KRACKER FIND:
Economic: the features of the Iraqi economy in 2010
A year after the global financial crisis
سمير النصيري Samir Alnasiri
One year after the global financial crisis and their implications reflected in a clear and evident in the Iraqi economy in 2009 will be the most impact in 2010 in all economic sectors, including in particular with regard to monetary policy, financial and banking system during the crisis of oil prices
Which is the main enforcer of the crisis on the Iraqi economy, given that oil is the main supplier to the achievement of the financial resources of Iraq.
In addition to the banking system in Iraq has no strategic partnerships of any kind with the global banking system and tactics in granting credit tight to a large extent.
Emphasizes the role of prices in the crisis, therefore, harmful influences in the Iraqi economy will be clear because of low public revenue offset by an increase in public spending and would inevitably in the figures and indicators of the overall budget for the year 2010, although the relative recovery of the world's major economies and higher oil prices higher installed to the $ 60 a barrel and we expect high levels of demand in the global market.
Therefore, this situation will impose a set of consequences and economic obstacles to the national economy, according to the following:
First - the sharp decline in overall revenues, including resources, mainly oil market during the next three years (2010-2012) due to a drop in oil prices, which you will never contact to high levels before the outbreak of the crisis hit in July 2007 up to (147) dollars per barrel as will determine the possibility of the Ministry of Finance in preparing a budget for the implementation of an ambitious reconstruction projects and the implementation of large investment projects planned.
II - expected in 2010, rising public expenditure and expenditure plans due to a security and stability and provide requirements of the forthcoming electoral process and the expenses of other requirements such as salaries, wages and amounts of coverage to support the ration card and the payment of foreign debt owed by Iraq and elsewhere. In addition to the continuing oil production quotas within the ceiling of a million and a half million barrels and not to develop oil projects and expansion of the network producing wells will not open to doubt as to restrict the movement of the economy and stop the lag in development projects and reconstruction because the deficit in the budget for 2010 will continue and rates are likely.
III - is expected that the approval of the budget for 2010 will be delayed some time due to the legislative elections and elect a government and a new Parliament that will affect the delay in the implementation of development plans will increase the investment potential negative consequences for the economy for the year 2010 in all areas, including significantly higher rates of inflation and unemployment rates that are already high at present.
IV - The inability of the Iraqi economy to develop domestic production capacity over the past years is clearly impact in the provision of local goods and services but also encouraged the expansion of imports increased and led to be competitive with the imported product is not balanced and thus will hurt the overall economy.
V. - will be the implications for investment in Iraq due to continued contexts and laws of the currently approved in the management of the investment process and development that did not encourage international companies to work in Iraq.
VI - will be affected by the banking system in Iraq is largely due to monetary and fiscal policies militant currently in place would impact positively on the economy in all vital facilities.
Remedies proposed to overcome the consequences in 2010
1. To increase public revenues and rising rates coupled with rising oil prices and we expect high demand during the next four months because of the winter season, coupled with high production quotas by at least (2-3) million barrels per day.
2. Reduction of public expenditure in all areas of the economy so as to achieve rational balance between revenue and expenditure and contribute to addressing the accumulated deficit in the budget for the years 2009 and 2010
3. Promote, develop and build the bases of the national industry and what he believes to reduce imports and not to import what is produced locally and support the industrial sector activity in order to achieve this goal.
4. Created a solid legislative, economic and security to encourage international companies to invest in Iraq. And the development of an operational mechanism based experiments of the countries that have preceded us in this area and non-compliance is now available, including laws, policies and mechanisms, because the foundation in building the economy is the broad investment and healthy, which guarantees the rights of investors and attract capital, the Iraqi refugee and the conditions and requirements necessary to do so, including the establishment of long-term investment portfolio to provide mechanism for the role of market maker by global investment firms.
5. Strengthen and reform the private banking sector in Iraq, and directing fiscal and monetary policy as a refresher for the expansion of the possibility of economic growth and stimulate the private industrial, agricultural and commercial banking and to contribute to building and supporting the national economy, particularly in non-oil sectors.
6. Review and update the development and review of legislation and laws regulating the economic activity that contributes to building relations of mutual trust between the activity and private investors and government bodies responsible for different sectors of the economy and the most important of these laws must be reviewed by the Law on Banks and Securities Commission Act and the enactment of new financial investment A review of gaps in the investment law in force.
7. Reform of the private banking sector through support for private banks to allow them to carry out banking operations and tools for all the projects and activities undertaken by the ministries and departments affiliated to it and not identified and accounted for in banks and opening documentary credits from foreign imports and the acceptance of foreign remittances and the issuance of (a bill of exchange), and equality with state banks actually In practice, agreed that the Iraqi Central Bank and the Ministry of Finance and its related entities, including coordination and standardization of regulations and legislation to achieve this.
8. The Central Bank of Iraq to reconsider studying the possibility of reducing the legal cover deductible and 25% of the volume of deposits in banks and frozen with the CBI without investment. These amounts can be frozen to invest and benefit from the support of private banks and enable it to expand its investment and the search for new banking products.
9. Setting up a company to ensure and secure the credit of all kinds, making the state contribute to the control and the risks involved in doing these credits to ensure a fixed percentage and a way that makes the State will guarantee at least 50% of the credit.
10. Review of the instructions issued by the Central Bank of Iraq regards the setting of interest rates and make it (a minimum and maximum) and give freedom of movement for the banks to conform to these limits.
11. Study the development, support and motivate the Iraqi market for securities and find the means and tools that are pushing to raise the prices index of the market and companies, including assets and consistent with the standards for production and profits by at least certainly for the true value of the shares and to prevent speculation that harm the Iraqi assets which are disproportionate to the value of the real and actual.
12. The need to develop a new system to ensure control of companies and financial institutions "outside the banks," which deals overseas transfers to protect the interests of citizens and the fight against money laundering operations.
13. We suggest that the Central Bank of Iraq to organize timing of policies to reduce benefits in order to ensure reduction of precautions implemented by the banks so that they became some of these banks pursued policies of credit and some short became a matter for long-term fixed deposits and the banks have adopted policies are very conservative to reduce the risk of fluctuating interest rates.
*خبير اقتصـادي * Senior Economist
Economic: the features of the Iraqi economy in 2010
A year after the global financial crisis
سمير النصيري Samir Alnasiri
One year after the global financial crisis and their implications reflected in a clear and evident in the Iraqi economy in 2009 will be the most impact in 2010 in all economic sectors, including in particular with regard to monetary policy, financial and banking system during the crisis of oil prices
Which is the main enforcer of the crisis on the Iraqi economy, given that oil is the main supplier to the achievement of the financial resources of Iraq.
In addition to the banking system in Iraq has no strategic partnerships of any kind with the global banking system and tactics in granting credit tight to a large extent.
Emphasizes the role of prices in the crisis, therefore, harmful influences in the Iraqi economy will be clear because of low public revenue offset by an increase in public spending and would inevitably in the figures and indicators of the overall budget for the year 2010, although the relative recovery of the world's major economies and higher oil prices higher installed to the $ 60 a barrel and we expect high levels of demand in the global market.
Therefore, this situation will impose a set of consequences and economic obstacles to the national economy, according to the following:
First - the sharp decline in overall revenues, including resources, mainly oil market during the next three years (2010-2012) due to a drop in oil prices, which you will never contact to high levels before the outbreak of the crisis hit in July 2007 up to (147) dollars per barrel as will determine the possibility of the Ministry of Finance in preparing a budget for the implementation of an ambitious reconstruction projects and the implementation of large investment projects planned.
II - expected in 2010, rising public expenditure and expenditure plans due to a security and stability and provide requirements of the forthcoming electoral process and the expenses of other requirements such as salaries, wages and amounts of coverage to support the ration card and the payment of foreign debt owed by Iraq and elsewhere. In addition to the continuing oil production quotas within the ceiling of a million and a half million barrels and not to develop oil projects and expansion of the network producing wells will not open to doubt as to restrict the movement of the economy and stop the lag in development projects and reconstruction because the deficit in the budget for 2010 will continue and rates are likely.
III - is expected that the approval of the budget for 2010 will be delayed some time due to the legislative elections and elect a government and a new Parliament that will affect the delay in the implementation of development plans will increase the investment potential negative consequences for the economy for the year 2010 in all areas, including significantly higher rates of inflation and unemployment rates that are already high at present.
IV - The inability of the Iraqi economy to develop domestic production capacity over the past years is clearly impact in the provision of local goods and services but also encouraged the expansion of imports increased and led to be competitive with the imported product is not balanced and thus will hurt the overall economy.
V. - will be the implications for investment in Iraq due to continued contexts and laws of the currently approved in the management of the investment process and development that did not encourage international companies to work in Iraq.
VI - will be affected by the banking system in Iraq is largely due to monetary and fiscal policies militant currently in place would impact positively on the economy in all vital facilities.
Remedies proposed to overcome the consequences in 2010
1. To increase public revenues and rising rates coupled with rising oil prices and we expect high demand during the next four months because of the winter season, coupled with high production quotas by at least (2-3) million barrels per day.
2. Reduction of public expenditure in all areas of the economy so as to achieve rational balance between revenue and expenditure and contribute to addressing the accumulated deficit in the budget for the years 2009 and 2010
3. Promote, develop and build the bases of the national industry and what he believes to reduce imports and not to import what is produced locally and support the industrial sector activity in order to achieve this goal.
4. Created a solid legislative, economic and security to encourage international companies to invest in Iraq. And the development of an operational mechanism based experiments of the countries that have preceded us in this area and non-compliance is now available, including laws, policies and mechanisms, because the foundation in building the economy is the broad investment and healthy, which guarantees the rights of investors and attract capital, the Iraqi refugee and the conditions and requirements necessary to do so, including the establishment of long-term investment portfolio to provide mechanism for the role of market maker by global investment firms.
5. Strengthen and reform the private banking sector in Iraq, and directing fiscal and monetary policy as a refresher for the expansion of the possibility of economic growth and stimulate the private industrial, agricultural and commercial banking and to contribute to building and supporting the national economy, particularly in non-oil sectors.
6. Review and update the development and review of legislation and laws regulating the economic activity that contributes to building relations of mutual trust between the activity and private investors and government bodies responsible for different sectors of the economy and the most important of these laws must be reviewed by the Law on Banks and Securities Commission Act and the enactment of new financial investment A review of gaps in the investment law in force.
7. Reform of the private banking sector through support for private banks to allow them to carry out banking operations and tools for all the projects and activities undertaken by the ministries and departments affiliated to it and not identified and accounted for in banks and opening documentary credits from foreign imports and the acceptance of foreign remittances and the issuance of (a bill of exchange), and equality with state banks actually In practice, agreed that the Iraqi Central Bank and the Ministry of Finance and its related entities, including coordination and standardization of regulations and legislation to achieve this.
8. The Central Bank of Iraq to reconsider studying the possibility of reducing the legal cover deductible and 25% of the volume of deposits in banks and frozen with the CBI without investment. These amounts can be frozen to invest and benefit from the support of private banks and enable it to expand its investment and the search for new banking products.
9. Setting up a company to ensure and secure the credit of all kinds, making the state contribute to the control and the risks involved in doing these credits to ensure a fixed percentage and a way that makes the State will guarantee at least 50% of the credit.
10. Review of the instructions issued by the Central Bank of Iraq regards the setting of interest rates and make it (a minimum and maximum) and give freedom of movement for the banks to conform to these limits.
11. Study the development, support and motivate the Iraqi market for securities and find the means and tools that are pushing to raise the prices index of the market and companies, including assets and consistent with the standards for production and profits by at least certainly for the true value of the shares and to prevent speculation that harm the Iraqi assets which are disproportionate to the value of the real and actual.
12. The need to develop a new system to ensure control of companies and financial institutions "outside the banks," which deals overseas transfers to protect the interests of citizens and the fight against money laundering operations.
13. We suggest that the Central Bank of Iraq to organize timing of policies to reduce benefits in order to ensure reduction of precautions implemented by the banks so that they became some of these banks pursued policies of credit and some short became a matter for long-term fixed deposits and the banks have adopted policies are very conservative to reduce the risk of fluctuating interest rates.
*خبير اقتصـادي * Senior Economist