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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    Proposals and solutions for the Iraq budget crisis 2020

    Rocky
    Rocky
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    • Post n°1

    solutions - Proposals and solutions for the Iraq budget crisis 2020 Empty Proposals and solutions for the Iraq budget crisis 2020

    Post by Rocky Tue 28 Apr 2020, 4:44 pm

    Proposals and solutions for the Iraq budget crisis 2020

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    A number of officials, deputies, economies, and bloggers have deliberated a number of proposals and questions in order to overcome the crisis in the budget for the year 2020, in light of the decline in world oil prices, and I would like to offer some answers about these proposals and questions as follows:
    1- The possibility of the Iraqi state printing the Iraqi currency outside the framework of the monetary block agreed to be issued by the Central Bank of Iraq (a new cash issuance) without the presence of a cover of gold and foreign currencies, which provides funds for overcoming the crisis in the budget for the year 2020?
    The answer here is that there is no such solution in modern Iraqi financial thought after the year 2003, just as the Iraqi Financial Management Law and the Iraqi Banking Law that includes the Iraqi Central Bank Law prohibits the issuance of a new currency without the cover of gold and foreign currencies, just as the international organizations that monitor the work of Iraq and issue its report Annual financial about Iraq prevents Iraq from such a measure that shakes the value of the Iraqi currency and thus weakens the Iraqi economy and causes economic inflation, knowing that the Iraqi currency is printed continuously but within the framework of compensation for damaged money within the monetary mass issued by the Central Bank of Iraq J amounting to approximately 48 trillion Iraqi dinars.
     
    2 - The possibility of the Iraqi state to raise the value of selling the dollar as for the Iraqi dinar in the window of currency sale, which provides new money for overcoming the crisis in the budget for the year 2020?
    The answer here is that the countries usually seek to raise the value of their local currency against foreign currencies, not the other way around, because that such a procedure will cause a loss of deal confidence and long-term savings in the Iraqi currency. Example: The Central Bank of Iraq is currently selling the (1) US dollar at 1190 Iraqi dinars sold in the Iraqi market at (1210) Iraqi dinars, assuming that the Central Bank of Iraq sold the (1) US dollars at (1290) Iraqi dinars it will be sold In the Iraqi market at the price of (1500) Iraqi dinars and more, and that is not Reason for the high dollar price of 100 Iraqi dinars, but because of the loss of confidence in the handling of the Iraqi currency, and it will cause a significant rise in prices with the survival of the level of salaries as it is causing a turning large layer of Iraqi society from the middle class to the poor layer.
    This is similar to what happened in Lebanon during this period, when the Central Bank of Lebanon reduced the value of the Lebanese pound (float) from (1700) pounds to one dollar to (3000) pounds to one dollar, but the price of the Lebanese pounds collapsed in the market to 4,500 pounds to one dollar and could not The Lebanese state has control over the currency rate. We do not want to repeat these mistakes in the Iraqi economy.
    3- Possibility of the Iraqi state to sell oil futures contracts (two oil coupons) to Iraqi citizens?
    The answer here is that selling bonds to citizens in exchange for interest will change according to oil prices in the future. A possible proposal if it is included in the 2020 budget law. As for selling oil coupons to citizens, it needs to (Change the Iraqi Oil and Energy Law No. 9 of 2007 - find stores for this oil because the oil companies You will extract it - get international approval from OPEC +) and this proposal is difficult to achieve.
    As for the mechanisms and how to get out of this crisis without harming the Iraqi economy, it is possible to provide available solutions as follows:
    1- Structuring the 2020 budget for an operational budget and a budget for basic needs of Iraqi society (salaries + drug and food security) and leaving the investment budget for oil price fluctuations, as the price of oil rises to be implemented with a supplementary budget, but if the transformation does not rise for the next year 2021.
    2- Structuring the 2020 budget for an operational budget with basic needs, covering the investment budget through internal debt from Iraqi banks or offering bonds with interest to the Iraqi community, to be paid when oil prices rise.
    3- Structuring the 2020 budget for an operational budget with basic needs, and covering the investment budget by withdrawing part of the balance of the Central Bank of Iraq in the form of central treasury transfers to the state to be paid by the state when oil prices rise exactly as it did in 2015.
    In conclusion, it must be noted that the Iraqi state received approximately $ 1280 billion dollars during the past 17 years, with a surplus of 200 billion dollars during these years. Now, once oil prices drop for two or three months, financial officials and deputies of the Finance Committee say they will cut rates of salaries or declare bankruptcy! !!! Does this talk make sense? Where are these billions? Where are planning in Iraq? Where are financial minds?

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