The Central Bank and international organizations discuss mechanisms to enhance financial inclusion

Economy News – The Central Bank of Iraq announced the organization of a workshop to prepare a strategy for financial inclusion in Iraq, in cooperation with the World Bank.

The Central Bank said in a press release received by Al-Iqtisad News, “ In cooperation with the Central Bank of Iraq, the World Bank organized a workshop to discuss steps for preparing a financial inclusion strategy in Iraq and the requirements for international support, as well as the role of partners from the public and private sectors in developing and implementing it, within the directions of the Central Bank. Iraq in the transformation towards financial inclusion and the development of the financial and banking sector, and the initiative of the Arab Monetary Fund to strengthen this strategy in the Arab countries .

He added that the workshop comes within the framework of the Arab Financial Inclusion Initiative organized by the Arab Monetary Fund in cooperation with the Global Alliance for Financial Inclusion and the German Organization for International Development, where the workshop discussed the importance of collecting data on financial inclusion indicators from the supply and demand sides .

According to the statement, the workshop was attended by a number of representatives of banks and payment companies, heads and members of the sub-committees emanating from the Supreme Committee for Financial Inclusion . , Explaining that the Central Bank of Iraq has taken a number of measures in recent years to enhance financial inclusion, which contribute to facilitating the preparation of this strategy .

Economy-news.net

Activating the files of corruption and speeding up their resolution are at the top of the agenda for the Al-Araji and Zidan meeting

Baghdad – National Security Adviser Qassem Al-Araji discussed, on Tuesday, with the President of the Supreme Judicial Council, Judge Faiq Zaidan, activating the files of corruption and expediting their resolution, according to the government curriculum.
The media office of Al-Araji stated in a statement, of which “people” received a copy, (November 3, 2020), that “National Security Adviser Qassem Al-Araji met today with the President of the Supreme Judicial Council, Judge Faiq Zidan, and Al-Araji discussed with the President of the Supreme Judicial Council, coordination and cooperation between The National Security Adviser and the Supreme Judicial Council, with regard to issues of mutual interest, security and judicial files, as well as combating terrorism and organized crime.

The statement added, “Al-Araji reviewed, during the meeting, the directives of the Prime Minister, Mustafa Al-Kazemi, regarding activating corruption files and expediting their resolution, according to what was mentioned in the government curriculum, as well as discussing many issues that would complete the current reform process, to advance state institutions.” And upgrading its work. ”

Nasnews.com

Al-Kazemi opens the electronic unified port gates of Umm Qasr for the Great Welcome Square project

Baghdad today – Today, Thursday (November 05, 2020), Prime Minister Mustafa Al-Kazemi inaugurated the unified electronic gates of Umm Qasr Port for the Great Welcome Square project.

The media office of the Prime Minister said, in a brief statement received (Baghdad today), that “Al-Kazemi opened the electronic unified port gates of Umm Qasr for the Great Welcome Square project.”

Earlier in the day, the Prime Minister, Mustafa Al-Kazemi, confirmed that the financial crisis that the country is going through is pushing us to build an economy that does not depend on oil.

The media office of the Prime Minister said in a statement received (Baghdad today), that “Al-Kazemi inaugurated this morning, Thursday morning, a gas tower that is the largest in the gas industry, which was implemented in the Basra Gas Company.”

The statement added, “Al-Kazemi praised the efforts of the workers and those in charge of this vital project, which represents an important economic pillar for the country, and a step for real development away from the traditional dependence on crude oil,” stressing that “the project will bring about a new policy for long-term development for Iraq and Basra Governorate, which deserves a lot from us.” “.

“The partnership between Iraqi institutions and sober international companies is an ideal way to advance the Iraqi economy and provide job opportunities for young people serving the country,” he said.

According to the statement, Al-Kazemi said, “The economic crisis that the country is going through prompts us to think about the future and build a solid, real economy that does not depend entirely on oil, in order to achieve a better life for all Iraqis.”

The Prime Minister, Mustafa Al-Kazemi, arrived in Basra Governorate this morning, and met a number of officials in the province, and inspected a number of vital sites there.

Baghdadtoday.news

The irrefutable logic of numbers and the inevitability of reform in Iraq

MENASource by Ahmed Tabaqchali

On October 13, Iraq’s Council of Ministers endorsed the White Paper for financial and fiscal reform. While, on the surface, the paper might appear to be yet another economic reform package in response to a fiscal crisis brought about by falling oil revenues, the lofty goals are likely to be forgotten as soon as rising oil prices rescue the state from its current quagmire. However, the paper—a first for any Iraqi government—identifies the fault lines in the economy and the political system that fostered them. Without specifically stating so, it aims to upend the stagnant status quo by proposing to redefine the role of the state in the economy and society away from the prior model that prevailed during the 1970s, which mushroomed to unsustainable levels in the post-2003 war years.

A key target of the reform process and the root cause of Iraq’s financial and liquidity crisis is its structurally unbalanced budget—the vehicle through which the state has expanded and maintained its role in the economy and society. Among the first elements introduced includes real fiscal discipline, part of a long-term structural shift to the federal budget that is expected to be incorporated for the first time into the 2021 budget. This will affect the salaries and entire system of subsides, that will be gradually cut over a three year period, from a projected 25 percent and 13 percent respectively in 2020 estimated GDP, to 12.5 percent and 5 percent of 2023’s GDP. Another significant first is to reduce financial support to State Owned Enterprises (SOE’s) by 30 percent a year.

However, achieving this is fraught with difficulties, given the political sensitivities and vested interests in these two issues. This is because they were the tools through which the post-2003 order exercised its patrimonial role as a redistributor of the oil wealth in exchange for social acquiescence of its rule and, thus, any change would mark the start of the order’s unravelling.

In a promising development, Iraq’s Finance Minister Ali Allawi noted in an interview following the paper’s endorsement by the Council of Ministers that, “There is less denial; before it was all denial.” This shift in attitude has come about with the slow realization that the current crisis is unlike others and a grudging acceptance of the White Paper’s main thrust: though the crisis brought on by the fall in oil prices due to COVID-19 was unforeseeable, the economy’s accumulated structural imbalances, compounded by demographic pressures, would have inevitably led to a similar economic and fiscal crisis. Furthermore, the White Paper asserts that the current crisis manifested itself in the budget’s un-resolvable quandary of a rising and a rigid current spending item versus variable and unpredictable oil prices (table below), as would happen in an inevitable future crisis.

(Source: The White Paper table 3, page 40, reproduced in English).

And, so, irrespective of the different assumptions made for 2020 and 2021, the federal budget will incur a significant deficit that it cannot finance as it did in the past (i.e. through a combination of accumulating arrears to the domestic private sector and to International Oil Companies (IOC’s) and through foreign and domestic borrowing). The key departure from the past is that accumulating arrears to the domestic private sector will amplify the COVID-19 stresses on the domestic economy, while foreign support is unlikely given the high spending undertaken so far, and likely to increase by governments worldwide—estimated by the International Monterey Fund (IMF) at $11.7 trillion or 12 percent of estimated global GDP for 2020—to support households and businesses to combat the negative effects of the pandemic. Moreover, domestic borrowing, which accounted for the bulk of borrowing during the 2014-2017 twin crises of the Islamic State of Iraq and al-Sham (ISIS) and the fall in oil prices, cannot be relied upon in the current crises as debt levels are now higher than they were at the heights of the last crises (table below).

(Source: The White Paper top part of table 4, page 41, reproduced in English).

Ultimately, without implementing the reforms proposed by the White Paper, the only available route is indirect monetary financing by the Central Bank of Iraq (CBI), which will inevitably lead to the erosion of its reserves. Those reserves could decline to dangerously low levels in only nine months, prompting a currency crisis and a likely forced devaluation of the Iraqi dinar (chart below).

While a devaluation is seen by the political elite as the preferred solution for stretching the state’s diminishing oil revenues to cover its expenditures—particularly the payments of salaries and pensions—the paper argues that this will soon unravel as prices for goods and services would rise in lockstep with the devaluation. This would amount to an increase in the cost of living and, thus, lower the living standards of the majority of the population—estimated at 40.2 million for 2020—given the country’s high dependence on imports to satisfy consumption of goods and services.

While the outlook and prognosis for Iraq seems grim, it is this grimness that finally promises to unlock Iraq’s potential and is the only effective guarantor for the success of reform. The White Paper’s recommendations, while difficult to implement, are technically achievable. The real obstacle to reform—now, as in the past—is the lack of political will to act on reform or, more accurately, the strong political will to preserve the status quo. However, the severity of the current crises has closed the door on the half-hearted ad hoc measures of the past, leaving no option other than structural reforms.

Ahmed Tabaqchali is the Chief Investment Officer of Asia Frontier Capital’s Iraq Fund. He is also a senior fellow at the Institute of Regional and International Studies (IRIS) and an adjunct assistant professor at the American University of Iraq (AUIS).

Atlanticcouncil.org

The Governor of the Central Bank is conducting a field visit to a number of exchange companies

Economy News:  Today, Tuesday, the Governor of the Central Bank of Iraq, Mustafa Ghaleb Makhaif, conducted a field visit that included a number of brokerage firms selling and buying foreign currencies on both Al-Karkh and Al-Rasafah sides in Baghdad.

The governor has a committee specialized in auditing companies from the banking supervision department at the central bank.

A statement of the bank’s media office received by “Al-Eqtisad News” stated that the governor was informed of the companies ’workflow and their dealings with the beneficiaries of the citizens. He also listened to the notes and suggestions of the owners of the companies and promised to study them by the bank and activate their outputs, in a way that reflects positively on the work of the Iraqi financial and economic sector.

He added that this visit comes from the bank’s keenness to see first-hand the actual reality of the work of these companies in order to develop the services provided by them.

Economy-news.net

The Central Bank opens an account with Euroclear to develop the performance of foreign reserves

With unremitting efforts by the administration of the Central Bank of Iraq in developing the management of foreign reserves, this bank opened an account with (EuroClear Foundation), which is the most important custodian institution that provides securities custody services as well as other services, including the ease of conducting investment operations without the need for a contract Agreements with issuer of securities, low cost of custody and ease of tracking.

This bank indicates that soon, the process was carried out by central banks and correspondent banks, which impose an additional commission on keeping these papers, as well as the limited investment due to the multiplicity of procedures and their complexity in the presence of the intermediary.

This step is important in the work of the Central Bank of Iraq, as it simulates international practices in the process of investing foreign reserves, and is an important achievement that this bank adds to its set of achievements in managing reserves and international transactions.

The Central Bank of Iraq

November 2, 2020

Delta – Dinar Guru  THESE ARE MESSAGES FROM IRAQI SOCIAL MEDIA TO THE NEW CBI GOV… “We hope that the value of Iraqi cash will be strengthened and that we can eliminate the zeros and return in a strong currency not necessarily at its previous value…”; “Once the zeros are removed from the local currency, poverty and debt will be eliminated and the mortgage stake is lifted. Then the value of the Iraqi dinar will return to the equivalent of $3.3778 as in 1971 and 1973…”; “with a return to the circulation of small coins, such as the rest of the countries, to preserve people’s rights to buy and sell…” THAT WAS JUST A FEW FROM THOUSANDS OF MESSAGES TO NEW CBI GOV…ALL ASKING THE SAME…RAISE THE VALUE AND COME OUT WITH NEW LDS…OVER A WEEK OR SO AND IT’S NOT STOPPING…THEY WANT THE CBI TO TAKE THEM BACK TO 3.22…

Dinarupdates.com/observer/

Iraq is cursed with its wealth .. so what to do? The World Bank answers

Shafaq News / Two experts at the World Bank warned that Iraq is afflicted with a double curse through a mixture of government corruption and a sick private sector.

In a report by the American Brookings Institution, translated by Shafaq News, the two economists at the World Bank, Bledi Chiliku and Wael Mansour, said that the resource curse refers to countries rich in their resources in obtaining the benefits of their national wealth. “Countries damned by their resources” tend to fall into conflict, corruption and economic turmoil.

The experts pointed out that in countries such as these, competition diminishes when the real exchange rate increases, governments adopt repeated fiscal policies, dependence on commodities expands, and exposure to external shocks increases.

And they considered that there may be curses less destructive than the mixture of the corrupt government and the sick private sector, and unfortunately, Iraq is completely connected to this curse, as a recent report showed.

The “Brookings” report stated that the oil wealth of Iraq has allowed it to be in a position to achieve income at a high – medium level, but its institutions and the socio-economic results that it records indicate a low and fragile country.

He pointed to growth being driven by oil production and associated investment, not by productivity. The educational system, which was once at the top of the ranks at the Arab level, is now placed at the bottom of the list.

Iraq has one of the lowest rates of female participation in the workforce in the world, while the unemployment rate among young people is 36 percent, suffers from deteriorating infrastructure and working conditions, and ranks one of the poorest among the countries of the high-middle economies.

The recent conflicts have had a significant economic cost, as the level of GDP in 2018 was 20 percent lower, due to the ISIS war.

Nearly two decades after the 2003 war, Iraq is still caught in the trap of fragility and facing increasing political and social unrest. Amid multiple crises, including the oil shock and the Covid-19 epidemic, in addition to the results of poor economic policies, and the inability to address corruption, Iraq is now facing the worst performance in its annual growth in 2020 since the fall of Saddam Hussein.

The two experts at the World Bank considered that there is a consensus that sustainable growth, job creation and improvement of the standard of living for Iraqis all require peace and stability, reducing dependence on oil and directing the state towards a market in which it relies more on the private sector, strengthening regional integration, and improving the general management of oil revenues.

While these goals remain in place from a technical point of view, successive attempts to achieve them by the government and donors have remained elusive. The two economists said, “We believe, mainly, that this is because the reform programs in Iraq are outside a strong political framework.”

The two experts believed that in order to understand the fragility, violence and limited development, careful analysis of the political system in the country, the nature of the social contract and social divisions in society is required.

They suggested that the best way to do this is through an analytical framework that looks at three competing levels: between political elites, between state and society, and between social groups. Applying this framework to fragile states suffering from conflict and violence helps them understand why reforms have not gone wrong.

As for Iraq, these three levels have turned violent in recent history. Conflict erupted over competition for power and resources. And Iraqi elites have exploited ethno-sectarian divisions in their quest for power. Also, large foreign interventions reinforced these lines of division and turned Iraq into a field for greater geopolitical competition.

In addition, the heavy dependence on oil has strengthened conflicts at all levels, exacerbated competition among elites, and undermined the principle of holding the state accountable for its responsibilities to the people. Also, the oil wealth reduced the incentives to collect other types of revenues for the government, especially from taxes. This, in turn, weakened the need for the principle of compromise – accountability between the state and society, which forms the basis and essence of state building processes.

While 64 percent of Iraqis say the country is divided, the political balance will become more fragile in the coming years in light of the available demographic data. In Iraq, one of the largest proportions of youth in the world, and a regional gap in terms of poverty rates and service provision. Homogeneity and social trust are low in the areas liberated from ISIS, while poverty rates are greater in the south, despite the fact that it pumps the majority of oil wealth.

In conclusion, the two economists asked what could be done at the level of change in thinking, and indicated three aspects: a political refocusing that includes all social groups, a re-action of the social contract in a way that enhances confidence, and a review of the economic model to be more diversified.

Progress in Iraq will be elusive unless the political elite stimulates change through an alliance between elites and people, and this country has a common political vision that recognizes the need for a system that provides development for all Iraqis. For the sake of the social contract, there is a need to build trust between citizens and the government, strengthen institutions, strengthen citizens’ involvement in infrastructure and services, and find the way for an investment climate that creates jobs for young people. There is a need to invest in people first, develop infrastructure and strengthen institutions in providing social services to citizens, and organize the macro-economy and the work of the private business sector

Shafaq.com

The strategic policies of the state are guaranteed to improve the country’s currency

We are now suffering from weakness in all our institutions, most of which are unstable, and when the military strategy turns from internal war to eliminate internal terrorism, the Ministry of Defense turns from defense at home to a regional deterrent force and has the power to attack, exposing the country to an invasion or bypassing by the neighborhood or from any ambitions. External and we have systems to block and intercept any bypass by air, land or sea port. International economic dealings change with us

When the country becomes industrial, not consumer, and we have exports and our oil exports are a supportive factor for the economy, then we talk about currency and the auction.

When the Ministry of Industry is unleashed to rehabilitate the infrastructure of the strategic factories in the country, such as petrochemicals, iron and steel, factories in Alexandria and others, and we start exporting our industrial products here, the dealing with currency changes.

When the government launches the Ministry of Agriculture and supports it with sufficient funds in order for the ministry to support and encourage the farmer here, we will dispense with importing from neighboring countries, and at the same time the ministry supports livestock and we have self-sufficiency of meat, birds and other things here, we will dispense with imports. Countries by repeating it abroad and repeating inside Iraq. Here we will have a word where all the import that I mentioned is done in the dollar currency. Here the bank is obliged to put the dollar in the auction, but if we had self-sufficiency, all our economic policies would have changed.

A year ago, I asked your forum that the import be from Turkey, Saudi Arabia, Iran, or Oman, that our importation from these countries, especially food and consumer products, through the two currencies of the dollar and the Iraqi dinar, and here we have put our currency in these countries and the Iraqi dinar will be dead inside the country because of failed economic policies Unfortunately.

It is among the circulating currencies in these countries, the first being the neighboring countries

And closer to your side the idea… We only import tens of billions from Turkey annually, all of them in dollars.

If we agreed that we would import half the amount in dollars and the other half in Iraqi dinars, here a significant number of dollar currency would have been preserved.

As for distant countries such as Europe and eastern countries, importing from them in the same way is half in the dollar currency and the second half in exchange for oil and its derivatives.

Here the same, we will maintain the balance of hard currency in the country.

Important note

With this economic strategy, the Iraqi dinar will be included in the currency notes in the markets, and it will have value and respect

My respect

Burathanews.com

Restore Iraq back to its International status

Al-Kazemi to his French counterpart: The government seeks to restore Iraq to its international status

Al-Kazemi to his French counterpart – The government seeks to restore Iraq to its international status(Baghdad: Al Furat News) Prime Minister Mustafa Al-Kazemi began his first talks on Monday morning in the French capital, Paris, with his meeting with French Prime Minister Jean Castex, in the presence of a number of ministers from the two countries.

“During the meeting, ways to develop bilateral relations between the two countries and strengthen them in the economic, investment, security and health fields were discussed, and the situation in the region was discussed, and views were exchanged on a number of issues,” a statement by his media office said.

Al-Kazemi pointed to “the importance of strengthening cooperation between the two countries in many sectors, as the government seeks solid relations with the countries of the world based on common interests and to restore Iraq to its international status.”
The French Prime Minister affirmed “France’s keenness to support Iraq in various levels.”

Alforatnews.com