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The effects of money laundering on the Iraqi economy

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The effects of money laundering on the Iraqi economy

Articles    02/12/2022 | 2:05 pm
Books / Adel Abdel-Zahra Shabib …

The process of money laundering has effects on all economic, political and social aspects alike, and among these effects:

1) The removal of a large part of the national income, which leads to the deterioration of the national economy in favor of the foreign economy.

2) The increase in the rate of local liquidity in a way that does not correspond to and is not commensurate with the production quantities of various goods and services.

3) Non-payment of taxes and financial dues to the state directly, and thus a significant shortage of revenues in the financial treasury.

4) Giving bribes to carry out various works causes corruption and gives room for criminals to expand in the country.

5) The bad reputation of the financial markets.

6) Distortion of business operations, which leads to a corrupt climate of investment, and

the success of the leakage of laundered money into the national economy leads to a distortion in the pattern of spending and consumption,

which leads to a lack of savings needed for investment and thus depriving important economic activities of investment beneficial to the community.

7) The successful exit of the laundered money from the national economy of other countries leads to an increase in the balance of payments deficit and the occurrence of a liquidity crisis in foreign exchange,

which threatens the state’s reserves with the state’s main bank of saved currencies

8) Money laundering is linked to an increase in lavish and irrational spending,

which leads to a rise Domestic prices and inflationary pressures in the national economy.

9) Money laundering leads to an imbalance in the distribution of national income and an increase in the gap between the rich and the poor (low-income in society),

which leads to a lack of social stability with the possibility of class conflict and acts of violence.

10) Money laundering leads to obstructing the implementation of public financial policies by evading the payment of taxes,

which is reflected on the balance of public finances and thus on the government's resources available to meet its obligations and on its economic and social performance.

11) The money laundering process leads to the collapse of the stock exchanges that receive funds resulting from economic crimes,

where the resort to buying securities from the stock exchange is not for the purpose of investment, but in order to complete a certain stage of money laundering, and

then the securities are suddenly sold, which leads to a decline Sharp stock prices in general in the stock market and then collapse tragically.

12) Illegal transactions resulting from money laundering can harm legal transactions through infection.

13) The growth of this type of crime leads to an increase in security and defense expenditures at the expense of the rest of the sectors, especially the social ones.

14) The money laundering process leads to distorting the democratic climate in society,

where the owners of illegal income ascend to Parliament, the People’s Councils and the Trade and Industry Unions, and

thus they invest all of the above to support their presence in continuing the money laundering process and the practice of criminal activities.

The development in the financial and banking sector has accelerated the use of automated payment and settlement systems to transfer funds, which facilitates the completion of suspicious operations for money laundering.

The use of the Internet also led to the expansion of fraud operations through its use of money laundering gangs to take advantage of the lightning speed of cash transfers across the world.

The new government in Iraq, which will appear after the October 2021 elections, is required to put an end to money laundering, combat corruption in general, and root it out.

Without this, a list cannot be established for Iraq.

Will you do that? I doubt it...

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