Financial Advisor to the Prime Minister: international loan provides an opportunity to reconsider the economic policy of the country

June 1st, 2016
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Side of the symposium

During the seminar the Institute of the progress of development policies
Guest »Institute of the progress of the policies of development« during his weekly briefing financial advisor to the Prime Minister, Dr. appearance of Mohammed Saleh to talk about the international loan, which will get Iraq from the International Monetary Fund and a group of countries and organizations to bridge the existing budget in the light of the economic crisis the country is facing deficits details.

A group of financiers, economists and businessmen have contributed to the seminar, which saw the show a lot of ideas and observations relating to the management of the loan and the reasons that have brought the country to such disastrous results in the economy

MP »Dr. Mehdi al-Hafez« pointed out at the beginning of the seminar to the case of misunderstanding between different circles in the country on the international loan that would give Iraq ..

There are those who deny that there are those who accept .. calling to clarify some things related to this file and is it is of significance loans or is it that the need is urged Iraq to resort to borrowing ..

explaining that the circumstances through which the country is now abnormal conditions and should be addressed within the framework of economic policies and how can the Iraqi economy that develops through taking all these considerations
Among «Hafiz« that the country is facing a difficult and very poor condition and he can not come out of this bad situation without the presence of proper management and real review of the political and financial management ..

He pointed out that Iraq is in a position current is unable to decide anything because of the political crisis of the regime is capable of to decide the country's interests on according to objective criteria and this is a big problem ..

revealing that the relationship with the World Bank and international Monetary Fund began in 2004, but we can not ignore the reasons that led to the deterioration of the situation in the country because of local politics that brought us to this situation ..

stressing that if we want to take the right decisions should do proper management according to the standards of governance that are managed through the democratic institutions in the country.

Financial Advisor to the Prime Minister and talk about the international loan details
So the appearance of Mohammed Saleh financial advisor to Prime Minister spoke about the international loan details ..

pointing out that Iraq is the founder of the World Bank, a member of the International Monetary Fund since 1944 and in 1977 the relationship began to stumble between Iraq and the International Monetary Fund after the previous regime had decided not to provide the Fund any statements concerning the Iraqi economy is no longer the relationship back to normal,

but after 2003 ..mbana that Iraq's relations with the two organizations organized by the UN security Council resolution 1483 of 2003, which committed Iraq positively engages with the IMF and the World Bank in order to reach Iraq's foreign debt settlement through agreement » Paris Club «which is binding and not an option for Iraq on the grounds that the stability of Iraq is part of the regional and international economic stability.

He said «in favor of« that the beginnings of dealing with the IMF and the World Bank was in 2003 through «Madrid Conference» donor countries but working president began settling Iraq's debt in the Paris Club after being held IMF important work for the benefit of Iraq through the preparation of tables identifying carry Religion was the tolerance level of Iraq's debt level state «Rwanda» no he can not pay more than 10 per cent of the debt, and this prompted the fund to invite countries of the Paris Club to extinguish 90 percent of Iraq's debt, provided that Iraq enters into a framework agreement (countries post-conflict ) this was in 2004, which extends to 2028 and apply to all of Iraq's foreign debt was then demand from Iraq has signed an agreement «credit ready» in which a number of conditions including modifying the financial situation in the country and the increase in fuel prices (gasoline), which was sold cheaply encouraged smugglers smuggled to neighboring countries after the signing of the agreement «Stand-by» in 2005 was written off 30 per cent of the debt as a meal again to be a total write-off of debt to 60 per cent the agreement was successfully concluded in 2008 and determine how the 20 per cent of the debt and thus Iraq may get rid of $ 100 billion of foreign debt and the remaining schedule of the debt until 2028 with stops all the benefits since 2005, and this represents a significant benefit to the country.

«Benefit» and added that the agreement with «Fund and the Bank» international routes was traveling at about good, especially in the section on debt until the end of the age of the second standby credit agreement in 2013, and today Iraq entered into a third agreement ..

pointing out that «Bank» request from Iraq to prepare detailed breakdown of the economic its potential and infinite money and funds available to the state institutions, as well as learn the details of dues Contractors amounting to 7.6 trillion dinars, as well as corporate governance performance of the Ministry of Finance and re bank restructuring Rafidain and Rasheed, and the establishment of the company to guarantee deposits and ensuring social welfare and the ration card and displaced communities ..

after an evaluation process by the Fund and the World Bank became clear that Iraq has completed important steps in this area and about in Iraq has succeeded, but because of financial distress arising from the decline in oil prices, the Bank and Fund has been estimated Internationals that the volume of distress with a gap of up to $ 50 billion for the period from 2016 to 2019 and on Iraq that manages his order ..

pointing out that access to international loan are not taken easily but Iraq must take a series of measures, including access by the international Monetary Fund on the net real exchange of Iraq during 2015 and when accessed discovered Salaries are too overgrown to the point of exaggeration as well as inflation and other clauses prompting the Fund and the World Bank to demand from Iraq, including the oil price of $ 35 instead of 45 and the export of 3.6 million barrels per day to reach the gap or deficit to $ 11 billion after deleting several paragraphs remaining $ 6 billion a year fund and the bank Internationals take care of bridging ..

praising the position of the State of Kuwait in support of Iraq after the talk to her to suspend the dues owed by Iraq ..

and a proposal from Canada was freezing benefits Paris Club debt amounting to $ 800 million (debt service) up to 2019 ..

pointing out that Iraq is not in the danger zone with respect to external debt, but the problem in the internal debt, which is growing constantly of 25 trillion dinars a treasury transfers and this year the bank will issue remittances treasury $ 13 trillion dinars and approved by the World Bank ..

indicating that the debt Management tough, especially as we approach the breach of the safety zone of up to 60 per cent of the volume GDP ..

He pointed out that Iraq is lucky, but we need help ourselves to invest in international support seven industrial nations recently announced a loan of $ 3.4 million euros .. He explained that Iraq will get about $ 20 billion over three years

He «benefit» to the agreement with the «International Monetary Fund» was transparent is a global organization capable and there are no secrets or Khvaya as some people talking about the loan ..

He explained that the fund is interested in the issue of poverty in Iraq because of the high indicators in this side of 23 per cent as well as the presence of large numbers of displaced people and there are four people, the poor of every 10 displaced as the per capita share of GDP due to falling oil prices dropped from 7000 dollars to 4000 and the unemployment rate up to 23 per cent ..

and we have another problem of entitlements oil companies you get $ 10 for every barrel regardless of the sales price if 100 or $ 20, and this is a problem and there are accumulated dues dating back to 2015 and the current year of billion dollars a month to meet the production costs and accruals Contractors amounting to 7.6 trillion dinars was to solve this problem by issuing bonds. .

indicating that the conditions of «international Monetary Fund» is governance performance of the Ministry of Finance through the provision of each chapter of the expenses and expenditures by the agreement to the Council of Ministers to endorse it and submit to the House of Representatives ..

the second condition is the application of income tax law on state employees was agreed exempt employees from the third division to the tenth and the inclusion of employees from second-degree up and be settling accounts on the entire income and not on the nominal salary only, as the fund request from Iraq for quarterly accounts demonstrate the absence of any manipulation system of social protection and displaced persons and the ration card and reimburse oil companies

He noted «benefit» that the agreement also requires issuing a strict law on financial management, as well as the introduction of the Integrity Commission as an active player in the independent follow-up process and adopt a document of the United Nations anti-corruption, and the condition is the other amendment of the Central Bank Law and an inventory of all arrears, which exceeded the duration of delayed 90 days and the The Ministry of Finance abide by new foundations, and more importantly, for the first time that Iraq's external and internal debt subject to scrutiny ..

revealing that the domestic public debt amounted to 37 trillion dinars and this may lead us to the problem of currency printing a grave danger because oil revenues are inadequate and there is a limit domestic borrowing, and audit involves also all the benefits that will be paid back for fear of having satellite Contracting or fake, ..

adding that other loan conditions is to take over the Supreme audit scrutiny of state employees all salaries and an intersection of process data to detect manipulators and who earn more than a paycheck, are also subject to audit all of Iraq's accounts State by an external auditor in accordance with international standards ..

explaining that Iraq sent a letter to the international Monetary Fund on June 15 expressing its approval of the conditions and mechanisms and the framework of fiscal policy presented to the Fund's board of Directors at the end of June if ratified the board of Directors the agreement is effective and launches the first installment of the IMF loan, which not less than $ 600 million and are getting the full loan through 13 push over 36 months, and before each batch is reviewed what has been achieved from the previous installment and be allowed to three years for each batch of loan payments and interest rate period 1.5 per cent and the loan goes to budget support

He denied «benefit» that includes the agreement with the International Monetary Fund for an item or material refers to the allocation of a quota for the Kurdistan region .. Indicating that the fund is dealing with the federal government ..,

adding that the provincial government took the initiative to subdue its oil exports to a foreign auditor in order to provide the federal government and the right step and the task of helping the international community to support Iraq and to heal the problems that we are experiencing.

Speaking «benefit» from the problem of salaries, which represent the biggest on the budget burden as the number of employees reached 4.5 million employees in addition to retirees, bringing the number to seven million need about $ 4 billion a month to provide salaries and sales of oil is insufficient to meet these amounts if Astqtana including entitlements companies ..

he explained that there will be new appointments, except for the exceptional appointments such as medical staffs and security forces and education if the improved conditions are some things may change ..

he said, adding that the agreement with the IMF represents the umbrella to get Iraq on loans from here and there, the British government has allocated 300 million pounds sterling and the Japanese JICA has allocated another and the Islamic development Bank in Jeddah Showing give Iraq $ 5 billion will be allocated for the construction of schools, as Iraq needs a 7000 school to meet the shortfall ..

Saleh also highlighted that there are two things Abosan hope and calls us to help ourselves out of the crisis .. The first is that Daash about to end, and this eventually became close probably did not exceed the next month of September at the latest ..

The second is that oil prices are improving, .., adding that the private sector he also will activate in the coming period, and this prompted the World Bank and the international Monetary Fund to the expectation that Iraq is capable of financial position by about appropriate $ 85 billion administration is it reasonable that the budget is not able to provide these amounts.

The expected effects of the international loan
Banking expert Dr «Majid picture» talked about other aspects linked to the economic reality of Iraq and expected the international loan and Antiquities .. wondering: What is Iraq's preparations for the implementation of the obligations of the loan, especially in the field of restructuring the banks that have not seen any practical action so far, although the study the task presented to the World Bank in this regard in 2011 ..

adding that the World Bank is also responsible for not pursuing this matter .. referring to the deficit facing the planned $ 21 billion budget, and oil sales reached $ 9 billion if the price of oil reached $ 40 increase the deficit to $ 36 billion real deficit, the central bank issued bonds worth $ 5 billion, and this added to the budget deficit cover it where you will fill this deficit

Speaking «mock» for Iraqi debt in the absence of transparency .. Indicating that the amount of external debt amounted to 65.5 billion dollars, including 47 Milirdolar debt Gulf States ..

The total domestic and foreign loans have reached $ 96 billion, including new debt and constitute 77 per cent of gross domestic product the total may rise to 100 per cent .. pointing out that the problem is in the state administration.

Dr «Mohammed al-Haj Hammoud,» the agent of former Ministry of Foreign Affairs .. He pointed to the importance of social issues highlighted by the agreement with the International Monetary Fund and was the first also be focusing on the issue of corruption and the money that was stolen and seek to bring it back through the mechanism of transmitting corrupt to the courts ..

stressing the importance of the private sector, which has seen a significant deterioration since 2004, so far evidence that the Iraqi industry has become a part of history, and it should be given to international organizations Iraqi private sector in all agricultural and industrial Asnavh.

Head of Iraqi businessmen union «Reza Ragheb Blibl», stressed that the solution to the economic crisis to Ajribt obtaining foreign loans but in the trigger economic development sectors through the creation of local economic cycle and the development of the economy .. Valkarz take one aspect and leave the rest of the aspects and this will remain our economy paralyzed unless you take government radical solutions ..

He explained that many of the businessmen showed their willingness in previous years to finance major projects until the manner of payment on credit for up to 10 years and such a precious opportunity that must be seized, but it seems that there is a will to keep the country on this case and continuous crisis
Banking expert «Samir Alnasiri» pointed out that the understandings with the International Monetary Fund carry the first two terms of national effort, which includes programs, plans and activities by the government ..

wondering, can you prepare such programs it possible to make a case of coordination between fiscal and monetary policies .. Lama the other side is to the private sector and what are the programs that stimulate the sector and help it to contribute about the best in the transition from a specific role to the role of development and reduce dependence on oil ..

proposal to create a bank to finance small and medium projects funded by the government by 25 per cent by contributing to the restructuring process of banks provided succumb to high-censorship in the private sector bears 75 per cent representing banks and private companies and other chock national entrepreneurs and this can take advantage of the private sector to get the economy moving.
Oil expert «Fouad Qassem Prince» ..

He pointed out that the debt of the province of Kurdistan since 2014, has so far amounted to $ 26.5 billion, internal and external, and wondered about the type of security to be submitted by the province in the event won 17 per cent of the loan because the provincial government is not able to fulfill because of the size of the debt .. calling to reconsider the law of the central bank in order to be possible to take advantage of the surplus reserves that have not been utilized in the face of the current economic crisis.

Financial expert, Dr. «Akram Mohamed Hassan» ..daa to negotiate with the oil companies instead of going to the World Bank for loans terms ..

As well as he can take advantage of the Iraqi Central Bank reserves especially as the international standard for the roof Reserve $ 42 billion and Almtovralhala is 52 billion dollars and therefore possible to take advantage of the difference of $ 10 billion .. pointing out that the biggest failure was in the investment side requires setting conditions for improving the situation of investment and benefit from the international loan. Likely inability to current political class to submit a draft of the solution.

Industrial expert «Hashim Thanon Atraqchi» .. He pointed out that the private sector contributes to the operation of more than 60 per cent of the workforce in the world ..

If the Iraqi private sector to hang it is running manpower .. calling for the need that this sector presence in the international loan through monitored to increase national production and not rely on imports, and the most important means of activating the private sector is the implementation of four laws (consumer Protection - customs tariff - the protection of the national product - AMA).

Economist «Bassem Jamil Antoine», he wondered about the programs put forward by the International Monetary Fund to deal with the phenomena of unemployment, poverty in Iraq ..

He pointed out that the number of retirees of the public sector exceeded two million either their number in the public sector 35 thousand and covered by warranty 150 thousand ..

calling to reconsider these things
Industrial expert «Amer Jeweler» from Baghdad Economic Forum pointed out that oil prices, even though rebounded, it will not cover investment in the country ..

He called for a campaign or a national council to prepare a program to support the national economy and diversifying its sources and not become our situation (borrow to eat only).

Banking expert «Muwaffaq Hassan Mahmoud» talked about the possibility of performing procedures and programs that will activate the private banking sector in Iraq to take advantage of the international loan
Economist «Behnam Elias Boutros» ..

He pointed out that the risks in Iraq remain high and the private sector needs to be a high degree of safety, wondering: Does the IMF's perception about the reality of the private sector in order to promote it?
Industrial expert, Dr. »Samir Lillo» ..

He expressed surprise at the high interest charged on loans granted from 6 to 9 per cent, a very high rate is not encouraging borrowing while the global ratio in circulation is 1.5 per cent evidenced by the interest levied on the loan ratio international Monetary Fund for Iraq.

Banking expert d. «Ali Husseini» of Assyria, the bank pointed to the existence of an integrated project financial management in Iraq had been prepared in previous years and can be utilized in the international loan administration ..

adding that the Central Bank Act of good laws, but the problem is the issue of censorship, which is also needed in the process of follow-up mechanisms for international loan spending.

Chairman of the Federation of Iraqi contractors pointed out that after 2003 handed Contracting However sundry ..

Then in 2007 exacerbated the problem after it intervened parties were contracting give views incompetent and thus projects have failed and stalled due to the 10 percent obtained by the Contractor starting given to parties or intermediaries therefore Iraqi contractor began, one of the best contractors began to falter because the government has not supported that arrived intact to non-payment of dues Contractors despite the fact that 70 per cent of Alquaolat carried out by contractors, Iraqi ..

suggesting that these contractors are given an opportunity in the construction of schools It provided the government to take measures to facilitate this task, or in the construction of gas stations ..

indicating that there is a great Marqlat up to 3 years to get approval for the construction of the station, and even in the field of agriculture ..

calling for the establishment of appropriate mechanisms to encourage the private sector to invest more space to ensure the success of projects