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Austerity policy shock will occur daily in the economy
Baghdad rumbling Almamori looming in Iraq approved another crisis in a storm is conjugated with a declining economy, rising fiscal deficit caused by raising fears of politicians and analysts that leads to undermine the capacity of the country to fight the insurgents, as quoted by the Wall Street Journal. In the past week, the International Monetary Fund said that Iraq's economy will fall by 2.75% in the current year 2014, which represents a negative first decline since 2003. In the meantime, the Finance Committee in the fractious Iraqi parliament decided last Wednesday to stop the controversy rages 10 months ago about the 2014 budget, which was supposed to recognize the country to finance the expenses of the current fiscal year, which ends on 31 December next. Without a budget officially sanctioned, the Iraqi government continues throughout the current year policy immediate spending, which caused many to stop investments in bio-oil sector, which provides about 93% of the country's budget. In return for this, the global decline in oil prices came by up to 25% since the beginning of the fierce attack, which was launched by the organization Daash last June to Iraq, to be associated with the floundering Iraqi politicians in seeking to reach agreement on the budget, which has expanded the already before the collapse of the security situation in country. Warns Iraqis policy makers and economic analysts that the financial crisis will increase the pace of challenges facing Iraq's ability to foil the successes and victories organization Daash, who managed to catch a third of the country, as well as weaken the country's ability to pump money required to move the central economy. Commented Carlo Sdralvić, who heads Iraq's mission in the Middle East and Central Asia Department at the International Monetary Fund, saying that "in Iraq, in particular, represent the government's economic President, as everything depends on government spending." He added that the decline in global oil prices, the Iraqi government was put under intense pressure, as well as this it will be difficult to devote more resources strongly to counter extremist organization Daash. With the conversion of government funding for the field of security, the prime minister, Haider al-Abadi, deliberately to take a series of austerity measures. But nevertheless, that the overall policy is based on Abadi deportation expenses to budget year 2015, which is still paid to the Iraqi government to the parliament despite the expiry of the deadline, which was approved 10 of last October, according to assurances deputies from the Parliamentary Finance Committee. Abadi and deliberately to reduce the budget for this year's expenses to 137 trillion dinars, equivalent to 117.9 billion dollars, out of the basic expenses that were 171 trillion dinars, equivalent to 147.16 billion dollars. There is no doubt that this reduction was painful to pause to consider the provision of 37 000 degrees and careers new government plans, including doctors and teachers, with decide to delay the increase in staff salaries currently in service. The government has also postponed plans to grant special students, according to what it says Magda al-Tamimi, an MP for the Sadrist bloc in the parliamentary Finance Committee. As well as this, there is talk in Parliament about reducing spending on aspects such as orphans, and the first projects of education, according to some lawmakers say. But even with large cuts, Iraq is still exceeding the budget deficit of about 27.6 trillion dollars, equivalent to $ 23.7 billion, according to Rep. Al-Tamimi. Abadi's office declined to comment on the details. Tamimi says that "expenses that were supposed to become the largest disbursement of expectations," adding that "because of these circumstances, and spending, which we started, and we have found ourselves and we got to spend each case the money that we have obtained." Arms purchases exceeded expenses and all other expenses associated with the financing of the salaries of the volunteers, and the plans to pay for the children of Sunni tribal fighters' salaries, along with Shiite militias signed by, until now, the biggest part in fierce fighting against al Daash. As the country suffers significant challenges in financing an estimated two million individual of internally displaced people, funding some MPs said he had been to a large embezzlement and extortion. He says that the House of Representatives without the actual balance on the ground, the country is suffering from a condition described reaction to the requirements of the economy, rather than planning. That as the biggest barrier in the political negotiations on the budget represent in the dispute with the government of the semi-autonomous Kurdistan region, which is available on its own oil wealth, as well as the ambitions of self-establishment of an independent state. And caused Arbil Baghdad angrily when I spoke recently stated regarding independence. But the problem is, and tensions began long before that, when Baghdad refused money for the province's share amounting to 17% of the budget transfer out of Iraq, in what was said to be a reaction from Baghdad about the steps the Kurds to export their oil directly without recourse to federal authorities oil. The dark, which came out by the International Monetary Fund, even before oil prices fell more than 25% in recent months evaluation. The Fund estimates that the growth of the Iraqi economy, which he said could reach 1.5% in 2015, without regard came from the sharp drop in oil prices, which fell to below $ 80 per barrel for the first time in two years. Others say Sdralvić and agrees that built the structure of the Iraqi state, according to the hierarchy of the top-Qaeda, with the central state economy, means that it will take a few more months until you start suffering the street. But even if the Iraqi government was able to hold on to the enormous expenditures on defense and armaments and war, the funding would be diverted from other infrastructure projects will cause difficulties and pains in the medium and long term. Also, the country will not find it that awaits him solace from the oil industry, which Ozdrht days. So that the oil pipeline Kirkuk-Ceyhan stopped working since the beginning of last March, which caused cessation of exports from the northern oil fields. Therefore, the pumping from the southern fields has increased the country where most of the reserves are concentrated in order to bridge the gap of shortage, but the lack of investment means that Iraqi production originally began to decline. Iraq's exports remained parked at the level of 2.4 million barrels per day during the current year, which is the same number that it was in the last year. Given the size of the ongoing conflict in the country against al Daash, returned IMF adjusts its expectations about Iraq's future oil exports to less than 4.4 million barrels by 2019, and this assessment dropped what preceded with an estimated figure B5.6 million barrels per day by the year. Even with the enormous oil reserves enjoyed by Iraq, which is the fifth in the world, but that the Iraqi politicians, such as Prime Minister al-Abadi, prefer austerity to borrow. He says Imad Mstaqa, an expert in economic and political affairs of the Middle East, that came as a result of leveraged avoid bad memories left by the era of the rule of former dictator Saddam Hussein, which was characterized by Blunderingly in borrowing policies. But this rejection can prevent Iraq at the end of the development of a dynamic economy is based on oil. Mstaqa concludes saying that "austerity is a bad thing. When the work is done to reduce the budget, you'll see a real shock."
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