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Iraqi currency and economic imbalances and structural value
12/14/2014 0 Comments
Iraqi currency value
Economic and structural imbalances
Dr. Kamal Al-Basri and professor harmful Sbahi
Iraqi Institute for Economic Reform
The article seeks to study fluctuations in the value of the Iraqi currency and interpretation of structural imbalances and the weakness of the application of good governance vocabulary behavioral and other factors. And concludes that the following factors may have led to increased demand for foreign currency and the lack of supply: foreign policy, and the weak economic business environment, fiscal policy, and the lack of political and economic instability, and weak domestic productive capacities, and the improvement in the Iraqi per capita income was a factor is the other, and the weakness of good governance and the rule of law, and the decline of family remittances from abroad, and the growing presence of remittance companies and brokerage firms (parallel market), and the emergence of trade areas in the border ports.
Progress thanks to Dr. Ahmed Hamdi al-Husseini to his participation in the preparation of this paper
Iraqi currency and economic structural imbalance value
Article seeks to study fluctuations in the value of the Iraqi currency and interpretation of structural imbalances and the weakness of the application of good governance vocabulary behavioral and other factors.
1. structural imbalances
Iraqi currency derived from the contents of the economy recover, and it can not study the stability of the currency value of eating away from economic reality. Currently the economy is suffering from weakness in the core of its components, and boils down to the reality of the Iraqi economy by looking at the gross domestic product for 2011 components accounting for the different sectors to GDP as follows: Oil 54.74% and Agriculture 4.15% and the industry about 1.83% .... Etc. It is clear that the Iraqi economy's dependence on the oil sector. GDP, the value of the current 53 499 prices have risen to 211.31 billion Iraqi dinars for the period 2004-2011, for the same period GDP at current oil prices, excluding value increased from 22 691 to 95 822 Mlyardinar.
The problem is, when oil revenues are much greater than the financial returns obtained from taxes, the government will find usually a financial asset at its disposal a large gain easy (no checks on the financial resources of the citizens account). This phenomenon will be encouraged in the absence of democracy (full sense of the term) to give the government a large area to act in public money is inefficient. An example of this resort for governments to adopt:
1) sterile economic policies in the aftermath: represented an increase of salaries and wages away from labor productivity accounts, and expansion in the creation of employment for non-productive purposes resulting from them inflated prices, and pursue a policy of supporting non-economic updated deformation in the structure of the economy and market signals, and the trend towards spending is a political product In essence, aims to connect the citizen power.
2) non-economic policies of spending: represented activities have no economic justification such as grants and aid and open diplomatic and foreign cultural circles do not add real value to the economy and citizens, and this is at the expense of pressing economic areas related to the dignity of the citizen.
A result of all the foregoing, the private sector in these countries enjoy the presence of a weak and marginal, because he does not enjoy the support (as is the case in the public sector), which is concentrated in the commercial and service areas of the economy. The absence of the real role of the private sector means the absence of creativity and speed of adaptation to the needs of the market and provide workers outside the public sector. The uniqueness of the public sector production and the absence of private sector competition will lead to the continued deterioration of the efficiency of the public sector production infrastructure to require government intervention and the protection of the public sector through financial support and policy of customs protection (currently support the annual rate of $ 3 billion). Thus, the government is working to protect the productivity of organizations inert citizen who finds unchanged compelled to buy goods or services at a higher price and the quality is poor account. That this sacrifice is usually also emphasizes international experiences do not lead to short-term and term to improve the performance and efficiency of the public sector production. The absence of a political role for the private sector to prevent citizens cake and staff hired for the government belonging to the orientations of the government, and undoubtedly it would affect the independence of the individual from the government and then the breadth Square independent civil society organizations. The government's move in those contexts eventually lead to the division of citizens into different factions of the beneficiaries and others.
Because of the limited job opportunities that can be created by the public sector, the government is seeking to create jobs by strengthening the role of the security of power by increasing the number of employees of the police and army and take advantage of surplus cash in the purchase of arms and military equipment. That encourages the growth of military capabilities to address internal and external differences militarily, and then pre-empt any signs of growth and development in absolute terms. On the other hand the oil revenue dependence on the price of oil to the global market presents economies of those countries to the waves of the tide, which is reflected in the sharp fluctuations in oil revenues (as flip it in the federal budget for 2008 planning - 2009. Finally, the oil revenues of the states usually benefit including the cities over the countryside, and this is what causes the case of migration from the countryside to the city, but no doubt that this migration is usually in a short period of time, resulting in severe bottlenecks due to inadequate supply of services in relation to demand and to multiple social and economic problems. But Aaktefi impact of this situation on the the level of services available in the city to exceed the weakness of the countryside contribute to agricultural and livestock production and for changes in the fertility of the land, which lead to heavy losses. The truth is that what progress can we find him credibility in the Iraqi economy, especially during the time period 1968 - 2003, is no doubt that the effects of these policies and nature has not radically changed, because of the political pressure of existing and reflected the lack of political will for change.
2. The market value of the Iraqi currency
Released in 1930, the first special law to issue currency Iraqi Dinar, and in 1932 was the issuance of the Iraqi dinar and the dinar = 3.3 pounds sterling, and in 1958 was decoding dinar link with the pound has been linked to the US dollar on the basis of the dinar = 3.3 US dollars. During the period from 1932 until 1990 was issued 12 emissivity of the dinar, and after 1990 the currency was printed locally in Mesopotamia presses and multi-exchange price, and after 2003 were printed issue new coins of the dinar, and became the exchange rate floating around. Figure (1) the exchange rate of the Iraqi dinar against the official explains the US dollar at the Central Bank (Auction currency) and in the parallel market (the local exchange market) for the period from January 2011 to February 2013.
Source: Central Bank of Iraq
The local currency is part of the sovereignty of the state and also is reflecting the amount of economic well-being, and the exchange rate plays an important role in the economic activities of the countries whether it be a commercial or investment activity, where it occupies the exchange rate a pivotal position in the monetary policy, where it can be used as a target or a tool, a as well as the indicator of the competitive state through its impact on economic growth components, such as investment and the degree of openness to international trade and capital flows, and the evolution of the financial sector.
The exchange rate is the rate that gets on the basis of foreign exchange swap national currencies. The exchange rate is determined according to the law of demand and supply, the more the demand has increased the price of the currency has increased and the lower the demand for less price. There are two types of drainage systems used by States to determine the value of its currency:
Fixed exchange systems: Install the currency exchange rate is either the single currency is characterized by certain specifications force it and stability. Or to a basket of currencies from the currencies of key trading partners, currency or constituent unit of the Special Drawing Rights, or Althmnah such as gold and silver metals.
Flexible exchange systems is characterized by its flexibility and usability of the amendment on the basis of certain criteria, such as economic indicators.
State may follow orbit flotation system where the authorities to amend the frequency of exchange rates on the basis of the level of reserves for its gold and foreign currencies. Or free-floating, which allows the value of the currency used to the ups and downs vary according to the market, this system allows the economic policies of liberalization of the exchange rate restrictions.
Itathersar exchange first measures of the Central Bank, which represents the main administration in the state to identify and manage the monetary policy so as to contribute to the achievement of economic goals for her country, and secondly banks and commercial companies remittance where intervene in the market to implement its customers orders or for its own account, where these centers collect Customer orders are banking Palmqasat, and thirdly brokerage firms and brokers who are active are compiled Omer purchase or sale of hard currency for the benefit of several banks or other customers away from transparency.
Factors affecting the currency in Iraq
Recently and over the past few months, the value of the Iraqi dinar dropped against foreign currencies until he was sometimes the market Parallel 1300 dinars per dollar after it was stable at 1185 dinars per dollar rate in spite of the stability of the sale of the Central Bank rate of 1166 dinars with the commission 13 dinars of remittances any 1179 dinars and 1171 dinars cash for sale and this indicates a high demand for the dollar in the domestic market due to the following factors:
• 1- External factors: formed a political and economic crises in neighboring countries (Syria and Iran) and embodied in these countries need to coin the dollar and foreign currencies. What happened is the depreciation of the local currency in those countries and reflected down the price of exports to Iraq, and create windows to attract dollar from Iraq to those countries through attractive transactions for the Iraqis and the same time a source of hard currency to the Iranians and the Syrians. On the other hand there are social coherence and family with these countries may also be a port to exit the dollar but it is difficult to predict Bmekdarh.
• 2- economic business: represented by the factors that lead to the result of domestic capital flight of foreign investors and declining environment, including political instability and the absence of the rule of law in economic transactions. There is no doubt that the time period that followed the 2008 has seen an improvement in the security situation, and in the rate of inflation in the exchange rate. However, the economic environment is still repellent acts do not encourage planning medium or long term. Which led to limiting the activities of some businessmen and yielding profit quick commercial projects, but I doubt that the percentage of it turned into another countries suffer from the scarcity of liquidity arising from the impact of the financial crisis that began in late 2008 (reaching ranked Iraq 165 of 183 countries in 2012)
• 3- public financial policy: Previous years have seen a rise in government spending rates than any other country in the world rates (public spending of 34.6 trillion dinars rose in 2004 to 117.1 trillion dinars in 2012) and most of the images are consumer spending, leading to the rise in spending the outside world (travel, medical services and scholarships, and the import of goods and investments in real estate projects, etc.), and also led to the rise in net Iraqi currency in circulation to $ 36 trillion dinars in 2013, raising the demand for foreign currencies, where the value of the Iraqi imports rose from 37302.7 million dollars in 2010 40632.5 million dollars in 2011 at a rate of change was 8.9%.
• 4- weak tax policies: also include the non-application of the customs tariff law, and of course that result in flooding the market with goods and services payable in dollars in most cases. Also, twice as efficient collection of dues check Aldharbah ensures extra earnings may find their way because of the weakness of the Iraqi banking credit to overseas Authority dollars.
• 5- political and economic stability: because the countries of Iraq described as transition and lack of political and economic stability, we find the proportion of individuals held accounts in foreign banks abroad tend to be of senior officials and wealthy, and increasingly these transfers directly proportional to the rise in oil revenues.
• 6- weak domestic productive capacities: the improvement in the rate of Iraqi per capita income of US $ 1670 to $ 5400 it looking for the initiation of more quantitative and qualitative terms. This factor in the market through external spending reflected on the import of machinery and new materials or by increasing spending on foreign consumer goods.
• 7- weakness of good governance and the rule of law: it embodies Bagr public money, corruption, and an example to determine estimates for projects with more than its real value, of course, lead and raise the frequency conversion of the Iraqi dinar to the dollar.
• 8- family remittance from abroad: in previous years there has been a significant proportion of the family of overseas remittance made to the interior and on the impact of improved Iraqi per capita income, but that these remittances have now eased to large ranges.
• 9- money transfer companies and brokerage firms (parallel market): The presence of these companies to encourage engage in foreign remittances which constitute pressure on the assets of the dollar and was the first to adopt documentary transfers.
• 10- decline in earnings of non-oil foreign currencies because of international grants and aid for reconstruction and the decline of the US presence in Iraq Akhas low.
• 11- trade zones in the border ports: The presence of these areas has encouraged the cash payment directly to the dollar at the border points of contact, which thus leads to higher direct demand for the dollar.
Recommendations
That what is happening in the deformation of the structure of the Iraqi economy is a foregone conclusion rentier economic policy, is not expected to dominate this deformation near the extent. Also, institutional work requires the application of the vocabulary of the adoption of good governance competencies, strategic vision, a sense of responsibility, transparency, securing the rule of law, ensure participation and unanimous acceptance and equality which targets can not be achieved in the near term as well. Generally the solutions in the monetary policy requires a long time to achieve the desired results, and based on the factors affecting the local currency in Iraq find it necessary to divide the solutions and actions into two parts:
Quick fixes (short-term):
• 1- reduce pumping hard currency (cash sales) in the central bank auction and increase the adoption of foreign remittances.
• 2- increase cash sales price at the central bank auction of equivalent sales price in the auction of foreign remittances in order to eliminate the profit realized because of the difference between the two prices.
• 3- sale and purchase of foreign companies and remittance companies to mediate the currency is done by licensed banks in Iraq in order to reduce non-compliant transactions of the conditions and procedures adopted.
• 4- compel traders and dealers in the trade between Iraq and neighboring countries to deal the financial transfer and letters of credit instead of cash purchase areas.
• 5- commitment to transparent auction information and cash transfers and the development of an electronic information system.
Radical solutions (long-term):
• 1- audit of the financial policy of the state and reduce inflation in operational spending.
• 2- need to speed up plans for banking reform in order to facilitate the cash exchange procedures.
• 3- to improve the tax code and work to expand horizontally while reducing tax evasion.
• 4- activate customs tariff because of its important role in providing incentives for producers with economic advantage, leading to a reduction in the volume of imports as well as improved operating revenue law.
• 5- to improve the economic business environment in order to raise production efficiency for companies and institutions of local production that would reduce the imports and increase the intake of foreign currency through exports, as well as attract foreign investment.
• 6- to use modern electronic mechanisms in the distribution of salaries and the use of banking instruments and encourage savings.
• 7- can be to issue a new currency or deletion of zeros from the current currency to have a positive psychological effect on the local currency dealers.
D.kamal visual
[You must be registered and logged in to see this link.]
12/14/2014 0 Comments
Iraqi currency value
Economic and structural imbalances
Dr. Kamal Al-Basri and professor harmful Sbahi
Iraqi Institute for Economic Reform
The article seeks to study fluctuations in the value of the Iraqi currency and interpretation of structural imbalances and the weakness of the application of good governance vocabulary behavioral and other factors. And concludes that the following factors may have led to increased demand for foreign currency and the lack of supply: foreign policy, and the weak economic business environment, fiscal policy, and the lack of political and economic instability, and weak domestic productive capacities, and the improvement in the Iraqi per capita income was a factor is the other, and the weakness of good governance and the rule of law, and the decline of family remittances from abroad, and the growing presence of remittance companies and brokerage firms (parallel market), and the emergence of trade areas in the border ports.
Progress thanks to Dr. Ahmed Hamdi al-Husseini to his participation in the preparation of this paper
Iraqi currency and economic structural imbalance value
Article seeks to study fluctuations in the value of the Iraqi currency and interpretation of structural imbalances and the weakness of the application of good governance vocabulary behavioral and other factors.
1. structural imbalances
Iraqi currency derived from the contents of the economy recover, and it can not study the stability of the currency value of eating away from economic reality. Currently the economy is suffering from weakness in the core of its components, and boils down to the reality of the Iraqi economy by looking at the gross domestic product for 2011 components accounting for the different sectors to GDP as follows: Oil 54.74% and Agriculture 4.15% and the industry about 1.83% .... Etc. It is clear that the Iraqi economy's dependence on the oil sector. GDP, the value of the current 53 499 prices have risen to 211.31 billion Iraqi dinars for the period 2004-2011, for the same period GDP at current oil prices, excluding value increased from 22 691 to 95 822 Mlyardinar.
The problem is, when oil revenues are much greater than the financial returns obtained from taxes, the government will find usually a financial asset at its disposal a large gain easy (no checks on the financial resources of the citizens account). This phenomenon will be encouraged in the absence of democracy (full sense of the term) to give the government a large area to act in public money is inefficient. An example of this resort for governments to adopt:
1) sterile economic policies in the aftermath: represented an increase of salaries and wages away from labor productivity accounts, and expansion in the creation of employment for non-productive purposes resulting from them inflated prices, and pursue a policy of supporting non-economic updated deformation in the structure of the economy and market signals, and the trend towards spending is a political product In essence, aims to connect the citizen power.
2) non-economic policies of spending: represented activities have no economic justification such as grants and aid and open diplomatic and foreign cultural circles do not add real value to the economy and citizens, and this is at the expense of pressing economic areas related to the dignity of the citizen.
A result of all the foregoing, the private sector in these countries enjoy the presence of a weak and marginal, because he does not enjoy the support (as is the case in the public sector), which is concentrated in the commercial and service areas of the economy. The absence of the real role of the private sector means the absence of creativity and speed of adaptation to the needs of the market and provide workers outside the public sector. The uniqueness of the public sector production and the absence of private sector competition will lead to the continued deterioration of the efficiency of the public sector production infrastructure to require government intervention and the protection of the public sector through financial support and policy of customs protection (currently support the annual rate of $ 3 billion). Thus, the government is working to protect the productivity of organizations inert citizen who finds unchanged compelled to buy goods or services at a higher price and the quality is poor account. That this sacrifice is usually also emphasizes international experiences do not lead to short-term and term to improve the performance and efficiency of the public sector production. The absence of a political role for the private sector to prevent citizens cake and staff hired for the government belonging to the orientations of the government, and undoubtedly it would affect the independence of the individual from the government and then the breadth Square independent civil society organizations. The government's move in those contexts eventually lead to the division of citizens into different factions of the beneficiaries and others.
Because of the limited job opportunities that can be created by the public sector, the government is seeking to create jobs by strengthening the role of the security of power by increasing the number of employees of the police and army and take advantage of surplus cash in the purchase of arms and military equipment. That encourages the growth of military capabilities to address internal and external differences militarily, and then pre-empt any signs of growth and development in absolute terms. On the other hand the oil revenue dependence on the price of oil to the global market presents economies of those countries to the waves of the tide, which is reflected in the sharp fluctuations in oil revenues (as flip it in the federal budget for 2008 planning - 2009. Finally, the oil revenues of the states usually benefit including the cities over the countryside, and this is what causes the case of migration from the countryside to the city, but no doubt that this migration is usually in a short period of time, resulting in severe bottlenecks due to inadequate supply of services in relation to demand and to multiple social and economic problems. But Aaktefi impact of this situation on the the level of services available in the city to exceed the weakness of the countryside contribute to agricultural and livestock production and for changes in the fertility of the land, which lead to heavy losses. The truth is that what progress can we find him credibility in the Iraqi economy, especially during the time period 1968 - 2003, is no doubt that the effects of these policies and nature has not radically changed, because of the political pressure of existing and reflected the lack of political will for change.
2. The market value of the Iraqi currency
Released in 1930, the first special law to issue currency Iraqi Dinar, and in 1932 was the issuance of the Iraqi dinar and the dinar = 3.3 pounds sterling, and in 1958 was decoding dinar link with the pound has been linked to the US dollar on the basis of the dinar = 3.3 US dollars. During the period from 1932 until 1990 was issued 12 emissivity of the dinar, and after 1990 the currency was printed locally in Mesopotamia presses and multi-exchange price, and after 2003 were printed issue new coins of the dinar, and became the exchange rate floating around. Figure (1) the exchange rate of the Iraqi dinar against the official explains the US dollar at the Central Bank (Auction currency) and in the parallel market (the local exchange market) for the period from January 2011 to February 2013.
Source: Central Bank of Iraq
The local currency is part of the sovereignty of the state and also is reflecting the amount of economic well-being, and the exchange rate plays an important role in the economic activities of the countries whether it be a commercial or investment activity, where it occupies the exchange rate a pivotal position in the monetary policy, where it can be used as a target or a tool, a as well as the indicator of the competitive state through its impact on economic growth components, such as investment and the degree of openness to international trade and capital flows, and the evolution of the financial sector.
The exchange rate is the rate that gets on the basis of foreign exchange swap national currencies. The exchange rate is determined according to the law of demand and supply, the more the demand has increased the price of the currency has increased and the lower the demand for less price. There are two types of drainage systems used by States to determine the value of its currency:
Fixed exchange systems: Install the currency exchange rate is either the single currency is characterized by certain specifications force it and stability. Or to a basket of currencies from the currencies of key trading partners, currency or constituent unit of the Special Drawing Rights, or Althmnah such as gold and silver metals.
Flexible exchange systems is characterized by its flexibility and usability of the amendment on the basis of certain criteria, such as economic indicators.
State may follow orbit flotation system where the authorities to amend the frequency of exchange rates on the basis of the level of reserves for its gold and foreign currencies. Or free-floating, which allows the value of the currency used to the ups and downs vary according to the market, this system allows the economic policies of liberalization of the exchange rate restrictions.
Itathersar exchange first measures of the Central Bank, which represents the main administration in the state to identify and manage the monetary policy so as to contribute to the achievement of economic goals for her country, and secondly banks and commercial companies remittance where intervene in the market to implement its customers orders or for its own account, where these centers collect Customer orders are banking Palmqasat, and thirdly brokerage firms and brokers who are active are compiled Omer purchase or sale of hard currency for the benefit of several banks or other customers away from transparency.
Factors affecting the currency in Iraq
Recently and over the past few months, the value of the Iraqi dinar dropped against foreign currencies until he was sometimes the market Parallel 1300 dinars per dollar after it was stable at 1185 dinars per dollar rate in spite of the stability of the sale of the Central Bank rate of 1166 dinars with the commission 13 dinars of remittances any 1179 dinars and 1171 dinars cash for sale and this indicates a high demand for the dollar in the domestic market due to the following factors:
• 1- External factors: formed a political and economic crises in neighboring countries (Syria and Iran) and embodied in these countries need to coin the dollar and foreign currencies. What happened is the depreciation of the local currency in those countries and reflected down the price of exports to Iraq, and create windows to attract dollar from Iraq to those countries through attractive transactions for the Iraqis and the same time a source of hard currency to the Iranians and the Syrians. On the other hand there are social coherence and family with these countries may also be a port to exit the dollar but it is difficult to predict Bmekdarh.
• 2- economic business: represented by the factors that lead to the result of domestic capital flight of foreign investors and declining environment, including political instability and the absence of the rule of law in economic transactions. There is no doubt that the time period that followed the 2008 has seen an improvement in the security situation, and in the rate of inflation in the exchange rate. However, the economic environment is still repellent acts do not encourage planning medium or long term. Which led to limiting the activities of some businessmen and yielding profit quick commercial projects, but I doubt that the percentage of it turned into another countries suffer from the scarcity of liquidity arising from the impact of the financial crisis that began in late 2008 (reaching ranked Iraq 165 of 183 countries in 2012)
• 3- public financial policy: Previous years have seen a rise in government spending rates than any other country in the world rates (public spending of 34.6 trillion dinars rose in 2004 to 117.1 trillion dinars in 2012) and most of the images are consumer spending, leading to the rise in spending the outside world (travel, medical services and scholarships, and the import of goods and investments in real estate projects, etc.), and also led to the rise in net Iraqi currency in circulation to $ 36 trillion dinars in 2013, raising the demand for foreign currencies, where the value of the Iraqi imports rose from 37302.7 million dollars in 2010 40632.5 million dollars in 2011 at a rate of change was 8.9%.
• 4- weak tax policies: also include the non-application of the customs tariff law, and of course that result in flooding the market with goods and services payable in dollars in most cases. Also, twice as efficient collection of dues check Aldharbah ensures extra earnings may find their way because of the weakness of the Iraqi banking credit to overseas Authority dollars.
• 5- political and economic stability: because the countries of Iraq described as transition and lack of political and economic stability, we find the proportion of individuals held accounts in foreign banks abroad tend to be of senior officials and wealthy, and increasingly these transfers directly proportional to the rise in oil revenues.
• 6- weak domestic productive capacities: the improvement in the rate of Iraqi per capita income of US $ 1670 to $ 5400 it looking for the initiation of more quantitative and qualitative terms. This factor in the market through external spending reflected on the import of machinery and new materials or by increasing spending on foreign consumer goods.
• 7- weakness of good governance and the rule of law: it embodies Bagr public money, corruption, and an example to determine estimates for projects with more than its real value, of course, lead and raise the frequency conversion of the Iraqi dinar to the dollar.
• 8- family remittance from abroad: in previous years there has been a significant proportion of the family of overseas remittance made to the interior and on the impact of improved Iraqi per capita income, but that these remittances have now eased to large ranges.
• 9- money transfer companies and brokerage firms (parallel market): The presence of these companies to encourage engage in foreign remittances which constitute pressure on the assets of the dollar and was the first to adopt documentary transfers.
• 10- decline in earnings of non-oil foreign currencies because of international grants and aid for reconstruction and the decline of the US presence in Iraq Akhas low.
• 11- trade zones in the border ports: The presence of these areas has encouraged the cash payment directly to the dollar at the border points of contact, which thus leads to higher direct demand for the dollar.
Recommendations
That what is happening in the deformation of the structure of the Iraqi economy is a foregone conclusion rentier economic policy, is not expected to dominate this deformation near the extent. Also, institutional work requires the application of the vocabulary of the adoption of good governance competencies, strategic vision, a sense of responsibility, transparency, securing the rule of law, ensure participation and unanimous acceptance and equality which targets can not be achieved in the near term as well. Generally the solutions in the monetary policy requires a long time to achieve the desired results, and based on the factors affecting the local currency in Iraq find it necessary to divide the solutions and actions into two parts:
Quick fixes (short-term):
• 1- reduce pumping hard currency (cash sales) in the central bank auction and increase the adoption of foreign remittances.
• 2- increase cash sales price at the central bank auction of equivalent sales price in the auction of foreign remittances in order to eliminate the profit realized because of the difference between the two prices.
• 3- sale and purchase of foreign companies and remittance companies to mediate the currency is done by licensed banks in Iraq in order to reduce non-compliant transactions of the conditions and procedures adopted.
• 4- compel traders and dealers in the trade between Iraq and neighboring countries to deal the financial transfer and letters of credit instead of cash purchase areas.
• 5- commitment to transparent auction information and cash transfers and the development of an electronic information system.
Radical solutions (long-term):
• 1- audit of the financial policy of the state and reduce inflation in operational spending.
• 2- need to speed up plans for banking reform in order to facilitate the cash exchange procedures.
• 3- to improve the tax code and work to expand horizontally while reducing tax evasion.
• 4- activate customs tariff because of its important role in providing incentives for producers with economic advantage, leading to a reduction in the volume of imports as well as improved operating revenue law.
• 5- to improve the economic business environment in order to raise production efficiency for companies and institutions of local production that would reduce the imports and increase the intake of foreign currency through exports, as well as attract foreign investment.
• 6- to use modern electronic mechanisms in the distribution of salaries and the use of banking instruments and encourage savings.
• 7- can be to issue a new currency or deletion of zeros from the current currency to have a positive psychological effect on the local currency dealers.
D.kamal visual
[You must be registered and logged in to see this link.]
