Between the bonds and put up private-sector support 3/23
Between the bonds and put up private-sector support
Mohammed Sharif Abu Mayssam
Everyone awaits the conclusions to him and promises procedural steps imposed by the state of the financial deficit caused by low oil prices and the war on terrorism and the nature of the government program that tend toward liberal market and take over private economic activities for the whole package.
The central bank is determined to put government bonds worth 1.5 trillion dinars for the Ministry of Finance in order to repay part of the deficit in the general budget and thus withdraw part of the storehouse of financial bloc in homes and recycled in the local market, and the cabinet is based on a realistic program, according to the document comprehensive reform of the ministerial change plan launched by the Council to ensure increase non-oil revenues to ensure double that during the years 2016 and 2017, while awaiting the businessmen and workers in the industrial and agricultural sectors to activate the central bank for banks specialized loan after being part of the loan in favor of the Land Bank Fund
The face of recession
It is very important steps to counter the recession and the financial deficit and activating the role of the private sector in GDP.
The reward did the central bank, as it identified the sale of bonds one month runs from the fifteenth of this March and ends on the fifteenth of April next year, where will be sold these bonds at rates discount and a coupon of 6 percent a year for a period of two years is double the rate of twice the value of one bond during the trading period Sindh, and this is what Cecil him to dribble the corrupt and powerful people to move on subsidized loans and get some of them through their effects and functional authoritarianism and trying to buy a larger amount of bonds to benefit from the interest rate differential.
Where the central loan by specialized banks will provide an interest rate of 4 percent is certainly the electronic mechanisms will not prevent access influential through specialized banks a window to get these loans that will reach amounts to about 20 billion dinars per loan.
Through our observation of the scene, does not seem to Central loan to specialized banks will enter into force in this period due to the reluctance of these banks in the preparation of cadres to implement the granting of loans electronically, and that you were able to embark on the granting of these loans, the grant for completion of statements on projects and procedure for detecting guarantees and booking it will take time, which is not enough to launch the exchange in the sale of bonds, reducing the inability to recruit some of these loans money to buy bonds.
However, the irony of the central announce the launch of the bonds lies in the acceptance of the use of these bonds as collateral for loans described the central statement characterization of the «financial facilities» without excludes subsidized loans as the banking facilities are often granted at rates high interest rates may exceed 10 percent, with guarantees Central contract with paragraph specialized banks pointed to the application of the terms of lending and documentation under applicable in these banks controls.
It is known that specialized banks accept securities in documenting guarantees and therefore, those who have money can buy these bonds interest rate of 6 percent (creditor) and submit them as collateral for a large loan interest rate of 4 percent (debtor) shall be the difference 2 percent in favor of getting the loan, and this is it support additional capital, not the private sector that deserves support, he who has the money being able to buy bonds worth 20 billion dinars, for example, does not need to loan this money to finance industrial or agricultural activity.
It is also important to draw attention to the possibility of hiring other subsidized loans, such as the agricultural initiative that lasts awarded under the budget instructions for the year 2016 of the refunds granted at interest rates of 2 percent in the bond-purchase loans, and the names of non-recipients of those loans names, especially since those loans awarded the grant mechanism is electronic. What it will add a new factor of the factors that contributed to the go of some of those loans to non-targets. It requires tighter control and follow-up on all forms of subsidized loans and projects compel owners fines in cases of non-implementation of the project.
Based on the progress Cabinet plan based on «a realistic program», according to what has been announced which are aimed at ensuring the increasing non-oil revenues and doubled during the years 2016 and 2017 should be studied in the applied aspects that do not bear the burdens and the poor and middle classes exclusively through austerity strict account with the program influence and corrupt and the owners of the money that matured on the capital expense of public money, under the pretext of supporting the private sector and the financing of the budget deficit.