Econonmist we really care about economically. We begin with quick solutions & strict
Prof. Abdul Hussain anbaki *: we really care about economically. We begin with quick solutions and strict
- POSTED ON 01/03/2016
First: the alarming indicators:
1. lost $ 1.3 billion Iraq annually reduced one dollar a barrel, let alone the decrease amounted to more than $ 80 in the last two years.
2. the widening budget deficit for adoption 95% oil $ 22 billion with $ 45 per barrel in 2016 to accommodate budget deficit to more than $ 42 billion with price limits of $ 30 a barrel.
3. investment spending is always the victim of any decline in oil prices since sacrificed first, leading to disruption of reconstruction and development and creates more deflationary pressures.
4. infrastructure inherited from the former dictatorial regime is very poor, and the amount of investment does not live up to the level of vandalism which lengthened her by terrorism after 2003 to now, as well as corruption in the selection and implementation of projects under the State grip isn't strong and engaged fire here and there, which makes production mandated in the real sectors and non-produced goods and services.
5. at a time when the economy needs stimulating to confront unemployment and deflation, the Government finds itself obliged to exercise austerity measures, the upside down so that the press aggregate demand in the economy at a time that is supposed to make to save the economy.
6. fiscal stimulus (the Central Bank) through 5 trillion dinars to the real sectors (housing, agriculture, industry) as well as 1.5 trillion for small and medium-sized enterprises, did not find its way to implementation as it disabled the first obstacles lack of bank machine capable of creating this trust, and the inability of the targeted sectors to absorb investments of this size and profitable opportunities unless complementary factors, many belonging to reduce costs and risks and increase profitable opportunities, and above all these obstacles the Supreme lending Committee managed according Non-economic criteria, where high-end when non-professionals.
7. the security sector, health and social support programme (presumably not affected very much) by austerity measures, fearing a retreat in our sacred against daash, fearing poor quality of life and standard of living decline and disease outbreaks, and it shows the ascetic impact more in agriculture, industry and services.
8. the relief of the displaced by war are not supposed to be affected, not temporally not in terms of size of it under the concept of emergency, there are about 3 million people out of production to the consumption sector.
9. reconstruction of the liberated areas of great challenge will be to daash as devastating a large proportion may reach 80% in gray – because it was released by excluding popular crowd – and 20% in Baiji and Tikrit, some areas of Diyala – because the crowd is basically edit-note that fridge which assumes that one editors stolen by calculated within the destruction of 20%, and the federal budget deficit is growing, experiencing and neighboring States have political agendas if donated grants for the reconstruction of these provinces has recently said (along the lines of the Marshall plan after the war The second world) to earn the loyalty of these provinces and perhaps truncated, or order development of Federal her absolute hand to establish a nursery for new generations of extremists preparing them for later stage, is also not withstand delays to return, but keeps spending continued consumer relief is absolute and expensive under a federal budget with empty following the collapse of oil prices driven by other factors are mostly political.
Second: measures of error determination:
There are three actions continue it will create strategic mistakes on the macroeconomic level are difficult to avoid in the future:
1. wrong continue to reduce staff salaries over the border, because there (7 million) paid 4 person staff and 3 retirees and social protection network, create spending represents more than 80% of total demand in the economy, and the continued reduction means continue to create a deflationary pressures become undesirable consequences.
2. it is wrong to continue to support the Iraqi dinar exchange rate to remain raised crutch (excessive) because it works the opposite of national product protection and our productive apparatus is dysfunctional and needs to motivate to work and become a competitor rather than production, as well as that will make us after losing most of the Iraqi Central Bank reserves and the gradual reduction of the dinar exchange rate to remain in a certain boundaries and not floating, which is not left to the market forces (supply and demand).
3. wrong continued expansion in borrowing, whether internal or external, that we borrow to support the general budget and the deficit, and that the balance is mostly a consumer we borrow to consume, how we cope with the burdens of public debt in the future, noting that the price of oil will remain low over the next three years or the relatively improved, and declining access to distributed production elements and that deflationary pressures and the inability of the State to fulfil its obligations towards contractors accumulated projects completed or completion percentages varying, it becomes difficult to Location marketing of public debt (Government bonds to the public) and external borrowing remains a prisoner conditions and recipes cannot be fulfilled in our current even though the correct recipes and reformist.
Third: what is the reason for the State to remain dominant in a market economy:
See what wisdom the survival of public domain (State property), this large in a country where the Constitution provides for the transition towards a market economy, waldomin one year of normal sources of funding they collectioned him not undergoing political rhetoric, while borrowing is an unusual source to turn to disaster States after not enough normal sources however no political debate, if private sector support we make it owner, not secondary State contractor loses an opportunity in the development of what Have on hand, and exhibits the kinds of ways to get the rights from State officials after undergoing all kinds of extortion, the State, in contrast to kick him margins in times of prosperity, financial help in times of crisis to sharpen his patriotism and ambition that the State itself is destroyed and vandalized times prosperity, this distorted economic entity resulting from temporary and random abuse, Genting, and neglect of strategies, plans and visions are prone to dust the shelves and here claimed the following :
1. our domain in hundreds of billions of dollars and can be found on State-owned land on the sheet attached herewith.
2. an inventory of such property and develop a detailed database, and then rated the highest Commission in the Cabinet – constitute for this purpose-based current liens, sell, or rent, or investment, etc.
3. There are special committees in the real estate registration Department put the estimated prices for land and property can be used to develop specific discretionary rates the lowest and highest ceiling be good indicator and transparent when you open auction for the sale or lease of real estate.
4. you can start the auction two months after forming committees and are earning money for the State budget to be selling or leasing extended for several years to be a source of sustainable funding over the medium term (5 years).
5. survival of the State the owner of all the Socialist thought and attachment other than the Constitution, which calls for the empowerment of the private sector which cannot be enabled unless the owner, also owns the private sector will create suppliers for funding:
– Proceeds of sale or rent
– Indirect returns, so that mating ownership and return to private ownership would lead to the development of performance and production and widening tax vessels makes future taxes are very important in financing the budget and turn State-to-state rentier levies.
6. infrastructure remains the responsibility of the Government, because the Government is incapable of funding, not only resort to decades of public-private partnership (PPP) and wrote a draft law is good cooperation with the World Bank and is today in the State Council assumed urgency in its legislation to initiate major projects under this method will create significant economic engines of the economy slipping into the pious lower bottom of the recession, and will increase the flexibility of the productive apparatus of Iraq in the face of supply shock coming retreat Import succumbed to balance-of-payments deficit, which represents more than 80% of the total supply in the economy.