Friday, March 27, 2020
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Government and parliamentary efforts to pay for the damage to the citizen's livelihood
Baghdad / Huda Al-Azzawi
The economic situation caused by the fall in the price of oil and the corona epidemic have prompted government and house officials to look for alternatives to cover the deficit and at the same time manage the country's health crisis.
Despite the objections to the violation of the salaries of employees, the challenges force to take austerity measures to cross this stage, according to deputies, officials and specialists in economic affairs, including the pressure of government expenditures and the review of the financial privileges of some groups, while others believe that this complex crisis and the political conditions of the country, has prepared any chance to approve the general budget for fiscal year 2020.
Dr Magda Tamimi, a member of the parliamentary finance committee, said the budget in its nature depends on two parts: oil revenues and non-oil revenues.
"Oil revenues make up about 93 percent of the budget value, as the Iraqi economy is one-sided, as opposed to a small income from taxes, customs, state real estate and other tax funds," she said, noting that these revenues have declined significantly during the current two years and the past, due to the lack of use of electronic transactions in order to maintain opportunities for corruption.
"Iraq has very large non-oil revenues, but the state treasury is only 10 percent, and the rest goes to the pockets of the corrupt," she said.
"The sharp drop in oil prices, which coincided with the outbreak of the Corona virus, has paralysed most state departments, not only in Iraq but in countries around the world," she said.
These challenges have prompted executives and legislatures to seek solutions, including recommending that certain categories of employees be cut off in order to support efforts to combat coronavirus and strengthen health services that are incapacitated, she said.
"There are also other proposals to address the financial crisis, by going to doors that do not affect the salaries of employees, which will be discussed at the next meeting of the parliamentary crisis cell, stressing that expenditures should be compressed, and money is directed towards the provision of health services and salaries and support for the poor.
Tamimi acknowledged that the state is having difficulty in securing these requirements and managing the funds in the next phase.
"The dramatic fall in oil prices will have a major impact on the budget, which has been delayed because of the country's political situation," said Abdel Hussein al-Hanin, an advisor to Prime Minister Abdel Hussein al-Hanin.
"We found it inappropriate to continue this situation, especially with the delay in forming a government that will take it upon itself to adopt a new budget for the country, which prompted the government to form a team of prime ministers to prepare a budget differently from previous budgets, based on performance and programs, and also to take into account the significant decline in oil prices," he said.
He revealed that there is a proposal to deduct a limited percentage of the staff allowance slot and not from their original salaries, and temporarily, provided that these percentages return with the gradual recovery of oil prices, but the matter is still under discussion.
He pointed out that the new budget, which is being prepared by the team in charge, will be free of deficits or there will be a low rate of not more than seven trillion dinars, which will be covered by the issuance of government bonds, in cooperation with
Another view is that the adoption of bonds as a resource to meet the necessary expenditures, a proposal that is still under discussion and study, pointing out that the Corona crisis has cast a shadow on the economies of the world as a whole, and may be better in the situation of Iraq than other countries, after taking a series of measures, as the government It is tended to postpone the completion of many installment payments for loans and there is a study to activate the private sector to face this current situation through banking facilities to make way for the private sector to stimulate the economy.
But economist Dr. Jaafar Baqir Alloush said the budget was important for the time being, and told Al-Sabah that "re-engineering public expenditures is the only access available to the monetary authorities in Iraq to get out of the crisis."
"The fall in oil prices to levels of one-third of their value in 2018 and half of their value on the basis of the 2020 budget has created an economic environment that is faltering in the face of the implementation of the budget." With global stock indices falling and many global financial markets heading towards economic stagnation that could extend for the rest of this year, Iraq is blocking access to additional funding to meet the budget deficit."
"There is a global crisis of low values for economic assets and a reassessment of the prices of world commodities, including oil," he said. The next recession will also set real determinants for the return of the price of oil."
"The overall shape of the Iraqi economy is dominated by distribution, with the services and distribution sectors accounting for 42 percent of GDP and oil at about 56 percent, and the productive sectors remain the weakest," he said.
"With such situations, quick and really available solutions are needed. The Iraqi dinar was depreciated in a controlled manner before it was forced to fall in order to ease the burden of the country's internal obligations."
"Overcoming the crisis of low oil prices requires stopping the approval of any budget and relying on the 2019 budget by reducing 30 percent on all aspects of exchange, including salaries and privileges starting with presidencies and general managers, and private degree holders," he said. "It will be necessary to reduce the amount of concessions and prevent the combination of two deposits, and to activate non-oil revenues from duties and taxes to a minimum of 10 billion dollars," he said.
In addition, the re-agreement with the Kurdistan Region guarantees access to oil revenues exported there, guaranteed means of payment, as well as pressure on government spending.
It is also possible, and to talk to Jawahery, to postpone the payment of the dues of the oil companies operating in Iraq, to provide sufficient amount of money and manage it properly during the remainder of this
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