IMF agreement test for Iraq

7/23/2016 0:00

Edmund O'Sullivan / Torgomh- Khalid Qasim
IMF has developed a tremendous program to rewrite Iraq's ailing economy.

The fund issued on July 14 and the current document consisting of 34 pages constitute the most ambitious attempt to remake the economy of one of the Middle East.

Paint a document program that Iraq agreed upon to ensure a loan from the Fund valued at $ 4.5 billion in order to bridge the gap revenues of the government resulting from the decline in oil prices .

The document also contains assurances demanded by international creditors and who will have to provide additional loans soon.

These loans include billion bonds government of the United States included in the billion - euro bond dollars is expected to be issued before the end of this year, and one billion other dollars from the World Bank and more than $ 3 billion in loans projects.

Says IMF: that Iraq needs to borrow $ 56 billion until the year 2019, this estimate comes at the top of the current debt of the country , which she mentions the fund amounted to $ 67 billion until the end of last year, equivalent to about 45 percent of the projected budget for the current year.

The main objective of the agreement is the fiscal deficit of the government, which has risen to 14 percent of gross domestic product last year. It is likely to increase more during this year, with oil prices so far amounted to an average 75 percent from their level of a year earlier as a whole.

Baghdad and agreed on the need to reduce the deficit to 1 percent of GDP in 2021, and achieved part of that goal over the high price of oil which is expected arrival level of $ 70 a barrel by the end of the decade.

but the bulk of the settlement will come through spending cuts and government reforms. This includes for the current year to increase taxes and cut salaries of employees and retirees and reduce the capital and the financial allocations for the Kurdistan region spending. The government has promised to complete 85 percent of the president spending the non - oil authorized in the current year budget.

Is expected to provide value - added tax and work to increase the efficiency of the 176 state - owned company outside the financial sector employs 550 thousand people, and mentions the agreement with the IMF that half of those Vaidon need.

Prepare this program is tremendous, and increases the size of the challenges faced by Iraq because of the military operations against the źDaash╗ and dealing with more than four million displaced people in the northern areas since June 2014. He fled about a quarter of a million Syrians into Iraq since the outbreak of the civil war there in 2011.

the world offers a real help to Baghdad to protect the Iraqi people from terrorism and external threats, but they are in need of hope on their ability to prosper as well. If achieved the IMF agreement this goal is a positive agreement, but there are economic and social costs must be paid before then.