The financial crisis strangling the Iraqi economy and the government continues to borrow from abroad

The financial crisis strangling the Iraqi economy and the government continues to borrow from abroad

Written by : Yasser Hilali in:August 29, 2017


Light News / Baghdad

Iraq is still going through a severe economic crisis after the collapse of world oil prices as the country's economy is totally dependent on the oil sector by up to 95% of Iraq's total income of hard currency.

With the rampant corruption in government institutions and the absence of real economic policies and the requirements of the war on terror and the presence of 4 million employees, as well as other financial obligations of the government resorted to the development provided by countries and international financial organizations and regional, which in turn tied the Iraqi economy, high financial commitments and long-term loans.

The government is seeking to emerge from the crisis by reducing dependence mainly on oil revenues, where the government Abadi announced its success in reducing the country's dependence on oil revenues to 85% after the rate was 95% percent in the previous government led by Nuri al-Maliki time.

For her part, member of the Committee on Economy and Investment Parliamentary Najiba Najib to activate the income-generating sectors will contribute to reviving the Iraqi economy, but the ministries that are considered an economic service is semi-disabled so far, and do not provide the required level to achieve self-sufficiency. "



She said in a statement that as a result of lower oil prices, the central bank reserves fell hard currency, which led to a rise in the dollar against the dinar and all obstacles to the advancement of the Iraqi economy.

For his part, he said economic expert on behalf of Jamil said the current financial crisis caused by low oil prices, and since 2015 the government began to implement a special plan to boost the economy, with targeted spending cuts and accounting corrupt, and increasing non-oil revenues, and activating the role of the private sector, and operation of the productive sectors. "

Jamil, who advises the Iraqi government, he added, "Those reforms proceeded slowly, especially with the expenses that the Iraqi government must pay to finance the war on Daesh and help the displaced, and other various areas of spending, adding that the ministries that are funded by the state and service is still below the level of ambition did not provide little to the general budget of the state.

With the acute crisis of Iraq resorted to foreign loans, reaching so far about $ 120 billion, according to deputies announced in the parliamentary Economics Committee.

The French Foreign Ministry also announced that it will give Iraq a loan of € 430 million "512 million dollars" this year.

French Foreign Minister Jean-Yves Ordian said, "It will be the loan is disbursed before the end of 2017, confirming the support of the Iraqi Paris moves in its war against terrorism and in the reconstruction of areas affected by the process.

The World Bank estimates, the cost of the reconstruction of the restored cities of the terrorist organization Daesh by about $ 100 billion, after the end of the battle of the restoration of Mosul, in the month of July.

Experts said the World Bank said the government expects the Iraqi government, to reach the value of the reconstruction bill of destruction left by the restoration of Mosul and other areas of Iraq battles to $ 100 billion.

Iraq had received a number of loans to finance reconstruction and the war against Daesh, as now, seeks to request a loan from the International Monetary Fund for the reconstruction process; which costs between 700 and a thousand billion, while government officials rely on donors in Kuwait, the Conference next year.

MP for the province of Nineveh, the victory of al-Jubouri said that the province need a great support to start reconstruction operations, where the Iraqi government is still unable to provide support for the province, as well as a political crisis rocking the Council of Nineveh, which is the most affected by the military operations of the Iraqi provinces. " .



She said in an interview for "Noor News" that the count is currently on international donors, especially to be held next year Kuwait conference, and the Iraqi government, they can not absolve themselves of their duties, and it today to begin the reconstruction of the city and restore life after receiving a number of loans. "

Challenges facing the government

The Iraqi government is facing very big problems and challenges, starting from the collapse of infrastructure in the provinces that have seen a war against terrorism, in addition to rampant administrative corruption and the lack of integrity and the adoption of quotas, cutting subsidies on industrial and agricultural sector, and the lack of reality of economic policy, as well as loans that have restricted the Iraqi economy and it is still going on at the request of those loans.

Financial Advisor to the Prime Minister announced the appearance of Mohammed Saleh, Iraq will get about $ 16 billion to fill the budget gap.

Saleh said in a statement that "Iraq has signed last year with the IMF agreement to provide a loan in the coming years on several batches.

And that "the agreement with the IMF will continue until mid-2019 and by 36 months," adding that "the loan will be soft interest of 1.5% per annum and the repayment period of five years and allow a period of two years."

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