Iraqi Dinar Discussion Board

[Zoinkers]

Committed to IMF's instructions

Dr. Amirah Al-Baldawi, member of the Economic and investment Committee in the Parliament, prepared a study on the Iraqi budget for this year, presented the basis and principles on which it was based.

She said in the study: “The paragraphs of the budget have not concealed its abidance to the terms of the IMF to write off Iraqi debt after canceling the subsidy of oil derivatives and foodstuffs (the ration card)”. She added: “The national strategy aimed, as stated in the federal budget, to reduce the subsidy, and then gradually withdraw from this policy that has a negative impact on the overall economy. Implementation has started in the 2006 budget when the allocations to support the ration card were reduced by 25% of the budget in 2005 and the policy continues for the 2007 budget. The subsidy was actually lifted all at once in time of oil crises and repeated jams in the distribution of oil derivatives in all Iraqi governorates, as well as the absence of a clear environment for investment in the oil sector, that may help to alleviate the crisis; this means Iraq will witness a high rise in the prices of derivatives in the coming months, if the decision of lifting the subsidy is not accompanied by intensive negotiations and bold”.

She explained: “The strategy of the 2007 budget contained the program of supporting the ration card adopting the necessary allocations, but it might be appropriate to decrease some items in the ration card or reduce them to the basic ones such as flour, baby milk, rice and tea leading to the reduction of no less than 15% of the allocations, in addition to not including citizens like traders, industrialists, contractors and other segments whose incomes are not below a certain level”.

She Stated: “The social benefits included in the budget such as the allocations of the ration card, the social protection network, allowances for military employees of the dissolved Ministry of Defense and the expenses of aid to those displaced have fell by 2.4% this year, less than what they were in 2006”. She pointed out: “allocations to the ration card also decreased from 45 00 billion dinars to 3928 billion dinars by 12.7%. The gradual withdrawal from the subsidy could be in favor of the Iraqi economy, but the needy segments would not benefit from it since it is accompanied by financial corruption mechanisms that serve the interest of only specific segments, like those involved in contracts of supplying the ration card materials, transferring and distributing them. Many areas, displaced families and needy families are still demanding their share of the ration card materials”.

She stressed: “the need for the State to establish a policy for protecting the needy and not to keep such procedures, like the non-including of rich merchants, contractors and others, as mere proposals”.

She wondered: “What are the mechanisms taken by the State to write off the names of these rich segments? How were they counted? How can we make sure that they would not penetrate the regulations put by the State to write off their names?” Adding: “in this area, the Ministry of Planning should play a role. It should organize a form for each family’s income, and then isolate the high-income families without any exceptions in order to treat the situation of poverty and need; also, the amount allocated for the ration card should go to those who really need the card’s materials which should be of fine qualities and quantities filling the need of the Iraqi citizen without needing to demand it”.

She continued: “As for social insurance and the social protection network which include limitted-income families, their allocations rose to 84% from last year to become 920 billion dinars in order to included the largest number possible of needy families who were about one million families last year; however, these allocations will not be able to include more than one million and five hundred thousand families with minimum salaries that has not even risen to an average level”.

She said: “As for the displaced families and victims of the deteriorating security situation, their allocations has been decreased by 5.6%, in addition to a modest budget to the Ministry of the Displaced and Migration, that does not match with the increasing numbers of the displaced and their exacerbating problems especially in winter, schools season and others. As for the victims’ compensations which are given to victims of terrorist attacks, whether they were civil or military, it is regrettable that these allocations were reduced by 50% from last year at a time when terrorist attacks increased and large numbers of Iraqis are becoming victims to them, leaving greater numbers of orphans, widows, the poor and damaged”. explaining: 'If the State does not take the increasing numbers of damaged Iraqi people into consideration and guarantee them what fills their needs without being compelled to resort to voluntary contributions, as happened in the incident of Imams Bridge, if they do not withdraw from the specialties of some of the huge bodies and add for the benefit of the victims and needy or at the very least, the social benefits allocations of the presidential bodies should be classified in a way that the largest part of them should go to the damaged people, and instead of opening the door for disaster donations, the Presidency of the Republic and the ministers should make those donations on behalf of all the sons of the Iraqi people in respond to any disaster or emergencies. Other than that, it is totally unacceptable to reduce the allocations of the needy and increase those of the luxurious without clear information of how will they be spent”.

Retirement Law
Dr. Amirah Al-Baldawi said: “The unified retirement law which was voted for by the previous National Assembly ensures that the retired will get 80% of his actual salary. Large numbers of citizens awaited the implementation of this law to retire from their jobs with a pension that guarantees them a decent life; however, implementing this law was stopped following the advice of the International Bank which sees that there is no country in the world spends all these enormous amounts to subsidize people who do not provide the State with any benefit in return”.

She continued: “The International Bank has presented a project included in the 2007budget; it proposed the establishment of a retirement fund financed through the discount of 12% of each governmental institution for the purpose of its employees’ retirement; also, discounting 7% of the government employees’ salaries to be deposited in this fund to be invested in order to increase them and provide the State with profit, as well as being deposited for the benefit of the retirees”.

She explained: “The wages of health and laboratory services had risen to 94% while the allocations of medicines were reduced by 16% this year compared to the year 2006, at a time when the numbers of the injured and those in need for treatment is increasing ; also, the health sector needs to be rehabilitated and supplied with modern medical devices and laboratory services, as well as provide opportunities for training and improving the performance of the medical cadre, the intermediate and advanced, since this sector is witnessing a great development in the neighboring countries and in the world. In addition, the State should start working by the health insurance card which will be of great benefit for the needy and the poor as well as improve the health service; it is very natural in a rich country such as Iraq that the needy are treated for free”. She added: “A quick look at the preparations of the 2007 budget for the deprived, in all their kinds, we find that the State has prepared itself to get rid of its obligations in the subsidy area without any clear plans or alternative solutions”.


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