Thurs. AM TNT News Articles 8-12-21



President of the Republic: Iraq is moving towards balanced relations that support the consolidation of security and stability in the region

The President of the Republic, Barham Salih, affirmed, on Thursday, that Iraq is moving towards balanced relations that support the consolidation of security and stability in the region.

According to a statement by his media office, {Al-Furat News} received a copy of it, that “the latter received at the Peace Palace in Baghdad, the British Ambassador to Iraq, Mark Bryson Richardson, and during the meeting, they discussed the bilateral relations that unite the two countries and ways to strengthen them, and reviewed developments in Iraq and the region, and the importance of Cooperation and coordination between the two countries to serve local and regional peace and stability.

And the President of the Republic stressed that “Iraq is moving towards balanced relations based on joint work with friends in the international community to consolidate security and stability in the region, ease its tensions, and support cooperation in the fields of economy, health, the environment, combating corruption, and solidarity in facing the challenges of terrorism and extremism.”   link

Parliamentary proposals to adopt a price of $55 per barrel of oil in the 2022 budget

The Parliamentary Finance Committee proposed a price of 55 dollars per barrel of oil as an appropriate price for building the 2022 budget, noting that sending a realistic budget to Parliament would greatly facilitate the committee’s work, because the 2021 budget was very exaggerated.

Committee member Jamal Kougar said, in a press interview, that “calculating next year’s budget on $50 a barrel is a good thing, and if I were the Minister of Finance, I would have built the budget on $55 a barrel, as it is a very appropriate price, especially since it is not possible to predict oil prices, as there was a decline After a rise,” he added, “but we expect an increase in prices with the intensive vaccination campaign (against Corona) in all countries of the world, and this means that we are moving towards the decline of the epidemic.”

He added that “oil prices today are more than what the 2021 budget was built on due to the fear that prices are subject to decline according to the markets,” noting that “building the 2022 budget realistically – according to the statements of the Minister of Finance – is a good thing because the 2021 budget was exaggerated and even the expenditures were large, as It was reduced from 168 trillion to 130 trillion, and the government has not yet spent this amount either.” 

Finance Minister Ali Allawi had announced that the ministry had begun preparing the 2022 budget a few days ago, and it will have a reform dimension, as it “different from previous budgets” and reflect “the reality of Iraq’s obligations”, while he indicated that the price of a barrel in the new budget will be 50 dollars, which is an adjustable figure, However, the value of a barrel of oil in the market is currently much higher, exceeding sixty dollars.   link

The financial advisor reveals alternatives to borrowing to face the fluctuations in global oil markets

Mazhar Salih, the financial advisor to the Prime Minister, confirmed, on Wednesday, that Iraq is able to bypass the step of borrowing from the global capital markets, by finding independent internal financial leverages, as well as benefiting from the economic surplus in the private sector.

Saleh said in a statement to the official agency, followed by “Nass” (August 11, 2021), that “Iraq does not have an opportunity to avoid direct borrowing from global capital markets or international financial organizations to face the risks of fluctuation in oil markets and a decline in oil rents, except by taking two ways; the first is to find financial leverage An internal, independent maximizing of non-oil revenues represented mainly by taxes and fees, by expanding the tax base, which is at the narrowest point in Iraq’s financial history due to the large number of evaders.  

He added, “Such developments in financial sustainability outside the oil rent and its external risks require to help increase per capita income; firstly, a broader growth in non-oil GDP and secondly, a rise in operating rates, which helps to raise income continuously, and this is one of the financial tributaries that increase of the internal financing opportunities in the general budget.  

He stressed that “the second way to avoid borrowing is not to neglect the need to move towards benefiting from the economic surplus in the private sector (savings), which requires, through joint financing between the state and the private sector, the activation of the principles of partnership as an important means in achieving the policy of self-reliance, especially in the field of joint investment spending in Financing projects and maximizing the production function.  

He pointed out that “direct borrowing and with attractive financial instruments to attract the public’s financial surpluses directly towards the general budget requires the issuance of attractive financial instruments in which the public invests its money and with appropriate interest or returns, such as national bonds, for example, and consider it an important alternative to external borrowing, if the sincere intention is held and available. The correct institutional mechanisms for such developments in the national financial market, which will become a supportive force for fiscal policy,” explaining that “for example, the public retains a cash mass of more than 70 trillion dinars of cash issued from it as monetary wealth outside the banking system at a rate that is still no less than 88%. In the form of liquid cash balances hoarded outside the banking system.  

He pointed out that “at the same time, this matter is a huge leakage that hinders the role of the cash surplus in completing the income cycle by converting savings into productive investments that serve growth in the national economy,” noting that “there must be the birth of an attractive voluntary financial market for the circulation of government bonds with interest, returns and privileges for investors with its tools.” Including the right to liquidate it and transfer it to cash when needed, and consider it a means of payment and a guarantee of the highest class.”  

Saleh concluded by saying that “in this way, the financial market will become one of the internal tributaries of public finances that enhance financial sustainability and gradually develop it within the sustainable development of the country.”   link

Source: Dinar Recaps


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