The head of the Iraqi Business Council, Daoud Abdul Zair, considered the continuation of the budget deficit a “great danger” on salaries, while he revealed an upcoming visit by the Central Bank of Iraq to Washington to discuss important issues.
Abdul Zair, during his hosting in the program {Free Words} broadcast by Al-Furat satellite channel on Tuesday evening, said: “The rise in operational spending since 2019 is due to employment, government and federal obligations, and employee salaries, along with the requirements of the political and administrative situation of the state,
explaining that “80% of operational spending goes to salaries, while 10% is allocated to sustain the management of public resources.”
Abdul Zayer pointed out that “corruption represents a prominent problem in government spending in general, including operating spending,” stressing that “the main imbalance lies in the philosophy of managing the economy in the country, where salaries are supposed to be financed from local revenues.”
He added that “the Prime Minister has diagnosed this defect; however, Iraq always faces emergency crises that prevent the provision of a suitable climate to convert oil resources into development and investment projects capable of covering part of operational spending.”
“Salaries constitute a great burden on the budget, as it reaches 8 trillion dinars,” Abdul Ziyar said.
Regarding financing,
Abdul Zair stressed that “the internal debt is safer and faster compared to the external debt, which imposes complex restrictions and conditions on Iraq,” warning that “the continuation of the budget deficit constitutes a threat to salaries,” pointing out that “the Central Bank’s reserves represent the sovereign fund of Iraq.”
He touched on “the impact of oil price fluctuations, saying that the reserves of the Iraqi dinar are based on oil reserves, which gives Iraq flexibility to act in the event of low oil prices,” adding that “Iraq’s non-compliance with OPEC decisions on reducing production may lead to low prices.”
“An upcoming visit by the Central Bank of Iraq to Washington to discuss intractable issues, such as the exit of the dollar to punishing countries, and foreign trade through American banks to ensure control over the transfer of funds,” Abdul Zair revealed.
He pointed out that “as of this year, the bank account will be financed in dollars directly from the central bank away from the currency auction, and the process will be limited to 5 local banks approved by the US Treasury, most of them foreign.”
Abdel Zair concluded by pointing out that “the performance of the central bank so far does not meet the ambitions,” stressing that “reliance on the export of crude oil will remain a chronic problem unless it is converted into oil industries that contribute to supporting the national economy.”
Wafaa Al-Fatlawi