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Bankruptcy 'Daash' economic collapse threatens Iraq
2014-11-21
Anbar, Karbala and Wasit declare bankruptcy and the rest of the provinces are moving to a similar announcement within weeks if Parliament fails and the adoption of the budget in 2015 to address the shortage of funds.
Baghdad, Iraq on the cusp of becoming an economic decline after the collapse of world oil prices by 25 per cent, and increased expenses of the war on the organization of the "Islamic state" and that what some call "Daash", and the absence of economic planning of the previous government that the state treasury is still empty handed.
Officials in the Iraqi government is trying to reassure the population about the days of the economic crisis that hit the country since, and avoiding discussion of the state's resources, but the economic numbers suggest that the economic crisis Stasv the country in the coming months.
Economic crisis centered on the state treasury bankruptcy of any of the face of fluctuations in world oil prices up resources, and that the high costs of the war on the organization of the "Islamic state" since the beginning of 2014, the previous government and evade approve 2014 budget will make Iraq the situation is not enviable.
World oil prices fell to around $ 80 per barrel because of the increasing global production, after that the price per barrel was $ 116 three months ago, the lowest level of oil prices four years ago, according to an international economic reports.
Iraq will be more affected by a decline in oil prices countries, because it has no plan to address it, and that estimates of the annual budget and placed incorrectly.
Oil Minister Adel Abdul-Mahdi, said last week that Iraq exported 2.0005 million barrels per day, and will be the price of a barrel of about 70 dollars, but avoid giving financial budget estimated value, although the calculated figure is not difficult and amounts to about $ 63 billion, slightly more or less, This amount is a real disaster for Iraq.
As the control of the "Islamic state" on large parts north of the country led to a decline in the production of oil fields in Kirkuk, north of Baghdad, and declining product of 670 thousand barrels per day to 25 thousand barrels per day, because the oil must pass from Kirkuk to Turkey through Mosul controlled by the "Islamic state".
The absence of economic planning is one of the causes of the disaster, the Iraq five years ago to exchange all amounts that spared the budget without funds to cope with the vulnerability of the country to an economic deficit or the need to spend money on emergency incidents, such as the war on "Islamic state."
Negative and the other thing is that the previous government was determine the budget on the basis of calculating the price of a barrel of oil is less than $ 15 for the real price at the same timing of adoption of the budget, and this is a big mistake as economic stresses economist Akram al-Hiti.
He said al-Hiti, "The governments of neighboring countries estimated the price of a barrel of oil when it sets the budget, at a price of at least $ 40 for the real price to face the prospect of lower world oil prices, but the former Iraqi government was putting a higher price for a barrel of oil, without considering the possibility of lower oil prices."
It is noted that the annual budgets of Iraq upward, and increases funds each year, because of the success in Iraq to increase oil production and export, the previous government and the allocation of all amounts in the budget bill without the spare funds to cope with the economic crisis.
In 2011 budget amounted to $ 82 billion, and in 2012 reached $ 100 billion, and in 2013 was the size of $ 115 billion, and in 2014 the Ministry of Finance estimated the value at about $ 140 billion after taking into account the price of a barrel of oil at $ 90 dollars, and here I got the disaster.
The problem is that the previous government made economic system in the country waits for the increase in the money every year, but did not create the economic system to decrease the likelihood of money, and this is what Iraq would threaten the economic crisis.
Last week, the government discussed the budget crisis at length, and after several meetings of the Council of Ministers announced the Prime Minister Haider al-Abadi said his government formally decided to follow the policy of austerity in expenditure, but he assured the government employees, whether in the civil or military functions that their salaries will not be reduced.
Other reasons behind the next economic crisis that the previous government of Prime Minister Nuri al-Maliki did not succeed in the adoption of 2014 budget year, which is estimated to reach more than $ 120 billion, and the surprise is that 65 per cent of the amount of the budget spent without any legal basis and official documents illustrate Where that money went.
The economist said Saeed Anwar "The previous government spent the amounts derived from the export of oil, valued at $ 70 billion without much fulfill its obligations and without documents and data can clear scrutinized to make sure that the money has not been stolen."
The new government can cope with the economic crisis by turning the corrupt officials in the state, and do internal borrowing money from banks, and the launch of the bond, and moving the funds of insurance companies, "says Saeed.
Other causes of the economic crisis is the war on the "Islamic state" which occupied large parts of the country in Mosul, Salahuddin and Anbar since the beginning of 2014 costs, where the government was forced to buy weapons and adaptation of thousands of people to fight the "Islamic state".
Although the Iraqi government has not officially declared for the costs of the war against "Islamic state" and perhaps she does not possess official statistics about because of administrative and financial corruption, these costs are not a few certainly, as it was discussed the 2014 budget plan for the end of 2013 did not know that the coming war will face fierce country.
He said Finance Minister Hoshyar Zebari last week that al-Maliki wasted billions of dollars on the formation of irregular forces to fight the "Islamic state", although the disbursement of these funds have been without good planning, and avoid Zebari said no official numbers on them.
The effects of the economic crisis because of the fiscal deficit also moved to the provinces, and declared bankruptcy three provinces namely Anbar, Karbala, Wasit, while the rest of the provinces will announce bankruptcy within weeks if the parliament failed to approve the 2015 budget and to address the shortage of funds.
Government officials and economists say that next year will witness investment projects because allocated for investment budget that will be affected by shrinking the amount of the budget and not the employees' salaries, but the biggest fear is the possibility of the difficulty of providing funds to finance the security forces to fight the "Islamic state", which seeks to exploit any weakness in the government .
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2014-11-21
Anbar, Karbala and Wasit declare bankruptcy and the rest of the provinces are moving to a similar announcement within weeks if Parliament fails and the adoption of the budget in 2015 to address the shortage of funds.
Baghdad, Iraq on the cusp of becoming an economic decline after the collapse of world oil prices by 25 per cent, and increased expenses of the war on the organization of the "Islamic state" and that what some call "Daash", and the absence of economic planning of the previous government that the state treasury is still empty handed.
Officials in the Iraqi government is trying to reassure the population about the days of the economic crisis that hit the country since, and avoiding discussion of the state's resources, but the economic numbers suggest that the economic crisis Stasv the country in the coming months.
Economic crisis centered on the state treasury bankruptcy of any of the face of fluctuations in world oil prices up resources, and that the high costs of the war on the organization of the "Islamic state" since the beginning of 2014, the previous government and evade approve 2014 budget will make Iraq the situation is not enviable.
World oil prices fell to around $ 80 per barrel because of the increasing global production, after that the price per barrel was $ 116 three months ago, the lowest level of oil prices four years ago, according to an international economic reports.
Iraq will be more affected by a decline in oil prices countries, because it has no plan to address it, and that estimates of the annual budget and placed incorrectly.
Oil Minister Adel Abdul-Mahdi, said last week that Iraq exported 2.0005 million barrels per day, and will be the price of a barrel of about 70 dollars, but avoid giving financial budget estimated value, although the calculated figure is not difficult and amounts to about $ 63 billion, slightly more or less, This amount is a real disaster for Iraq.
As the control of the "Islamic state" on large parts north of the country led to a decline in the production of oil fields in Kirkuk, north of Baghdad, and declining product of 670 thousand barrels per day to 25 thousand barrels per day, because the oil must pass from Kirkuk to Turkey through Mosul controlled by the "Islamic state".
The absence of economic planning is one of the causes of the disaster, the Iraq five years ago to exchange all amounts that spared the budget without funds to cope with the vulnerability of the country to an economic deficit or the need to spend money on emergency incidents, such as the war on "Islamic state."
Negative and the other thing is that the previous government was determine the budget on the basis of calculating the price of a barrel of oil is less than $ 15 for the real price at the same timing of adoption of the budget, and this is a big mistake as economic stresses economist Akram al-Hiti.
He said al-Hiti, "The governments of neighboring countries estimated the price of a barrel of oil when it sets the budget, at a price of at least $ 40 for the real price to face the prospect of lower world oil prices, but the former Iraqi government was putting a higher price for a barrel of oil, without considering the possibility of lower oil prices."
It is noted that the annual budgets of Iraq upward, and increases funds each year, because of the success in Iraq to increase oil production and export, the previous government and the allocation of all amounts in the budget bill without the spare funds to cope with the economic crisis.
In 2011 budget amounted to $ 82 billion, and in 2012 reached $ 100 billion, and in 2013 was the size of $ 115 billion, and in 2014 the Ministry of Finance estimated the value at about $ 140 billion after taking into account the price of a barrel of oil at $ 90 dollars, and here I got the disaster.
The problem is that the previous government made economic system in the country waits for the increase in the money every year, but did not create the economic system to decrease the likelihood of money, and this is what Iraq would threaten the economic crisis.
Last week, the government discussed the budget crisis at length, and after several meetings of the Council of Ministers announced the Prime Minister Haider al-Abadi said his government formally decided to follow the policy of austerity in expenditure, but he assured the government employees, whether in the civil or military functions that their salaries will not be reduced.
Other reasons behind the next economic crisis that the previous government of Prime Minister Nuri al-Maliki did not succeed in the adoption of 2014 budget year, which is estimated to reach more than $ 120 billion, and the surprise is that 65 per cent of the amount of the budget spent without any legal basis and official documents illustrate Where that money went.
The economist said Saeed Anwar "The previous government spent the amounts derived from the export of oil, valued at $ 70 billion without much fulfill its obligations and without documents and data can clear scrutinized to make sure that the money has not been stolen."
The new government can cope with the economic crisis by turning the corrupt officials in the state, and do internal borrowing money from banks, and the launch of the bond, and moving the funds of insurance companies, "says Saeed.
Other causes of the economic crisis is the war on the "Islamic state" which occupied large parts of the country in Mosul, Salahuddin and Anbar since the beginning of 2014 costs, where the government was forced to buy weapons and adaptation of thousands of people to fight the "Islamic state".
Although the Iraqi government has not officially declared for the costs of the war against "Islamic state" and perhaps she does not possess official statistics about because of administrative and financial corruption, these costs are not a few certainly, as it was discussed the 2014 budget plan for the end of 2013 did not know that the coming war will face fierce country.
He said Finance Minister Hoshyar Zebari last week that al-Maliki wasted billions of dollars on the formation of irregular forces to fight the "Islamic state", although the disbursement of these funds have been without good planning, and avoid Zebari said no official numbers on them.
The effects of the economic crisis because of the fiscal deficit also moved to the provinces, and declared bankruptcy three provinces namely Anbar, Karbala, Wasit, while the rest of the provinces will announce bankruptcy within weeks if the parliament failed to approve the 2015 budget and to address the shortage of funds.
Government officials and economists say that next year will witness investment projects because allocated for investment budget that will be affected by shrinking the amount of the budget and not the employees' salaries, but the biggest fear is the possibility of the difficulty of providing funds to finance the security forces to fight the "Islamic state", which seeks to exploit any weakness in the government .
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