TLM724 Administrator BondLady’s Corner
Nationalization of Iraqi banks
Aqeel Al-Ansari* In the fifties and sixties of the last century, with the spread of the Nasserist tide, the elimination of the private sector and capitalism and the trend towards socialism and nationalization became prevalent. On the fourteenth of July 1964, the government of former President Abdul Salam Aref issued Resolution No. 100, which provided for the nationalization of all private banks and branches of foreign banks in Iraq. One of the fathers of this decision was Dr. Khair al-Din Haseeb, the owner of the Nasserist ideology nationalization of banks;
There was no economic or banking motive for the nationalization at the time, meaning that the Iraqi banks, as well as the branches of foreign banks, were not facing any financial difficulties, which confirms that the decision was purely political.
The biggest loser from this decision was the shareholders and bank owners. The decision stipulated that they be compensated with nominal bonds payable after 15 years and at an interest rate of 3 percent.!
Here, we cannot be certain that anyone received his right after 1979!!
The negative effects of nationalization on the banking sector are significant.
Banks were managed with a centralized, non-competitive mentality, which pulled the banking sector out of the role of a competitor and a magnet for citizens’ hoarded money to turn into a window for passing government projects and initiatives such as agricultural, industrial, housing and other initiatives.
The other problem is the loss of confidence among investors to invest in banks for fear of nationalizing them.. As for the ordinary citizen, he has lost absolute confidence in the banking sector.
As for foreign banks, they lost confidence in the Iraqi market, and therefore we did not find a foreign bank operating in Iraq until 2004, that is, after the change.
The government took control of the banking sector.
That control loses competition and innovation, and the best example of that is today. We see that the two largest banks in Iraq are Al-Rafidain and Al-Rasheed, far from development and competitive technology. They do not even have a single ATM, and they have a combined market share of more than 85 percent!
This is because there is no need to compete, and even in the event of loss and non-recording of profits, the government is obligated to pay the salaries of the employees!
And the government is appointed by the general managers, whether or not by agency, and the powers overlap between the Central Bank and the Ministry of Finance.
In most countries of the world, private sector banks enter the competition process in providing the best services to achieve profits for shareholders.
Here the customer will receive the best possible services to continue with the bank, and the shareholder or investor in the bank will increase his profits.
The opposite is the case in government banks. Governments are supposed not to enter into the banking business, either from near or far, and this is the role of the central bank, its role of supervision and legislation..
Except in the Iraqi case, we find the government represented by the Ministry of Finance owning the largest banks, and private banks did not take their expected role for many reasons, including the control of government banks, as well as the weakness of private banks.
Are there solutions?
Yes, to rehabilitate the Rafidain and Al-Rasheed banks, and to offer the shares for internal investment in the Iraqi Stock Exchange, and to open subscription for all citizens, at a rate of 49 percent. The government retains as a shareholder 51 percent.
To elect a board of directors bound by a development plan, and for this board to be accountable to the shareholders, who are the ones to be elected.
The actual supervision and control over the work of banks should be from the central bank only, and the government is an investor only.
Stimulating private banks to merge with each other, as well as expanding their branch network, as well as setting the minimum required banking services needed by the Iraqi market.
Work on monitoring the services provided by some banks and creating a banking competition law (bundling), which limits forcing customers to transfer the settlement of their salaries to the bank in return for obtaining a service, i.e. a package of services.
This legislation will develop the banking sector and increase competition because the customer is the decision maker.
* Economic and banking Views 56 Date added 27/08/2021 https://economy-news.net/content.php?id=26119
Al-Kazemi pledges to draw inspiration from the contents of the National Dialogue Conference paper and submit it to the political forces to become a pledge and a national charter that provides an atmosphere of confidence to contest the elections
Friday 27 August 2021 13:24 | political Number of readings: 165 Baghdad / NINA / – Prime Minister Mustafa Al-Kazemi promised to draw inspiration from the contents of the National Dialogue Conference paper in Baghdad and present it to the political forces to become a pledge and a national charter that provides an atmosphere of confidence to contest the elections.
Al-Kazemi said in a tweet to him, “I was amazed at the proposals presented by the National Dialogue Conference in Baghdad, which included social, professional, cultural and youth figures from all provinces and the reform paper that they voted on. finished8 https://ninanews.com/Website/News/Details?key=923753
Washington: We Will Provide A Financial Grant To Monitor The Elections In Iraq
The United States representative to the UN Security Council, Linda Thomas Greenfield, confirmed Washington’s efforts to expand its relations with Iraq, while indicating that her country would provide a financial grant to monitor the elections.
Greenfield said during her speech at the UN Security Council in the council’s session on the Iraqi issue, that “the recent visit of Prime Minister Mustafa Al-Kazemi to Washington and the steps of the strategic dialogue between the United States of America and Iraq herald the success of a new chapter of vital partnership relations,”
noting that “the United States It will expand its relations with Iraq to include a number of bilateral issues, including economic development, climate adaptation, public health, and human rights, to ensure a long-term, sustainable and strategic partnership.
She added, “Through this renewed commitment, the United States has donated more than 500,000 doses of the Pfizer-Paitonic vaccine that have been delivered to Iraq, and an additional 155 million dollars in humanitarian assistance.”
With regard to the electoral process in Iraq, Greenfield stated that “the United States will provide Iraq with a grant of $5.2 million for the election monitoring team in the United Nations Assistance Mission for Iraq, which comes after a previous US commitment of $9.7 million,” stressing that “this indicates the confidence of the United States.” full support of the United Nations Assistance Mission for Iraq (UNAMI), its impartiality, its expertise, and its serious commitment to a better future for Iraqis.”
She commended “the work of the United Nations Assistance Mission for Iraq in documenting human rights violations and laying the foundations for appropriate accountability together,” stressing “her country’s support for the holding of free and fair elections in Iraq.”
The US and Iraqi delegations stressed, earlier, during the fourth round of the strategic dialogue between the two countries, that the security relationship will completely transform into the role of training, providing advice and assistance, exchanging intelligence information, and withdrawing US combat forces from Iraq by December 31, 2021. https://www.radionawa.com/all-detail.aspx?jimare=25672
A Parliamentary Committee Reveals The Laws That Will Be Carried Over To The Next Legislative Session
Baghdad – Mawazine News The Parliamentary Legal Committee revealed, on Friday, the laws that the House of Representatives will move to the next legislative session.
Committee member MP Saeb Khidr said, in a statement to the official agency, that “the House of Representatives will not be able, in the remainder of its parliamentary life, to legislate important laws such as the Integrity and Oil and Gas Law,” noting that “these laws will be carried over to the next legislative session if elections are held.” On their scheduled date on the tenth of next October, and that if the elections are postponed, some laws can be discussed.”
He added that “there are a number of laws that have been carried over to the next session, including the Cabinet Law, the Law of the Reconstruction Council, the law on prosecuting ISIS terrorist gang members and other laws,” noting that “the Integrity Law and the Oil and Gas Law are among the important laws that were submitted to the Parliamentary Legal Committee, It could have been discussed, but it was moved to the next parliament.
Khadr pointed out that “in the event that the legislative elections are postponed, the Council of Reconstruction Law, the Civil Service Law and the Cabinet Law will be discussed,” stressing “the importance of legislating these laws because of the state’s need for them.” https://www.mawazin.net/Details.aspx?jimare=165187
Iraq Condemns The Kabul Bombing And Affirms Its Position On Terrorism In All Its Forms And Manifestations
Friday 27 August 2021 12:43 | political Number of readings: 260 Baghdad / NINA / – Iraq affirmed its strong condemnation and denunciation of the bombing that took place in the Afghan capital, Kabul, which killed a number of individuals and wounded others.
Foreign Ministry spokesman Ahmed Al-Sahhaf said in a statement today: We express our sympathy to the Afghan people and the families of the victims, and affirm Iraq’s position rejecting terrorism in all its forms and manifestations, and its support for the international community in confronting terrorism, especially since Iraq faced takfir and extremism in all its forms of intellectual necessity. for these groups.”/ End 8
Oil Prices Rise, Brent Jumps Above $72 A Barrel
Economie| 10:21 – 27/08/2021 Follow-up – Mawazine News: Crude oil prices recorded, today, Friday, a noticeable increase, supported by the weakness of the dollar.
And the futures contracts for the month of October next rose by 1.41%, to reach $72.07 a barrel, while the price of Brent crude futures contracts, for the month of next November, rose by 1.28% to reach $71.08 a barrel.
The US WTI futures contract for the month of October also rose by 1.39%, to reach $68.36 per barrel.
This week, the strongest growth in oil prices was recorded since October of last year, as the price of Brent crude rose by 8.9% and WTI by 9.55%.
The rise in the price of oil supports the weakness of the dollar, as its index (the price of the dollar against a basket of currencies of six countries – the main trading partners of the United States) decreased by 0.07% to 93 points. https://www.mawazin.net/Details.aspx?jimare=165191