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How do we protect Iraq from collapse? : The difference between the borrowing policy and the policy of devaluation
2015/10/07
We mentioned in a previous article, that all global indicators confirm the impossibility of the rise of oil prices to previous levels because of the possibility of shale oil production and quantities too large in at least forty countries in the world, including the United States and China at a cost ranging between (70-50) dollars a barrel , and this means that the oil in the long term will range price of a barrel between (80-55) dollars a barrel at best, either in the near term will be witnessing decreased else where it is expected that up to nearly 30 dollars a barrel or may be less because of the increased production Iranian and Libyan and Iraqi during the next year and beyond from the past.
Based on this fact, there will be a large budget deficit at least thirty billion dollars a year counterbalance unusual, but that Iraq has decided to stop all investment projects Vsiraouh deficit between eight billion to fifteen billion dollars, depending on a range of variables, most notably the cost of the war on Daash and the price of a barrel Oil in the coming year.
Faced with this reality there are two solutions only two: the first solution: borrowing from various international destinations depending on treasury bonds or any other means, and the government chose unfortunately this option and accepted borrowing from international banks annual interest rate in excess of 10% even in 2028, The Selection this way will the country's economy to a complete collapse, not only because of the loan, which ranges from six to eight billion dollars in this high interest, but because of the open door of borrowing to cover the budget deficit, which means borrowing each year to come to cover the deficit, and the process of calculation is very simple, depending on the data present and on the assumption that the increase in oil production will be offset by the deterioration of oil prices, as we mentioned earlier, in 2028 if the situation continues what it now will total loans up to $ 84 billion and the total interest arising from them would amount to $ 63 billion, which means that Iraq will fall under debt of more than 147 Billion dollar.
This is three times the resources of oil now, in fact we will not get to this stage, because the country's economy would collapse long before that will not be the domain is available for lending to Iraq by any global destination, and marching the country and jeopardize the sovereignty and impose a large and multi-economic constraints such as increased fuel price and increasing the cost of Food and tax increases, electricity, water and the collapse of the Iraqi dinar, and the citizens will suffer very great suffering, but it is possible in this case that the other worse things happen can not be predicted now.
The second solution: Reduce the Iraqi currency value; The descent value of the currency is a normal in a lot of countries in the region, and the descent of the currency impact in the first place a negative impact on the increase in the prices of imported goods and materials, but in the long term provides a ground for the rise of industrial, agricultural and even general renaissance for all Productive sectors if taken the right economic policies, and this has been achieved in many countries such as Turkey and Iran, the region, where the currency is going down very heavily in these two countries during the past three decades, but the industrial renaissance in these two countries was too great not because of the currency's slide, but due to make informed economic policies as well as an agricultural renaissance and tourism in the two countries, while in Iraq, the descent of the currency a few months ago, when the dollar stood at nearly 1,400 dinars was primarily for the field open to a group of politicians to get rich on the suffering of the people account Therefore There were two prices of the coin large teams with the adoption of counterfeit menus as it turns out this is to everyone through the media.
Was taken in 2006, is a thoughtful decision to raise the value of the Iraqi dinar than one thousand and five hundred dinars to the dollar to less than a thousand and two hundred dinars to the dollar, if the decision to lift the value of the Iraqi dinar up to thirty percent resulted in the destruction of the Iraqi industry to the public sector and the private sector level as well as sector deterioration agricultural, where the result of this decision to increase the cost of goods produced in Iraq up to thirty percent, making them uncompetitive and similar imported from outside the borders of goods, stopped on the impact of government laboratories as well as private sector plants because of the inability to market Iraqi products in the Iraqi market, we've had Iraq in the ranks of the major industrialized countries in the region such as Iran and Turkey, and now the Iraqi industry deteriorated and we import a lot of manufactured goods from Saudi Arabia and the UAE factories !!! The same thing happened in the agricultural sector we started to import from neighboring countries because agricultural production has become cheaper than our production.
The high rate of the dinar (2006) had some positive effects and very cheap imported goods, and achieve Iraqi traveler from surplus when traveling outside of Iraq, yet these positive effects, but the losses the collapse of the industrial sector and stop the decline in the agricultural sector and that we need to borrow far outweigh those positive effects .
The principle of reducing the currency exchange rate stems from the principle that the exchange by the state by income, if we spent the money is not our money, but borrowed money and benefits accumulated it must soak in the end, it will be Quana much more severe than the occurrence of Greece, for example, Greece state infrastructure incomplete electricity, water, hospitals, schools and housing, while we lack electricity net and water and sewage networks and we have a great weakness in the health and education system Vnaftqr for hospitals and good schools and dwell a lot of people in tin houses in the slums, and a lot of roads and public utilities subversive, and Snstlm cities After the elimination of wasteful Daash and get them out of them, God willing.
The devaluation could have a negative impact can not lose sight of them, but must also adopt a set of solutions in order not to have such a negative impact on the citizen effects, particularly the poor class, where if I take a government decision to reduce currency for once and make the dollar equivalent (1500) dinars as the price was up to the year (2006), we must keep the exchange preferentially to import the necessary materials such as some essential food items such as wheat, sugar and oils, meat, milk and other medicines and medical supplies and all materials and supplies that are necessary price, and preferential price is the current exchange rate any limits ( 1200) dinars to the dollar.
In this case may not be the conduct of currency price preferential depending on the lists does not know the validity and can be manipulated as is the case at present, but are approved preferential price in the open only bank credits, and in this way ensures that the theft of money depending on the difference between the discharge rates.
Must also be given preferential price for travelers for treatment outside the country, the price of the new drainage must be pricier one and steady may not be taking the high commission by the banks and money changers.
If the devaluation of the exchange rate at this level an increase of about 30%, this could provide a surplus of up to 25% of the budget) the 5% will be for food, medicine and travel patients for treatment), if the budget was up to the 60 billion dollars for this year, the surplus will be up to the 15 billion dollars and this amount over to (9) billion dollars which Iraq is seeking to obtain from the loan from international banks, depending on the treasury bonds of $ 6 billion.
You must use this surplus effectively in the important projects of the country without commissions or robberies, but which feared him greatly that the political parties that formed the economic committees to get the commission through its ministries projects, but I was shocked because of the shrinking budget due to lower oil prices eyes will open dramatically to pounce on this surplus, so if Brother Dr. Haider Abadi take a clear policy and marginal to stop corruption, this increase in funds will dock again in the pockets of the corrupt.
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2015/10/07
We mentioned in a previous article, that all global indicators confirm the impossibility of the rise of oil prices to previous levels because of the possibility of shale oil production and quantities too large in at least forty countries in the world, including the United States and China at a cost ranging between (70-50) dollars a barrel , and this means that the oil in the long term will range price of a barrel between (80-55) dollars a barrel at best, either in the near term will be witnessing decreased else where it is expected that up to nearly 30 dollars a barrel or may be less because of the increased production Iranian and Libyan and Iraqi during the next year and beyond from the past.
Based on this fact, there will be a large budget deficit at least thirty billion dollars a year counterbalance unusual, but that Iraq has decided to stop all investment projects Vsiraouh deficit between eight billion to fifteen billion dollars, depending on a range of variables, most notably the cost of the war on Daash and the price of a barrel Oil in the coming year.
Faced with this reality there are two solutions only two: the first solution: borrowing from various international destinations depending on treasury bonds or any other means, and the government chose unfortunately this option and accepted borrowing from international banks annual interest rate in excess of 10% even in 2028, The Selection this way will the country's economy to a complete collapse, not only because of the loan, which ranges from six to eight billion dollars in this high interest, but because of the open door of borrowing to cover the budget deficit, which means borrowing each year to come to cover the deficit, and the process of calculation is very simple, depending on the data present and on the assumption that the increase in oil production will be offset by the deterioration of oil prices, as we mentioned earlier, in 2028 if the situation continues what it now will total loans up to $ 84 billion and the total interest arising from them would amount to $ 63 billion, which means that Iraq will fall under debt of more than 147 Billion dollar.
This is three times the resources of oil now, in fact we will not get to this stage, because the country's economy would collapse long before that will not be the domain is available for lending to Iraq by any global destination, and marching the country and jeopardize the sovereignty and impose a large and multi-economic constraints such as increased fuel price and increasing the cost of Food and tax increases, electricity, water and the collapse of the Iraqi dinar, and the citizens will suffer very great suffering, but it is possible in this case that the other worse things happen can not be predicted now.
The second solution: Reduce the Iraqi currency value; The descent value of the currency is a normal in a lot of countries in the region, and the descent of the currency impact in the first place a negative impact on the increase in the prices of imported goods and materials, but in the long term provides a ground for the rise of industrial, agricultural and even general renaissance for all Productive sectors if taken the right economic policies, and this has been achieved in many countries such as Turkey and Iran, the region, where the currency is going down very heavily in these two countries during the past three decades, but the industrial renaissance in these two countries was too great not because of the currency's slide, but due to make informed economic policies as well as an agricultural renaissance and tourism in the two countries, while in Iraq, the descent of the currency a few months ago, when the dollar stood at nearly 1,400 dinars was primarily for the field open to a group of politicians to get rich on the suffering of the people account Therefore There were two prices of the coin large teams with the adoption of counterfeit menus as it turns out this is to everyone through the media.
Was taken in 2006, is a thoughtful decision to raise the value of the Iraqi dinar than one thousand and five hundred dinars to the dollar to less than a thousand and two hundred dinars to the dollar, if the decision to lift the value of the Iraqi dinar up to thirty percent resulted in the destruction of the Iraqi industry to the public sector and the private sector level as well as sector deterioration agricultural, where the result of this decision to increase the cost of goods produced in Iraq up to thirty percent, making them uncompetitive and similar imported from outside the borders of goods, stopped on the impact of government laboratories as well as private sector plants because of the inability to market Iraqi products in the Iraqi market, we've had Iraq in the ranks of the major industrialized countries in the region such as Iran and Turkey, and now the Iraqi industry deteriorated and we import a lot of manufactured goods from Saudi Arabia and the UAE factories !!! The same thing happened in the agricultural sector we started to import from neighboring countries because agricultural production has become cheaper than our production.
The high rate of the dinar (2006) had some positive effects and very cheap imported goods, and achieve Iraqi traveler from surplus when traveling outside of Iraq, yet these positive effects, but the losses the collapse of the industrial sector and stop the decline in the agricultural sector and that we need to borrow far outweigh those positive effects .
The principle of reducing the currency exchange rate stems from the principle that the exchange by the state by income, if we spent the money is not our money, but borrowed money and benefits accumulated it must soak in the end, it will be Quana much more severe than the occurrence of Greece, for example, Greece state infrastructure incomplete electricity, water, hospitals, schools and housing, while we lack electricity net and water and sewage networks and we have a great weakness in the health and education system Vnaftqr for hospitals and good schools and dwell a lot of people in tin houses in the slums, and a lot of roads and public utilities subversive, and Snstlm cities After the elimination of wasteful Daash and get them out of them, God willing.
The devaluation could have a negative impact can not lose sight of them, but must also adopt a set of solutions in order not to have such a negative impact on the citizen effects, particularly the poor class, where if I take a government decision to reduce currency for once and make the dollar equivalent (1500) dinars as the price was up to the year (2006), we must keep the exchange preferentially to import the necessary materials such as some essential food items such as wheat, sugar and oils, meat, milk and other medicines and medical supplies and all materials and supplies that are necessary price, and preferential price is the current exchange rate any limits ( 1200) dinars to the dollar.
In this case may not be the conduct of currency price preferential depending on the lists does not know the validity and can be manipulated as is the case at present, but are approved preferential price in the open only bank credits, and in this way ensures that the theft of money depending on the difference between the discharge rates.
Must also be given preferential price for travelers for treatment outside the country, the price of the new drainage must be pricier one and steady may not be taking the high commission by the banks and money changers.
If the devaluation of the exchange rate at this level an increase of about 30%, this could provide a surplus of up to 25% of the budget) the 5% will be for food, medicine and travel patients for treatment), if the budget was up to the 60 billion dollars for this year, the surplus will be up to the 15 billion dollars and this amount over to (9) billion dollars which Iraq is seeking to obtain from the loan from international banks, depending on the treasury bonds of $ 6 billion.
You must use this surplus effectively in the important projects of the country without commissions or robberies, but which feared him greatly that the political parties that formed the economic committees to get the commission through its ministries projects, but I was shocked because of the shrinking budget due to lower oil prices eyes will open dramatically to pounce on this surplus, so if Brother Dr. Haider Abadi take a clear policy and marginal to stop corruption, this increase in funds will dock again in the pockets of the corrupt.
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