actions and contribute to the quality assurance standards for local products and services and imported.
* Encourage private banks to invest in economic projects so as to enhance the proportion of its contribution to GDP and to speed up legislative amendments to achieve this goal.
Iraq in 2030
The National Development for the years Draft Plan (2018-2022) will lead to a democratic system of political economy of Iraq is approaching the concept of (state - market / social), which will lead inevitably to the birth of the objective conditions in achieving the goals of the social market system of the three pillars:
First: Creating market: any generating patterns of institutional ownership , which is based on the system of companies and facilitate the registration and approval of procedures by simplifying general policy is moving towards improving the business climate.
Second: market financing: by directing the energies and turn them into soft lending to market forces product oil rents resources (funded by the supplier 's sovereign lending funds, for example, lending program of 5 trillion dinars to the private sector from the Central Bank of Iraq).
Third and last: Market Protection: unified national retirement state and the private sector fund, and so the state will ensure competitiveness, protect and prevent monopoly and spreading state of economic and social welfare, through the promotion of efficient production and equitable distribution of entry and wealth which is the philosophical structure that are supportive of the sustainability of the market / social, and this was confirmed by Saleh to build a diversified national economy , according to the private sector development strategy until 2030 (*).
(*) Financial and economic adviser to Iraqi Prime Minister this is what posted on the Iraqi economists network in September 2017
Shatha Khalil , a researcher at the
links Center for Research and Strategic Studies