Privatization is an effective method to avoid losses companies

1/18/2016 0:00

BAGHDAD Imad emirate

privatization is not a goal in itself but a means to increase the efficiency of the performance of the Iraqi economy and increasing production and productivity, and reduced government spending, which is one of the basic requirements for the restructuring of the economy and to correct the budget deficit.

This is what began by talking »Sabah» Dean of the Faculty of Administration and Economics at the University of Mustansiriya Dr.. Qusay al-Jabri said that there are many institutions that have low production efficiency to the point that it is the institutions are not able to cover expenses in spite of receiving grants from the Ministry of Finance, and the presence of other companies turned out to be a profitable institutions after receiving such

grants.

Jabri pointed to Bureau report Financial Control for the year 2010, which included the presence of 52 companies out of 141 suffer from the high volume of investment compared to cash payments Bmqubaudhatha what indicates a weakness in investment returns and the inability of these companies to realize their profits. And the fulfillment of their obligations as well as the inefficiency of the administration to act on

its assets.

He continued Dr. Jabri this makes us wonder why it has not been the privatization of such companies? And why the government budget bear the additional burden? Is not it better to subsidies directed this into profitable investment areas recording a decline in the budget of the deficit and increase gross domestic product by

another.

He went on saying, in front of these questions in the light of the trend towards a market economy, then it requires a review of the economic environment through abandonment Progressive State for comprehensive support and orientation policy towards meaningful and give the private sector a greater role in economic activity support, and cited the experience of Jordan in this area as the privatization process during the period 1996 - 2003 provided worth $ 700 million annually at a rate of 4.1 percent of gross domestic

product .

He said: here we stand again in front of the sectors that should be privatized, any projects that passed ownership to the private sector Winning or losing, where he explained d. Jabri in this regard that the most important sectors that can be vested in the private sector is the services sector, provided that there are fundamental changes in prices in order to serve the two parties consumer and the private sector

and reiterated: Here rid the state of the expenses and the burden of significant financial problems afflicting the sector as well as its ability to absorb labor National unemployed that make up 15 percent of the total labor force due to property investment opportunities in the service sectors to absorb labor is

skilled.

He pointed out that the success of this requires the issuance of the Organization of legislation for the privatization programs designed to prevent monopoly and encourage competition as well as being subject to the control of the consumer as a protection and ensure competition

International .

As for the projects that are privatized, the privatization of loss-making projects lead to the reluctance of the private sector to participate in such projects, because his main goal is to achieve a

profit.

He revealed d. Jabri, the existence of two options either to be the rehabilitation of these facilities and then sell it as a win-win projects, or if it is combined with other projects or

filtered. He stressed that the privatization of the winning projects open the way for the private sector from achieving the goals of profitability to develop and support these projects by giving a competitive advantage in the regional market through the transfer of appropriate technology and attract expertise and skills in those industries to be able to cope with foreign goods of high quality and low costs especially when entering Iraq as a member of the WTO World. He concluded d. Jabri, from the foregoing, we can say: that the adoption of such alternative scenarios in macro-economic policy will make an impact in reducing the deficit in the Iraqi budget, and rationalizing the behavior of government spending and directed towards areas of development productive reflect the effects in increased production and incomes in the long term, this is the part of the deficit reduction in the current account through export subsidies or bring imports from the other side, and thus an adjustment in the imbalance in the balance of internal and external.