A former official at the Central: the fiscal deficit will not greatly affect the citizen and no need for external borrowing

A former official at the Central: the fiscal deficit will not greatly affect the citizen and no need for external borrowing

01/11/2014 (0:01 pm)

Baghdad / Wael grace

A former official at the central bank says that Iraq is passing through a crisis “temporary liquidity”, following the increase in the expenses of military operations and the displacement crisis and low oil prices that are expected to settle at $ 80. As he says that the time has come to launch the government’s “economic change” and dismantling of barriers to private sector campaign.
The former official is assumed that the crisis can be avoided by rearranging spending priorities, and the development of “sound” for the collection of fees and taxes diluted way measures do not affect the shoulders of the citizen, and the expansion of domestic borrowing door firing bonds and patient involvement in external debt because they carry a large burden on the country.
The chairman of the government, “Haider al-Abadi,” recently, about his government had discussed the issue of the federal budget for 2014 three times, and will provide a cash budget to the House of Representatives, representing the amounts disbursed by the government since the beginning of this year, with military spending, “pointing out that” 2015 budget will be based on the current year’s budget, because the current problems will continue in the coming year, the province of Kirkuk, where oil wells stopped, as well as lower prices for a barrel of oil dramatically to below $ 90 per barrel. ”
Abadi added that “the Council of Ministers decided to follow the policy of austerity in unnecessary expenses, and we will continue with this policy, because we can not confine the military effort and salaries and basic services to citizens.
The total revenue and expenditure for the first seven months of the year features the in another era Nuri al-Maliki shows that Iraq has spent all the amounts derived from the export of oil, even though he did not pay the Kurdistan dues nor the amounts allocated to Basra petrodollars, nor most of the financial obligations of the provinces which fell to Daash.
In the meantime, says the former deputy of the Central Bank the appearance of Mohammed Saleh told the “term” that “Iraq over the exceptional circumstances in the last ten months, and increased expenses due to the war on Daash, and the circumstances that accompanied the fall of a number of provinces, however, the organization, in addition to the problem of the displaced.” , noting that these events have led to “withdraw cash” available to the government.
He said the former official said that the current liquidity crisis is “temporary”, but accompanied by the problem of the low price of a barrel of oil nearly 25% from the previous price, pointing out that Iraq is in front of the problem of high costs and falling oil prices, which constitute 95% of the country’s budget did not remain in front of the financial management only reconsider the “engineering expenses.”
He says Saleh, said that “there are expenses and regulations and decisions of the financial burdens that can be deferred,” adding, “It is time to rationalize expenses and put him to the priorities of expenses such as counter-terrorism and the displaced and the salaries of the staff and the necessary needs of the citizens, in line with the difficult conditions experienced by the country.”
The former official at the Central Bank believes that the cash could end with “austerity in disbursements” and increase revenue, such as taxes and fees imposed in does not affect the citizen and the cost of economic life, through the organization of sources and outlets of financial achievement and according to the plans studied and “Maps collection” followed by the world, such as taking a thousand dinars for each government treatment, “but they are very low sums totaling would be great,” he said, adding that the government can activate the private sector, which is the biggest money savers. He says Saleh, said that “the state and its institutions to establish a climate allows through which the private sector to spend his money in the field of investment and development and to provide full opportunity to take the role,” noting that the last sector living conditions “inherited” from the restriction and pressure affect the freedom of action. It also asserts that “the government program,” which referred to the adoption of the shift to a market economy appropriate mechanisms can be insufficient to dissolve a lot of financial problems, pointing to the possibility of borrowing from the market, “internal borrowing” by exporting bonds.
But contrast warns of global “external borrowing debt”, because it carries damage and large burdens, so you must wait before entering into this field, also calls for the government to start a big reform campaign and “change” in the economic field to lift obtrusive investment laws and other legislation to speed up the involvement the private sector.
Oil prices have tumbled about 25 percent since June, and overshadowed by a significant increase in high-quality shale oil production from North America to demand at a time of stagnant economic growth. Analysts say an oversupply may continue Snoat.fima expects former official at the central bank to stabilize the price of a barrel of oil at $ 80, while he had predicted, and the former Minister of Oil, “Ibrahim Bahr al-Ulum,” The decline in oil prices to $ 70.

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