"Economy News" published details of Iraq 's agreement with the International Monetary Fund

Views 149 Added 05/22/2016 - 21:20

Economy News / special

An informed source at the Ministry of Finance, on Sunday, details of the agreement concluded by Iraq with the International Monetary Fund.
The source for "Economy News" that the agreement provided for the granting of a loan exceeds the initial $ 5 billion, with the following text of the Convention:

First, the general details

1 - that this agreement is not the first, was preceded by two agreements: one in 2005, and the settlement of Iraq's obligations with creditors in the Paris Club, and the other in 2008, to address the repercussions of the sharp decline in oil prices at the time.

2 - the value of the loan is 5.4 billion (billion) dollars.

3 - The interest rate on this loan does not exceed 1.5% per annum.

4 - assumed that this loan helps to strengthen the creditworthiness of Iraq, and raise the credit rating, the building "umbrella financial | pave the way for the establishment of the seven major industrialized nations (G7) to provide credit facilities for Iraq amounts could reach more than $ 15 billion. Among these facilities helping Iraq to ease the burden of repayment obligations with the Paris Club, as well as those relating to the payment of international financial obligations. Add to receiving additional financial support from the World Bank, and other countries.

5 - that this loan will help reduce the "extra" in the state budget, the impact of the drop in oil prices, and to follow the procedures help reduce the deficit "total" deficit (ie the total deficit) in the state budget.

Second requirements

1 - that the Iraqi government to take necessary measures to reduce expenditure in the state budget for fiscal year 2016.

2 - take measures to settle the dues of oil companies, and do not let Petrakmha.

3. full salary and allowances for senior subordinate state employees, functional upper grades, and private, to income tax. These range from tax (according to different income segments) between 7.5% to 15% of the total salary and allowances. As for the lower grades, they impose income tax on only the nominal salary, without benefits.

4 - rehabilitation (or restructuring) self-funded public companies.

5. work hard to raise the efficiency and performance of the financial regulatory agencies in the country, at all levels. And impose strict controls on the doors of disposition of this loan.

Third, other information.

1 - There are controls for the collection of public service wages, to take into account the living conditions of low-income people.

2 - will not raise fuel prices (fuels), because oil prices are currently low, and because existing prices are rewarding for the government.

2 - There is no requirement laid off workers in the government sector.

3 - There are no conditions permit stamped on the ration cards, nor salaries of social protection network, and not government subsidies provided to the displaced.

From the above, the social costs are difficult to this Agreement, are those associated with the repercussions of negative to cut public spending (in the absence of almost entirely of institutions capable of allocating available the best possible ways and means of economic resources, and the lack of the ability to pursue a management efficient public money) .. and also those costs associated with the taxation of the salaries of all employees.

As for how to dispose of the amount of the loan, check spent on the purposes for which has been allocated for it originally, and achieve the main objectives of it, the burden of implementation and follow-up in question, it will be the responsibility of the international parties involved and supportive of this agreement (basic degree), and not the responsibility of the Iraqi government alone.

The Finance Minister Hoshyar Zebari announced that, in the (May 19), to reach an agreement with the World Bank Fund for a loan worth $ 5.4 billion, and as pointed out that the loan will allow securing additional financial assistance to reach about $ 15 billion over the next three years, confirmed the governor CBI, on the Keywords that the annual interest rate of the loan is up to 1.5%.

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