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BECAUSE OF BREMER: IRAQI CITIZEN IS DEMANDED TO PAY $ 3,000 BEFORE HE WAS BORN…

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The Iraqi Ministry of Commerce at a special conference related to trade policy and economic reform, unveiled the creation of the commercial parasitic class by Americans depending on the other, have no history or roots in Iraq, grew up with projects of companies working with the US Army, as well as the continued decline of the balance of the Central Bank of hard currency.

The conference dealt with, in which specialists of the economy participated in it, some of the problems faced by Iraq enhanced in numbers, including:

  1. The most serious steps taken by Bremer in 2003 towards monetary system in Iraq are not the dissolution of the army and security services or the Ministry of Information , or military industrialization or other only, but the abolition of foreign exchange control department of the Central Bank, as an economic adviser to the prime minister Mudher Mohammed Saleh says: that the cancellation of Control Department as a “need” of a new political system based on a market economy, pointing out that the creation of the department of money laundering was a substitute for them.

He added that the “totalitarian regimes depend on the foreign exchange control departments in monetary policy; to restrict the movement of money, either in the democratic systems that adopt a market economy policy , it gives the freedom of movement of money, which fits the economy of Iraq , which turned after 2003, from a socialist system to a market economy, and so it must liberalize its current account at the expense of the balance of payments , especially after it signed the resolution 1483 , which comes to dealing with international organizations.

Saleh pointed out that “Iraq passed the law (56) for the year 2004 which relates to full liberalization of the balance of payments and thus the external transfer control department is illegal, and therefore issued a law to establish Anti – Corruption Department No. 93 of 2004 and amended by Law 39 of the year 2015 and this department has become a substitute for foreign exchange control department.

However, a number of economists, academics , experts believe that the cancellation of foreign exchange control department of the Central Bank is the reason behind the smuggling of hard currency , and that the most dangerous steps approved by the US civil administrator in Iraq Paul Bremer to the monetary policy in Iraq is to cancel the foreign exchange control department.

  1. The size of Iraqi imports of consumer goods that do not include any production commodity by $ 410 billion until 2015.
  2. In 2015 ( the year of austerity) the import of Iraq was amounted ‘s $ 44 billion , while revenues of oil $ 39 billion, as the Ministry of Planning, announced of the rise of Total imports for the year 2015 to $ 41.6 billion.

The Central Bureau of Statistics of the Ministry stated in a report that ” the total imports for the year 2015 for materials of commodity and petroleum products amounted to $ 41.6 billion, equivalent to 48.6 trillion dinars, recording the highest increase in the amount of 12.4% for the year 2014, as imports in which amounted to 37.1% billion dollars equivalent to 43.3 trillion JD at a rate of compound growth of 11.7% for the year 2013 “.

The report added that ” the total imports of non – oil goods according to the marine border outlets amounted by 35.1 billion dollars , equivalent to 41 trillion dinars , recording the highest increase in the amount of 185% for the year 2014 as it reached $ 12.3 billion , equivalent to 24.8 trillion dinars , accounting for 89.3% of total imports of non- oil goods for the year 2015 “.
He pointed out that “imports through maritime ports is the highest value compared to the ports of land and air borders , which amounted to 4.5 trillion Iraqi dinars, while imports reached through land ports 0.4 trillion dinars.”

  1. Iraq balance of hard currency fell in the central bank auction of $ 88 billion to $ 67 billion, and continued to decline until it reached $ 43 billion, at a rate of decline equivalent to $ 9 billion a year. ”

At the time,a member of the Committee on Economy and Investment parliamentary, Salam al – Maliki accused the Central Bank of wasting the financial wealth of Iraq saying: “There are measures included many suspicions of corruption and fraud to what is known as a window of foreign currency sale in the central bank that caused the depletion of the currency of the country, and led to the decline in reserve of the dollar in the bank ‘s treasury , which was amounting to more than $ 88 billion to an unknown number that the Central Bank can not to declare it. ”

Maliki said that the low level of cash reserves of hard currency to low levels portends of serious disasters in the short and long term; threatening Iraq of the bankrupt, and saddling with external debt , “noting that” there is a huge difference between the approved price in the local market and the adopted price in Central Bank , which allowed the spoilers and those behind them by depriving the government of tax and customs in addition to depriving the Iraqi citizen of the benefit of the real exchange rate. ”

5 – The currency auction transferred the dollar from a tool of financial exchange into a commodity that is bought and sold based on the price difference between the government price and the market price, and the loss of Iraq from the corruption of money laundering amounted up to 360 billion dollars.

The corruption and money laundering operations that occurred during the nine years , ie , for the years (2006-2014) , the most corrupt period in the ancient and modern history of Iraq , has made Iraq one of the most corrupt countries in the world. Note that Iraq ‘s imports during the nine – year amounted to $ 550 billion, and 60% of this amount was sold in the currency auction in Baghdad, which is supervised by the Central Bank of Iraq, ie , up to $ 360 billion .. And these amounts were transferred out of Iraq through civil companies and banking offices. And probably the money went to Iran and Syria. . Although if Iraq’s oil revenues were used rationally, it would make Iraq a developed country nowhere else in the region… but the financial corruption prevents this from happening. Corruption in Iraq, such as cancer that destroys the body of Iraq eating the whole of it…

The Finance Committee member of parliament , Haitham al – Jubouri, said the corruption in the auction currency is done by providing of ” the central bank facilities in the sale of currency, where any known businessman can buy the dollar, by offering the purchase bill to import goods from a particular country, then these funds are transferred to the banking company , “pointing to the existence of a people in Baghdad preparing the bill and stamped it with seals of foreign companies noting that the value of one bill reaches to amount of four dollars.”

He added that ” A businessman who owns a bank or banking company will transfer funds to several countries to sell the dollar and benefit from it , ” adding that ” the Central Bank confirms to the competent authorities to audit the invoices is not his duty , but is the duty of the Economic Crime Department of the Ministry of the Interior” .

  1. The steps to open the door of import widely is the abolition of the customs tariff and to maintain 5% (if applied under the control of mafias of corruption), as it was approved by the law of federal budget for fiscal year 2017 received from the Council of Ministers and passed by the House of Representatives, as the 2017 budget was empty of the activation of the law of customs tariff, as contained in Article 24 / c, of the 2016 budget law, which stipulates: to abolish the activation of the law of the custom tariff No. 22 of the year 2010 as amended and consumer protection law No. 1 of 2010 and the Law on the protection of Iraqi products No. 11 of 2010 to be applied to all border crossing points to achieve justice. ”
  2. All plants of the areas of industrial Jamelah turned into warehouses for dirty goods imported from Iran and China, which is characterized by its inability to survive and validity of the termination occurs after hours of use , or several days for being imported from sources and commercial companies operate according to the base for the use of one time, and thus the local product lost its ability to compete with the imported product.
  3. US occupation since 2003, helped to create a parasitic business class that do not have any history or roots and grew up on the projects of the companies working with the US Army (Bechtel, Hellbarton) and this class turned into a virus within the Iraqi market in search of rapid commercial profit, prompting mostly to imitate or get benefit from the commercial agencies that they bring it and this working to the destruction of the national industry, and make Iraq a market for the disposal of shoddy products, and without development and no national industry to be mentioned.

But the question remains how to allow the national industry to be a real competitor in the domestic consumption market, the matter needs to provide raw materials and support for laboratories by giving their owners loans without interest, or very low benefits, and the providing these plants with electricity, fuel , and even the dollar must be given with discounted prices for traders as it was in effect before 2003, where it allows the trader to buy the dollar at the official price from the banks on condition to make these factories to work and to import raw materials.

  1. What happened in 2003 is not the fall of the regime but the fall of the productive the state of both the government and private pillars, and the absence of economic and administrative planning and the lack of investment the earned huge money from oil exports in productive economic projects led to the emergence of significant imbalances in the balances required for the economic process and the emergence of a distorted one-sided economy. Until 2009, the proportion of the contribution of industry to GDP did not exceed 1%, and the agriculture sector 3%, which is very low ratios.

The dependence of Iraq on abroad in securing its supplies of food, medicine, water, electricity , and some oil derivatives and other goods portends to a catastrophic risks, and the collapse of infrastructure, and the budget deficit, high unemployment rate, and the trade imbalance is due to the dependence on oil revenues to cover commodity needs from abroad, an indicator of disruption of production structure and the inability of national sectors in the meeting of local market needs of commodity products.

The industrial and agricultural degradation: as it forms the backbone of national economy for many developed countries of the world noting that the industrialized countries rely on the industrial sector for the operation of labor and reap taxes to the state treasury and move other economic activities as it is in the United States, Japan, Germany and other countries.

The agricultural production sector, there are countries that its economies depend on the agricultural and livestock sector , such as Denmark, Switzerland, Australia and others.

The Iraqi economy is characterized by very weak in the productivity of these sectors, where there are no huge productive institutions in Iraq using modern production techniques in the field of heavy industry or advanced industries

  1. Public debt of Iraq reached internally and externally $ 110 billion, and including the outstanding Gulf debt outstanding until the end of 2016, this debt constitutes of 30% of the value of gross domestic product with the exclusion of outstanding debt that a third of it is internal and thus, there are two aspects of the debt under control and they are the interior of $ 46 billion dollars, and the outstanding amount of $ 41 billion, and the financial adviser to Prime Minister Dr. Mudhaffar Mohammed Saleh squandered fears of the seriousness of the debt on the Iraqi economy, because the share per capita of debt is about 3 thousand dollars and his share of the gross domestic product is exceeding five thousand dollars, explaining that the need of Iraq from debt Of 2017, which will be obtained from the International Monetary Fund, which pledged $ 5.3 billion and Iraq earned 1.250 billion dollars, and the World Bank pledged $ 3 billion of which we got a billion dollars, in addition to two billion dollars that came as an aid to Iraq . But economic experts at a conference of the Ministry of Commerce expressed their fear of rising of public debt and its negative impact on the Iraqi economy.
  2. Iraqi children are born in debt to $ 3000, the coming generations of Iraq will bear the burdens of debt, loans that plunged the country without solutions, as the warnings of economists ere escalated for the collapse of the economic situation in Iraq, after the announcement of the Finance Committee in the Iraqi parliament for the rise of the country’s internal and external debt to 119 billion, according to the announcement of a member of the Finance Committee Magda Tamimi. , In a statement that the total internal and external debt owed by Iraq amounted to $ 119 billion, including $ 80 billion in foreign debt. Stressing that the total debt was $ 107 billion , but after the British loan estimated $ 12 billion , a total debt has become of $ 119 billion, and indicated to the fear of going of the recent loans designed for the reconstruction of infrastructure to the pockets of corrupt .

Despite the fiscal deficit experienced by Iraq, the government is now heading to more loans under weak producing economic sectors of revenue with the exception of oil, which is the only supplier of the Iraqi economy and the federal budget.

  1. The current value of the Iraqi dinar is not real but it is the value of stability and the alternative of cash reserve; because the government cannot afford to float a political currency. The flotation means ” a tool of monetary policy instruments of states, used only with currencies that the governments determine its worth, and not left to other factors and, floating differs from the ” devaluation ” of the currency, which is determined by the open market on the basis of supply and demand, and the floating is against link, Currencies linked vs, a major currency or basket of currencies are floating through the “decoder” link partially or completely, the opposite of devaluation of the currency is high value, as happens for major currencies in free markets such as the US dollar or the euro or other, depending on supply and demand, and the strength of the fundamentals of economies they represent ,and the actions of speculators in the Currency markets.
  2. deliberately disable the Consumer Protection Act, which is a type of government regulation works to protect the interests of consumers, so the governments enacted laws governing this process, which is in the end for the service of the consumer citizen and to reduce fraud and protect them and punish those who carried out it by the strongest possible sanctions in order to preserve citizens’ health and safety and the safety of members of his family, and in the case of the economic situation in Iraq, which is suffering the chaos of import, which beneficiary mafias stand behind them and if the law is enacted , it will be emptied from its content.
  3. The problem of border crossings is that it is removed from the authority of the Ministry of Interior to the an independent body associated to prime minister but the procedure has not activated so far because of the lobbies controlling the ports, which means that “Cancel of the system will contribute to the entry of informal goods that do not carry a certificate of origin and non – certified by the commercial attaché of Iraqi embassies in the countries of the world, in addition to the smuggling of materials and the monuments and foreign currency abroad. ”

While the Interior Ministry issued a statement of clarification on the reasons for cancellation of electronic system at border crossing points, it came to the fact that this section did not obtain the legal approvals of its formation , “noting that” it is an additional loop for the bureaucracy to contribute to the consecration of disguised unemployment, confusion and administrative interference. “.

The statement added that “all goods and cargo entering Iraqi territory controlled by an act of the core duties of the Customs Police and Customs Authority and Board of Supreme Audit and the Division of Intelligence of ports and borders, ”asserting that ” objectors are some of those affected by the professional context of internal decisions.”

  1. The Jordanian delegation that visited Iraq has asked Iraq for three things: (Trebil outlet, oil line, the exception of Jordanian goods from taxes), they got what they wanted while Iraq had no any demand.
  2. The size of Iraqi funds deposited in Jordanian banks 15 billion JD, note that each $ 100 equivalent to 70 Jordanian dinars, and therefore, the amount is in dollars more than $ 21 billion.
  3. The capacity of the streets of Baghdad, 200 thousand cars in which there were one million and 200 thousand cars and enters daily 600 thousand cars from the provinces. And walking in the streets of the capital Baghdad and the roads, a number of cars is equivalent to about three times the capacity of it, and that the country borders were opened in front the flow of cars over several years since 2003, and that the customs tariff law including cars of all kinds 5% to be collected upon registration in the traffic offices, which contributed to the dumping of market with these goods.
  4. The capital Baghdad needs to 72 hospitals, while there are 32 with a deficit which is estimated at 40 hospitals.
  5. School buildings deficit rose to more than ten thousand school buildings.
  6. There is no specialized trade in Iraq that may to import (medicines) and import (tomato) and import licenses.
  7. The state apparatus increased from 800 thousand employees to 4 and a half million employees, which cause for Iraq the problem of disguised unemployment , which means the presence of numbers of labor more than the actual need of the institution. The risk of of open unemployment is the larger and most dangerous from the risk of disguised unemployment that the risk of disguised unemployment are no less with its negative consequences than the risk of open unemployment noting that the disguised unemployment decrease the level of productivity of workers, poor efficiency in the operation of workers, low – profit of operator organization for these workers, inability to increase the incomes of workers, lower morale among workers, increasing the burden and administrative costs on the operating organization for workers, the the brain drain as a result of not securing the psychological, physical and social needs of the employees of the operating organization, the spread of the recruitment process of favoritism and brokers instead “for employment.
  8. Population growth in Iraq , with a 3% annually in the sense that the population of over a million people, in other words , if we achieve an economic growth rate of 3% will be the result of the economic equation is zero. And increase the population without the development will be of a negative impact on the labor market, savings and investment, and consumption

24 – Baghdad residents throw food to the waste that is enough for two million and a half million people daily.

  1. There is no standardized data base in Iraq that can be consulted by anyone who has something to do with it whether government or private institution , or an external investor and the case is entrusted to the ideas of ministries and the weak of the base caused that inputs of data to be incorrect with the result that the results and processors are inaccurate .

26 – the previous budgets , the current and the future are operational that does not include investment to drive the economy because oil prices will remain unchanged, which means Nothingness for the economic development and diversification of sources of income, and the continuation of the deficit and unemployment, which weakens the national economy in light of the low oil prices.

  1. The value of inoperative projects (structures) amounting to $ 206 billion at the rate of more than 9,000 broken project, leading to an economic and urban paralysis, making Iraq borrow from the IMF and the United Nations Fund “, explaining that” reducing dependence on oil and activating the role of the private sector on the production, will contribute to the creation of a state of use. ”
  2. The size of losses of military equipment due to the fall of Mosul is $ 28 billion.

So it is obvious and very natural that we get because of the unfair decisions of Bremer against the Iraqi people to these frightening results and we sink in many of the problems that have a beginning and even the experts do not know an estimate for its end and the current and future results, that Bremer during his rule of Iraq put the destruction plan of an accurate the management , where not treatment or medicine is useful , only the economic collapse, whatever the potential of the state, whatever the strength of successive governments.

But our hope remains that Iraq will rise with powerful Iraqi will include all of the components of the Iraqi people, to break the dark restrictions imposed by the dark period of the rule of Bremer, and Iraq goes back to its former era , free and united.

 

Shatha Khalil

Unit Economic Studies

Translated by: Mudhaffar al-Kusairi

Rawabet Research and Strategic Studies Center

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