Don961: Iraq is heading towards sustainable development
Saturday 12 March 2022 Baghdad: Mustafa Al-Hashemi
The expectations of specialists in economic affairs indicate that Iraq will get rid of all its foreign debts and other international financial obligations, during the current year, especially after oil prices recorded a rise that exceeded $100 per barrel during the past two weeks, amid predictions of achieving financial surpluses as a result of the rise estimated at about $20 billion. .
According to the financial advisor to the Iraqi Prime Minister, Mazhar Muhammad Salih, expected net financial surpluses of no less than 20 billion dollars in the event that the exchange continues at a rate of 1/12 of last year’s budget, and therefore the prevailing cash flows will be reassuring and there is no need for borrowing in all its forms.
In this regard, the economic researcher Saif Al-Sumaidaie believes that “Iraq is on its way to get rid of all its foreign debts, especially after the final closure of the Kuwaiti compensation file,” noting that “the rest of the debts will be able to be paid in light of the rise in oil prices and the adoption of the fiscal policy for spending 1/ 12 because it will also provide a surplus of allocations to the ministries ».
Al-Sumaidaie added in an interview with “Al-Sabah” that “Iraq will witness for the first time since 1990 a financial liberation from its external obligations, which means that the budget will be almost free of deductions for debts, except for the debts of the International Monetary Fund and the World Bank.”
Al-Sumaidaie pointed out that “this is one of the things that count for the country, as it will go on the path to achieving economic development and liberating it from the restrictions that were impeding development and sustainable development.”
It is noteworthy that the volume of debts owed by Iraq to the International Monetary Fund and the World Bank ranges between 5-6 billion dollars, an amount that moves in decrease with the payment of its installments and interests periodically.
Adviser to the Prime Minister, Mazhar Muhammad Salih, had confirmed earlier that the total external public debt on Iraq had decreased to $20 billion, noting that the year 2022 would be free of financial hardships and financing restrictions.
While the internal debt “is still the largest at the present time, and exceeds the external debt three times, but it remains confined within the framework of the government financial system and is not related to the public,” explaining that “the loans of the World Bank in particular are long-term, with grace periods of about 6 years, It usually extends for about 14 years and the benefits are moderate.”
In turn, the expert in economic affairs, Dr. Hussein Al-Khaqani, renewed his call to those responsible for preparing the budget, to continue allocating 5% of the oil revenues, which were deducted as compensation to Kuwait, and to transfer them to a comprehensive and comprehensive fund that protects Iraq from the impact of fluctuations in oil prices in the global market, and to reduce dependence on Oil as the sole resource for the budget.
Al-Khaqani told “Al-Sabah” that “this percentage was deducted from Iraq’s annual sales of oil, whether those sales increased or decreased, and it is a moving number that is not fixed, but the percentage is fixed, and a group of funds can also be established that contribute to achieving sustainable development, as a fund to promote Iraq’s exports. of agricultural and industrial products, the Natural Disaster Damage Reduction Fund, the Private Sector Support Fund, and others.
He continued: “Instead of adding this percentage to the budget without controlling government spending, the 5% will be a limit to the waste of public money, and a control of the operational budget outputs, the majority of whose allocations go as salaries to general sector employees..”
And the economic academic, Dr. Majid Al-Baydani, said earlier to “Al-Sabah”: “Now, after liberation from the Kuwait compensation file, Iraq has to start a series of development measures to establish local funds that support Iraq’s economy.”
Al-Baydani stated that this would increase Iraq’s gross domestic product, and enter the path of economic recovery .”
Which allows for the possibility of paying off the debts of the International Monetary Fund and the World Bank, and some other foreign debts, so that Iraq will be completely free from the constraints of foreign debts, and thus achieve prosperity for its children.” LINK