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Mimicry and the failure of investment experience in Iraq
Dr. Saleh Mustafa Nasrallah
2/2/2015
Mimicry and the failure of investment experience in Iraq
The issue of reform of a system, either socially or politically or economically are in fact can not be reproduced by any previous experience of a society and in absolute terms; that the reform process in any country depended on the results generated by the experiments (success and failure) by the objective conditions of that country which gradually until it reaches up to him to take advantage of the successes of failures and successes, and the success of others. This does not mean neglecting the experiences of others, since it is not necessary to go forward-thinking people to change the same stages, where some of them can be shortened or bypassed and the adoption of other conditions to suit the stage. In all cases must correct the foundations for change mode, Valagafzac is studied will not achieve any positive results, especially for a country like Iraq was converted from state control of the markets and the price system, to the open market system.
The economic process through which Iraq and in particular the nascent institutional investors from the womb of the socialist system or the state's economy policy, and central planning and bureaucratic offices, to enter an advanced stage and leaps toward foreign and domestic investment taking other experiments without study stages of development, and starting from the end of the findings of the world and without study reforms that accompanied him, is something very wrong. Often hesitate names of countries have taken investment approach and succeeded in their performance and become significant in the industry, the economy and reconstruction, such as Korea, Japan, Malaysia and some socialist countries that have turned to the market such as China and other countries, however, cited these countries forget the period of time that it took many to establish institutions and procedures associated with them in addition to the abolition of all laws and procedures disruptive to the process of investment, as well as the failures that occurred shown that while access to the encouraging results.
But what happened in Iraq that they had passed a law to invest without reference to what it takes to be a legally investment real help to develop the country and follow him to the ranks of countries that pursued by investing in their development, they did not benefit from the experiences of these countries, they did not try to consider to introductions that we talked about earlier; therefore issued Investment Law No. 13 of 2006 trapped a large number of economic and legal obstacles and contradictions, including:
* Law was passed and did not issue instructions to the Ministry of Finance or the Central Bank to clarify the banking facilities to investors, Banks Iraq is equipped to deal with foreign investors, especially in the field of financial and electronic transfer, and other banking facilities in the world.
* Law was passed not canceled the laws and items obtrusive him or even edit some, especially the Ministry of Municipalities (Notwithstanding the provisions of Article 33 that does not work any provision inconsistent with the provisions of this law).
* Law was passed and select what is known as a single window (which means that all that is needed investor approvals and facilities can be completed in one place, so you do not have to move from one department to another to complete Muaqath) and kept the veto by the relevant authorities, but this selection remained inactive because of inconsistencies between the ministries of internal instructions.
* Law was passed did not confirm the role of local governments as well as the central government to do its duty to the implementation of infrastructure projects of roads and highways, and railways, and extending the sewer, and plug in the power of all kinds for the investment project, in order to fit with what is in the countries that began in the investment process of highways and railways, and other service organizations for training and rehabilitation and other investor has no interest to start and waits for promises not sure of them, what we are from poor implementation of projects, although it simple. While doing the work of the parallels with what is encouraging the spirit of the law of reforms in infrastructure, services and institutions encourage the investor on the one hand and earn the confidence of seriously working on the implementation of the law and the facilities contained therein on the other hand.
So if we want to accelerate the implementation of the Investment Law and take the initiative and not to wait until the completion of the requirements listed above, at least to start legal reforms and renovations of infrastructure until objectivity, legal and cultural circumstances relating to the investment policy is complete.
This is in regards to the Iraqi investment law, if we moved to the Central Bank of Iraq experience, the problem is greater, as Nizrōh on the British experience was adopted after the economic recession and social devastation that has occurred in which after the First World War, and of the high benefits proportions, and it was the goal of the Bank of England then is attract foreign capital and to strengthen the pound, an increase of cash and in kind of gold reserves, while "Our experience does not include the foreign deposits because the interest of global currencies low and is up 2.7%" (the name of Abdul Hadi Hassan: monetary policy in Iraq, the National Investment Commission ).
The British central bank also resorted to credit deflation policy at home raised the interest rate, prompting businessmen to their reluctance to resort to credit request "shoved deposit their savings in banks for credit cards to get rid of the high interest, which led to reduce the amount of money from circulation" (d .abd Qader Yousef al-Jubouri: Economic History, Mosul University), and happened to direct monetary deflation, leading to reduce the amount of paper money necessary for the exchange, and thereby reduce wages and increase domestic production while providing new job opportunities.
The Iraqi experience, they are mainly based on the sale of the dollar in order to attract the local currency and then put up for market Brochure pay the salaries of the staff and the implementation of some service projects (strategic projects almost parked) and where the remains of inflation as it is with the survival of price rise, continuously and that the lack of national production and an increase in Unemployment, therefore, the central bank and financial device thinking first support small investment projects and real estate projects through soft loans to absorb labor and solving the housing problem worsening longstanding decryption population density in the housing unit one, and thus to control the price of land on the one hand and reduce dredging this agricultural lands and orchards producing vegetables and fruits.
Promises to start, the transfer of experience from other countries and strictly ostensibly without the availability conditions will lead to a big mistake. Without banking and fiscal policy that will fix that contribute to the elimination of inflation on the one hand and the provision of goods and increase national production on the other hand to rein in prices and the adoption of Interest Policy appropriate for the Iraqi case, the investment banking operation will stumble, if not fail.
* Iraqi engineer and economist.
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Dr. Saleh Mustafa Nasrallah
2/2/2015
Mimicry and the failure of investment experience in Iraq
The issue of reform of a system, either socially or politically or economically are in fact can not be reproduced by any previous experience of a society and in absolute terms; that the reform process in any country depended on the results generated by the experiments (success and failure) by the objective conditions of that country which gradually until it reaches up to him to take advantage of the successes of failures and successes, and the success of others. This does not mean neglecting the experiences of others, since it is not necessary to go forward-thinking people to change the same stages, where some of them can be shortened or bypassed and the adoption of other conditions to suit the stage. In all cases must correct the foundations for change mode, Valagafzac is studied will not achieve any positive results, especially for a country like Iraq was converted from state control of the markets and the price system, to the open market system.
The economic process through which Iraq and in particular the nascent institutional investors from the womb of the socialist system or the state's economy policy, and central planning and bureaucratic offices, to enter an advanced stage and leaps toward foreign and domestic investment taking other experiments without study stages of development, and starting from the end of the findings of the world and without study reforms that accompanied him, is something very wrong. Often hesitate names of countries have taken investment approach and succeeded in their performance and become significant in the industry, the economy and reconstruction, such as Korea, Japan, Malaysia and some socialist countries that have turned to the market such as China and other countries, however, cited these countries forget the period of time that it took many to establish institutions and procedures associated with them in addition to the abolition of all laws and procedures disruptive to the process of investment, as well as the failures that occurred shown that while access to the encouraging results.
But what happened in Iraq that they had passed a law to invest without reference to what it takes to be a legally investment real help to develop the country and follow him to the ranks of countries that pursued by investing in their development, they did not benefit from the experiences of these countries, they did not try to consider to introductions that we talked about earlier; therefore issued Investment Law No. 13 of 2006 trapped a large number of economic and legal obstacles and contradictions, including:
* Law was passed and did not issue instructions to the Ministry of Finance or the Central Bank to clarify the banking facilities to investors, Banks Iraq is equipped to deal with foreign investors, especially in the field of financial and electronic transfer, and other banking facilities in the world.
* Law was passed not canceled the laws and items obtrusive him or even edit some, especially the Ministry of Municipalities (Notwithstanding the provisions of Article 33 that does not work any provision inconsistent with the provisions of this law).
* Law was passed and select what is known as a single window (which means that all that is needed investor approvals and facilities can be completed in one place, so you do not have to move from one department to another to complete Muaqath) and kept the veto by the relevant authorities, but this selection remained inactive because of inconsistencies between the ministries of internal instructions.
* Law was passed did not confirm the role of local governments as well as the central government to do its duty to the implementation of infrastructure projects of roads and highways, and railways, and extending the sewer, and plug in the power of all kinds for the investment project, in order to fit with what is in the countries that began in the investment process of highways and railways, and other service organizations for training and rehabilitation and other investor has no interest to start and waits for promises not sure of them, what we are from poor implementation of projects, although it simple. While doing the work of the parallels with what is encouraging the spirit of the law of reforms in infrastructure, services and institutions encourage the investor on the one hand and earn the confidence of seriously working on the implementation of the law and the facilities contained therein on the other hand.
So if we want to accelerate the implementation of the Investment Law and take the initiative and not to wait until the completion of the requirements listed above, at least to start legal reforms and renovations of infrastructure until objectivity, legal and cultural circumstances relating to the investment policy is complete.
This is in regards to the Iraqi investment law, if we moved to the Central Bank of Iraq experience, the problem is greater, as Nizrōh on the British experience was adopted after the economic recession and social devastation that has occurred in which after the First World War, and of the high benefits proportions, and it was the goal of the Bank of England then is attract foreign capital and to strengthen the pound, an increase of cash and in kind of gold reserves, while "Our experience does not include the foreign deposits because the interest of global currencies low and is up 2.7%" (the name of Abdul Hadi Hassan: monetary policy in Iraq, the National Investment Commission ).
The British central bank also resorted to credit deflation policy at home raised the interest rate, prompting businessmen to their reluctance to resort to credit request "shoved deposit their savings in banks for credit cards to get rid of the high interest, which led to reduce the amount of money from circulation" (d .abd Qader Yousef al-Jubouri: Economic History, Mosul University), and happened to direct monetary deflation, leading to reduce the amount of paper money necessary for the exchange, and thereby reduce wages and increase domestic production while providing new job opportunities.
The Iraqi experience, they are mainly based on the sale of the dollar in order to attract the local currency and then put up for market Brochure pay the salaries of the staff and the implementation of some service projects (strategic projects almost parked) and where the remains of inflation as it is with the survival of price rise, continuously and that the lack of national production and an increase in Unemployment, therefore, the central bank and financial device thinking first support small investment projects and real estate projects through soft loans to absorb labor and solving the housing problem worsening longstanding decryption population density in the housing unit one, and thus to control the price of land on the one hand and reduce dredging this agricultural lands and orchards producing vegetables and fruits.
Promises to start, the transfer of experience from other countries and strictly ostensibly without the availability conditions will lead to a big mistake. Without banking and fiscal policy that will fix that contribute to the elimination of inflation on the one hand and the provision of goods and increase national production on the other hand to rein in prices and the adoption of Interest Policy appropriate for the Iraqi case, the investment banking operation will stumble, if not fail.
* Iraqi engineer and economist.
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