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The reality of the banking system in Iraq
December 22, 2016
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Over the Iraqi banking system through several stages it started from 1867, and was the oldest Ottoman Bank, Bank of the Shah of Iran origination, eastern British Bank, and then I started to Iraqi national banking stage in 1935 , which saw the creation of the agro - industrial bank that became after 1940 two banks: the Agricultural Bank , industrial Bank.
In 1941 , Rafidain Bank was established as a banker government and commercial single, then the Central Bank of Iraq in 1947, has been established the Land Bank in 1948 , Cooperative Bank and the Bank of mortgages, and many of the Iraqi private banks as a bank credit and United Bank and Rasheed Bank, in addition to branches of foreign banks , which exceeded the 15 bank , mostly belonging to the Lebanese banks, and Jordan.
At the present time the Iraqi banking system consists of 54 banks , including 7 - governmental organization, and one newly established Islamic, and 23 commercial banks , a special 0.9 Islamic banks and 15 branches of foreign banks. As well as a representative office of a foreign bank and one. There are many institutions that do some banking, of which 34 money transfer company, and about 2,000 affiliated banks foreign exchange company, with the loan guarantee, Inc. for the financing of small and medium enterprises, and the two companies for services electronic banking and smart card, in addition to about 800 branch belonging to the banks and spread over All of Iraq 's provinces.
To understand the depth of the banking system of work must be identified to the fiscal and monetary policy and the functions of the Central Bank, The functions of the bank are coined and printed the national currency and to support the national currency and the consolidation and install the internal and external value, in addition to strengthening the cash cover, and managing state reserves of Alojunba.osm cash and management of monetary policy to maintain the stability of prices and exchange rates, and to encourage the growth of the financial system and ensure its safety, control of banks, commercial banks and engaged in acts of currency swap.
Fiscal policy is the approach of the government expenditure and revenue planning. As monetary policy is the process by which the government can control the supply of money, often targeting the rate of inflation, and interest rates to ensure price stability and public confidence in the currency, which contribute to economic growth, reduce unemployment and maintain the exchange rates that could to predict with other currencies. It can be noted that monetary policy expansionary or contractionary process; as the expansion increases the overall policy listings of money in the economy is greater than the usual fast, deflationary expanding the money supply more slowly than usual; that it is shrinking, although expansionary used to combat unemployment in the recession by reducing the interest rates in the hope that the ease of access to loans will entice companies to expand,
It owns monetary policy decisions in the hands of executive power in fees seigniorage, and determine the price of gold and silver, the price of the local currency against foreign currencies.
After the Iraqi Central Bank Law No. 56 of 2004 and the Banking Act No. 94 of 2004, according to the methodology of the market economy is interest rate liberalization, and the abolition of credit plans, opening the door to work for foreign banks either through participation in local banks, without putting any limits on the participation rate or open branches in Iraq, without specifying the capital, in addition to the possibility of opening offices to represent them, and the launch of freedom of foreign exchange and the abolition of restrictions on the transfer of money, except for the requirements of anti - money laundering and terrorism financing law, ensure that all banks, including banks specialized to one law means the commercial banking activity only.
After April 2003 the Iraqi economy collapsed and the banking system is underdeveloped in all administrative, financial and service areas, because of the wars , economic blockade and the militarization of production, and the involvement of government banks external and internal financial relationships are complex and confusing to her, in addition to Iraq , disruption of economic and activities for global developments in all intellectual, scientific and material fields . Which led to the weakness of international confidence in Iraqi banks, and the weakness of the Iraqi role in the economic activity and development activity.
Hence the need to reconsider the status of the banking system in Iraq, the organization of work and the laws, and improve its performance, and its role in the economic and development activity and the strengthening of international relations.
Since mid - 2014, Iraq is going through an economic and financial suffocating crisis began to escalate and worsen both objective and subjective , including financial mismanagement and financial and administrative corruption in the country 's economic institutions, and act indiscriminate and unplanned oil resources generated in previous years and the lack of government 's Reserve, for reasons
falling oil prices in the global market by 65 % from the prices, costs and requirements of the war on terrorism and the occupation of Daesh up to 40% of the area of Aera s, and the lack of a systematic or a clear strategy for the Iraqi economy and the lack of visibility and coordination between fiscal and monetary policies, relying entirely and exclusively on oil resources and the failure of successive governments to develop plans and programs to diversify resources and encourage other such as agriculture, industry, tourism and other sectors and other sectors of the economy,
And not to apply the strategies drawn up by the committees and bodies advisers in the Cabinet and in collaboration with the UN and international organizations, of which there were up to 16 strategy have not been put into practice as they are not supporting the days of financial abundance of oil revenues, and not to go towards building a secure infrastructure sponsoring and supporting institutions Iraqi economy and Iraq enter into agreements and contracts for the long - term aim of developing the oil industry, but the reality of the situation confirms the great damage they would have these contracts, for example licensing rounds decades, a service contract? How to be a service contract and duration of 20 years? And given how the oil - producing fields , one of the most important fields of Iraq to foreign companies? And why Iraq has signed contracts was originally does not suffer at the time of under funding?
Is Iraq really can produce guessed him in the 2017 budget? And was able to produce this amount CAN exported? If her chest , but it affects the price of oil? What is the effect of these contracts on OPEC? Are you able to get to the desired output level or not, and the Central Bank 's insistence on the use of the mechanisms and methods previously adopted in the monetary policy applications, including the auction of foreign currency continue to sell and sell up to $ 200 million a day.
Central Bank of Iraq and authorized the establishment of banks is solid and the granting of licenses for the shareholders and owners' capital do not understand the economy and the banking something as important to have the bank's capital not less than 250 billion Iraqi dinars, was a large part shift from currency traders and money changers to the heads of the boards of directors and members of the boards of directors They brought commissioners managers and leaders of banking is a competent and sped away from the concept that the bank is to implement their own business and have forgotten that there are rights of shareholders and objectives with economic, specific to the banking business and is contributing to the gross domestic product and thus be for the banks is important and essential role in sustainable economic development and provide the best of modern and technical services to customers and the development of a culture of saving among the public which confirms the statistics and indicators in 2015. the savings rate reached 23% and the proportion of compactness reached 77%. this indicates a lack of public confidence in the banking sector of Iraq. And maintaining the application of laws that do not fit with the reality of the Iraqi economy, which was brought by US civil administrator Paul Bremer in 2004, including 94 Banking Act of 2004 and the Central Bank Law 56 of 2004 and the law of Iraq Stock Exchange 74 for the year 2004.
These laws are governing the banking and economic work in Iraq in addition to the illegal investment and money laundering , which has been making modifications to them, and that the banking sector (financial sector and investment) , which should play the desired economic development role is weak and is threatened with collapse of the Iraqi economy , especially as the price of oil does not exceed $ 30 a barrel while the budget for the year 2016, adopted a price of $ 45 a barrel , so we think it should be on the Council of Ministers and the Committee of Central Bank of Iraq and stop reviewing and analyzing and diagnosing the causes.
Which is characterized by the Iraqi market , a lack of the number of citizens who have a bank account , which allows the banks a substantial margin to attract thousands of customers who are looking for an integrated banking service, and despite the diversity of Arab and foreign banks operating in the country , but most of them do not have much capital and work is limited to speculation in the auction currency to achieve quick profits which will reflect negatively on the reality of the local market have been cases of smuggling of capital registered outside the country in the civil and foreign banks by dealing at the central bank auction , which should set strict economic laws to the work of banks,
Central Bank of the most prominent and said the Iraqi banking sector problems down the banking bloc, which is supposed to be a bank for every 10,000 residents, is located is much less, where there is a bank for every 32,000 people and this little compared to international standards, and the absence of banking strategies actors annual detailed plans for the majority of banks provided for by the banks Article 26 law, and do not fit banking services with the requirements and directions of the Iraqi economy to a market economy, where the number of services of the banking Act Article 27, more than 50 banking service either actually made the 20 service, in addition to the weakness of banking technologies means (banking services Home, for example) to see a customer revealed remittances account, pay bills for gas, electricity, phone, which is used in the status of this service in Britain debut in 1983 either in Iraq has not only used in a very narrow range.
And it suffers the administrative structure in many, especially government ones from sagging banks, in addition to the government's policy of discrimination in dealing with private banks, which is to prevent the state departments and companies deposit their money in those banks and non-acceptance of certified and regular instruments and letters of guarantee issued by it, but within certain limits, nor allow competition with other banks, and the absence of supporting institutions such as the deposit insurance Corporation and the insurance on loans and study the market risk, traditional routines and procedures approved by the Registrar of companies circle and delay ratification of the decisions taken by the General Administration of banks, including the increase of capital, holding its general assembly meetings, delaying the re private banks shares are traded on the current trading sessions in the Iraq Stock Exchange, causing damage and loss to shareholders and investors, delays in government banks and some private banks from the acquisition of comprehensive banking systems or to link their branches networks contacts with public administrations and the non-application of the electronic banking.
He said a number of Iraqi parliament members specialists in the economic sphere that "the failure of local banks made the Iraqi market in need of investment for foreign banks, and the reason for their decline in the country is the failure of the Iraqi banking sector, the fact that the foreign investor looking for a safe and advanced banking environment to facilitate his work and keeps his money." .
They stressed the need of the Iraqi market with an investment character of global banks help attract investment companies and transfer of expertise to local banks, and the advancement of the process of investment through the granting of loans and money transfers, and the use of modern banking techniques facilitate the realization and speed up the completion of transactions.
Member of the Committee on Economy and Investment MP / National bloc white / Aziz Mayahi, said, Iraq needs foreign banks with investment character to support the investment process in the country, adding that local banks lacked not extend technologies that work with the Universal, and that investment needs to be a solid legal environment The stability of the political and security and developed banking sector, to enable companies to come to invest, not of Nha looking for a safe environment in which the rule of law and modern systems.
He explained that the Iraqi environment need sophisticated foreign banks with high capital investment and the nature of the support of the investment process and economic development in the country, plus they will be able to create a competitive atmosphere between them and the local banks , and therefore will develop the banking sector.
He added: There is the difficulty of handling the banking fact that the Iraqi banking sector lags behind and is working with systems and legislation old does not keep pace with winning the world 's development, noting that most of the Iraqi banks limited their work to bid farewell to the money and selling foreign currency, they need to issue letters of guarantee to attract investors.
MP / coalition of Kurdish blocs / Sheriff Soliman, called to encourage sober international banks to open branches in Iraq to attract foreign investment and to support the reality of investment in the country.
Sulaiman said that one of the most important obstacles to the process of investment in the country is the lack of a sophisticated banking system, where Iraq has elements of economic and international companies have the desire to invest, but they are surprised by a host of obstacles when they came to Iraq.
He added that the process of the advancement of the investment requires the presence of international banks sober and sophisticated, and the development of foreign relations, and the enactment of laws for working to meet the need for companies and push forward the wheel of investment.
And stressed banking expert Mohsen Ali, on new legislation for banks that the practice of law is not conducive to the development of the banking sector does not attract international banks to operate in the country.
He explained that the local banks are not able to fulfill the requirements of the investment process in the country due to lack of their capital, and that the government and private banks do not Asttien bridge the investment processes and the requirements of economic development grants loans and advances due to the physical potential and technological Ltd ..
In spite of the Investment Law No. 13 of 2006 had excluded the investment in the banking sector from its provisions , but that the investment in the banking sector takes legal framework based on the legal central bank No. 56 of 2004, banks No. 94 of 2004,
and attributed the banking expert Muwaffaq Hassan Mahmoud, reasons the failure of the current Bhacleth Iraqi banking sector, to many factors , including the "weakness and confusion in quite a few of the instructions issued by the Central Bank of Iraq between now and then, and withdrawn or modified days later. The decline in bank supervision efficiency and professionalism , but lack of seriousness. "
He said that the supervisory methods on banks have not kept pace with the evolution of central banks in developed countries and in neighboring countries, including preventive controls, in addition to the lack of the banking system to the corporate governance rules needed to monitor the performance of boards of directors and, and validation of the commitment of the laws, regulations and instructions, and the lack of sector of the culture of banking risks and ways evaluation and management and ways to mitigate or reduce them. Also included reasons, and the emergence of the governing bodies and departments of a bank is a professional unrelated nor experience nor knowledge of banking work, and lack of qualifications not only has a sudden financial fortunes hovering suspicions about their sources.
He pointed to another problem facing the banking sector «The faintly funds that do not meet the needs of development capital, as well as other sources of financing».
And saw economist Ahmed Alobreha, that "a manifestation of failure in Iraq is not the government 's ability to enforce the law, as the central bank is unable alone to impose censorship and evaluate banking performance level."
Financial Advisor to the Prime Minister emphasized the appearance of Mohammed Saleh, the banking market «is homogeneous under the State - owned banks to attract capital and deposits , has claimed 90% of them, to keep their special 10%. He explained that " the last private and government banks operate according to the nineteenth century systems." And he declared that «adults who get a credit of 12 percent, and with the failure of all banking transactions due to tripping 32 pulls the treatment, since the private banks are very conservative and the government contrary, is evident from the large loans granted by the size of government.
Salih said the currency auction «important and necessary» file, and asked «You could create a bank to the private sector be the opening credits of the centrality of his duties and shift gradually to cover imports?».
The banking expert Samir Nasiri warned against the "collapse of the banking system in Iraq soon in the event of problems faced during this year did not address." He stressed that its collapse means the collapse of the economy. He pointed out that research and studies and the results of indicators does not receive the attention evidenced by the decline in deposits recorded by the five largest banks in Iraq, as well as the low liquidity and operational, credit and capital investment and profits, without losing sight of the impairment of assets. He stressed that these indicators are dangerous.
He described the MP Mehdi al - Hafez control which is supposed to be exercised by the central bank for the weak and confused, and announced that the sale of dollar by the central bank process represents a sensitive issue for the citizen, it is assumed that the process of converting ordinary and easy amounts to be as they are in other countries. He stressed the lack of separation between what exists in the central bank and banking transactions, and the corruption that exists in the state.
Tax policy:
On the government to benefit from customs duties and taxes imposed , including that all countries of the world imposed and regards it as a way to achieve a number of economic, developmental, financial, social and protect domestic products from foreign competition and the expansion of domestic production and export development goals, as well as the creation of the financial resources of the public budget to cover government expenditures as well as facilitating oversight function and control the volume of imports for processing trade balance problems.
In countries that do not have significant natural resources , such as the Hashemite Kingdom of Jordan is almost entirely dependent on the taxes and fees to finance public expenditures and budget. But in Iraq, the lack of development vision of appropriate economic policies and financial and administrative corruption rampant in all aspects of the state has deprived the country to take advantage of this important resource, which reflected negatively on the Iraqi economy.
The impact has clearly emerged after falling world oil prices , as happened since mid - 2014 and so far , which led to the befuddled the government 's accounts and the difficulty in securing staff and retirees ' salaries and cover the war against al Daesh terrorist and work on the growing budget deficit caused by the low cover expenses oil export earnings is very large.
To face these consequences the government was forced to apply a number of ways to address the situation, including reducing the number of ministries and the reduction of the three presidencies salaries, deputies and senior staff, as well as deducting a percentage of employees, retirees and some other actions salaries, lending from the International Monetary Fund and the imposition of taxes and customs duties and increase some of the other ones as well impose or increase fees for certain services provided by the State for the citizens, who can not afford to bear the taxes and fees the impact or increased, while still spending huge amounts of money to remuneration and deputations and incidentals on MPs, ministers and functional scores Supreme like there is no case of austerity experienced by young minimum staff and categories of people.
One of the problems facing the application of taxes and fees they lead to higher prices for imported goods subject to taxes and fees in the local market rates, the burden on citizens, including the lack of efficiency and fairness of the administrative body responsible for guessing the collection as the What levied the money from these taxes do not all go back to the budget public and even go into the pockets of some parties and individuals and corrupt mafias in various departments and state agencies in the collection of the tax devices there are some Almkhmnin haggling citizens to pay a certain amount in exchange for reducing the amount of tax dramatically and seductive , which encourages citizens to bow to this demand and lead to the public treasury deprived of a lot of this money.
There are a lot of doubts about the fate of the money collected from the border outlets and citizens, including a trillion and two hundred billion dinars has collected from citizens in the past year as a result of the rampant corruption in the state apparatus. Accordingly, the achievement of the goal behind taxation of citizens requires that coupled with the means to ensure the dimensions of the impact of corruption on this process and verify collected accurately and deliver it to the competent financial authorities.
Regarding the extent of corruption at border crossing points central bank governor stressed that the border crossing points for a country that imports everything under the current circumstances is assumed that this process should be the highest degree of organization, competence and integrity, not not only financial reasons , but also do not insult environmental and health and safety of citizens. The materials reach and penetrate the border crossing points and the intervention of our cities which lacked the specifications or forged or was the authority to change , referring to the border crossing points remain , however corrupt , however dominant it, and that the faithful of goods in the border areas and some workers are getting more than you get the state.
The bottom of the above, the economic reforms necessary to reduce the Iraqi Maanahalhab all segments and components resulting from the lack of livelihood Sharif and poor services, unemployment and poverty , which is a reflection of economic conditions and bad on her head , a corruption of the banking sector , where the unemployment rate has risen to more than 25% between youth groups and graduates who are able to work as the poverty rate rose , according to official of the Ministry of planning and Development cooperation and the Ministry of Labour and social Affairs data to 31%.
Shatha Khalil
Unit Economic Studies
links Centre for Research and Strategic Studies
Sources:
concept and what fiscal policy [You must be registered and logged in to see this link.] -
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CBI / General Directorate of Statistics and Research
tomorrow Press
Baghdad (news)
economist Network Iraqis / Nabil Jaafar Abdul Redha
d. Sinan Mohammed Rida al - Shibibi
Medhat al - Quraishi
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December 22, 2016
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Over the Iraqi banking system through several stages it started from 1867, and was the oldest Ottoman Bank, Bank of the Shah of Iran origination, eastern British Bank, and then I started to Iraqi national banking stage in 1935 , which saw the creation of the agro - industrial bank that became after 1940 two banks: the Agricultural Bank , industrial Bank.
In 1941 , Rafidain Bank was established as a banker government and commercial single, then the Central Bank of Iraq in 1947, has been established the Land Bank in 1948 , Cooperative Bank and the Bank of mortgages, and many of the Iraqi private banks as a bank credit and United Bank and Rasheed Bank, in addition to branches of foreign banks , which exceeded the 15 bank , mostly belonging to the Lebanese banks, and Jordan.
At the present time the Iraqi banking system consists of 54 banks , including 7 - governmental organization, and one newly established Islamic, and 23 commercial banks , a special 0.9 Islamic banks and 15 branches of foreign banks. As well as a representative office of a foreign bank and one. There are many institutions that do some banking, of which 34 money transfer company, and about 2,000 affiliated banks foreign exchange company, with the loan guarantee, Inc. for the financing of small and medium enterprises, and the two companies for services electronic banking and smart card, in addition to about 800 branch belonging to the banks and spread over All of Iraq 's provinces.
To understand the depth of the banking system of work must be identified to the fiscal and monetary policy and the functions of the Central Bank, The functions of the bank are coined and printed the national currency and to support the national currency and the consolidation and install the internal and external value, in addition to strengthening the cash cover, and managing state reserves of Alojunba.osm cash and management of monetary policy to maintain the stability of prices and exchange rates, and to encourage the growth of the financial system and ensure its safety, control of banks, commercial banks and engaged in acts of currency swap.
Fiscal policy is the approach of the government expenditure and revenue planning. As monetary policy is the process by which the government can control the supply of money, often targeting the rate of inflation, and interest rates to ensure price stability and public confidence in the currency, which contribute to economic growth, reduce unemployment and maintain the exchange rates that could to predict with other currencies. It can be noted that monetary policy expansionary or contractionary process; as the expansion increases the overall policy listings of money in the economy is greater than the usual fast, deflationary expanding the money supply more slowly than usual; that it is shrinking, although expansionary used to combat unemployment in the recession by reducing the interest rates in the hope that the ease of access to loans will entice companies to expand,
It owns monetary policy decisions in the hands of executive power in fees seigniorage, and determine the price of gold and silver, the price of the local currency against foreign currencies.
After the Iraqi Central Bank Law No. 56 of 2004 and the Banking Act No. 94 of 2004, according to the methodology of the market economy is interest rate liberalization, and the abolition of credit plans, opening the door to work for foreign banks either through participation in local banks, without putting any limits on the participation rate or open branches in Iraq, without specifying the capital, in addition to the possibility of opening offices to represent them, and the launch of freedom of foreign exchange and the abolition of restrictions on the transfer of money, except for the requirements of anti - money laundering and terrorism financing law, ensure that all banks, including banks specialized to one law means the commercial banking activity only.
After April 2003 the Iraqi economy collapsed and the banking system is underdeveloped in all administrative, financial and service areas, because of the wars , economic blockade and the militarization of production, and the involvement of government banks external and internal financial relationships are complex and confusing to her, in addition to Iraq , disruption of economic and activities for global developments in all intellectual, scientific and material fields . Which led to the weakness of international confidence in Iraqi banks, and the weakness of the Iraqi role in the economic activity and development activity.
Hence the need to reconsider the status of the banking system in Iraq, the organization of work and the laws, and improve its performance, and its role in the economic and development activity and the strengthening of international relations.
Since mid - 2014, Iraq is going through an economic and financial suffocating crisis began to escalate and worsen both objective and subjective , including financial mismanagement and financial and administrative corruption in the country 's economic institutions, and act indiscriminate and unplanned oil resources generated in previous years and the lack of government 's Reserve, for reasons
falling oil prices in the global market by 65 % from the prices, costs and requirements of the war on terrorism and the occupation of Daesh up to 40% of the area of Aera s, and the lack of a systematic or a clear strategy for the Iraqi economy and the lack of visibility and coordination between fiscal and monetary policies, relying entirely and exclusively on oil resources and the failure of successive governments to develop plans and programs to diversify resources and encourage other such as agriculture, industry, tourism and other sectors and other sectors of the economy,
And not to apply the strategies drawn up by the committees and bodies advisers in the Cabinet and in collaboration with the UN and international organizations, of which there were up to 16 strategy have not been put into practice as they are not supporting the days of financial abundance of oil revenues, and not to go towards building a secure infrastructure sponsoring and supporting institutions Iraqi economy and Iraq enter into agreements and contracts for the long - term aim of developing the oil industry, but the reality of the situation confirms the great damage they would have these contracts, for example licensing rounds decades, a service contract? How to be a service contract and duration of 20 years? And given how the oil - producing fields , one of the most important fields of Iraq to foreign companies? And why Iraq has signed contracts was originally does not suffer at the time of under funding?
Is Iraq really can produce guessed him in the 2017 budget? And was able to produce this amount CAN exported? If her chest , but it affects the price of oil? What is the effect of these contracts on OPEC? Are you able to get to the desired output level or not, and the Central Bank 's insistence on the use of the mechanisms and methods previously adopted in the monetary policy applications, including the auction of foreign currency continue to sell and sell up to $ 200 million a day.
Central Bank of Iraq and authorized the establishment of banks is solid and the granting of licenses for the shareholders and owners' capital do not understand the economy and the banking something as important to have the bank's capital not less than 250 billion Iraqi dinars, was a large part shift from currency traders and money changers to the heads of the boards of directors and members of the boards of directors They brought commissioners managers and leaders of banking is a competent and sped away from the concept that the bank is to implement their own business and have forgotten that there are rights of shareholders and objectives with economic, specific to the banking business and is contributing to the gross domestic product and thus be for the banks is important and essential role in sustainable economic development and provide the best of modern and technical services to customers and the development of a culture of saving among the public which confirms the statistics and indicators in 2015. the savings rate reached 23% and the proportion of compactness reached 77%. this indicates a lack of public confidence in the banking sector of Iraq. And maintaining the application of laws that do not fit with the reality of the Iraqi economy, which was brought by US civil administrator Paul Bremer in 2004, including 94 Banking Act of 2004 and the Central Bank Law 56 of 2004 and the law of Iraq Stock Exchange 74 for the year 2004.
These laws are governing the banking and economic work in Iraq in addition to the illegal investment and money laundering , which has been making modifications to them, and that the banking sector (financial sector and investment) , which should play the desired economic development role is weak and is threatened with collapse of the Iraqi economy , especially as the price of oil does not exceed $ 30 a barrel while the budget for the year 2016, adopted a price of $ 45 a barrel , so we think it should be on the Council of Ministers and the Committee of Central Bank of Iraq and stop reviewing and analyzing and diagnosing the causes.
Which is characterized by the Iraqi market , a lack of the number of citizens who have a bank account , which allows the banks a substantial margin to attract thousands of customers who are looking for an integrated banking service, and despite the diversity of Arab and foreign banks operating in the country , but most of them do not have much capital and work is limited to speculation in the auction currency to achieve quick profits which will reflect negatively on the reality of the local market have been cases of smuggling of capital registered outside the country in the civil and foreign banks by dealing at the central bank auction , which should set strict economic laws to the work of banks,
Central Bank of the most prominent and said the Iraqi banking sector problems down the banking bloc, which is supposed to be a bank for every 10,000 residents, is located is much less, where there is a bank for every 32,000 people and this little compared to international standards, and the absence of banking strategies actors annual detailed plans for the majority of banks provided for by the banks Article 26 law, and do not fit banking services with the requirements and directions of the Iraqi economy to a market economy, where the number of services of the banking Act Article 27, more than 50 banking service either actually made the 20 service, in addition to the weakness of banking technologies means (banking services Home, for example) to see a customer revealed remittances account, pay bills for gas, electricity, phone, which is used in the status of this service in Britain debut in 1983 either in Iraq has not only used in a very narrow range.
And it suffers the administrative structure in many, especially government ones from sagging banks, in addition to the government's policy of discrimination in dealing with private banks, which is to prevent the state departments and companies deposit their money in those banks and non-acceptance of certified and regular instruments and letters of guarantee issued by it, but within certain limits, nor allow competition with other banks, and the absence of supporting institutions such as the deposit insurance Corporation and the insurance on loans and study the market risk, traditional routines and procedures approved by the Registrar of companies circle and delay ratification of the decisions taken by the General Administration of banks, including the increase of capital, holding its general assembly meetings, delaying the re private banks shares are traded on the current trading sessions in the Iraq Stock Exchange, causing damage and loss to shareholders and investors, delays in government banks and some private banks from the acquisition of comprehensive banking systems or to link their branches networks contacts with public administrations and the non-application of the electronic banking.
He said a number of Iraqi parliament members specialists in the economic sphere that "the failure of local banks made the Iraqi market in need of investment for foreign banks, and the reason for their decline in the country is the failure of the Iraqi banking sector, the fact that the foreign investor looking for a safe and advanced banking environment to facilitate his work and keeps his money." .
They stressed the need of the Iraqi market with an investment character of global banks help attract investment companies and transfer of expertise to local banks, and the advancement of the process of investment through the granting of loans and money transfers, and the use of modern banking techniques facilitate the realization and speed up the completion of transactions.
Member of the Committee on Economy and Investment MP / National bloc white / Aziz Mayahi, said, Iraq needs foreign banks with investment character to support the investment process in the country, adding that local banks lacked not extend technologies that work with the Universal, and that investment needs to be a solid legal environment The stability of the political and security and developed banking sector, to enable companies to come to invest, not of Nha looking for a safe environment in which the rule of law and modern systems.
He explained that the Iraqi environment need sophisticated foreign banks with high capital investment and the nature of the support of the investment process and economic development in the country, plus they will be able to create a competitive atmosphere between them and the local banks , and therefore will develop the banking sector.
He added: There is the difficulty of handling the banking fact that the Iraqi banking sector lags behind and is working with systems and legislation old does not keep pace with winning the world 's development, noting that most of the Iraqi banks limited their work to bid farewell to the money and selling foreign currency, they need to issue letters of guarantee to attract investors.
MP / coalition of Kurdish blocs / Sheriff Soliman, called to encourage sober international banks to open branches in Iraq to attract foreign investment and to support the reality of investment in the country.
Sulaiman said that one of the most important obstacles to the process of investment in the country is the lack of a sophisticated banking system, where Iraq has elements of economic and international companies have the desire to invest, but they are surprised by a host of obstacles when they came to Iraq.
He added that the process of the advancement of the investment requires the presence of international banks sober and sophisticated, and the development of foreign relations, and the enactment of laws for working to meet the need for companies and push forward the wheel of investment.
And stressed banking expert Mohsen Ali, on new legislation for banks that the practice of law is not conducive to the development of the banking sector does not attract international banks to operate in the country.
He explained that the local banks are not able to fulfill the requirements of the investment process in the country due to lack of their capital, and that the government and private banks do not Asttien bridge the investment processes and the requirements of economic development grants loans and advances due to the physical potential and technological Ltd ..
In spite of the Investment Law No. 13 of 2006 had excluded the investment in the banking sector from its provisions , but that the investment in the banking sector takes legal framework based on the legal central bank No. 56 of 2004, banks No. 94 of 2004,
and attributed the banking expert Muwaffaq Hassan Mahmoud, reasons the failure of the current Bhacleth Iraqi banking sector, to many factors , including the "weakness and confusion in quite a few of the instructions issued by the Central Bank of Iraq between now and then, and withdrawn or modified days later. The decline in bank supervision efficiency and professionalism , but lack of seriousness. "
He said that the supervisory methods on banks have not kept pace with the evolution of central banks in developed countries and in neighboring countries, including preventive controls, in addition to the lack of the banking system to the corporate governance rules needed to monitor the performance of boards of directors and, and validation of the commitment of the laws, regulations and instructions, and the lack of sector of the culture of banking risks and ways evaluation and management and ways to mitigate or reduce them. Also included reasons, and the emergence of the governing bodies and departments of a bank is a professional unrelated nor experience nor knowledge of banking work, and lack of qualifications not only has a sudden financial fortunes hovering suspicions about their sources.
He pointed to another problem facing the banking sector «The faintly funds that do not meet the needs of development capital, as well as other sources of financing».
And saw economist Ahmed Alobreha, that "a manifestation of failure in Iraq is not the government 's ability to enforce the law, as the central bank is unable alone to impose censorship and evaluate banking performance level."
Financial Advisor to the Prime Minister emphasized the appearance of Mohammed Saleh, the banking market «is homogeneous under the State - owned banks to attract capital and deposits , has claimed 90% of them, to keep their special 10%. He explained that " the last private and government banks operate according to the nineteenth century systems." And he declared that «adults who get a credit of 12 percent, and with the failure of all banking transactions due to tripping 32 pulls the treatment, since the private banks are very conservative and the government contrary, is evident from the large loans granted by the size of government.
Salih said the currency auction «important and necessary» file, and asked «You could create a bank to the private sector be the opening credits of the centrality of his duties and shift gradually to cover imports?».
The banking expert Samir Nasiri warned against the "collapse of the banking system in Iraq soon in the event of problems faced during this year did not address." He stressed that its collapse means the collapse of the economy. He pointed out that research and studies and the results of indicators does not receive the attention evidenced by the decline in deposits recorded by the five largest banks in Iraq, as well as the low liquidity and operational, credit and capital investment and profits, without losing sight of the impairment of assets. He stressed that these indicators are dangerous.
He described the MP Mehdi al - Hafez control which is supposed to be exercised by the central bank for the weak and confused, and announced that the sale of dollar by the central bank process represents a sensitive issue for the citizen, it is assumed that the process of converting ordinary and easy amounts to be as they are in other countries. He stressed the lack of separation between what exists in the central bank and banking transactions, and the corruption that exists in the state.
Tax policy:
On the government to benefit from customs duties and taxes imposed , including that all countries of the world imposed and regards it as a way to achieve a number of economic, developmental, financial, social and protect domestic products from foreign competition and the expansion of domestic production and export development goals, as well as the creation of the financial resources of the public budget to cover government expenditures as well as facilitating oversight function and control the volume of imports for processing trade balance problems.
In countries that do not have significant natural resources , such as the Hashemite Kingdom of Jordan is almost entirely dependent on the taxes and fees to finance public expenditures and budget. But in Iraq, the lack of development vision of appropriate economic policies and financial and administrative corruption rampant in all aspects of the state has deprived the country to take advantage of this important resource, which reflected negatively on the Iraqi economy.
The impact has clearly emerged after falling world oil prices , as happened since mid - 2014 and so far , which led to the befuddled the government 's accounts and the difficulty in securing staff and retirees ' salaries and cover the war against al Daesh terrorist and work on the growing budget deficit caused by the low cover expenses oil export earnings is very large.
To face these consequences the government was forced to apply a number of ways to address the situation, including reducing the number of ministries and the reduction of the three presidencies salaries, deputies and senior staff, as well as deducting a percentage of employees, retirees and some other actions salaries, lending from the International Monetary Fund and the imposition of taxes and customs duties and increase some of the other ones as well impose or increase fees for certain services provided by the State for the citizens, who can not afford to bear the taxes and fees the impact or increased, while still spending huge amounts of money to remuneration and deputations and incidentals on MPs, ministers and functional scores Supreme like there is no case of austerity experienced by young minimum staff and categories of people.
One of the problems facing the application of taxes and fees they lead to higher prices for imported goods subject to taxes and fees in the local market rates, the burden on citizens, including the lack of efficiency and fairness of the administrative body responsible for guessing the collection as the What levied the money from these taxes do not all go back to the budget public and even go into the pockets of some parties and individuals and corrupt mafias in various departments and state agencies in the collection of the tax devices there are some Almkhmnin haggling citizens to pay a certain amount in exchange for reducing the amount of tax dramatically and seductive , which encourages citizens to bow to this demand and lead to the public treasury deprived of a lot of this money.
There are a lot of doubts about the fate of the money collected from the border outlets and citizens, including a trillion and two hundred billion dinars has collected from citizens in the past year as a result of the rampant corruption in the state apparatus. Accordingly, the achievement of the goal behind taxation of citizens requires that coupled with the means to ensure the dimensions of the impact of corruption on this process and verify collected accurately and deliver it to the competent financial authorities.
Regarding the extent of corruption at border crossing points central bank governor stressed that the border crossing points for a country that imports everything under the current circumstances is assumed that this process should be the highest degree of organization, competence and integrity, not not only financial reasons , but also do not insult environmental and health and safety of citizens. The materials reach and penetrate the border crossing points and the intervention of our cities which lacked the specifications or forged or was the authority to change , referring to the border crossing points remain , however corrupt , however dominant it, and that the faithful of goods in the border areas and some workers are getting more than you get the state.
The bottom of the above, the economic reforms necessary to reduce the Iraqi Maanahalhab all segments and components resulting from the lack of livelihood Sharif and poor services, unemployment and poverty , which is a reflection of economic conditions and bad on her head , a corruption of the banking sector , where the unemployment rate has risen to more than 25% between youth groups and graduates who are able to work as the poverty rate rose , according to official of the Ministry of planning and Development cooperation and the Ministry of Labour and social Affairs data to 31%.
Shatha Khalil
Unit Economic Studies
links Centre for Research and Strategic Studies
Sources:
concept and what fiscal policy [You must be registered and logged in to see this link.] -
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CBI / General Directorate of Statistics and Research
tomorrow Press
Baghdad (news)
economist Network Iraqis / Nabil Jaafar Abdul Redha
d. Sinan Mohammed Rida al - Shibibi
Medhat al - Quraishi
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