Al-Kazemi’s advisor clarifies the details of the proposed sovereign wealth fund
political Today, 13:12
Baghdad - INA - Nassar Al-Hajj
, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, explained, today, Saturday, the details of the proposed sovereign wealth fund to be established in Iraq, while specifying the entity responsible for its management.
Saleh told the Iraqi News Agency (INA): "The world's sovereign wealth funds were established at least 6 decades ago and were built on the fact that the returns from the resources of the producing and exporting countries of raw materials as financial surpluses have become an important part of capital wealth that can be invested, maximized and continuously increasing instead of consuming it with budgets.
Large operational budgets in general annual budgets are mostly unproductive.
He added that "the philosophy of defining those returns from raw resources such as oil and other depleted natural wealth is not necessarily for consumer spending, but rather they are capital assets in themselves, which requires their sustainability and maximizing their growth by investing for the benefit of the nation in a profound cumulative way for wealth itself and across generations, and based on that and in order to serve capital assets."
The current resulting from the revenues of raw materials, including oil wealth, the majority of the oil-producing countries in particular have established sovereign investment funds from their surpluses from oil revenues and employed them as capital in various investment assets, whether financial or real and generating income to increase the capital in them as a growing wealth for the benefit of the people".
He continued: "Therefore, double returns in the form of income will accumulate within the investment of the resources of these sovereign funds in the form of an expanding capital wealth, realizing at the same time that the sovereign fund is an investment fund in nature, and thus the sovereign fund goes to a lofty goal, which is to maximize the nation's depleted resources for the benefit of sustainable development goals from during the intergenerational economic boom.
He stressed that "the current generation should provide supplies for sustainable welfare for the next generation and in accordance with the best investment practices for the assets that will be included in the sovereign investment portfolio and within the framework of the sovereign wealth fund itself," explaining that
"the sovereign wealth fund is often managed by the executive authority as a direct sovereign entity. And in cooperation between the country’s financial and monetary authorities, and the performance of the sovereign fund is monitored by legislators in the House of Representatives within the country’s legislative assets and control rules.”
He pointed out that "one of the most important themes that were discussed on the subject of the Iraqi sovereign fund in a symposium he held at the House of Wisdom last September focused on the dilemma (How can a deficit economy over the past 40 years establish a sovereign wealth fund?... And sovereign funds". phenomenon that arose in surplus economies in general).
And he added: "The answer to this question is the adoption of a sovereign wealth fund directed to real investment inward within the framework of exceptional strategic economic and social development and in a different administrative style, which requires the presence of the state's economic sovereignty again in the management of the economic project by moving the idle projects and idle wealth of the public and private sectors, That is, in partnership with the market and foreign investment, and
this will lead to the development and development of the national economy and its transformation into an economy of sustainable surplus on investment activities that lead to diversification of the sectors of the economy.
He noted that "the proposed inward-oriented sovereign fund is managed through a system similar to holding companies, as it was noted that the existing 80 sovereign funds around the world differ from state to state and from fund to fund."
He concluded his speech by saying: "In order to avoid legislative difficulties, it was proposed that the Iraqi Fund for Foreign Development in the Iraqi Ministry of Finance be the legal basis for managing the next sovereign wealth fund for Iraq after agreeing on the style, model and nature of the fund, whose money will necessarily be from the state's wealth outside the general budget, mostly and in partnership." financial and administrative resources with the natural and intangible wealth of persons.