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Tuesday 21 April 2020 - 09:17
Parliamentary Finance: External Borrowing Is Subject to Parliamentary Approval
Baghdad - Waaa - Hendrin Makki
The parliamentary finance committee said Tuesday that the government's approach to foreign borrowing needs the approval of the House of Representatives.
"The government cannot resort to external borrowing without obtaining the approval of the House of Representatives," said Mp Ahmed al-Saffar, a member of the committee, adding that "parliament has already voted to ban borrowing from abroad until iraq's old debts are repaid."
"Foreign loans have a very high financial interest rate, especially since most loans are used for consumption rather than investment, which means that the government is unable to return them for repayment," he said.
"The state's financial spending reached a high level last month because of some measures taken by the government," he said, adding that "salaries need about $3.5 billion a month, while oil sales per month do not exceed two and a half billion dollars."
"The government can resort to internal borrowing from banks and giant companies to meet financial expenses in the current crisis," he said, adding that "in a period of crisis, the great powers are putting bonds at good interest rates on the market and then buying them back when the crisis ends."
Earlier, the House Finance Committee announced that there were internal options away from foreign borrowing.
"There are solutions that can be offered that can dispense with external loans to overcome the low oil prices," Said Haitham al-Jubouri, chairman of the Finance Committee, told The Iraqi News Agency (AAP), adding that "the ideas put forward include the activation of customs and the issue of levies, as well as the possibility of utilizing the revolving accounts of some departments in banks."
"The preference is to go in the direction of internal borrowing because it is government funds," he said.
Al-Jubouri stressed the need to "not affect the liquidity available to banks, especially since the economic movement in the country depends on it."
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