Iraq cancels direct food purchases
Iraq cancels direct food purchases
Al Arabiya - [5/31/2011]
Iraq's trade ministry has scrapped direct cash purchases of basic food items, such as sugar, wheat and rice, in an effort to outweigh corruption, Deputy Trade Minister Sweiba Mahmoud said according to Reuters reports on Sunday.
The majority of corruption in the country's food supply channels occurred within direct cash purchases, Ms. Mahmoud told a news conference.
"There was a mechanism of cash purchase in the trade ministry and this mechanism has been cancelled," she said.
Protests have broken out over shortages and corruption. Most of the essential food items imported for the national monthly food ration program had come from direct cash purchases, a ministry source said.
The move to cancel the purchases was announced as part of a 100-day target set by Prime Minister Nuri al-Maliki to improve his fragile coalition government's performance.
But the country would continue to hold public and selective tenders to supply food needs, said Ms. Mahmoud.
Iraq’s economy had been battered by the US-led invasion in 2003 that toppled former president Saddam Hussein and led to sectarian violence, a lack of public services and unemployment.
Iraq is one of the world's largest grain importers; it consumes around 4.5 million tons of wheat a year, 1.2 million tons of rice, and 780,000 tons of sugar annually, Reuters reported.
The country, with a population of 30.3 million, has an annual GDP of $117 billion and a GDP per capita of $3,600.
Meanwhile, Ms. Mahmoud said that Iraq had enough sugar in stock to last until September, according to Reuters.
The ministry had requested a total budget allocation for 2011 of 7 trillion dinars ($6 billion), but had only received 4 trillion dollars so far, which was just enough to cover the food ration program needs until the end of September.
Ms. Mahmoud said that the shortfall had slowed down the ministry's performance, but it expected to receive a supplementary budget from oil revenues.
She added the government intended to phase out the food ration program by the end of 2014, keeping it only for the most disadvantaged.
Analysts say that this would give more of a chance for the private sector to import national food requirements.