2021/08/11 21:20 number of readings 126 Section : file and analysis
How can the increase in the per capita income of Iraq be achieved?
Baghdad / Obelisk: The financial advisor to the Prime Minister, Mazhar Muhammad Salih, proposed, Wednesday, August 11, 2021, two ways to achieve an increase in the income of the Iraqi individual.
Saleh told Al-Masala,
"The first is to find independent internal financial levers that maximize non-oil revenues, represented by taxes and fees, mainly by expanding the tax base, which is at the narrowest point in Iraq's financial history due to the large number of evaders."
He stressed that "the second way is to move towards benefiting from the economic surplus in the private sector (savings), which requires, through joint financing between the state and the private sector, the activation of the principles of partnership as an important means in achieving the policy of self-reliance, especially in the field of joint investment spending in financing projects and maximizing the production function.".
He added, "Such developments in financial sustainability outside the oil rent and its external risks necessitate to help increase per capita income,
firstly, a broader growth in non-oil GDP, and
secondly, a rise in operating rates, which helps to raise income continuously, and this is one of the financial tributaries that increase of the internal financing opportunities in the general budget.
He pointed out that "direct borrowing and with attractive financial instruments to attract the public's financial surpluses directly towards the general budget requires the issuance of attractive financial instruments in which the public invests its money and with appropriate interest or returns, such as national bonds, for example, and consider it an important alternative to external borrowing, if the sincere intention is held and available.
The correct institutional mechanisms for such developments in the national financial market, which will become a supportive force for fiscal policy,” explaining that
“for example, the public retains a cash mass of more than 70 trillion dinars of cash issued from it as monetary wealth outside the banking system at a rate that is still no less than 88%. In the form of liquid cash balances hoarded outside the banking system.
He pointed out that "at the same time, this matter is a huge leakage that hinders the role of the cash surplus in completing the income cycle by converting savings into productive investments that serve growth in the national economy," noting that
"there must be the birth of an attractive voluntary financial market for the circulation of government bonds with interest, returns and privileges for investors with its tools." Including the right to liquidate it and transfer it to cash when needed, and consider it a means of payment and a guarantee of the highest class.”
Saleh concluded by saying that "in this way, the financial market will become one of the internal tributaries of public finances that enhance financial sustainability and gradually develop it within the sustainable development of the country."