A former official at the Central: No need to fear much of the fiscal deficit and internal borrowing alternative external debt


Investment projects in the capital Baghdad Imaging (Mahmoud Raouf)
A former official at the Central: No need to fear much of the fiscal deficit and internal borrowing alternative external debt
Author: BS
Editor: BS
31/10/2014 19:08
Number of Views: 368

Long-Presse / Baghdad

A former official at the central bank says that Iraq is in crisis “temporary liquidity”, following the increase in the expenses of military operations and crisis of displaced persons and the drop in oil prices, which are expected to stabilize at Al80dolar. In what was believed that the time had come for the government to launch a campaign “economic change” before lifting the restrictions of the private sector.

It is assumed the former official said that the crisis can be avoided by rearranging spending priorities, and the development of measures “sound” to the collection of duties and taxes diluted manner do not affect on the shoulders of the citizen, and the expansion of domestic borrowing door firing bonds and patient involvement in external debt because they carry a large burden on the country.

The chairman of the government, “Haider al-Abadi,” recently, about his government had discussed the issue of the federal budget for 2014 to three times, and will provide a cash budget to the House of Representatives, representing the amounts disbursed by the government since the beginning of this year, with military spending, “pointing out that” 2015 budget will be based on the current year’s budget, because the current problems will continue in the coming year, where oil wells stopped the province of Kirkuk, as well as lower prices of a barrel of oil dramatically to below $ 90 per barrel. “

Abadi added that “the Council of Ministers decided to follow the policy of austerity in unnecessary expenses, and we will continue with this policy, because we can not confine our military effort, salaries and basic services to citizens.

The total revenue and expenditure for the seven months the first of its features the year in the last era of Nuri al-Maliki found that Iraq spent all amounts derived from the export of oil, even though he did not pay the Kurdistan dues nor the amounts allocated to Basra petrodollars, nor most of the financial obligations of the provinces which fell to Daash.

In the meantime, says the former deputy of the Central Bank the appearance of Mohammed Saleh told the “term” that “Iraq passed in exceptional circumstances during the last ten months, and increased expenses due to the war on the organization of the Islamic state, and the circumstances that accompanied the fall of a number of provinces, however, the organization, in addition to the the problem of the displaced, “he said, adding that these events have led to” withdraw cash “available to the government.

He said the former official that the current liquidity crisis is “temporary”, but accompanied by the problem of the low price of a barrel of oil to nearly 25% from the previous price, pointing out that Iraq is in front of the problem of high costs and falling oil prices, which constitute 95% of the country’s budget was left in front of the financial management However, a review of the “engineering expenses.”

He says Saleh, said that “there are expenses and regulations and decisions of the financial burdens that can be deferred,” adding, “It is time to rationalize expenses and put him to the rudiments expenses such as the fight against terrorism and the displaced and the salaries of the staff and the necessary needs of the citizens, in line with the difficult conditions experienced by the country.”

The former official at the Central Bank believes that the cash could end with “austerity disbursements” and increase revenue, such as taxes and fees imposed in does not affect the citizen and the cost of economic life, through the organization of sources and outlets of financial achievement and according to the plans studied and “Maps Collection,” which the world followed , such as taking a thousand dinars on every government treatment, “but they are very low sums totaling would be great,” he said, adding that the government can activate the private sector, which is the biggest money savers.

He says Saleh, said that “the state and its institutions that the climate allows through which the private sector can arise spend his money in the field of investment and development and give full opportunity to take the role,” noting that the latter sector living conditions “inherited” from the restriction and pressure affect the freedom of action. It also asserts that “the government program” which pointed to the adoption of appropriate mechanisms for the transition to a market economy can be a guarantor to dissolve a lot of financial dilemmas, pointing to the possibility of borrowing from the market, “internal borrowing” by exporting bonds.

But contrast warns of global “external borrowing” debt, because he holds damage big burden, so you must wait before entering into this field, also calls for the government to start a big reform campaign and “change” in the economic field to lift obtrusive investment laws and legislation again to accelerate engagement the private sector.

Oil prices have tumbled about 25 percent since June, and overshadowed by a significant increase in higher shale oil production quality of the North American on-demand at a time of stagnant economic growth, analysts say oversupply may continue Snoat.fima former official at the central bank is expected to stabilize the price of a barrel of oil to $ 80, while he had predicted, and the former Minister of Oil, “Ibrahim Bahr al-Ulum,” The decline in oil prices to $ 70.

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