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Sunday Afternoon Iraq Economic News Highlights 7-16-23

How Do You Settle Prices?

Economical  2023/07/16  Yasser Al-Mutwali   In a situation like the one the Iraqi economy is going through from structural distortions due to the ineffectiveness of the productive sectors in industry and agriculture and its dependence on oil as a single source, the issue of controlling prices seems very difficult, or as it seems to some, uncontrollable.

It is useful here to focus on necessary consumer goods, especially food, whose prices affect the poorest and most vulnerable groups, and we do not exclude the middle class from its side effects when measuring welfare rates in a country.

Although the ration card system, whose vocabulary has been somewhat improved, under the direction of the prime minister, is still ambiguous in its inclusion of not a few numbers of non-eligible target groups, and this requires the exclusion of those who do not meet the conditions.

Here, it is surprising that the Ministry of Commerce, which is sovereign and enjoys large allocations from the public budget, is unable to reach the stability of food prices and even other consumer goods, according to the size of the allocations.

The solution is simply summarized by the intervention of the Prime Minister by restoring the system of consumer cooperative societies according to modern foundations and mechanisms adopted in developed countries through the system of allocating colored cards according to living standards to include vulnerable groups and the middle classes, thus controlling prices.

I believe that cooperative societies have an important economic feasibility, including the employment of unemployed hands, and secondly, the allocation of shares for workers in cooperative societies to share the profits, thus achieving prosperity for these groups, and in order for the ration card to remain exclusively for the poorest classes and those unable to work.

The Ministry of Commerce has the infrastructure ready to achieve this economic feasibility in addressing the issue of price stability because it owns the largest complexes, which are the central markets spread throughout Iraq, which are now subject to suspicious and useless investment.

It, i.e. the Ministry, is also the largest importer of most commodities and consumer goods according to its import allocations.

Simply put, the process of stabilizing food and consumer prices is possible if the government is able to revive consumer cooperative societies in the form of private cooperative companies whose capital is shares for its employees and not state employees.

Thus, the speculators in the exchange rates will lose one of the most important justifications for the fluctuation of exchange rates under the pretexts of extensive imports of food commodities.

And in the event that the state controls the prices of necessary consumer goods, the exchange rate will be determined and the volatility will recede, so the official price will balance with the parallel price, meaning that the cooperative societies will be a reason to reduce the intensity of competition between the two prices and achieve price stability.

Sudanese Advisor: Oil Price Rates For The Current And Next Years Will Not Be Less Than $77

Energy  Economy News – Baghdad  On Saturday, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, identified two factors that play their role in ensuring the sustainability of the demand for Iraqi oil for the coming years, while noting that the oil resource constitutes the base of the tripartite budget revenues by 90%.

Saleh said, “There are two factors that play their role in ensuring the sustainability of demand for Iraqi crude oil for the coming years, and that global crude oil price rates during the current and next years will not be less than an average of $77 a barrel, and for two central reasons surrounding the global economy,” according to the official news agency. .

He explained, “The first reason is that India and China are still reaping the highest economic growth rates in the world, and they are on their way to leading the global economy in a sustainable manner in the next two decades without a doubt, which increases their demand for crude oil to sustain the wheels of industrial production in them and strongly, just as Their demand for the oil of the West Asian markets, which is the closest and truly abundant, will continue because of the large reserves that are close to half of the world’s oil reserves and the abundance of production, and with this the two countries (India and China) will constitute the safety valve in stopping the advance of global inflationary depression that is expanding through the symbolic markets of the Western industrial world now. .

He pointed out that “there is a positive relationship between the high rates of economic growth and the high demand for energy resources, specifically crude oil, as the Indian and Chinese markets constitute the main import center for the oils of the Gulf region within the growing economies of Asia on the one hand, and the oil of Iraq in particular on the other hand, and India is And China is the two largest customers in importing Iraqi oil, and they constitute the center of gravity in the two movements of the Iraqi trade balance now.

He continued, “As for the second and important reason or factor in the conditions of the global energy market, it is represented by the continuation of the war in Ukraine on the one hand, and the world’s high needs for crude oil on the other hand, and oil prices will not fall below an annual rate that, in our estimate for the current and next years, is not less than $77 a barrel.” On average, as we mentioned, that is as long as the Ukrainian-Russian war continues and affects Russia’s energy supplies.

And he added, “Especially since Russia, in which oil and gas production constitutes the second position in the world, is in a difficult position in marketing energy products and exporting them globally at equilibrium prices,

which means that the Ukrainian war and Russia’s blockade of Western countries is still blocking the regular flow of oil and gas resources from Those countries to the markets of the West, in order to meet the increasing demand for energy resources, which made reliance on alternative energy production centers, but at a high cost, specifically the American oil market,

meaning that the lack of Russian oil and gas has raised the cost of producing alternatives in the world and set minimum costs that will make oil prices It fluctuates between 77-87 dollars per barrel as long as the war is raging in Ukraine until now.”

He concluded by saying: “In light of the foregoing, and since the oil resource constitutes the base of the tripartite budget revenues by nearly 90%, there is a positive bet on the regularity of funding the federal general budget from the oil resource exported to world markets without stumbling blocks that lead to resorting to borrowing or any financing methods that represent A burden on the tripartite budget or the country’s financial strengthening.   Views 106  07/15/2023


Where do Iraqis spend their money?

2023-07-16 Shafaq News/ According to a report published by the “Numbio” website, which deals with the standard of living of the countries of the world, Iraqis spend their money mainly on markets.

The report stated, according to the latest update in July 2023, seen by Shafaq News Agency; “Expenses of the Iraqi family are distributed among markets at a rate of 31.4%, followed by monthly rent at a rate of 20% and transportation at a rate of 13.3%, followed by monthly services at a rate of 12.3%.”

And she continued, “The family also spends its expenses on restaurants at a rate of 12.2%, on sports and leisure at a rate of 8.2%, and on shoes and clothes at a rate of 2.6%.”  LINK

Deputy: America Is The First Source Of Threat To Iraq With Its Disgraceful Interventions

Information / Baghdad..  On Sunday, the representative of the Al-Sadiqun Parliamentary Bloc, Ali Turki Al-Jamali, called on the legislative and executive authorities to take a serious stance against the American side for its disgraceful threats to Iraq’s sovereignty.

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Al-Jamali said in an interview with Al-Maalouma agency, “The blatant American interference has begun to negatively affect the citizen,” noting that “America continues its interference in the internal affairs of Iraq in various security and economic fields.”

He added, “The American interference is still present, and the government and parliament must realize that,” stressing “the need to respond categorically to the American interventions under the pretext of protecting Iraqi funds.”

He pointed out that “America used the dollar as a weapon in its hand against Iraq and its people, and today it is trying to use the electricity file to stir up the Iraqi street.”

A member of the Al-Fatah Alliance, Uday Abdul-Hadi, had accused America of pressure to thwart the oil agreement with Iran in exchange for gas. LINK

The Minister Of Communications Is Discussing With Spacex The Introduction Of Satellite Internet To Iraq

Economy   2023/07/16  readings: 117   Baghdad-Iraq today:  The Iraqi Ministry of Communications announced that a meeting was held between its Minister, Hayam Al-Yasiri, and representatives of the “SpaceX” company, with the aim of introducing Internet service through space to Iraq.

And a press release stated, “Al-Yasiri met for the second time with representatives of the international company SpaceX, who came to Baghdad to discuss the details of the project to introduce Internet service through space to Iraq.”

He added, “During the meeting, the technical and security designs of the project were discussed and discussed, as well as the approved mechanism for providing citizens with Internet service, in line with the ministry’s aspirations to improve the level of services provided.”

Al-Yasiri expressed her keenness to provide the service at the lowest possible prices compared to the prices offered by SpaceX in other countries.

Al-Yasiri confirmed her keen interest in the ministry’s vision of the security and legal measures that must be adopted in the project before contracting with international companies that provide this service, according to the statement.  LINK

Parliamentary Finance: The Government Will Challenge A New Batch Of Budget Items

2023/07/16  Omar Abdul Latif  The Finance Committee in the House of Representatives suggested that the government submit another appeal against the 2023 budget.

Committee member Muhammad Nuri told Al-Sabah: “The government filed a lawsuit with the Federal Court, as the appeal included paragraphs within 12 legal articles in The budget is Articles 2, 16, 20, 28, 62, 63, 65, 70, 71, 72, and 75, which are related to contracts, appointments, compensation, and salary deductions. which the government submitted to Parliament, in addition to the fact that the additions and amendments to the budget items have a financial side and are inconsistent with the government program.

Nuri added, “This was the first round of appeals, and we expect that there will be other appeals by the government for a set of other materials that have been added,” indicating that his committee “is awaiting instructions for implementing the budget, after issuing a state order with a group of materials from the Federal Court to stop the implementation of these articles.”

Regarding past appeals to the budget, the deputy explained that it “will affect the budget in a specific way and not in all aspects, but the most prominent is what is related to contracts, additions and financial costs, while there is no impact on the region development program and the basics of budget work in both its investment and operational parts.”   Edited by: Ali Abdel-Khalek

Parliamentary Legislature Warns Against Rushing To Approve Oil And Gas

Political  | 09:27 – 07/16/2023   Baghdad – Mawazine News  A deputy in the Parliamentary Legal Committee warned against rushing to deal with the oil and gas law, as it is a controversial law and needs mature formulations, as its hasty approval will leave a negative impact.

Committee member Omid Muhammad explained, “There are controversial and non-controversial laws and political laws, and the oil and gas law is one of these laws that need time and negotiations between the political blocs, the Kurdistan region, and the federal government.”

Muhammad added, “The legislation of the oil and gas law will solve many outstanding problems between the region and Baghdad in the first place, and other problems pending in Baghdad itself, as it is considered one of the pending political laws, so the legislation of the law is important, but its formulation is more important.”

The deputy pointed out the need to “avoid speeding up the legislation of the law without studying it, as the draft needs a clear legal formulation that is acceptable to all and can be properly applied on the ground.”