Ongoing government action to address financial challenges

Ongoing government action to address financial challenges


Saturday, April 18, 2020
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Ongoing government action to address financial challenges 
Baghdad/ Farah al-Bat
 
As Deputy Prime Minister and Finance Minister Fouad Hussein unveiled deliberate government measures to address financial challenges after the fall in crude oil prices, a financial expert called for speeding up the implementation of an emergency plan to get Iraq out of a potential financial crisis with the potential for continued effects of the spread of the coronavirus in most countries of the world. "We expect the repercussions of the corona spread to the world economy to continue until the end of this year or the beginning of next year," thamer al-Azzawi, an expert, told Al-Sabah.
"Any contraction or decline in the world economy means that the Iraqi economy will be affected, especially since it affects Iraq's main resource, oil," he said.
 
Economic crisis
"The parliament and the government should speed up the implementation of an economic contingency plan to remove or reduce the effects of the financial economic crisis on Iraq," he said.
"One of the most important components of this plan is to achieve agricultural and industrial self-sufficiency in most products," he said, calling for "investing the funds accumulated in some banks, to reduce the crisis."
Meanwhile, the International Monetary Fund (IMF) has confirmed its readiness to provide assistance and cooperation with Iraq to develop a financial plan and prioritize public spending.
 
Cash Fund
"Deputy Prime Minister and Finance Minister Fouad Hussein discussed with the representative of the International Monetary Fund the financial and economic situation," the Finance Ministry's information office said in a statement.
"The minister met, through closed-circuit television, with the head of the Middle East and Central Asia section of the International Monetary Fund (IMF) in Washington, Jihad Azour, and his delegation, and the iraqi side attended the meeting from the Director General of the Public Debt Department in the Ministry of Finance Salaheddine Al-Hadithi and advisor to Prime Minister Salem al-Jalibi," he said.
"At the beginning of the meeting, Hussein explained the most prominent challenges facing Iraq in light of the crisis of the spread of the Coronavirus, the fall in oil prices and the recent opec meeting with the oil countries outside the organization, called OPEC Plus, as a decision was taken to reduce the export of about 10 million barrels per day to the world markets, and Iraq's acceptance of a reduction of more than 1 million barrels per day of Iraq's production, and the impact of this decision and the fall in oil prices on the financial and economic situation in Iraq," the press office said.
The deputy prime minister explained the deliberate measures on how to deal with this situation and how the government can address these challenges.
 
Iraqi Market
On the market situation and the availability of food, Hussein stressed the abundance of agricultural goods and animal products in the Iraqi market, and this is due to the decisions taken in the meetings of the Ministerial Council of the Economy, as the Ministry of Agriculture was supported to protect local agricultural and animal products, which led to the presence of reservoirs and food cover for the local market, which is positive under the current circumstances and the local market prices are not affected due to the closure of border crossings and the suspension of trade with other countries due to the spread of corona disease."
He pointed to the development in the agricultural sector, stressing that the current government plays a role in finding possible solutions to overcome and avoid the current crisis in the face of the coronavirus pandemic and the financial crisis." 
 
Financial facilities
For his part, the fund's representative explained the Fund's readiness to provide assistance and cooperation with Iraq in order to develop a financial plan and prioritize public spending, and the possibility of Iraq benefiting from the fund's financial facilities to member states.
He stressed that it is important to continue to deal with international financial organizations, especially since the Fund is ready to discuss with various countries to help Iraq in the areas of health and finance.
"Iraq will begin reducing its oil production by 22.8 percent from May 1, in accordance with the latest OPEC agreement," Oil Minister Thamer al-Ghadban said.
"The reduction rate applies to all OPEC countries without exception," he said, denying "reports that Iraq has volunteered to reduce its oil production."
 
Oil price
"Financial resources are more important than the amount of oil production," he said, noting that "the reduction was based on studies so that the price of oil would rise, the lower the supply and the market stabilized the price."
"There is no point in increasing production as selling prices fall, so everyone will be a loser," he said, adding that "opec's actions are aimed at increasing the price of a barrel, thereby increasing the financial return."
"Iraq's share of OPEC production includes production from the Kurdistan Region," he said, adding that "a delegation from the Kurdistan Region will arrive in Baghdad to discuss the reduction after contacts made in the past few days."

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