Iraq's economic crisis: impacts and solutions

Economic crisis known as the turmoil economic balance which arises normally from the imbalance between production and consumption, as defined by some as serious disorder in State financial measure things that needs effort, harnessing to remove and return the situation to probity, moderation, meaning a broader economic crisis defined as each glitch occurs in State resources due to natural or human factors, reflected the impact on the State and individuals.
Countries when exposed to devastating disasters such as wars, earthquakes, hurricanes and deadly epidemics put their mark on all the wealth of human, animal and plant and water, leading to the hit paralyzed economies and produce severe crises and notably the financial crisis. Especially if its economy unilaterally cash as the Iraqi economy, where oil represents the backbone of the national economic structure for Iraq, is an artery feeding the economic development process as a result of reliance on oil resources that represent a lifeline for rapid growth and building sustainable development plans. These oil resources are the main element in the general budget of the country's economic policy because they make up more than 94 percent of the State budget.
The causes of the current economic crisis in Iraq to the fallout of the global financial crisis that began in 2008 in the United States, which launched the renamed "financial and monetary eruption", where there were several factors which hastened to visibility deterioration of us credit resulting from extensive real estate borrowers finance shackled by enormous benefits, plus real estate depreciation and the inability of borrowers from landlords and banks of payment so low property value exceeds 80%, resulting in the collapse of the large central banks Funded secondary banks, companies and institutions productive car factories. As a result of the decline in the stock market, was accompanied by the collapse of stocks in Europe, Asia, Australia and Canada, which came as a result of a decline in the exchange rate of the dollar led to lower the price of a barrel of oil on the world market.

Low oil prices in the world oil bourses following a direct impact on the development of the hydrocarbon projects according to Iraqi plans prepared by the Iraqi Government, these plans will be implemented to develop oil process depends primarily on increased production and exceeded the previous rates ranging from (2-5) million barrels, which had hoped that up to 4 million barrels, which reflected negatively on the development plans and the general budget that feed these plans. Lower oil prices also impact negatively on economic growth in Iraq due to fluctuations in the u.s. dollar and its reflection on the dinar because global oil price fluctuations up or down significantly affect the price of a barrel of oil as a result of the dependency link Iraq's oil to the United States and exchanges and equivalent monetary value of the us dollar is the rate prevailing under in global oil price fluctuations, the impact of this decline in prices not to activate national investment.
Coupled with low oil prices, the fragile security situation and the spread of financial and administrative corruption, inflation and Government his flabbiness and widespread underemployment among staff, weak agricultural and industrial sector and the decline in tourism one of the major reasons for the economic crisis occurring in Iraq now. Although the Government of Prime Minister Haider Abadi had identified mechanisms to bypass the fiscal deficit in the current budget by reducing salaries and three presidential awalaktrad bodies of the International Monetary Fund or World Bank, or IDB, or external or internal bonds, or impose taxes and duties on goods and imported goods. But those actions have faced popular indignation, protests occurred in most of the Central and southern governorates.

The economic crisis being experienced by Iraq represent practically the Government faces tough test Abadi and reality to the test in case of inability to overcome the crisis and emerge from them with less loss. Therefore, the current reality and to address the shortfall in the annual budget that the country's economy turns into a tired Wii through direct management of all joints of the national economy and supervised by the Iraqi Government for an interim period until the crossing of the financial crisis, and therefore requires more rational steps away from impromptu decisions, oil policy relies on a clear strategy necessitates reliance on modern art techniques that help increase production, balanced monetary policy by the Central Bank takes into consideration developments International monetary fluctuations and its impact on the Iraqi currency, the revitalization of the role of national investment and activating the role of the national authority for national investment under the investment law No. 13 of 2006 also calls for expanding the horizon of the powers of the Commission, the responsible attitudes of the Government to protect its Iraq funds deposited in the Federal Reserve, to refrain from importing luxury goods and replacement of local products, stop creating new jobs and employment opportunities in the public sector to reduce the problem of inflated administrative apparatus of the State, reducing salaries of private jobs And the abolition of financial privileges thereto, expedite enactment determines the number of advisers in the three presidencies and their deputies, and have to academic advisor directly related to his work, the oil Ministry initiative to increase production to compensate for low prices, work To diversify revenue sources away from one-sided economy which depends on oil revenues by expanding Government in agriculture and industry and religious tourism, revitalize the integrity and authority of the Office of financial supervision to curb corruption, solve outstanding problems on export of oil between the Government Center and the Kurdistan Regional Government, and finally call the security organs and the organs of the Ministry of defence to review the security plan and a new strategy commensurate with the scale of the security challenges that security would create an environment conducive to reconstruction and help The inflow of foreign investments.

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