Iraqi economy during 2015: falling oil prices highlighted the need to diversify sources of income


BAGHDAD / Acer Jabbar of the Iraqi economy did not differ in the past in 2015, from its predecessor, which has not seen "quality developments" but witnessed several "crises" that have affected the rate of growth and the level of poverty, and reaffirmed the seriousness of its dependence on oil as a source of "quasi-single" income.
Oil: tumble in prices and production progress
What remains of the oil sector tops the lists of economic events as every year, but he saw in 2015, down a record compared to its predecessor, after losing nearly 60 percent of the price of the global market, from about 120 to less than $ 40 a barrel, which had a negative impact on Iraq's economy which depends on its imports by more than the 95 percent, forcing the government to a "declaration of emergency" especially in the face of terrorism, and stumbled agreement entered into with the Kurdistan Regional Government. The oil sector has faced a lot of problems during 2015, including benefits oil companies operating in Iraq, which has repeatedly threatened to pull out of the non-receipt of their financial dues.
However, the Oil Ministry has sought to increase production and export rates, it was able Basra Gas Company, to reduce the waste associated gas burned by an estimated 35 percent, with an increase of investment from 500 to nearly 850 feet million standard cubic feet (Mqmq) until the end of December .
One of the important events in the oil sector in 2015, signing of the Shell "agreement of principles" with the Ministry of Industry and Minerals, in the (January 28), promised "important first step" to the formation of a joint committee of management and start planning for the activities of future projects, including the construction of a petrochemical complex in Basra, valued at $ 11 billion, for the production of ethane gas.
Monetary and fiscal policy: expose corruption and the repercussions of declining value of the dinar
The campaign Foundation range of information, culture and the arts, against corruption led by the documents deposited with Chairman of the Finance Committee late, Ahmad Chalabi, of the most prominent events in the financial sector where revealed smuggled money abroad as well as "shortening and ignore" some government agencies for it, but the views judicial and other supervisory pledged to follow up those files, investigation, although it is not clear that any results so far.
The exposure of the financial sector to crises of several during 2015, including the decline in value of the dinar against the dollar, reaching its exchange rate to a thousand and 400 dinars, what raised the ire of the Iraqi street as a result of the repercussions on prices, especially that Iraq imports the majority of its needs from abroad, which forced the Central Bank of Iraq to take the phrase measures to reduce the exchange rate, which undo the imposition of the eight tax percent of the value of imports carried out by banks, and to provide facilities in the currency Foreign remittances auction as well as reduce the deposit amount of money for five days, to strengthen the position of the dinar against the dollar.
To boost the economy in the country, the Central Bank of Iraq gave six trillion and 500 billion dinars, to the banks of sectoral (industrial, agricultural, real estate) and housing fund, and private banks, to encourage small and medium enterprises.
But the central bank issue, a new currency of the fifty thousand dinars category, infuriated the Iraqi street, where counting specialists that it will lead to greater deterioration of the value of the local currency and increase inflation, although they come between the bank to support the economy.
The Cabinet approved, in December 2015, the registration of the Islamic Bank of Mesopotamia, in the Department of the Registrar of Companies in the Ministry of Commerce (public companies), with a capital of more than 130 billion dinars, according to the provisions of articles (3,4,5) of the General Companies Law No. (22) of 1997 as amended.
2015 saw the Third Banking Conference, which brought together a group of Iraqi private and government banks, and other Arab, and slice Chierweijn, where the conference came out to support the recommendations of the Iraqi economy and the banking sector.
In the sixteenth of September 2015 House of Representatives voted on Money Laundering Act, which the central bank said it will provide the legal framework for the banking sector almost in line with international standards.
It was agreed the central bank with one of the largest global companies to seek gold bullion from the weights (5.10, 15.20, 25 and 50) g, 24 carat, and put up for sale, it has been identified selling price based on the cost and continued to Baghdad International Airport, plus administrative uploads by one percent.
Communications: compete feverishly for the fourth mobile license
Hauled the subject of the fourth mobile license on an exceptional interest in the telecommunications sector during 2015, especially after the conflict between the CMC and the Ministry of Communications, in particular that the Commission expects to sell about three billion dollars.
The diminished opportunity and the Ministry of Communications for a license that, after the Council of Ministers authorized the CMC to act on them under the law, which will hopefully put in the auction, has been engaged by the ministry.
On the other developments in the sector, the Ministry of Communications contracted with the company "Ericsson Swedish" to create a force optic network with a capacity of 150 A-line operating optical cable technology for home (FTTH).
Let's face the repercussions of the financial crisis, the Ministry of Finance collects sales tax of 20 percent, on the shipment of mobile phone cards, despite opposition CMC and citizens.
2015 saw the establishment of Zain and Asia Cell for mobile phones launched nearly a quarter of their shares for trading on the Iraq Stock Exchange.
Transportation: real profits and international sanctions
It seems that the Ministry of Transport was "most likely" during 2015, because of the size of the profits made by companies, such as lines of the Iraqi Air and private transport, road transport, ports, he faced "serious obstacles" most notably the international sanctions on Iraqi Airways.
Has global civil aviation authority IATA Council decided to put the Iraqi Airways in the "black list" and prevent them from flying in European airspace because of the lack of commitment to the conditions and international standards, particularly related to safety.
Also faced Airlines, stiff competition from a company (Fly Baghdad) fledgling, which was established during 2015, and the aircraft entered the market a new Arab and regional lines.
The ministry's private transportation company, revealed in June 2015, on the allocation of 140 billion dinars to implement a number of projects in the provinces of Baghdad, Karbala, Najaf, Maysan, Muthanna, Dhi Qar, Diwaniyah, but it faced a lot of problems because of the lack of the necessary land allocation.
It launched the ministry (Taxi Baghdad) as an investment project implemented by travelers and public delegations transport company, in collaboration with a private company, which provided the last 505 car for the transfer of the citizen from his house to the Baghdad International Airport or the global leg of the railway, and it is hoped the project applied in Basra the beginning of 2016.
In (23 December 2015), announced Transport Minister, Bayan Jabr, on the transfer of the implementation of the project port of Faw to Basra Holding Company, confirmed reduce the amount of the project to one billion 300 million dollars, at a time when the province of Basra management indicated that the company is executing the project will offer 51 percent of its shares to the population of the province.
Iraq's budget: austerity and external solutions
We have achieved the Iraqi Council of Representatives, a precedent when it was able to approve the federal budget before the end of 2015, for the first time after 2003, the rate of 105.8 trillion dinars, by revenue of $ 81 trillion dinars, and expenses of 105 trillion dinars, and the export price for oil of $ 45 a barrel, and the amount of export 3.6 million barrels per day, and the inability of 25.7 trillion dinars.
And it included the 2016 budget a lot of "surprises" her not to include functional scores or investment projects, as well as the fiscal deficit is difficult to coverage under the current expenditure, which prompted the government to think seriously to resort to external solutions such as issuing bonds or borrowing opposed by many parties including parliamentary , specialists warn of its consequences.
Electricity: a chronic deficit and hopes of prospective investment and privatization
Electricity case continued degradation and stir popular discontent, as in previous years, where justified by the Ministry of Electricity that lack of allocations and the loss of an important potential obstetric due to military operations in the areas controlled by the terrorist organization Daash, as well as damage to transmission and distribution networks components.
But the ministry announced the implementation of new projects and entered the service station Alhaidariya in the province of Najaf, which was funded by the Iranian grant, card 160 MW, as well as carbonated Maysan station in the province of Maysan, a capacity of 500 megawatts, the station Diwaniyah gas capacity of 500 MW. The ministry plans to implement a project smart "Iromuatr" standards during 2016, in Baghdad and the provinces, with plans to set up 110 thousand scale.
The ministry also believed in the need to go for investment and privatization to solve the electricity crisis, which has been divided Baghdad and the provinces to the 180 region will be awarded for investors service contracts working to provide service to the citizen and the collection of wages, as well as the investment of the production sector have been allocated 19 locations in plants to increase production capacity.
Although the ministry confirms that the production has increased up to 3000 MW during 2015, but they complain about the loss of up to 4000 MW as a result of the effects of the war against (Daash).
And, like the Ministry of Electricity and complaining of lack of financial allocations, as it confirms that received more than ten percent of the allocations identified during 2015, although they make up only 30 percent of its needs.
Agriculture: terrorism and indiscriminate import hamper the dream of self-sufficiency
At the level of the agricultural sector dreams of self-sufficiency remain outstanding, as a result of the loss of important spaces "usurped" by organizing Areas (Daash), and random import.
The Ministry of Agriculture has sought to intensify their efforts in the central and southern governorates to make up for that shortfall, by focusing on strategic crops, especially wheat, which were planted 500 thousand acres of the total one million and fifty thousand were ready for planting, as well as encouraging the cultivation of senior and adoption of modern irrigation methods , to cover 80 percent of the need of the ration card.
The ministry has encouraged the cultivation of vegetables using greenhouses and poultry projects, and managed to achieve a "breakthrough" in the fish farming and introduced a floating cages FAO technical cooperation International.