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Iraq and the oil and the seven lean years
8/25/15
The average price of a barrel of Arab oil was $ 60.2, the beginning of January last, fell to $ 54.1 in July, but the average price over the past few days reached $ 40 a barrel
BAGHDAD / Obelisk: did not bring the level of oil prices in the second half of 2015 as some had expected the leaders of the Arab oil-producing countries, which bet on improved prices start at this time.
Apparently, these expectations came in light of a survey conducted by the organization "ESCWA" economic performance of the countries in the region for the year 2014/2015, where the survey predicted that oil prices will be this year, between $ 40.6 per barrel, as a minimum, and $ 70.3 max, According to published "Anatolia", and I followed, "the obelisk."
According to the monthly bulletin of the Organization "OPEC" for the month, the average price of a barrel of Arab oil was $ 60.2, the beginning of January last, fell to $ 54.1 in July, but the average price over the past few days reached $ 40 a barrel.
There are expectations that prices will fall to below 40 dollars a barrel, and especially in light of global economic conditions are not favorable, and after China's entry at the beginning of a wave of slow growth problems.
Oil markets are still suffering from a glut in supply, leading to the exclusion of hope for improvement in oil prices in the short and medium term, and in addition to international factors, regional and country factors experienced by the Arab oil-producing countries, and that makes it obliged to continuing production at high rates, because of public revenues in this adoption states over oil resources dramatically.
This reality of low and unexpected prices on the international market may impose on economic governance in the Arab countries of oil set of challenges, which made Abdul Khaleq Abdullah, a political advisor to the Crown Prince of the Emirate of Abu Dhabi, Mohammed bin Zayed Al Nahyan, commented by saying: "expectations of further decline in the price of a barrel crude oil, and probably will reach $ 35 by the end of 2015, after it was the price per barrel to $ 105 the summer of 2014, seven lean years to come. "
There is no doubt that the lean years that Ststqublha Arab oil-producing countries, will make them change their economic policies, for growth rates, and operating, and the continuation of support programs, and government operating, and work to increase the margin contribution of the private sector, with the following address what can be imposed by the crisis of the challenges of the those countries.
In Iraq and in the light of the current war, the Iraqi government has focused only on the purchase of ammunition to fight the extremists, Vtosrt conditions of companies and factories that were contracted with the government, especially as these companies rely exclusively on government contracts.
In early 2014, he began suffering Iraq from the threat of economic downturn, especially after the government lost swathes of its territory after the dominance of militants "Daash" on them, and the worsening of the decline in oil prices, with the outbreak of the case of corruption in Iraq's budget, that depend on them from oil revenues by 95 percent .
Declining growth rates, of any state, not just a number, but the consequent negative economic repercussions, including the decline in the economy's ability to generate new business opportunities, as well as the decline in government revenues, lower exports, and others.
In July, Iraq's oil revenues amounted to about $ 31 billion, according to figures from the Ministry of Oil, and this figure is less than $ 3 million from the Natural returns to Iraq in a month, let alone enjoy the northern region to sell oil independently in isolation from the central government.
According to the Arab Monetary Fund estimates in its report "Prospects for the Arab economy", issued in April, the GDP growth of the oil-producing Arab countries as a whole rates will decline in 2015, reaching 2.9%, compared to 3.7% in 2014.
At the country level, the IMF predicted decline in Saudi output to 2.8% in 2015 and 2.4% in 2016, compared to 3.5% in 2014, and Algeria is expected that the growth rate of decline of about 3% during the current year, and in the Emirates is expected to achieve the rate of growth in the non-oil sector by 3.4% in 2015, up from 4.8% last year.
In general, the growth rates of decline in Gulf oil states will significantly impact on the real estate sector, who is leading the growth significantly, after oil, and therefore will be affected functions associated with the real estate sector in the coming period, which will impact negatively on the labor-exporting Gulf countries, both from the Arab region, or Asian countries.
Economic policies tend to follow oil countries Sir policy reverse the crisis, in the sense that in the context of low growth rates, governments take oil mechanisms that would increase public spending, to not fall into the trap of recession, and even those economies to maintain an acceptable level of economic activity.
But this policy will be the price range of negative effects, especially the rise in the budget deficit, which is estimated reaching 19.5% in Saudi Arabia, and 21.6% in Algeria, and 9% in Iraq, and 30% in Libya, and 10% in Bahrain.
An important note in this regard, which is that some Gulf states began to implement the recommendations of the International Monetary Fund, led by Emirates liberalization of the energy price early August now, and is expected to Saudi Arabia to take similar steps to rationalize public spending, but neglected energy subsidies currently, but may extend it Employment in the government sector to the rates, and the rationalization of this sector wage bill.
But increased public spending in the Arab countries oil policy, Arab oil countries may not be able to them in the medium term, if the crisis of the collapse in oil prices continued, due to the direction of these countries, without exception, toward the clouds of foreign exchange reserves, or the issuance of local bonds to finance the budget deficit, which underlines the depth of the financial crisis of these countries, despite the abundance of oil that have been made over the period 2003 - 2014.
You will find the Arab oil states themselves obliged to implement the orientations of the International Monetary Fund, which largely focused on the budget structure, and generally focusing the agenda of the IMF in its reports on these countries, the importance of the abolition of energy subsidies, and to reconsider in government employment, and to give a greater opportunity for the private sector in economic activity, and stimulate the government bond market to finance the budget deficit, and maintain the balance of foreign reserves.
But these reforms posed by the Fund, does not keep pace of political and social conditions experienced by the Arab oil-producing countries, both those that suffer from armed confrontations, as is the case in Iraq and Libya, or at war in Yemen, which Saudi Arabia and other Gulf states (except Oman) .
Helped high solvency Arab oil countries, especially the Gulf countries, the practice of regional role significantly during the past five years, where was able to change driving the Arab Spring revolutions, through a clear funding mechanism, to prevent and tenders, which helped to drop those revolutions.
Another confrontation waged by the Gulf states now against the Iranian position in Yemen, and if the crisis of the collapse of oil prices continues, it will affect undoubtedly the funding mechanism which characterized the Gulf oil states during the last period, both down financial support for Egypt and Tunisia, for example, or decline in funding for the armed opposition in Yemen, Syria and Libya.
It is also expected to decline spending on armaments by the Gulf oil states, which represent an important figure in the volume of spending the Middle East on this sector, where it came from Saudi Arabia in fourth place among the nations of the world in spending on armament, and the UAE in the ranking of the 19 worldwide , according to a report issued by the Institute of the Stockholm International Peace Research Institute (SIPRI).
The UAE and Saudi Arabia spend 58% of the volume of spending the Middle East on armaments in 2014, $ 150 billion.
It could be argued that the economic management of the Arab oil countries, mainly of a political nature, is not expected to make a decision to reduce its oil production in light of the collapse of prices, or reconsider its military confrontation with the Iranian position in all of Yemen, Syria and Iraq.
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8/25/15
The average price of a barrel of Arab oil was $ 60.2, the beginning of January last, fell to $ 54.1 in July, but the average price over the past few days reached $ 40 a barrel
BAGHDAD / Obelisk: did not bring the level of oil prices in the second half of 2015 as some had expected the leaders of the Arab oil-producing countries, which bet on improved prices start at this time.
Apparently, these expectations came in light of a survey conducted by the organization "ESCWA" economic performance of the countries in the region for the year 2014/2015, where the survey predicted that oil prices will be this year, between $ 40.6 per barrel, as a minimum, and $ 70.3 max, According to published "Anatolia", and I followed, "the obelisk."
According to the monthly bulletin of the Organization "OPEC" for the month, the average price of a barrel of Arab oil was $ 60.2, the beginning of January last, fell to $ 54.1 in July, but the average price over the past few days reached $ 40 a barrel.
There are expectations that prices will fall to below 40 dollars a barrel, and especially in light of global economic conditions are not favorable, and after China's entry at the beginning of a wave of slow growth problems.
Oil markets are still suffering from a glut in supply, leading to the exclusion of hope for improvement in oil prices in the short and medium term, and in addition to international factors, regional and country factors experienced by the Arab oil-producing countries, and that makes it obliged to continuing production at high rates, because of public revenues in this adoption states over oil resources dramatically.
This reality of low and unexpected prices on the international market may impose on economic governance in the Arab countries of oil set of challenges, which made Abdul Khaleq Abdullah, a political advisor to the Crown Prince of the Emirate of Abu Dhabi, Mohammed bin Zayed Al Nahyan, commented by saying: "expectations of further decline in the price of a barrel crude oil, and probably will reach $ 35 by the end of 2015, after it was the price per barrel to $ 105 the summer of 2014, seven lean years to come. "
There is no doubt that the lean years that Ststqublha Arab oil-producing countries, will make them change their economic policies, for growth rates, and operating, and the continuation of support programs, and government operating, and work to increase the margin contribution of the private sector, with the following address what can be imposed by the crisis of the challenges of the those countries.
In Iraq and in the light of the current war, the Iraqi government has focused only on the purchase of ammunition to fight the extremists, Vtosrt conditions of companies and factories that were contracted with the government, especially as these companies rely exclusively on government contracts.
In early 2014, he began suffering Iraq from the threat of economic downturn, especially after the government lost swathes of its territory after the dominance of militants "Daash" on them, and the worsening of the decline in oil prices, with the outbreak of the case of corruption in Iraq's budget, that depend on them from oil revenues by 95 percent .
Declining growth rates, of any state, not just a number, but the consequent negative economic repercussions, including the decline in the economy's ability to generate new business opportunities, as well as the decline in government revenues, lower exports, and others.
In July, Iraq's oil revenues amounted to about $ 31 billion, according to figures from the Ministry of Oil, and this figure is less than $ 3 million from the Natural returns to Iraq in a month, let alone enjoy the northern region to sell oil independently in isolation from the central government.
According to the Arab Monetary Fund estimates in its report "Prospects for the Arab economy", issued in April, the GDP growth of the oil-producing Arab countries as a whole rates will decline in 2015, reaching 2.9%, compared to 3.7% in 2014.
At the country level, the IMF predicted decline in Saudi output to 2.8% in 2015 and 2.4% in 2016, compared to 3.5% in 2014, and Algeria is expected that the growth rate of decline of about 3% during the current year, and in the Emirates is expected to achieve the rate of growth in the non-oil sector by 3.4% in 2015, up from 4.8% last year.
In general, the growth rates of decline in Gulf oil states will significantly impact on the real estate sector, who is leading the growth significantly, after oil, and therefore will be affected functions associated with the real estate sector in the coming period, which will impact negatively on the labor-exporting Gulf countries, both from the Arab region, or Asian countries.
Economic policies tend to follow oil countries Sir policy reverse the crisis, in the sense that in the context of low growth rates, governments take oil mechanisms that would increase public spending, to not fall into the trap of recession, and even those economies to maintain an acceptable level of economic activity.
But this policy will be the price range of negative effects, especially the rise in the budget deficit, which is estimated reaching 19.5% in Saudi Arabia, and 21.6% in Algeria, and 9% in Iraq, and 30% in Libya, and 10% in Bahrain.
An important note in this regard, which is that some Gulf states began to implement the recommendations of the International Monetary Fund, led by Emirates liberalization of the energy price early August now, and is expected to Saudi Arabia to take similar steps to rationalize public spending, but neglected energy subsidies currently, but may extend it Employment in the government sector to the rates, and the rationalization of this sector wage bill.
But increased public spending in the Arab countries oil policy, Arab oil countries may not be able to them in the medium term, if the crisis of the collapse in oil prices continued, due to the direction of these countries, without exception, toward the clouds of foreign exchange reserves, or the issuance of local bonds to finance the budget deficit, which underlines the depth of the financial crisis of these countries, despite the abundance of oil that have been made over the period 2003 - 2014.
You will find the Arab oil states themselves obliged to implement the orientations of the International Monetary Fund, which largely focused on the budget structure, and generally focusing the agenda of the IMF in its reports on these countries, the importance of the abolition of energy subsidies, and to reconsider in government employment, and to give a greater opportunity for the private sector in economic activity, and stimulate the government bond market to finance the budget deficit, and maintain the balance of foreign reserves.
But these reforms posed by the Fund, does not keep pace of political and social conditions experienced by the Arab oil-producing countries, both those that suffer from armed confrontations, as is the case in Iraq and Libya, or at war in Yemen, which Saudi Arabia and other Gulf states (except Oman) .
Helped high solvency Arab oil countries, especially the Gulf countries, the practice of regional role significantly during the past five years, where was able to change driving the Arab Spring revolutions, through a clear funding mechanism, to prevent and tenders, which helped to drop those revolutions.
Another confrontation waged by the Gulf states now against the Iranian position in Yemen, and if the crisis of the collapse of oil prices continues, it will affect undoubtedly the funding mechanism which characterized the Gulf oil states during the last period, both down financial support for Egypt and Tunisia, for example, or decline in funding for the armed opposition in Yemen, Syria and Libya.
It is also expected to decline spending on armaments by the Gulf oil states, which represent an important figure in the volume of spending the Middle East on this sector, where it came from Saudi Arabia in fourth place among the nations of the world in spending on armament, and the UAE in the ranking of the 19 worldwide , according to a report issued by the Institute of the Stockholm International Peace Research Institute (SIPRI).
The UAE and Saudi Arabia spend 58% of the volume of spending the Middle East on armaments in 2014, $ 150 billion.
It could be argued that the economic management of the Arab oil countries, mainly of a political nature, is not expected to make a decision to reduce its oil production in light of the collapse of prices, or reconsider its military confrontation with the Iranian position in all of Yemen, Syria and Iraq.
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