Dinar Reporter (IQDUSD)

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Economics: With the Iraqi dinar continues to rise

Inflation continues to threaten the economic development process in the country

Baghdad - Lamia Numan
It seems that the exchange rate of the Iraqi dinar did crystallize concepts new economic policy of the country, despite the rise but inflation is still sabotaging the Iraqi economy and the citizen's pocket,

Certainly, the economic reforms of the monetary policy and of real investment and export oil and the flight of capital and government spending and conditions of the International Monetary Fund and attract foreign investment, unemployment and other effects, and debt accumulation and economic burdens left by the former government remains hesitant in its monetary policy to develop the plans and programmes and conventions for the advancement of the Iraqi economy .

These hubs economic declaring itself an attempt to stabilize the Iraqi dinar and reduce inflation and serious attempts by the Iraqi Central Bank to raise interest between this and that the economy swings between IMF conditions and the debt States to Iraq and the natural resources of oil, gas, uranium and other minerals in addition to the wealth of animal and agricultural and other remains unused and scattered smuggled illegally outside Iraq.

To find out the problem and we see economic approach dialogue with Dr. Kamal Basri, an economist in the Prime Minister's Office to review with him the whole what goes on in the corridors of the Iraqi economy problems and reforms could push for recovering the value of the Iraqi dinar.

We review starting axes and conditions of turmoil, instability and insecurity, unemployment, lack of investment projects to attract foreign investment, capital flight and industrialists, traders and others and neglecting investment law, neglecting the private sector, all aspects affected negatively on the financial and economic returns, development and this is what contributed to the deterioration of a citizen increased of the paragraph.

Dr Basri that the high proportion of citizens living in poverty because of the economic challenges that stand in the way of the problem of unemployment, poverty and the low standard of living of large segments of society, and unemployment is estimated at 18 percent after they were after the war about 30 percent in addition to the dominance of hidden unemployment in the sectors , which have a high proportion of employment versus small contribution to the gross domestic product and tackling poverty and deprivation by Iraq to develop policy and economic support is a list of government support to cover the prices of oil derivatives, the ration card, a network of social protection, the costs of electricity and water and to support farmers and others.

Because of the fruits of improved security situation there has been continued decline in the rate of inflation and increasing purchasing power due to improved movement of people, goods and erratic movement of the market and the return of optimism to the people, helped to raise the value of the dinar.

Perhaps economic recovery also be activating the investment law provides facilities for Arab and foreign investors?

The Congress approved the Law of Public Investment Act 2006 and activating to increase contributions sectors generally, and therefore increased employment, exports and the entry of modern technology for the development of those sectors and increase production.

Q: What are the actions on this matter?

Simplify map to chart Iraq and simplify investment procedures to enter the business and residence and to initiate the establishment of projects and reconstruction, and others, and to create a competitive environment to lure investors and make Iraq a rival to the Arab and international, in addition to the search for ways of accelerating the response of banks and insurance companies for investment requirements.

This is the other side, the past year has seen, especially after the second half increased government investment has amounted to the rate of implementation of investment projects in the ministries "including the Kurdistan region" 68 percent hit rate of implementation in the provinces to 74 percent after the rates
Low in 2006.

Current efforts focus on simplifying contracting procedures and the opening of bank credit and the opening of the high contracting powers.

Q: Of the Central Bank of Iraq and the granting of interest rates on deposits and revenues to 20 percent, however are still steps the Central Bank to absorb inflation floating!

success if the inflation induced by providing liquidity undesirable, but inflation in Iraq is due to other factors, but this does not expect the policy of high interest rates to deal with the problem, recent statistics indicate the decline in the inflation rate in January 2007 to 15 percent on it was inflation in recent years.

But it is certainly saying that the policy of lifting the value of the Iraqi dinar against the dollar would reduce the prices of imported goods and improving the purchasing power of the Iraqi currency.

The high interest rates led to difficulties for borrowers at a time when economic policy is still in place are open supportive private cumbersome political results of the previous era, no doubt that monetary policy led to the stagnation and contraction of private economic activity, and thus the emergence of a situation contradiction between monetary and fiscal policies .

International Monetary Fund demanded that Iraq increased the prices of fuel and deliberative prices in the local market and trade for the gradual reduction of the inflation rate, as the Government has taken a decision to lift the prices of oil derivatives is provided cover protects the poor from the implications of the high prices?

The policy of support prices of oil derivatives is one of the facades centralized policy for the planning and distribution of resources and because of the complexity of the loss and corruption and the smuggling of products to neighbouring countries because of the price difference, and the unequal distribution of national income affect the class and the impoverished class is the rich benefit most, We do not forget distort the price structure and the disruption index of economic feasibility in addition to the absence of policy rationalization of the use of oil derivatives and therefore increase the potential demand for domestic production, which led to the government to import oil derivatives from neighboring countries.

There is also the absence of economic incentive to the private sector to address the problem of the shortage suffered by the market in the supply of oil derivatives, these problems explain the situation looting suffered by the Iraqi economy.

Despite the efforts of the Iraqi government and American pressure to the member countries to reduce the debt owed by Iraq, since the days of the previous regime or extinction, but that did not help to raise the value of the Iraqi dinar rate, are there economic reforms and expenditures international players in this regard?

Start Limits Iraqi debt estimated 140 billion dollars, the Iraqi government has been holding agreements with the Paris Club and the International Monetary Fund for the purpose of settling those debts, and is expected to complete by Iraq's pledge with the International Monetary Fund to undertake economic reforms, which included write off 80 percent of the debt.

That the state and society between only two options, the choice between continuing the pattern of current spending or look for other alternative There is no doubt that the alternative chosen by the show of support progressive option is correct and courageous step to correct the mistakes of the past.

As for the reformist policy is consistent with the requirements of reform advocated by the International Monetary Fund necessary for the return of the Iraqi economy to the area of international relations, it is useful to mention that States Länder stipulated in the Paris Club debt for the purpose of fighting Iraqi and 80 percent discount to get Iraq confident IMF.

During the signing of agreements assistance and support of the Convention EPCA "Alabka", which was signed in November of 2004 and the Convention on SBA, to continue support of government-directed work to drain the limited resources of the State nor beneficial envisaged class did not provide the required investment in basic services to the community, but to achieve financial interests Some of the state's resources and makes vulnerable to corruption and loss has helped economic and strategic agreement with the International Monetary Fund to improve the performance of the economic situation.

Ears: a deliberate ways to make cash balances for the growth of the Iraqi economy and banishing the spectre of inflation is evident in the set of indicators related to the security situation, and attract investments and the presence of strategic economic operate by the State of the changes and stimulating capabilities Iraqi economy, which would raise the exchange rate of the Iraqi dinar and put away the spectre of inflation experienced by several countries.

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