Iraq demands broad economic reforms, will it respond?

Iraq demands broad economic reforms, will it respond?


Iraq demands broad economic reforms will it respondThe United Nations Mission to Iraq believes that carrying out economic and financial reforms during the coming period is important and that the country needs international and domestic support to implement it, especially with regard to the crisis of the depreciation of the dinar and the restrictions imposed by the Federal Bank on selling dollars two months ago.

This was evident in the briefing of the head of the “UNAMI” mission in Iraq, Jenin Blaskarat, before the UN Security Council, when she warned of the consequences of delaying the economic, monetary and financial reform that the country seems to need and is long overdue.

She referred to the clear wave of anxiety in Iraq recently, following the rise in the exchange rate in the parallel market, which increased pressure on Iraqi women and men on a daily basis.

The Central Bank of Iraq had taken measures under pressure from the US Federal Bank and international organizations to change the mechanism for selling dollars, especially the import and export amounts, and to make them consistent with financial and banking developments in the world, which led to an increase in the exchange rate to the limits of 1800 dinars per dollar, a significant increase from the previous price, which was It amounts to 1470 dinars.

These serious calls for the implementation of real economic reforms, after the situation in Iraq has reached dangerous levels that threaten it with the return of protests again in most of its regions, and the deputies found it an indispensable necessity to maintain the stability of the country.

Save the economy

In the context, Jamal Cougar, a member of the Finance Committee in the Iraqi parliament, stressed the need to carry out a set of reforms to save the economic situation and said, “The reforms that the United Nations is talking about and that are supposed to be implemented are represented in the necessity of sending the budget, applying the electronic platform, fighting corruption, and modernizing the applicable economic system.” Noting that “this system has been followed since the sixties of the last century, and our budget is a budget of items.” He added that since the establishment of the Iraqi government in 1921, the budget is a balance of items and the whole world has bypassed this system, stressing the need to structure the financial system, which is the most important point that should be worked on, as well as improving the financial policy and the banking system, as it is not reasonable to steal 3.75 trillion dinars (2.5 trillion dinars). billion dollars) and its discovery after months, indicating that there is a failed monetary system in the Iraqi state.

Cougar indicated that all countries in the world apply the “Swift” system, except for countries that are outside the global monetary system, indicating that there is a possibility to implement this system in Iraq, despite our doubts that there is a desire to do so.

Liberalization of the balance of payments

On the other hand, the Advisor to the Prime Minister for Financial Affairs, Mazhar Muhammad Salih, revealed that the country is heading towards a broader liberalization of the balance of payments and lifting the restrictions imposed and restricted on many of its transactions with abroad for inherited reasons, indicating that this step includes liberalizing transfers in foreign currency in a flexible and orderly manner through the financial system. Sober international and high-level international banking institutions.

Saleh said that this matter will provide a high level of governance and transparency in Iraq’s banking and financial relations with the outside world, and achieve broader stability in the exchange market, indicating that it is necessary that these measures be commensurate with the country’s reserves in foreign currency, which touched 115 billion dollars, which is the highest in the history of Iraq. financial.

It is likely that the country will witness stability in the exchange market in the coming days.

lead time is necessary

In turn, the specialist in economic affairs, Mustafa Hantoush, saw “the need to negotiate with the US Federal Bank in order to request a deadline and carry out internal reforms.” He said, “The entry into force of US sanctions on a number of countries, including Iran, Syria and Lebanon, is tightening the screws on the Iraqi dollar.”

He regretted “the presence of inappropriate personalities in the centers of drawing Iraqi financial policy and the lack of real reforms, which led to a large increase in the official exchange rate in the country and generated a state of monetary fluctuation and lack of concern for the dinar.”

He added that the increase in the exchange rate is due to the absence of real coordination with the US Federal Reserve, which became clear after implementing the platform, excluding banks, and requesting purchase and sale invoices.

Hantoush stressed the need to negotiate with the US Federal Reserve and request a period of no less than a year to control the market, in addition to internal procedures represented in addressing the issue of the broker and merchants who do not have invoices, even though they are real merchants.

He pointed out that merchants are afraid of taxes, border crossings, customs, and the Registrar of Companies, which leads to a trend towards the loyalist who pays bribes.

Civil peace

For his part, political science professor at Al-Mustansiriya University, Issam Al-Faili, said that the United Nations believes that the poor economic situation affects civil peace in Iraq.

He explained that “the economic life in the country is linked to a basket of global currencies, the most important of which is the dollar, which contributed during the past days to creating a state of congestion in the street due to its rise in conjunction with government measures to address it.”

He added that the United Nations, represented by Blasschaert and others, indicated that procedures and reforms by the Iraqi government need to be strengthened, especially in the issue of controlling border crossings, some ports, and economic institutions, especially money transfer companies.

Stacked dinars

Al-Faili explained that the application of the American “Swift” system embarrassed many parties that were transferring money without control and tended to buy dollars from the markets, indicating that many forces own full houses stacked in the Iraqi currency and began to push them towards the market while buying the US dollars in a large way.

He added that the government measures represented in striking the dollar smuggling gangs resulted in the arrest of a number of these gangs, and there are a number of follow-up operations in the center, south, and others, indicating that the United Nations wants Iraq to go towards broader measures related to controlling the unofficial border crossings.

He pointed out that the sources talk about the existence of more than 24 unofficial crossings through which money is smuggled, which leads to the arrival of the Iraqi dollar to neighboring countries and countries beyond the neighborhood, indicating that what is sent by the US Federal Reserve to Baghdad goes to the pockets of the corrupt in their economic institutions beyond that. the border.

He stressed the need for high coordination with the region to follow up on the unofficial routes used by dollar smugglers, pointing out that the volume of smuggled money was clear after sales decreased from $300 million to the range of $50 to $70 million, which means that two-thirds of the money was destined for smuggling. .