Saturday 20, January 2024 | Political Number of readings: 271 Baghdad / NINA / Prime Minister Muhammad Shiaa Al-Sudani confirmed that Iraq today is on the right path. Al-Sudani said during his inauguration today of the Fine Arts Intersection Bridge, that the projects are being completed according to the timings, or even less than their timings.
He added that the bridge at the Fine Arts Intersection is simple and the ceiling of our goals and ambitions is large, indicating that this intersection came after a clear vision and promise from the government regarding the provision of services.
He explained that the projects in this area will be completed with the Sarafiya Intersection Bridge and the construction of a bridge parallel to the Sarafiya Bridge.
The Prime Minister renewed the government’s commitment to implementing all projects.
We coming out from war. We coming out from the worst thing in our life. We just start to walk...We just start to grow...It almost collapsed but didn't collapse. It maintained itself and maintained himself stable...The only thing that destabilize the economy of Iraq is the war...Iraq is a very strong country...In a couple years Iraq is going to be one of the stronger countries in the world...Iraq is very strong.
Iraq survived the worst thing in their life. We survived 3 or 4 wars in the last 50 years. We survived it and each time we came back and we came back strong. This time we're going to come back very strong...Iraq economy never collapse by himself. Iraq economy always stable unless somebody else disable it for them. Iraq's economy is one of the best economy in the world and it's going to come back to the best economy in the world. The negative things about Iraq will never revalue, it's a scam, that's all bullshit. Iraq's going to come back one day and it's coming to come back soon.
On the sidelines of the Davos Forum at its 54th session held in Switzerland last week, the Prime Minister, the Prime Minister and his accompanying delegation, and the Governor of the Central Bank continued to hold meetings, understandings and negotiations with the World Bank, the International Monetary Fund, the President of the European Bank for Reconstruction, JPMorgan Bank and global financial institutions with the aim of accelerating the measures implemented by the government in cooperation with the Central Bank towards achieving financial and banking reform.
In implementation of the twelve government curriculum (financial and banking) in which the government’s program for the financial and banking sector and strategic policies and procedures were drawn up in paragraphs (1-7).
To restructure the public budget, manage public money, reduce the pressure of consumer spending in favor of projects and programs for sustainable development, pressure public debt to a minimum, limit external borrowing for investment and service projects. The borrower repays the loan from the project revenues, establish the Iraq Fund for Development and include it in the general budget in 2023.
Controlling the border crossings, reforming the tax system and making, maximizing revenues for economic productive sectors other than oil, and reaching their percentage in budget revenues over the next 3 years to 20%. The main and important goal is to reform the banking and private sector, according to paragraph (7), which considers financial and banking reform is the beginning of the successful economic reform, with a focus on structuring and enabling government banks, reconsidering their work, and enabling private banks to be able to support investment and development in a real way. It is indeed initiated by the government and the Central Bank with contractual and negotiating procedures with the international auditing and advisory company Ernst Andy Young and under the supervision and direct follow-up of the Prime Minister and his confirmation that the company’s global programs are applicable and differ from previous experiences and to ensure the achievement of the goal according to the time period planned to complete the project in full.
The meeting with the CEO of JPMorgan Bank of America on the sidelines of the Davos Forum held in Switzerland, asking him to cooperate with the Central Bank and banks to open accounts for Iraqi banks to regulate foreign trade financing and help accelerate digital transformation applications and the use of electronic payment technologies, in addition to the diligent follow-up of the Minister of Finance and the Governor of the Central Bank of Iraq.
With regard to banking reform, the Central Bank has made great efforts to implement what was stated in the government curriculum in the face of the challenges faced by the reform process, where in 2023, the organization of foreign trade financing and digital transformation in the banking sector was achieved, the imminent launch of a national lending strategy, the establishment of a Rida Bank to finance small and medium enterprises, and the work is continuing to reduce the exchange rate fluctuation of the monetary dollar in the parallel market. In general, the plans of the Central Bank aim at my mirrors:
First – Developing and reclassifying the Iraqi banking system, enhancing citizens’ confidence in it and providing financial solvency that enables it to meet requests quickly and when requested.
2-Transforming banks to their primary function of lending for sustainable development.
3. Banks that do not provide loans and banking facilities that help in development lose their meaning as banks, which requires a specific position on them from the Central Bank.
4. Banks are the lever of development and the importance of the Ministry of Finance and the Central Bank to support banks, develop their functions and rely on their own capabilities in dealing with sober international correspondent banks, to be organized by the international banking system in accordance with international standards and to obtain the internationally approved classification.
v. Withdraw funds outside the banking cycle and enter them into the banking system by providing comprehensive banking products and services to customers without slack, smoothly, easily and transparently.
All the above objectives Although the period set for implementation according to the government’s timetable ranges from (1-4) years, the government and central bank strategy for 2024 will shorten the time and achieve most of the above goals. There are banks that are moving towards the required development and banks that still need an additional period of time to achieve the goals, and there are troubled banks that are now making exceptional efforts from the bank to the central and management of these banks to rehabilitate them.
What concerns us here is the real functional role of banks in providing loans and banking facilities and moving from the role of banking to the developmental role. There are two important observations that must be taken into account with regard to providing loans and banking facilities to stimulate the economy.
First: The nature of the activities of banks depends on the nature of the activities of the economic sectors, and that economic activity is concentrated in foreign trade (imports), so it requires controlling imports, supporting the local product, and supporting the private industrial sector, which the government is currently working to promote with calculated executive procedures and with the cooperation of all other sectors.
Second: It is necessary to provide the legal environment and extend the authority of law in order to eliminate the phenomenon of default in the payment of loans by making legislative amendments and treating private sector debts similar to the debts of the government sector as excellent debts payable, which will help the expansion of the private banking sector to grant bank financing of all kinds.
The other important thing is to move the public and private banking sector to a sober and sophisticated economic sector that is committed to international regulations, rules and standards for compliance, anti-money laundering, financial reporting and risk management, and thus to be actually a lever for development.
And contributing to the revitalization of the economic cycle by activating and supporting the financing of small and medium enterprises and large development projects through which the construction of a solid national economy and sustainable development is achieved that ultimately serves the Iraqi people and their aspirations for a better life.
This means that each government or private bank has a targeted plan for the four years specified in the government curriculum and under the supervision and follow-up of the Central Bank in the fields of development of payment systems and modern banking technologies, moving from cash dealing to dealing with modern electronic payment methods in accordance with international standards, offering new banking products to stimulate financial inclusion, work to build capacity, train and qualify human resources, achieve the goal of investing in human capital and develop the structural structure of the banking sector.
Banks also pay attention to the application of financial stability standards, which are financial safety indicators such as the capital adequacy rate, liquidity ratio, profitability ratio such as the ratio of profit and net profit to capital, the ratio of return on assets, the ratio of return on shareholders’ equity, the ratio of activity cost, leverage and the ratio of the employment of funds, in addition to the adoption of indicators to measure performance efficiency.
Recently, we have been receiving several pieces of news that give indication that currencies will begin to float up this year.
Will they float to their real value in 2024?
This remains to be seen. It is more important that this year of transition be one whereby exchange rates are tested on the markets and weigh in their worth through the banking system against other currencies.
It is a process whereby the synchronization of the entire Global Economy is currently in play.
We already know that the Indian Rupee has come out and voiced that they expect their currency to trade against the US dollar at 80 to 82 cents by the end of the year. Many countries are expected to bring in their projections soon.
It is important that we develop strategies on what to do in exchanging our currencies as more news develops.
The Finance Committee headed by Atwan Al-Atwani and the presence of its members hosted on Sunday, 21/1/2024, Minister of Finance Taif Sami to discuss a number of important financial files based on the regulatory aspect.
Al-Atwani welcomed, according to the statement, {Al-Furat News} received a copy of it, at the beginning of the hosting of the Minister of Finance, stressing: “The importance of holding the meeting to discuss financial issues, spending, and completing the tables for the budget of 2024, in addition to the topics of added amounts for the purchase of energy, compensation of employees, examiners, and the implementation of projects included within the government plan,” adding that “there are meetings and field visits to institutions to see all the details.”
“The Finance Committee also discussed the possibility of diversifying non-oil revenues and not relying on oil revenues, and the need to move towards multiple revenues to achieve self-sufficiency and end the deficit, as well as the financial amounts for the year 2023,” the statement added.
For her part, the Minister of Finance presented an explanation on the procedures for financing institutions and implementing the tripartite budget after its publication in the Official Gazette, as well as the project financing and opening accounts to state departments, explaining that the financing of projects is carried out according to the allocations and listing requirements, stressing the importance of modifying the components and abuses, in coordination with the Ministry of Planning in addition to the subject of the region’s revenues.
The committee also listened to the problems facing the ministry in preparing the budget schedules for 2024, the plan to fill the deficit, paying foreign debts, financing institutions, and provincial projects, discussing the development of appropriate solutions, and the ministry took its role in finding alternatives.
The interventions of the members of the Finance Committee included the allocations of the provincial projects and how to include them in the tables of the budget 2024, in addition to the subject of the customs tariff, and the estimated price of oil according to the estimates, with the verification of non-oil revenues for the budget.
At the end of the meeting, the committee requested all data and details of the actual expense and deficit, through official letters, stressing the speedy preparation of budget schedules and sending them to the committee for review and vote.
