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Tuesday Evening Iraq Economic News Highlights 8-22-23

An International Group Discussing Reducing Dependence On The Dollar

Arab and international   Economy News – Baghdad  South African Vice President Paul Machattel stressed the importance of the “BRICS” summit held this week in Johannesburg, and revealed the main issues to be discussed.  He pointed out that representatives of the “BRICS” countries (Russia, Brazil, India, China and South Africa) will focus in today’s meeting mainly on discussing reducing the group’s dependence on the dollar.  He stressed that “BRICS” will discuss the issue of increasing payments among its members in national currencies.

Today, Tuesday, in Johannesburg, South Africa, the 15th BRICS summit kicked off, where the summit will discuss the issue of accepting new members and developing an economic, trade and financial plan for the bloc.

South Africa, which chairs the summit this year, said more than 20 countries, including Algeria and Saudi Arabia, had applied to join the group.

The presidents and leaders of Brazil, China, India and South Africa will meet, while Russian President Vladimir Putin will participate via video technology in the summit held under the slogan “BRICS and Africa”. Moscow will be represented at the event in the personal presence of Russian Foreign Minister Sergey Lavrov.   Views 43  08/22/2023

In The Document.. The Central Bank Determines The Exchange Of The Dollar For Travel Purposes

Time: 08/22/2023 Read: 1,196 times  {Economic: Al Furat News} The Central Bank of Iraq set the dollar exchange rate for banks and exchange companies authorized to sell the dollar for cash for travel purposes.

In its communication to banks and companies, the bank specified, a copy of which {Euphrates News} obtained, “the exchange rate of the dollar for the purposes of travel in cash sales at 1305 dinars.”

It is noteworthy that the Central Bank had set the price of selling amounts of documentary credits and international settlements of electronic cards (1305) dinars per dollar, the price of selling amounts of transfers abroad (1310) dinars per dollar, and the price of cash sales (1310) dinars per dollar. LINK

An Accused Steals Nine Billion Dinars From A Government Bank

August 22, 2023  Baghdad / Obelisk Al-Hadath: The Federal Integrity Commission announced the issuance of (6) sentences in absentia that imposed a term of imprisonment of (42) years against a customer of a government bank. For stealing about nine billion dinars.

The Legal Department of the Commission indicated that the Rusafa Criminal Court, which is specialized in examining cases of integrity, issued (6) sentences in absentia, with a total of (42) years in prison, against a customer of Al-Rafidain Bank. For stealing an amount of (8,985,000,000) billion dinars by issuing checks in agreement with other defendants whose cases were separated, noting that among them were employees of a branch of Al-Rafidain Bank in Baghdad.

The department added, indicating that the amounts were deposited in the accused’s account in (4) banks, and withdrawn without the bank sending notices to the banks from which the amounts were withdrawn regarding the existence of a balance in the customer’s account covering the amount of the checks to clear it.

She explained that the court, as a result of the available evidence and evidence, as well as the convict’s escape from justice; I found it sufficient and convincing to criminalize him, based on the provisions of Article (444 / Fourth and Eleventh) of the Penal Code, in association with Articles (47, 48 and 49) thereof, and the rulings issued against the fugitive convict also included support for seizing his movable and immovable money, and giving the affected party the right to request Compensation if the decision becomes final

Minister Of Labor: We Have About 400 Billion Dinars Within The Budget Of The Lending Fund

Money  and business  Economy News – Baghdad   The Minister of Labor and Social Affairs, Ahmed Al-Asadi, confirmed, on Tuesday, that the ministry has set new instructions for granting loans through the amendments made to the lending law, “so that the loans go to real projects that are economically feasible.”

The Ministry of Labor stated in a statement that Al-Asadi “presided over a meeting of the Board of Directors of the Fund for Supporting Small, Income-Generating Projects.”

Al-Asadi said, “The ministry has about 400 billion dinars within the budget of the lending fund, and these amounts must be spent on real projects,” pointing out that “90% of the loans granted are advances, not loans to establish real productive projects.”

Al-Asadi stressed “the necessity of setting up a mechanism to implement the new instructions for granting loans, diagnosing weaknesses in financing projects, introducing borrowers to training courses to qualify them, implementing projects with the importance of studying the economic feasibility of each project,” adding that “the ministry is facing a major project, which is amending the law, The minimum loan amount is 20 million.

During the meeting, according to the statement, “the loans granted within batch 35 and batch 36, which were launched recently, were reviewed, and a study was discussed on mechanisms to ensure that loans achieve the goals set for them, as well as the recommendation of the Prime Minister regarding taking the necessary measures to include social protection beneficiaries with loans, and establishing mechanisms regarding This is by the Department of Labor and Vocational Training and the Social Protection Authority.    Views 28  08/22/2023

The Government Rejects The World Bank’s Report On The Size Of The Debt, And Specialists Confirm.. Where Is The Truth?

TUE, 22-08-2023, KARRAR AL-ASADI  The World Bank report on Iraq’s debts amounting to 152 billion dollars, aroused the ire of a government financial advisor, and considered it exaggerated because all internal and external debts do not reach half of the aforementioned amount, while economists agreed with the report, which described the Iraqi economy as “fragile”, due to its dependence on oil. Just.

The financial and economic advisor to the Prime Minister, Mazhar Muhammad Salih, says, “The internal public debt is approximately 71 trillion dinars (about 48 billion dollars), and the government banking system still maintains its possession in the form of government bonds and treasury transfers, which are also estimated when evaluated in foreign currency at approximately 54 billion dollars.” “.

And Saleh added, “As for the external debts payable from now until the year 2028, it is estimated at 23 billion dollars, but there are debts due after the aforementioned year, and with it the external debt may become about 30 billion dollars.”

And he shows that “there is a debt pending on the 2004 Paris Club agreement, that is, the sovereign debt before 1990, and it belongs to four Gulf countries and four other countries, it is about $ 40 billion, and if it is activated, if it is correct (because it is obnoxious debt that funded the Iraqi-Iranian war at the time ), it must be discounted at 80 percent, under the Paris Club to be less than $9 billion or less.”

Saleh is surprised at “how the Iraqi debts are calculated by the World Bank report,” and he attributes this to “his reliance on the hypothetical deficit in the federal general budget, estimated at about 64 trillion dinars, so that the external debt reached $50 billion, meaning that 40 percent of the annual deficit estimates were added.”

As an expectation of the total internal and external public debt, therefore, the reading of Iraq’s internal and external debt, according to what was published by the World Bank, came to be approximately $153 billion. However, the ratio of public debt to GDP will remain between 52-55 percent of that estimated output for the year. 2023, which is within the current safe economic stability area, which is usually estimated at 60 percent.

And the World Bank announced, yesterday, in a report entitled ( Renewed Pressures: Iraq’s Recovery is in Danger ), that the Iraqi economy is a fragile economy, and that the country’s debts have increased to 152 billion dollars, indicating that the Iraqi economy suffers from stagnant non-oil gross domestic product, and industries , and agricultural activities, with high rates of inflation, as Iraq lacks under its current government; For large-scale structural reforms that strengthen its economy away from oil, according to the report.

For his part, the researcher specialized in economic affairs, Nabil Jabbar Al-Tamimi, points out that “the Iraqi economy is certainly fragile, because it still depends on oil only, and the World Bank report was an assessment of the situation of the Iraqi economy, as the report indicates that there are no variables to avoid crises, The report was not talking about a temporary situation.”

Al-Tamimi adds, “The World Bank report talked about an ongoing dilemma, and indicated the absence of any changes in the fragile Iraqi economic situation during the previous government headed by Mustafa Al-Kazemi or the current government headed by Muhammad Shia’a Al-Sudani.”

And he shows that “extricating the Iraqi situation from the characteristic of fragility, is done through diversifying the economy and the state’s financial resources, and not relying only on oil,” pointing out that “there is a government tendency for this diversity through gas investment and activating and activating refineries, and great attention must be paid to activating the sector.” It is not possible for job opportunities to remain in the government sector only.

According to the World Bank, Iraq’s lack of diversification of income sources due to the chaotic policies of successive governments led to a contraction of the gross domestic product by 1.1% in 2023 and an increase in the country’s public debt to reach 58.3% after it was 53.8% in the previous year, which will reach $152 billion. , an increase of 10 billion dollars,

while the total external debt amounted to 50 billion dollars, and the internal debt amounted to 102 billion dollars, which means that the government authorities borrowed in the previous three years internally about 60 billion dollars, at a rate of 15 billion annually, and with annual interest on internal debts of 16 to 17 percent of the debt.

In addition, the researcher in financial affairs, Alaa Gluub Al-Fahd, states that “Iraq still has a rentier economy and relies mainly on oil by about 95 percent of the gross domestic product, and this is what makes the Iraqi economic situation fragile, and its situation depends on international fluctuations in oil prices.”

Al-Fahd added, “There are no real plans to activate the agricultural, industry and tourism sectors, in addition to the fact that there is inflation in government spending and an increase in the annual budget, and this spending goes to the salaries of employees, and this is what makes the economy dependent on the oil market, and that is why it is fragile.”

And he continues, “There is a need to make real reforms in order to change the interface of the Iraqi economy by activating the idle sectors and the private sector in the field of investment, energy, and manpower employment, especially with a population increase of (3%) and a significant weakness in the private sector, thus increasing government employment generates An increase in the volume of spending, and all of this requires a real implementation of reforms in order to diversify funding sources.

The researcher concludes in the financial issue that “the value of debts owed by Iraq, whether internal or external, does not affect Iraq’s economic situation, as long as there is a large reserve for the Central Bank of Iraq in addition to the large reserves of gold in the bank, especially since most of these debts have been settled and most of them are internal debts.” Also, some of those debts are not real and the former regime is responsible for them.

External borrowing in the budget constitutes 20 percent of total investment spending, and most of it goes towards developing the two most important sectors in the country, namely electricity and health. The process is that the sectors to which the money goes are still suffering from major problems, indicating that borrowing confirms the state’s inability to implement projects on its own.

The value of the budget for the current year and the next two years is 198 trillion dinars (about 150 billion dollars) for each year, and the budget was based on a price of 70 dollars per barrel, while the deficit rate reached 63 trillion dinars.