Iraq and the zeroing of IMF loans…what has changed?

Iraq and the zeroing of IMF loans…what has changed?

Iraq and the zeroing of IMF loans...what has changedTurkey did it in mid-2015 when Recep Tayyip Erdogan, then Prime Minister, announced that his country was able to pay all debts owed to the International Monetary Fund. This was the first time in 52 years that Türkiye became debt-free with the IMF.

Before that, in 2013, Turkey succeeded in ending its borrowing adventures from the Fund, during the era of the sixty-first Turkish government formed by Erdogan at the time, even though the governments that preceded the Justice and Development Government relied heavily on the Fund to manage state resources, fill financing gaps, and cover the budget deficit.

Despite the severe pressures that the Turkish economy has been exposed to in recent years as a result of hyperinflation and the collapse of the lira’s exchange rate, successive governments have refused to resort to the IMF and borrow from it due to the severe risks resulting from that, including political, economic and social risks, as those governments realize that the Fund’s programs work to Drowning national economies in a swamp of debt and dependency, becoming dependent on international creditors, eliminating the middle class, causing waves of high prices, price inflation, and endless economic and financial instability, and putting the ruling regime in constant confrontation and perhaps conflict with the citizen, who alone bears the cost of the austerity programs imposed by the Fund and others. From creditors.

Iraq pays all its dues to the International Monetary Fund, amounting to $8 billion, at once

When Turkey paid the last installment of the IMF loan, it was then one of 11 countries in the world that was able to “zero” its debts to the Fund on time and without delay in payment, since the year 2000. Among the most prominent of these countries were South Korea (2001), and Brazil ( 2005), Russia and Uruguay (2006), Latvia and Hungary (2013), and Macedonia, Romania and Iceland (2015).

This week, Iraq repeated this scenario when it paid the debts it owed to the IMF once, and according to the statements of the Advisor to the Iraqi Prime Minister for Financial Affairs, Mazhar Muhammad Salih, his country has repaid all the loans it had obtained from the International Monetary Fund since 2003, amounting to 8 billion dollars.

It is noteworthy that Iraq, until recent years, almost fell completely into the arms of the IMF and creditors, despite the fact that it was an oil-producing country, due to the corruption that was rampant in the country, eating away the green and dry land, and sweeping away the state’s dollar resources, and was accompanied by the smuggling of tens of billions of dollars abroad by successive regimes. He ruled the country after the American occupation in 2003.

In 2021, Iraq requested an emergency loan worth $6 billion from the IMF, and in May 2016, it obtained a loan from the Fund worth $13 billion to fill the general budget deficit and the financing gap that the country was going through.

Iraq was almost drowning in foreign debt, and repeating the experiences of other Arab countries, but it decided to put an end to the bleeding of borrowing, financial corruption, and the plundering of public money by taking advantage of its current dollar resources, especially resulting from the improvement in the price of oil and gas, and it accumulated foreign reserves at the Central Bank, which almost… It evaporated years ago, and to some extent blocked the channels of money smuggling to neighboring countries, including Iran, Syria, and Lebanon.

Thus, Iraq escaped the fate that befalls creditor countries that fall into the arms of that financial institution and submit to its toxic programs and malicious loans, the dangerous repercussions of which rarely escape a country.

In exchange for Iraq’s move to liberate itself from the slavery of the International Monetary Fund, the governments of some countries, including Egypt, Jordan, Morocco, Sudan, Tunisia, Lebanon, Pakistan, and Argentina, insist on obtaining more loans, thus sinking further into the mire of external debt and the subsequent implementation of austerity programs, the cost of which the citizen pays in full in the form of… Jumps in prices, a collapse in local currencies, mass impoverishment, the collapse of the middle class, and millions joining the extreme poverty class.

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