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Fiscal sustainability is the cornerstone of economic reform

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Fiscal sustainability is the cornerstone of economic reform

Samir Al-Nasiri

Samir Nasiri *

The observer and observer of the role of economic institutions during the lean years that Iraq has gone through and is still going through since 2003 with regard to managing the Iraqi economy notes that there are failures, challenges and repercussions related to the loss of methodology, lack of clarity of policies and programs, and the inconsistency of strategies prepared in partnership with international organizations, experts and Iraqi advisors with the reality The Iraqi single-resource economy, which depends mainly on oil rents, has led to a structural and structural defect in the economy, the lack of stability in the financial system and the monetary system due to the deficit in revenues, the oil deficit, the deficit in the balance of payments, the deficit in public budgets, and the lack of coordination between the fiscal and monetary policies, in addition to That's mismanagement of public money.

In addition, the private sector was not given an effective role in making economic decisions..

All the above failures, in addition to political and security instability and the war on terror, led to economic instability and deficiencies in the visions to build a solid national economy capable of drawing the preludes to the transition to a market economy.

The above failures and challenges have created a fog and a pessimistic outlook for our economic future among our people and many of our economic elites.

However, many economists, financial and local and far-sighted experts believe that there are promising points and experiences that some economic institutions have undertaken during the past 18 years, clearly and effectively, which are the years of the stifling economic and financial crisis, and one of the most prominent bright spots in this process is the experience of the Central Bank in supporting the national economy with its governorate.

The most important thing achieved in the Central Bank is its contribution to achieving economic resilience and enhancing financial sustainability in crises.

Through implementation and development measures and building balanced relationships with Arab, regional and foreign banks, and its strategy for the past five years, in addition to the results achieved on the scope of domestic monetary policy applications, and convincing international financial organizations, the most important of which is the official reports issued by them, confirm the success of the central bank’s policy in achieving an important transition for the Iraqi economy from the gray stage. To follow up periodically.

As far as we who are interested in the economic, financial and banking affairs know in the implementation procedures of the means of monetary policy applications, the bank has played a major role in supporting the national economy and strengthening the state treasury in addition to its numerous contributions and initiatives to stimulate the economic cycle, enhance liquidity at banks and continue to pay the salaries of employees and retirees, and the entitlements of contractors and farmers, and reach To re-extend coordination bridges between the fiscal and monetary policies and to propose economic and structural policies for preparing public budgets for the coming years and attempts to restore confidence in the banking system.

The Central Bank has demonstrated its clear ability to interact, analyze obstacles to work and create conditions to overcome challenges.

However, there is still a long way to go in front of the Central Bank and the relevant government agencies.

In order to reach a sound national economy building, therefore, I invite economic elites to interact with bright points and experiences and sing them with their ideas, visions and proposals to build a solid national economy, overcome challenges, correct wrong paths, and in transparent and calm dialogues.

Because maintaining the spirit of economic steadfastness and financial victory and proceeds to ensure the financial sustainability of the coming years coming for the most prominent reasons that the Iraqi economy is based on oil and depends on its oil resources in mainstream and causing its prices worldwide decline and a rise between 20% (20% - 70%), cars and imbalances in the management of the economy The lack of clarity of vision, economic curriculum and the ventilation of the organized legal environment for the management of economy and money.

And the lack of a sovereign fund in years of financial abundance All this coincided with conditions of fragility and instability, which led to the country's burden of additional economic problems and large financial costs, which were reflected in the increase in the unemployment rate and the percentage of the population below the poverty line.

This required the government, its agencies, institutions, advisors, and economic elites to reconsider plans and programs to overcome the weakness and fragility that were diagnosed by national and international reports, with trends that require national sensitivity and real and sincere intentions for change and reform.

And that a new economic methodology is adopted

by diversifying the sources of budgetary resources,
moving the economy from rentier to productive,
establishing a market council,
engaging the private sector in making economic decisions during the next five years and
leading the market in accordance with Iraq’s 2030 vision

* An economic and banking advisor
Number of observations 205, date of addition 04/05/2021

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