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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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    National Interest: Financial services via "mobile" will reduce corruption in Iraq

    rocky
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    • Post n°1

    National Interest: Financial services via "mobile" will reduce corruption in Iraq Empty National Interest: Financial services via "mobile" will reduce corruption in Iraq

    Post by rocky Sat Apr 24, 2021 9:54 am

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    Baghdad - IQ  
    After 18 years of the US-led invasion of Iraq and the overthrow of Saddam Hussein’s rule, the Iraqi economy is preparing for a technological leap that could allow it to bypass the structural problems and corruption loopholes that stifle the private sector. On the first of next May, the Iraqi Trade Bank will launch its application for financial services via mobile phone .
    This step may seem simple, but the ability to pay money over the phone has helped many countries in most regions of the world overcome weak physical banking infrastructure, dry up common corruption systems and encourage innovation, according to Bilal Wahab, a researcher at The Washington Institute, and Michael Rubin, a resident scholar at the Institute. American Enterprise in the analysis published by the American "National Interest" magazine .
    Wahab and Robin say that corruption has been an obstacle to the Iraqi economy for many years. Transparency International places Iraq among the most corrupt countries in the world, just ahead of Eritrea and Cambodia, with a slight improvement compared to the level of corruption 10 years ago. The mass public demonstrations against corruption in Iraq in October 2019 led to the resignation of the prime minister, but did not lead to meaningful reforms .
    He added that "one of the most common commonalities between the components of the Iraqi political spectrum is the willingness of politicians to use their positions to enrich themselves and their families or for the benefit of their companies. The problem is more evident in Iraqi Kurdistan, where politicians use private jets while doctors and teachers ’salaries have not been paid for months.
    In the era of Saddam Hussein and in the first years after his ouster, the Iraqi government used to pay salaries to employees in cash, which opens the door to the inclusion of fake names on the payroll, and allows chiefs to deduct money for themselves from the salaries of their subordinates. To counter these practices, the government sought to move to a system of paying salaries through bank accounts. 
    But depositing salaries into bank accounts is not sufficient for the simple reason that Iraqis do not trust the banks. And the use of banking services in Iraq is still low. Until 2017, the percentage of Iraqis who owned bank accounts was about 20 percent of all Iraqis .
    Now, despite the presence of about seventy banks operating in Iraq, only three major banks, namely Al-Rafidain, Al-Rasheed and the Iraqi Bank for Trade, account for about 85 percent of the total assets of the banking sector .
    There is only one large international bank operating in Iraq at present, Standard Chartered, which has a small number of branches and focuses on major government projects. The Iraqi International Smart Card Company won a contract to electronically pay the salaries of government workers through cards insured with biological agents, "Qi card." In 2019, the company said it had about 7 million people carrying its cards .
    The researchers say that the weakness of the banking system in Iraq is a major reason behind the World Bank placing Iraq in the 186th place out of 190 on the ease of obtaining loans index in the World Bank's report on doing business for the year 2020, and this led to a large exit of capital from Iraq .
    Ali Allawi, the Iraqi Finance Minister, for example, says that about 250 billion dollars have gone out of Iraq since 2003, which is three times the annual budget of Iraq. At the same time, the weakness of the banking system has pushed Iraqi citizens to rely more on informal financial transfers, which negatively affects the government's ability to follow the movement of funds and collect taxes and fees .
    For example, the public treasury loses about 90 percent of potential customs revenues estimated at $ 7 billion annually due to corruption by officials and armed militias .
    At the same time, the central government in Baghdad and the Kurdistan Regional Government are not making sufficient efforts to enhance citizens' confidence in the banking system. There is a bill in the Iraqi parliament to insure deposits that no one cares about .
    In 2014, when the Kurdistan Regional Government faced a liquidity crisis, it seized the money from bank deposits, thus denting citizens' confidence in the banking sector as a whole. But the emerging "Corona" pandemic has prompted large numbers of Iraqis to accept the idea of ​​a digital economy. In Erbil and Baghdad, food delivery applications via smart devices such as Tiptop and Express have increased in popularity. In the city of Sulaymaniyah in the Kurdistan region, residents have increased their interest in using the website "Beekbook.com" to buy their needs instead of going to stores .
    As Iraqis prepare for the era of the digital economy, as more than 40 percent of Iraqis were born after the 2003 invasion, the move to enter the Iraqi Trade Bank into the world of mobile banking will reverberate in broader areas of public confidence. For example, when a car passenger in Iraq is fined 50,000 dinars ($ 34) for not wearing a protective mask against the emerging "Corona" virus, he does not know if the money he will pay reaches the public treasury or goes to the police's pocket. Whereas, when paying the fine via mobile applications, he will make sure that it reaches the public treasury .
    The same applies to various forms of fines and fees that Iraqi citizens pay. At the same time, the Iraqi Trade Bank’s provision of electronic banking services could allow Iraq to overcome the increasing obstacles to traditional banking infrastructure and corruption caused by overlapping interests .
    While most regions of Iraq, such as Karbala, Anbar and Baghdad, have the ability to attract investors and provide them with the opportunity to achieve large profits, financial services via mobile phone will facilitate the practice of commercial activities, help avoid large bank fees and support greater transparency .
    Therefore, researchers Bilal Wahhab and Michael Rubin call on the US administration to provide all means of support to the Iraqi government in order to develop the Iraqi banking system and push it towards the transition to a digital economy while ensuring its information security. At the same time, it is in the interest of the United States to coordinate and cooperate with Iraq to ensure that mobile financial transactions applications that allow currency exchange between dinars and dollars do not turn into a back channel for Iran to circumvent US sanctions.
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