Economic reforms between the desired and necessary

8/25/2015 0:00

Dr. Acer Yassin *
In the midst of demonstrations in various Iraqi cities, and between ceilings slogans disparate and sometimes contradictory in other times, the Iraqi decision maker stands confused between what is needed and what is necessary at this critical stage. Under the oil revenues decline again with another drop in world oil prices, and will have to therefore deepen the imbalance in the general budget, particularly with the growing steadily overhead, on the Iraqi street has to deal with demanding greater wisdom and realize the magnitude of the restrictions on the decision-maker.

Jobless rates

In the Iraqi reality, which is currently characterized by high unemployment rates for working with an almost complete stop to the private sector which made the only way to create jobs is to engage in the armies of public sector employees and handcuff the government financial commitments and to engage in a vicious cycle of budget deficits and directing mostly to ongoing to cover allocations salary expenses , we find that the entry of government in the event Rkunha to political bids and open the door appointments wide will lead to a breach in the delicate balance of competition between the public and private sectors in a climate of relatively high salaries for the public sector when compared with the wages earned in the private sector, and scaled the desired role of industrial initiatives Successive launched by the government or seeking to launch that.

Reform programs

By one of the most important economic reform mechanisms agreed on the necessity of most of the Iraqi people, is the reform of the public sector and this necessarily mean the privatization of a wide range of public institutions, it represents an integral part of economic reform programs because it represents a radical change of economic policies in order to mobilize domestic resources for development economic and social through ease the burdens borne by the state budget and not be continued with the support of many institutions that have proven practical experience during the last years of their inability to keep up with the terms of the new market mechanisms, and therefore public spending tab more efficiently towards strengthening the infrastructure that form the mainstay of the empowerment of the private sector of access to strategic projects to be the first yeast to create a competitive environment for the private sector and strengthen its role in the foundation get the economy moving. But such a procedure requires a gradual basis as a requirement to take appropriate to enable those institutions steps of the sustainability of the reform, seen as a partnership as an ongoing relationship with no fixed time limit or may be for long periods of time.

That any future government policies should be in accordance with the integrated structure and within the timetable thoughtful carefully to avoid resources that adhere to rapidly waste and extravagance to achieve political outbidding be of long-term impact, and must be the maker of the economic decision to avoid yielding to political haggling and independence of its decision in order to achieve optimal feasibility of allocation of economic resources. It can not be a balance between the desire for a public street and to demand the government to provide government support almost completely to the community and the urgent need to adapt the support and increase its effectiveness through directed properly towards the target groups exclusively they can be adequately circulate utility to new segments of the society.

Adjust spending

There is also conscious of the fact that the only way to reduce the budget in Iraq deficit is to expand and diversify its public revenue sources of non-oil conjunction with adjusting public spending, and to diversify sources of revenue requires a specific mechanism to find alternatives in line with the reality in Iraq, which suffers a number of imbalances limit the government's ability to find resources put other non-oil revenues to finance Activities.

We find, for example, the dominance of indirect taxes on the tax structure in Iraq, which indicates to bear all segments of society and without exception the tax burden represented by the high prices of various commodities, something that we have seen in the Iraqi street during the last few days of a sharp rise in prices of some food commodities and even the experience of imposing tax on prepaid cards for mobile phones that have been moved to burden citizens without affecting profit phone companies

That the state should use its financial instruments, Bugeaha of spending and taxes simultaneously and consistently, due to their role in achieving some economic goals and contribute in one way or another in the process of economic reform through the reform of the investment program at the expense of operating expenses and this requires an effective and capable private sector to employ existing with unemployment able to encourage this sector at reasonable cost and to develop an acceptable mechanism to diversify the sources of public revenue non-oil is socially acceptable and to avoid the transfer of burden to individuals and the community to avoid congestion financial institutions.
* Iraqi academic