Finance Minister: The situation in Iraq is very critical ... the size of the debt constitutes 90% of the national product
Editing date: 9/8/2020 19:19 • 63 times read
Finance Minister Ali Allawi said, Tuesday, that the Iraqi economy is very critical due to the repercussions of previous cumulative policies, while noting that the total debt volume constitutes 80 to 90 percent of the Iraqi national product.
Allawi said during a session hosted by the House of Representatives, that "the economic reform program needs a long time to present it because the economic situation in Iraq is going through a critical situation due to the repercussions of previous cumulative economic policies that passed on the Iraqi state since the fifties of the last century until now, especially the legislation of the law on agricultural reform."
And the decisions of the socialist package, in addition to the loss of the economic vision that weakened the private sector and made all resources in the hands of governments," noting that
"the current government suffers from a scarcity of funds that forced it to borrow internally and externally and cannot implement the presentation of the paper within the period specified by the law voted on."
He noted "the formation of a specialized team with a cadre of 40 employees working continuously to work on preparing and submitting the required paper despite the current health conditions," noting that
"the reasons for delaying its submission are technical and historical, setting the ceiling for the government's submission of the first negotiable reform paper at the end of this month."
The reforms paper will be presented in its final form in the middle of next month."
Minister Allawi pointed out that "there are three types of loans, including commercial that the Iraqi government has moved away from, borrowing from governments and the third by borrowing from international development institutions such as the World Bank and the Arab Fund for the purpose of investment, especially those related to the requirements of improving the electricity sector through activating previous economic agreements with Siemens and General Electric Company," stressing
"the importance of reviewing the exchange rate so that the Iraqi economy enters the cycle of competition with the interest of the International Monetary Fund in the issue of the exchange rate, and the Ministry has received an amount of 15 trillion dinars in full to meet the needs of salaries."
The Minister of Finance pointed out, "The need to borrow was to support the general budget and fill the financial deficit without giving support to investment projects," explaining that
"the trend to borrow from the International Monetary Fund comes because it has specific programs in support of countries suffering from financial crises, such as Iraq, with loans for a period of three. Years on condition that they are linked to administrative and financial reforms."
He pointed out that "the government has opened communication channels with the International Monetary Fund because Iraq does not have a source for internal borrowing except the Central Bank of Iraq and the absence of accredited financial markets in Iraq, in addition to the fact that government banking institutions are overburdened with debts to the government to finance the financial deficit in budgets and private banks have no financial financing."Large".
He explained, "Carrying out concrete economic reforms requires 5 years by finding new alternatives for revenues," noting that
"the total debt represents 80 to 90 percent of the Iraqi national product, and the foreign debt is 160 trillion dinars, including the debts of Kuwait and Saudi Arabia amounting to 40 billion dollars," Citing the lack of a possibility for the Ministry of Finance to count the monetary mass in Iraq.