Back to the economics of war

rocky wrote:Back to the economics of war


Monday, April 20, 2020
 1

Back to the economics of war
Ibrahim al-Abadi
 
It is hoped that Mr. Al-Kadhimi's government will begin its work after gaining the confidence of parliament in the same week that the agreement of the exporting and producing countries, OPEC+, this optimistic expectation is based on the leaking of a positive atmosphere surrounding the negotiations to form a government, despite the expected difficulties.
Iraq has entered the plight of the financial and economic crisis, and economists know more than others the true meaning of this crisis, when they deal in the language of numbers and collide with the reality of the terrible figures about the decline of Iraq's financial revenues to two-thirds and the high operational cost of the state machine increased by the government These data will inevitably affect Iraqi society and its members psychologically and valuely, and the political and security situation will be shaken when the financial table shrinks significantly, the funds of the ministries are reduced and the financial flows, which were gained by the forces that succeeded in reaching out to all state facilities, will be shaken. The expectations are that the financial crisis will hit the sensitive nerve of the parties and blocs that are now taking care of their interests by fighting for positions from which they hope to collect money, interests and returns other than those that they have infiltrated before and made them a frog that supplies them with golden eggs.
The problem will be bigger than the government's capacity and stronger than all possible options, the central bank's fiscal reserves are not enough to finance the budget deficit to impose the bank's cooperation with the government in this regard, what exists no more than 67 billion dollars, which is acceptable reserves if the government does not have to finance its budget deficit, which will reach 50 percent if we assume that the fiscal revenue will not reach 30 billion dollars at the best estimates, and the measure of salaries and subsidies 7 million Iraqis will be a difficult ordeal if that requires that 50 billion dollars alone, not to mention other operating requirements, as the pressure of trade mafias and import agents, which last year released more than $60 billion to cover imports and bank transfers went unchecked.
We are facing a serious crisis by all measures and the populist rhetoric and the noise of some mPs and the speeches of politics and the media do not benefit from it.
There is no easy solution at all, the prime minister-designate realizes that success in the battle to manage the financial crisis requires the use of Iraqi economists who are not subject to blackmail and improvisation of party leaders and their representatives in parliament, and a harmonious group of economic ministers should be chosen to put an end to the regrets that have continued since 2004, where the language of political interests and vulgar clientelism has prevailed over the logic of the economy and its equations and laws, until Iraq became an example of lost opportunities and corruption protected by guns. 
Optimists talk about the possibility of turning the serious threat into an opportunity, but the only chance that has not yet been missed is to go to production and close border crossings to imports, reduce consumer spending, adjust the salary scale, reduce the differences between the layers of employees and impose an upward tax on individual income.
The government has a basket of unpopular decisions accompanied by social unrest, but the structural adjustment of the economy has become more than necessary and it is necessary to be frank the people at the first opportunity to start a mobilization of psychology and public media so that the Iraqi adapts to the economics of austerity and is satisfied with the necessities, which are more than the economics of war, which has been left little, but the return to relative welfare, will be suspended on the rotation of the economy from its miserable rent to a productive economy, a condition that will only be achieved by years of thought and a renaissance policy that will not be produced by the current political class, Political change will be a prelude to the advancement of the crumbling economy and lazy daily thought.  The world will change around us and we are forced to adapt to the new reality with all its political, economic and intellectual variables. 
And morality.

[You must be registered and logged in to see this link.]