Assurances of the importance of the role of the private sector in economic activity

3/26/2017 0:00

Baghdad / Emad Emirate
adoption of alternatives in economic policy contributes to reducing the budget deficit and pay to rationalize government spending and leads to the development reflects the impact in increasing production, since these alternatives would address the imbalances of the Iraqi economy suffered because of a burden on the budget, as well as the weakness of the private sector and its contribution to the gross domestic academic economist , d. Qusay al - Jabri explained that the disruption of the general budget structure is the high proportion of current spending to investment spending, and the increase in government spending led to a decline in the rate of income by increasing imports from the other side.

Jabri said in an interview with the "morning" that the budget deficit is determined by factors and macroeconomic variables must economic policy - makers and decision - makers to take them into account when drawing the fiscal policy to achieve internal and external balance.

He said the privatization of enterprises losing, which is a burden on the budget, support for the private sector to increase its contribution to the Gross Domestic Product generates positive effects in reducing unemployment and stimulating aggregate demand , which helps pay the total width of the wheel and adjust the imbalance in the real sector.

Jabri said the privatization itself not be considered a goal but a means to increase the efficiency of the performance of the Iraqi economy and to increase production and productivity and cut government spending , which is one of the basic requirements for the restructuring of the economy and reduce the budget deficit.

A number of the various ministries , such as transport industry and government companies managed earlier in the shift from losing companies to profitable after being rehabilitated and the adoption of good governance and economic feasibility in its development.

He pointed out that the existence of institutions that have low production efficiency to the extent that it is unable to cover the operating expenses despite the receipt of funding compared to the ones turned out to be profitable after receiving funding, indicates a weakness in the returns of investments and the inability of these companies to make profits and fulfill its obligations as well as the inefficiency of the administration to act in cash its assets.

He asked Jabri, why not taken privatization of loss - making companies? Why bear the extra burden of the budget? , Is not it better that the subsidies went to these profitable investment areas recording a decline in government spending and minimize the budget deficit by increasing GDP by another?

In front of these questions in the light of the trend towards a market economy confirmed Jabri that it requires a review of the economic environment through the gradual abandonment of the state for comprehensive support and orientation policy towards meaningful and giving the private sector a greater role in support of economic activity.

He pointed out that the most important sectors that can be vested in the private sector is the services sector , provided there are fundamental changes in prices to serve the consumer and the private sector 's interest, explaining through it would eliminate the state of large expenses and financial burdens suffered by the sector as well as its ability to absorb the national labor force unemployed.

Jabri stressed that the success of this approach requires the issuance of the Organization of legislation privatization programs designed to prevent monopoly and encourage competition as well as being subject to the control of the consumer as a protection to ensure fair competition, either for any loss - making projects that can be privatized, the privatization of loss - making projects lead to the reluctance of the private sector to participate in such these projects, because the goal of the private sector to achieve profits.

Therefore , the capital avoid entering into such projects or to be purchased for less than its carrying value what the budget holds additional losses.

He suggested Jabri the first two options: to be the rehabilitation of these facilities and then sell them as a winner and the second to be integrated with other projects corresponding or filtered.

He pointed out that the privatization of profitable projects opens the way for the private sector to achieve profitability and the development and support of these projects and give them an edge competitive in the regional market through the transfer of technology appropriate.

As well as attracting technical expertise and skills in those industries to be able to face foreign goods with high quality and low cost.