Economic reform in the Prime Minister’s vision and government platform, 21 DEC

 Economic reform in the Prime Minister’s vision and government platform

Last week, Prime Minister Mohammed Shiaa Al-Sudani, while answering the questions of those present in the (Peston Talk) program on the Rudao screen, said that economic reform starts from financial and banking reform and the confirmation that the economic vision of the government is based on a careful diagnosis of the obstacles and challenges of economic reform, which has not been achieved since 2003 because the banking and financial sector has not witnessed any real reform process for two decades because without a healthy financial and banking sector, a healthy national economy cannot be built.

Therefore, the Prime Minister’s vision for comprehensive and radical economic reform comes in line with what was mentioned in more than 12 axes that discuss economic reform, the details of which were mentioned in the government curriculum, which was focused on and considered one of the priorities to be implemented.

What is interested here is what is mentioned in the twelve axis (financial and banking reform) and the paragraphs (1, 2, 3, 4, 5, 6 and 7) thereof, which stated clearly and accurately that (financial and banking reform in a way that provides a real and effective base for the advancement of the Iraqi economy and stimulate investment through restructuring and mechanization of government banks, reconsidering their work, stimulating private banks and enabling them to be able to support investment and development in a real way) and that the vision of the Prime Minister focuses on the importance of the financial and banking sector so that within the financial structure of the economy occupies a vital center in mobilizing savings and financing development through its ability to flow money between the categories of the national economy, which is the main step for economic reform and the measures currently carried out by the bank The Central Bank, with high coordination with the support of the government, to implement its new comprehensive strategy to reform, develop and classify banks according to several axes, most notably the completion and implementation of projects from the monetary economy to the digital economy and the community of cash, and the development of national payment systems by establishing the National Company for Payment Systems, which will develop and operate payment systems under the supervision of the Central Bank, launch the strategy of financial inclusion, work to adhere regularly to international standards of the international standards of the global financial system, focus on organizing foreign trade financing, opening accounts for Iraqi banks with correspondent banks, controlling foreign transfers, opening dealing in other foreign currencies, in addition to the US dollar. Also, drawing up a national plan for lending that adopts new mechanisms to regulate the granting of loans for the development Small and medium enterprises according to the initiative of the Prime Minister as a leader for the employment of young people and qualifying them to choose their projects by relying on the own financial capabilities of banks and attracting deposits to provide and invest liquidity in accordance with the instructions of the Central Bank.

And directing the initiative of financing small and medium enterprises towards the economic and productive sectors that have the most impact on contributing to development. The establishment of Riyada Bank, the establishment of the Loan Guarantee Company, the activation of the work of the Deposit Guarantee Company and the amendment of its internal system to enhance confidence in the banking sector. Continuing the measures and using monetary policy applications to control the exchange rate and reduce the gap between the official price and the black market price, which began to narrow towards reaching the target and balanced exchange rate.

Referring to the Prime Minister’s assertion that the government cannot accept that the official exchange rate is equal to the black market rate. All this indicates that the many services provided by the banking system in the developed countries were not able to achieve their progress and economic growth. The strength of the banking structure has become a necessity for building a prosperous economy that adopts modernity and sound sustainable development. The development of banking habits and awareness of the importance of developing banking facilities in a way that secures building the national savings base and developing the financial resources necessary to build the economy has become one of the priorities of the decision-maker.

Therefore, the safety of the banking system and the mobilization of sound decisions in the field of economic policies towards the development and modernization of banking systems ensures achieving momentum in the world of real and financial investment, which revives the financial and monetary markets, which leads to attracting foreign capital seeking profit. The government and the Central Bank should take the necessary measures to fortify and strengthen local banking systems in a way that makes it able to face the challenges of moving capital from and from abroad without causing money laundering or smuggling of foreign exchange, thus increasing the profitability of financial and banking institutions and strengthening the structure of GDP. This is what the government and the Central Bank are currently active in, which is in fact a vision and a new reformist economic thought to harness all the possibilities and energies in order to achieve it in the next stage.