Our economy is space. Monetary policy is an example

May 29th,2017

Abdul Husein Al - Henin

I do not find any better than a description of the Iraqi economy. All of our financial transactions are satellite and the central bank auction, which sells the dollar according to space satellite deals and invoices. More government spending is wasted on astronomers, and even our esteemed government is a space object.
Moreover, no expert can determine the identity of the Iraqi economy if it tries to measure it according to a well-known economic theory or an experienced experience of a country. It is distorted and without a clear identity. It can not be described as a capitalist system because capitalism is the essence of profit and the individual's property and rights. public, nor is it a socialist because the essence of socialism and logos are achieved through a social profit public interest, and which realized the individual interests of the people, according to theoreticians.
Is simply a system based on chaos and easy money and the system and laziness and deceit and fraud and manipulation of all engines of the economy and disable them without a logical reason, but the absence of vision and the kidnapping of the state by a layer knocked on the source of economic decision for more than thirty years and mated their interests with the new system to continue in the parasitic game germs can not live only in a polluted environment, and to explain some of that we will address as well as an important and dangerous of the monetary policy of the Central Bank of Iraq.
There is no convincing explanation for the undeclared agreement between the fiscal policy of the Iraqi government and the monetary policy adopted by the Central Bank of Iraq only to destroy the Iraqi economy through the bias of the foreign product at the expense of local agricultural and industrial product by insisting on the process of monopoly selling foreign currency and get the dinar from the market of During a notorious auction designed to serve banks and companies (48 banks and money transfer companies) are shops that do not practice banking but focus their role in receiving their daily share of the currency teams which are in fact a regular share of the parties of the Authority to perpetuate its ruin Iraq through the waste of approximately 10 - 15 million dollars a day go to the pockets of parties at the rate of 200 thousand to 300 thousand dollars for each bank or a company and transfer and banking, may increase or decrease this proportion according to the weight of the parliamentary and government or by the value of the daily difference, between the dinar's rate at the central bank and its price on the market.
Reviewing the monetary policy of the central bank should begin with the sale of the currency to be at the forefront of the reform of monetary policy, which includes reconsidering the policy of tightening the value of the dinar against the dollar, which serves specific political groups at the expense of the Iraqi economy and the interest of the people in general, and do not claim the discovery of a great thing If we say and confirm that the current hardline policy is not compatible with the free market economy and is not fully compatible with what is happening in the world of the open market across borders and nationalities, while noting that the Iraqi state exports one commodity is oil and receive revenues in US dollars while struggling from In order to reduce its value against the Iraqi dinar while the dollar is a significant situation in all the global financial markets and on the contrary we see in Iraq, a significant decline in real value within a policy oriented where the difference between the dinar in the bank and the parallel market (the market of banking companies) To the political parties that monopolize the purchase of the currency through their banks and joint companies in the auction of the daily currency, and no country conspires on its economy in this way except Iraq is acting in contrast to the countries of the productive world (China, for example), which is struggling to stabilize (Yuan) the prince This is my part of the successes of China, which surpassed Japan to become the second global economy after the United States.
That exchange rates exaggerated for psychological or political reasons have nothing to do with the value of the real dinar and it will not only serve the foreign product and foreign exchange smuggling operations outside the country and necessarily produce a negative impact of reducing the competitiveness of agricultural production and the domestic industry, reducing the rise in exchange rates from incentives for the production of goods and weaken the competitiveness with imported products, as it leads to heavy damage to agriculture and this is what is happening now as a result of internal exchange bias against agriculture with the terms of the increased need to import food, and this situation benefit importers in particular, whether they Such as the Ministry of Commerce or the private sector, which provides a model environment for incubators of corruption (the reports of the Commission on Integrity confirm this now), not to mention the effects on the expense of capital transactions, where the growing concern and push the capital to escape, especially in the light of fear of new cuts We see now that most Iraqi capital is stable in the banks of neighboring countries such as Jordan and the UAE and others as a result of lack of confidence in the policies adopted by the government in the management of the economy, and loss of confidence in the prevailing monetary system, and this is the root cause in creating an environment repelling foreign investment in Iraq.
We must be aware that the supply and demand in the international financial markets is the best option for the Iraqi currency without the intervention of the state and that a stable currency at a reasonable price against other currencies is better than a high-priced currency but is very concerned about the shocks of the market, so we urgently need a new economic philosophy that leads to generating development And to expand the supply and demand for local production in all its variants, especially in an important aspect of monetary policy is dealing with the value of the development of the dinar or the liberation of the value of the dinar is the best way to cut all ways of corruption in front of parties in this vital and dangerous sector of the Iraqi economy.
The liberalization or floating of the currency is not strange or innovative in the money market, it is a tool of the monetary policy of the States and not a frightening thing or adventure calculated as calculated by bandits benefiting currency teams at the auction bank, and often used this process when the central bank departments to correct The value of currencies that governments value as they are in Iraq now for reasons not related to development, but the motives of theft as well as political objectives aimed at misleading people with the value of national currency is disproportionately high market value.
Usually, the central banks deal with foreign currency in the world in three ways, the first called the restricted value, which is currently adopted by the Central Bank of Iraq and these include the determination of a fixed exchange rate of the dollar by pumping the dollar to the market to maintain a fixed price, but not true, and this behavior has lost Iraq tens of billions of dollars as well as debt, which account for more than $ 100 billion currently.
The second method is floating or editing the value of currency exchange, which means preventing any intervention at the price of the currency, but make the market is the controlling exchange rate has been an adventure in the very short (months) because it may create confusion and extremism in exchange rates at the moment of decision to float and beyond days because of a few anti-propaganda that will be used by speculators in the currency market and the absence of the head of a real money cycle in Iraq, but it is good and beneficial in the short and medium term (one to two years).
The third method is called the floating float, in which a specific price is set for the dollar, and another represents a maximum limit, leaving the currency floating between these two prices. This is what it personally called the "driving value of development." For example, 1500 dinars and although it has not announced a minimum and higher, the price fluctuated between two prices was the highest does not exceed 1550 and a minimum price of not less than 1450 dinars with the opening of windows for sale in each bank or banking company all over Iraq and to be a branch of the Central Bank in the center of each linking the province with an electronic advertiser transparent any citizen can read it everywhere, though a The proposal is to provide up to $ 11 billion to the State Treasury annually, and more clearly is to link the Iraqi dinar to the US dollar, as Gulf countries do when they linked their currencies to the US dollar and the process of change depends on changing the value of the dollar in global markets, which is important to understand the size and measurement of cash in Iraq With the same in the global markets and through it can know the nature and size of our economy accurately away from the fallacies and auctions, which is spoken by many of the (dinosaurs) kidnapped economic decision in one of the most dangerous and delusions and practices in the Iraqi society .
In order not to be accused of theorizing as the users promote, a very practical example must be presented from the Middle East. Egypt has liberalized the Egyptian pound seven months ago and the press has stood against this decision. Many have objected to illiterate people who are accustomed to the old socialist pattern woven by Nasser and Followed by governments, but the rapid output so quickly realized that the problem of foreign exchange in Egypt is something of the past, and the Egyptian balance of payments surplus of 7 billion dollars after the deficit was 12 billion dollars in 2011, and foreign exchange reserves are outperforming global rates, and succeeded Bank Center Therefore, we say that flotation is the only scientific and internationally proven solution to eliminate the theft of hard currency from the Central Bank, which is the ideal solution to launch the development process by encouraging the agricultural and industrial product of Iraq and the heart of the equation development of bias to the national product.
The reform of the monetary policy should not only reform the value of the dinar, but should include the interest rate and the terms of lending. The Iraqi central bank will be half the economic solution in Iraq and the other half will be linked to the government's fiscal policy and the reform of the loose administrative structure of the Iraqi state.