IMF … between the development of economy and finance of corruption in Iraq
IMF … between the development of economy and finance of corruption in Iraq
Posted 28/11/2016 11:09 AM
Corruption and economic disarray practiced by successive governments in Iraq since 2003, in all its forms and fields is more greedy and deadly and spread the country’s economy from the direct physical occupation.
And it highlights the seriousness of the corruption Iraq’s request to borrow from the International Monetary Fund; to address the deficit in the balance of payments on the one hand and dumping the Iraqi economy, debt and economic dependency does not end on the other hand; forcing Iraq to open the doors of its economy wide for interventions, and controlled by the IMF’s major companies IMF, who will bear the burden of debt for future generations.
In the same context, the Iraqi government signed the so-called agreement warm-measures with the Fund; because of acute shortages and balance of payments deficit of Iraq in light of the financial crisis, and corruption, stifling the economy and waste of public money to the state, and these measures represent a program overseen by the Fund with the help of the World Bank; to assist member countries two, and facing such crises.
Created the International Monetary Fund by the end of the Second World War, which claimed the lives of tens of millions, as it met in 1944, representatives of 44 countries at a conference in Bretton Woods, USA, where they put the plans in order to stabilize the global financial system and encourage the development of trade, remove obstacles in the long term on lending and international trade, and the reconstruction of Europe.
And discharged from the Bretton Woods Conference, which is essential to oversee the international monetary system and strengthen and to provide advice to its members on economic policies, and provide loans to the Member States, and control of recycled Convention.
The fund gets its funds from the member countries, and depending on the size of the quota is determined by the number of each country’s votes in the Fund’s members, and the limits of borrowing provided by his fund, the greater the size of the country’s economy in terms of output, increased its stake in the fund, the United States of America, which is the largest economy in the world, and contribute the lion’s share in the international Monetary Fund and a share of the 17.6% of the total quota,
Can not be separated World Bank action which works on the development of developing countries, the fight against poverty and the development of financial systems of the Member States for the work of the International Monetary Fund, they are working in parallel and cooperation, and are linked organically, and to any State that becomes a member of the World Bank requires her to be a member of the Fund international Monetary first.
And that’s where the International Monetary Fund works as an umbrella safety and the protection of international financiers, as they can be Akarzoa their money without caution or concern at will when the liquidity they have, the fund repayment to them and ensures that no matter what the conditions are, and the results, note that this is contrary to the principle of a free market, which states: “bear the lender and the borrower’s part of the responsibility taken by the lending decision “; which means that the financiers are making gains and profits under all circumstances, while the borrower pays high prices in the cases of right and wrong, (vow of globalization / Yahya Abdul Hai Zaloom).
In May / May 2016 and the IMF agreed to give Iraq a loan of $ 5.4 billion over three years, and was the first value of a batch of the loan of $ 600 million, and the unfortunate fact that are lending to the oil country program application, so how about if this is the state of the richest countries of the world, such as Iraq; and it raises doubts about the issue of borrowing.
The financial and administrative corruption and financial crises in Iraq sapped its economy Because of lower oil prices, Iraq has lost 85% of the strength of its economy; for adoption mainly on oil, causing paralysis of the economic movement in it, “because the rentier mentality that government works depends on the sale of crude oil, and the principle of maximizing financial returns far from achieving sustainable development, growth rates, and this is a deficiency and clear to the political system and a lack of experience on how economic life management and reforms and management of crises, and do not keep up with developments in the economic and political environment and the technological revolution at home and abroad; the creation of these crises, so it was necessary, the relevant macroeconomic management, a series of actions which is evaluating the reserves of the state of the foreign public debt, currencies, after the general financial evaluation and availability of financial resources for investment, as there must be an order of priority that would achieve economic reforms, and all these reasons and the absence of economic decision to address the crises reflected negatively on the economic situation and brought the government to borrow money from the international Monetary Fund.
Economic Adviser to the Prime Minister revealed the appearance of Mohammed Saleh, said that the loan was worth $ 5.4 billion.
And that the interest rate on this loan does not exceed 1.5% per annum.
It is assumed that this loan helps to strengthen the creditworthiness of Iraq, while the Parliamentary Finance Committee criticized Iraq borrow from the IMF and legacy of corruption eating away at government departments. (Compare with news)
The IMF has put several conditions on lending to Iraq, including oversight of the auditing Iraqi financial institutions, and the reduction of social benefits, and not compromising the salaries of young staff, with the exception of second-class staff and first who are the rank of director general or above, and the imposition of a tax expense of them.
Premium Fund loan granted to Iraq to 17, a boost that is watching after each batch bridge the economic gaps by Iraq mechanism, what is so obvious evidence that calls into question the credibility of the IMF policies pursued by successive Iraqi governments over the previous years after 2003.
As a result of this corruption revenues fell; what contributed to the high number of poor people in Iraq for more than 10 million people while the country is witnessing a big wave of displacement exceeded 4 million Iraqis are suffering a lack of services or any chance to live decent, and the widening financial gap between expenditures and revenues to $ 50 billion according to Iraqi government sources.
And the balance of payments registered a deficit may be financed sections of it by using foreign reserves, which shrank by 13% at the end of September 2015, according to the International Monetary Fund and approval of the Iraqi government to do so.
IMF experts noted the following observations on the economic policies in Iraq:
1-lack of discipline in the public finances of the Iraqi state, expressing disappointment that the process of allocating oil resources are based on political considerations, not economic science.
2-large banks in the name, size suffer according to the IMF experts severe shortage in the capital, Fmsrv Rasheed has half of the minimum capital requirements of 250 billion Iraqi dinars, or $ 214 million. The Rafidain Bank, it has a minimum of five, while Islamic banks and the number of 6 banks operate without its own Islamic banking law. Although the number of banks in Iraq of 56 banks, there is no exchange of information among themselves about what the terms of existing or potential borrowers.
It is strange that the Iraqi banks do not apply the most basic assets of banking, because after thirteen years of change that took place in Iraq, they do not have a record internationally tariff, (IBAN), which is an essential and important in the global banking deal, because the corrupt do not want to link the system Iraqi banking with the global banking system to facilitate money laundering operations and the financing of suspicious transactions; what does this impact negatively on the development of the banking sector, the decline in the flow of foreign investment.
3. In a large neglected in macroeconomic statistics, which suffer neglect and poor experience; therefore, most of the accounts that are prepared lacked quality, as a result of the comprehensive source of data on the activities shortage, the categories of spending in the gross domestic product, and according Fund forecasts will reach Iraq’s oil revenues to 5 trillion dinars in the current year, and 12 trillion dinars in 2017, while public debt, it will rise to 66% of gross domestic product this year actually retarded the Iraqi economy and lack of confidence of international institutions and government departments that came to Iraq after 2003, not to mention the ‘s future is encouraging for the economy for these reasons, the Iraqi imposed several conditions on the fund to give Iraq any loans, and agreed with the Iraqi government on a number of measures, and most important:
1-application of the “one treasury account”, to prepare a list of accounts of all banks that are under the control of the Ministry of Finance, identifying all sub-expenditures in the federal government.
2. disclose the size of dues to local contractors, and provide detailed accounts of social welfare, and the ration card.
3. stop any new appointments, with the exception of health, education and security sectors.
4. tighten controls on money laundering, calling the Integrity Commission to investigate the financial assets of senior officials; to improve anti-corruption efforts, and promotion.
5. World Bank assistance to the Ministry of Planning to carry out the reform of the “General Investment Management”; therefore face Fund experts to establish a central unit for the management of public investment to examine the projects based on the female students of the feasibility of the establishment of the so-called “integrated projects bank” management of the Ministry of Planning, in order to increase investment spending, growth and achieve outside the oil sector.
6. supervision of Iraq’s debt and censored in addition to audit employees’ salaries to prevent manipulation, frequent payment or payment for so-called “aliens”.
7. In a time when Iraq is suffering a severe shortage of services, especially electricity and water will increase the price of electricity for those who consume more than 600 kilowatts per month, and the Ministry of Finance has proposed taxing the salaries of employees of the second-class upwards, (Middle East Online).
So it was better for the Iraqi government, rather than borrowing a process that will inevitably have negative effects on Iraq’s economic future and the dependence of the Fund, to be treated wounds itself by relying on their own resources, to stop the bleeding of corruption and procrastination law enforcement on the one hand, and reduce expenditures on the other hand, because the a serious attempt to address the main causes of the problem, instead of seeking treatment results, states and governments when has a real resolve crises and problems will be available, heading straight towards the real reasons for it, without any wrapping, sometimes no matter what, and at other times trying to process the results without the introduction of the reasons, and in application for saying: “diagnosis of half medicine”, the government should be more transparent in the diagnosis of the situation, and more procedural in traffic on the right track in processors, bearing interest of Iraq’s sovereign, and the national mind.
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