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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

Many Topics Including The Oldest Dinar Community. Copyright © 2006-2020


    The economic impact of the bilateral deficit in Iraq

    Rocky
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    • Post n°1

    The economic impact of the bilateral deficit in Iraq Empty The economic impact of the bilateral deficit in Iraq

    Post by Rocky Fri 30 Sep 2016, 3:33 pm

    [size=16][size=24]The economic impact of the bilateral deficit in Iraq[/size][/size]
    By:Mohammad Reza Abbas-09.30.2016
    (Voice ofIraq) 
    became theimpact ofgovernment deficits on thenational economy information when Iraqi citizen, themerchant and theconsumer .aladz that struck theIraqi state budget two years ago because of thedecline inoil prices in global markets affected the viability ofstate spending on government projects, appointments new, and the coverage ofsocial security programs.Suffice it to cite three examples ofthe negative effects offiscal deficits on thelives ofcitizens and thenational economy.The first is thedemonstrations that swept throughout Kurdistan region because of thedelayed payment of theterritory salaries, II, is ademonstration ofpeasants throughout Iraq to delay their dues and that affected more than ayear, and thethird, delayed payments tocontractors in most provinces of thecountry, andthere hebecame thousands of investment projects It stopped working because of thescarcity customizations.
    bridge thefiscal deficit by borrowing from local banks hold temporarily but not without cost to thenational economy and that the government borrowing from domestic banks 'capital available to theprivate sector will reduce as much as thesize of theloan to thestate.When thegovernment borrows a billion dollars from local banks, the private sector will lose thebillion dollars he could borrow and use in investment projects.In other words, what borrows thegovernment of themoney from thebanks , thecivil will not be available to theprivate sector, and leads to theresult toincrease government spending at theexpense ofcivil investments.
    Negative effectson thenational economy will grow when theymeet thefiscal deficit with thedeficit in thebalance ofpayments ,which isknown toincrease foreign dues effects on thenational economy.Aladzen called in thelanguage of theeconomy ," thebilateral deficit" or Twin deficit.
    In theory that the fiscal deficit is the reason why the trade deficit, because the payment of the government 'sdeficit through domestic borrowing will lead to arise in interest rates which in turn will raise the value of local currency generally foreign currencies.The high exchange rate of the local currency in turn leads to a decrease in the value of exports (due torising commodity prices internally) and an increase in imports from abroad size (because of their licenses ,compared with domestic prices), and thus the increase in imports to exports lead to arise in the trade deficit.
    Iraqis, economy Iraq does not represent aglobal weight, it is asmall economy and open to theworld ( theproportion of thevolume ofexports and imports to domestic production volume exceeds 100%), no significant effect on theinterest rate in theglobal markets, and theneed forIraq toglobal investments, made it thecapital offreedom ofmovement inand out from Iraq .As long as that volume ofsavings in Iraq ,much less than thesize of theinvestment (or desire forthem), the interest rateon loans will be high compared with theoutside world.
    Rise in interest rates on domestic loans ratio could lead to internal investor reluctance toborrow (higher interest rates does not encourage theinvestor ornaments), but the high rate ofinterest in thelocal market of theforeign investor will encourage enter theIraqi market and demand for theIraqi dinar will increase along with thedomestic prices of goods and services escalate.
    Iraq 'sexports will not beaffected much higher value of theIraqi dinar and the obvious reason is that Iraq does not have thegoods intended for export.
    But the rise in the value of the Iraqi dinar will allow the entry of foreign goods imported more than it needs and therefore the deficit in the balance of payments shows (trade deficit).In such a case would be in Iraq is not one type of disability, but two types: the fiscal deficit and thetrade deficit.The first stop development or hampered ,and the second serving the growing foreign debt of the country and allows foreign impose conditions upon, as the World Bank to do with the borrowers.
    What to do?No tax system in Iraq helps control power in the economy, not Iraq 'sability world oil prices Control (the small production of world production).In addition, Iraq isin the midst of military preparations for the Liberation of Mosul kidnapped by theterrorist organization Daesh and lack of employment opportunities for a large percentage of the local workforce with about four million displaced.Any international financial assistance is welcome, but the last number of global assistance to Iraq is not toexceed three billion dollars ,a large sum, but istoo small for theneeds of thecountry.
    Optimal solution to theproblem ofAladzen in Iraq after theliberation of theconnector is toguide thestate budget to local investments.There areat least two reasons for this conclusion.The first is that Daesh will bedefeated before Christmas and New Year 'sDay and thus diminish thefinancial burden on themilitary state.The price ofa single tank equals fifty build residential houses.Second, that oil prices will not continue to decline, oil iscurrently in theUnited States much of thedrinking water price ischeaper, it does not benefit theUS economy and economic development in theworld.You may not auto manufacturing plant in theUnited States and Europe tosell their car in theworld markets unless there is cash in thepockets ofcitizens ,and thecontinuing deterioration ofoil prices ,Iraq 'sson or theson or theson of theSaudi Venezuela will not help buy what they need from foreign products.Simply that global companies can not sell their products in poor countries financially.Thus, the rise inoil prices in theglobal markets will lead to bridge thefiscal deficit in theIraqi state budget and inturn will frequently capital available to theprivate sector and thecheap prices benefit which inturn will raise the ornament investments (civil and governmental organizations), which inturn increases the demand for labor and increase citizen 'sincome.High oil prices in theglobal markets ofIraq can also pay outstanding debt and non owed him and thus freed from paying annual interest, which inturn supports thebalance ofpayments and theIraqi so Iraq gets rid of Aladzen restrictions.
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