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Mazhar Saleh Calls For The (Social Market) For A Diversified Economic System And Confirms The End Of The Fiscal Deficit Phase

2021/07/03 20:00    number of readings 190    Section : file and analysis

Baghdad / Obelisk: Adviser to the Prime Minister for Financial Affairs, Mazhar Muhammad Salih, calls for the implementation of the “social market” strategy to provide a diversified economic system in its sources that turns Iraq into a productive power, declaring that the country has passed the stage of deficit and the need for loans.

Saleh told “The Obelisk” on Saturday, July 3, 2021 that the deficit, which was estimated at 29 trillion dinars, or about two billion dollars, in the current year’s budget, which was built on the assumption that the price of a barrel of oil is $45 has become a thing of the past, and the budget Now you do not need to borrow in the current fiscal year, because oil revenues have become more valuable than what was planned.

He added that the cash revenues for the budget of the next six months, if they continue in this high form, what is allocated for borrowing will be only a theoretical case, with the exception of loans linked to international financing funds for the purposes of implementing some projects from which withdrawals are being made and do not in any case exceed $3 billion.

The Prime Minister’s advisor called for the implementation of the “social market” strategy to provide a diversified economic system that transforms Iraq into a productive force.

Saleh told “The Obelisk” that the population curve in Iraq still indicates a high growth of no less than 2.6% annually, which is the highest in the world, pointing to the current high national income, which is sourced from oil, which constitutes a direct proportion of about 45% of the GDP, which has a percentage of An effect of more than 80% in the components of growth of that product.

He added that this is through the impact of oil on the structure of government spending, whose revenues still constitute 93% of the total revenues of the general budget, adding:

Despite this, the coexistence of two pension systems, one on the other, is a fragile and frightening relationship, and I mean that there are more than 8 Millions of Iraqis receive salaries, pensions, grants, or social benefits from the state, which means that the majority of the Iraqi people receive income from oil revenues under the family support system.

He pointed out that the system is based on the principle that “the recipients of government income in our country guarantee the livelihood of a family of five,” which indicates that the majority of the population receives government income directly or indirectly, and this is a form of social solidarity, and it is still somewhat reassuring until now. the present.

He added that the country’s population increase by one million people annually, and the continuation of employment at low annual levels, will cumulatively affect the risks of disruption of production joints and the increase in unemployment among the youth, which is currently approximately 23%, and in a young nation in which young people constitute nearly 60% of the population.

He resumed saying that regardless of the increasing problems of poverty due to the Corona pandemic, the closure of the global economy and the deterioration of oil prices in the past year, the system of salaries, government pensions and subsidies has formed a safety valve in maintaining the standard of living and facing social collapse within the current Iraqi dependency base.

He explained that despite this, there are two restrictions if the economy continues to depend on oil until 2050 without diversifying the sources of national income in it,

the first: that the country’s population will double and may reach nearly 80 million people, and the second: the world’s progress towards the implementation of the Paris climate agreement by making emissions Carbon will reach zero in 2050, which means that the world will turn to alternative, renewable energy and the global demand for oil will fall.

And he indicated that keeping the situation as it is will lead to the fragility of the current support system itself or its thinning over time and the difficulty of extending it because the oil financial cover will not be sufficient theoretically and realistically to support 80 million people in light of the current government operation and the disruption of the private sector.

He noted that Iraq has only one strategy before it, which is to launch a social market system that is capable of developing the joints of the economy in manufacturing manufacturing, cash agriculture, tourism and service areas, and transforming Iraq into a diversified productive force, provided that oil revenues are directed between the years 2022-2032 to funds that finance private productive activity and provide A brave law for security and social protection against forms of unemployment.

And he concluded his speech by saying: Here, a prosperous economic system that is diversified in its sources will be born, not dependent on single, depleted wealth.    Obelisk