Sovereign funds and facing financial crises
Sunday 04 April 2021 151
Baghdad: the pillar of the emirate
It has become necessary to establish a sovereign wealth fund to limit the effects that global financial crises create, which are occurring periodically, as this sovereign fund represents one of the pillars of achieving economic reform, as a tool for financial and economic diversification and a focus for economic reform.
Member of the Strategic Center for Arab and International Studies, Dr. Ahmed Omar Al-Rawi said: “Despite the issuance of the Public Financial Administration Law No. 6 of 2019, which stipulated the transfer of the surpluses of the state’s public budgets to the sovereign fund, this fund has not been established to this day, despite the existence of the capabilities to establish a sovereign fund through the establishment of the Central Bank of Iraq, To transfer $10 billion from central reserves to the establishment box".
He pointed out that the Ministry of Finance must commit to allocating no less than 5 percent of oil revenues annually and from the estimated oil price differentials achieved from surpluses in the general budgets. To contribute to building the large port of Faw and the railway connection, and to support development in the country after the investment programs failed in the state budgets.
He stressed that "the success of the sovereign fund in its tasks requires that the fund have an independent administration with local and foreign expertise under supervision and cooperation with the World Bank and the Institute of International Sovereign Funds."
Member of the Baghdad Economic Forum d. Ikram Abdul Aziz indicated that «Iraq has an experience in forming a sovereign fund represented in the Construction Council, which was established in 1950. 42 million dinars, and the Reconstruction Council contributed to the implementation of many development projects for Iraq, but this council was dissolved after 1958 and a ministry was formed in its place. Planning ».