The launch of the first “digital economy” service a few days later in Iraq: The fate of the fines will be guaranteed .. What does it mean to pay money over the phone?
An American report shed light on an economic and digital transformation that will be achieved in Iraq in a few days, represented by the launch of one of the famous Iraqi banks for a digital application for financial services, while the transition to the digital economy will be an opportunity to legalize or eliminate financial corruption, and bypass the weakness of the banking infrastructure.
The Iraqi economy is preparing to achieve a technological leap that could allow it to overcome the structural problems and corruption gaps that suffocate the private sector, as the Iraqi Trade Bank will launch on the first of next May its application for financial services via mobile phone
While this step may be considered a simple one, paying money via mobile phone has helped many countries in the world to bypass weak physical banking infrastructure, dry up common corruption systems and encourage innovation, according to Dr. Bilal Wahab, a researcher at The Washington Institute, and Michael Rubin, resident researcher at The Washington Institute. American Enterprise Institute in the analysis published by the American National Interest magazine.
Wahab and Robin say that corruption has been an obstacle to the Iraqi economy for many years, and Transparency International places Iraq among the most corrupt countries in the world, with a slight improvement compared to the level of corruption 10 years ago.
They added that one of the most prominent common denominators between the components of the Iraqi political spectrum is the willingness of politicians to exploit their positions to enrich themselves and their families or for the benefit of their companies, while noting that in the first years after 2003 the Iraqi government used to pay salaries to employees in cash, which opens the door to the inclusion of fake names in Payroll, and it allows presidents to deduct funds for themselves from the salaries of their subordinates, and to counter these practices the government sought to move to a system of paying wages through bank accounts, and this matter has become mandatory for workers in the prime minister and the presidency, but it is still optional for workers in Parliament.
But depositing salaries in bank accounts is not enough for the simple reason that Iraqis do not trust banks, and the use of banking services in Iraq is still low. Until 2017, the percentage of Iraqis who own bank accounts was about 20% of the total Iraqis, and now despite the presence of about seventy banks operating In Iraq, only three major banks, namely Al-Rafidain, Al-Rasheed and the Iraqi Trade Bank, account for about 85% of the total assets of the banking sector.
There is only one large international bank operating in Iraq now, which is Standard Chartered, and it owns a few branches and focuses on major government projects. The Iraqi International Smart Card won a contract to electronically pay the wages of government workers through cards insured with biological agents “Qi Card”. In 2019, the company said it had about 7 million people carrying its cards.
The researchers say that the weakness of the banking system in Iraq is a major reason behind the World Bank placing Iraq in the 186th place out of 190 on the ease of obtaining loans index in the World Bank’s report on doing business for the year 2020. This led to a large exit of capital from Iraq.
Ali Allawi, the Iraqi Finance Minister, for example, says that about 250 billion dollars have gone out of Iraq since 2003, which is three times the annual budget of Iraq. At the same time, the weakness of the banking system has pushed Iraqi citizens to rely more on informal financial transfers, which negatively affects the government’s ability to follow the movement of funds and collect taxes and fees. For example, the public treasury loses about 90% of the potential revenues of customs, estimated at 7 billion dollars annually, due to corruption of officials and armed militias.
At the same time, the central government in Baghdad and the Kurdistan Regional Government are not making sufficient efforts to enhance citizens’ confidence in the banking system. There is a bill in the Iraqi parliament to insure deposits that no one cares about.
In 2014, when the Kurdistan Regional Government faced a liquidity crisis, it seized money from bank deposits, denting citizens’ confidence in the banking sector as a whole.
But the new Corona virus pandemic has prompted large numbers of Iraqis to accept the idea of a digital economy. In Erbil and Baghdad, food delivery applications via smart devices such as Tiptop and Express have increased in popularity. And in the city of Sulaymaniyah, in the Kurdistan region, residents have increased their interest in using the website “PayBook.com” to buy their needs instead of going to stores
As Iraqis prepare for the digital economy era, as more than 40% of Iraqis were born after the 2003 invasion, the move to enter the Iraqi Trade Bank into the world of mobile banking will reverberate in broader areas of public confidence. For example, when a car passenger in Iraq is fined 50,000 dinars ($ 34) for not wearing a protective mask against the emerging corona virus, he does not know if the money he will pay reaches the public treasury or goes to the police’s pocket. Whereas, when paying the fine via mobile applications, he will ensure that it reaches the public treasury. The same applies to various forms of fines and fees that Iraqi citizens pay.
At the same time, the Iraqi Trade Bank’s provision of electronic banking services could allow Iraq to overcome the increasing obstacles to the traditional banking infrastructure and corruption caused by overlapping interests.
While most regions of Iraq, such as Karbala, Anbar and Baghdad, have the ability to attract investors and provide them with the opportunity to achieve large profits, financial services via mobile phone will facilitate the practice of commercial activities, help avoid large bank fees and support greater transparency.
Therefore, researchers Bilal Wahhab and Michael Rubin call on the US administration to provide all means of support to the Iraqi government in order to develop the Iraqi banking system and push it towards the transition to a digital economy while ensuring its information security. At the same time, it is in the interest of the United States to coordinate and cooperate with Iraq to ensure that mobile financial transactions applications that allow currency exchange between dinars and dollars do not turn into a back channel for Iran to circumvent US sanctions. link
President of the Kurdistan region: Those who think that Article 140 is dead are ‘deluded‘
The President of the Kurdistan Region, Nechirvan Barzani, called for “strengthening” the concept of citizenship in Iraq, and while noting that the application of Article 140 would solve all problems, he stressed that the legislation of the oil and gas law is important for the specificity and status of Kirkuk governorate.
Barzani said during his hosting of the “Bal Three” program, presented by colleagues, “Saif Ali, Zainab Rabie, and Hisham Ali,” followed by “People”, “It is the duty of everyone in the current stage to strengthen the concept of citizenship and build a true partnership capable of making Iraq a homeland for all components.” .
And the President of the Kurdistan region promised that “the root of the problem in Iraq lies in the way of thinking,” pointing out that “democracy does not necessarily mean holding elections every 4 years.”
Barzani considered that “the current generation of young people in Iraq is not the same as 10 years ago, as the current generation of Iraqi politicians does not accept slogans without content.”
“The current stage is no longer a transitional stage, as we are on the verge of very important elections in the future,” he said.
The privacy of the Kirkuk situation
Barzani pointed out that “the Kirkuk problem has two sides: the first is natural resources. If there was an oil and gas law, everyone would be reassured, and for the solution to the Kirkuk problem there must be an oil and gas law. The second is the land problem, as Baghdad’s insistence on not recognizing the existence of any Kurdish right.” incorrect”.
Controversial Article 140
The region’s president called for the implementation of Article 140 of the Iraqi constitution, and its implementation usually puts an end to all the problems of the Kurds and other nationalities in the disputed areas.
He described those who considered Article 140 “dead” as “illusions.”
Kurdistan region and the displaced
Barzani pointed out that it was our duty in 2014, after ISIS took control of some areas, to open the doors to the displaced, and we received about two million displaced people from Iraq and Syria, we did not see any security threat from them, and we were happy with the return of many of them to their areas.
He emphasized that “good relations” were and are between the citizens of the Kurdistan region and the displaced. link
Vietnam+: (Vietnam) Central bank to keep proactive, flexible monetary policy
For the time ahead, the State Bank of Vietnam (SBV) will keep a proactive and flexible monetary policy basing on market developments and forecasts for the macro-economy, SBV Deputy Governor Dao Minh Tu told a meeting on April 22.
This monetary policy is meant to control this year’s inflation within the targeted ceiling of about 4 percent, support macroeconomic stabilisation, assist economic recovery, ensure liquidity, maintain the stability in the monetary and forex markets, and create conditions to reduce capital expenses for people, businesses, and the economy as a whole, the official said.
The SBV will maintain a close watch on domestic and foreign macro-economic and monetary changes, foreign exchange rate developments, as well as foreign currency demand and supply to set appropriate exchange rates, he noted, adding that it will uniformly carry out measures and policy tools to stabilise exchange rates and the forex market to help ensure macro-economic stability.
Besides, credit provision will be boosted, especially for priority fields to match economic restructuring and help fuel growth and stabilise the macro-economy.
Tu also stressed the need to tighten control over credit for high-risk areas like real estate, transport projects in build-operate-transfer (BOT) and build-transfer (BT) formats, and securities while at the same time taking synchronous solutions to tackle difficulties facing those hit hard by the COVID-19 pandemic and natural disasters.
The central bank will order credit institutions to facilitate people and enterprises’ access to credit to help minimise loan-sharking, he said.
Pham Thanh Ha, Director of the SBV’s Monetary Policy Department, reported a credit growth rate of 3.34 percent as of April 16, compared to the end of 2020, pointing out that the credit growth has begun stagnating as credit has increased by just 0.41 percent in half a month though the rise was 0.76 percent in January, eased slightly to 0.66 percent in February due to the COVID-19 resurgence, and surged by 2.93 percent in March.
The SBV affirmed that since the year’s beginning, it has flexibly and synchronously used monetary policy tools to ensure liquidity for the banking system, stabilise the monetary market, and help reduce input cost for credit organisations, thereby easing the pressure on deposit and lending interest rates.
Source: Dinar Recaps
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