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Is the law required infrastructure or law to fund the reconstruction and maintenance of the infrastructure?
Date: Sunday 09/30/2012 07:14 pm
Part II
Dr. Fadel Abbas Mehdi
Former international economic adviser and economic researcher
Undoubtedly many questions posed by specialists on our politicians always optimists rapid achievements of the global giants?? Which we expect to be entrusted to the Iraqi economy is inversely proportional to the time promised Palace of achievement and directly proportional to the hopes of lacking realism verification record achievements burn time!!
The relentless pursuit to pass the law quickly referred to "joyful and shocked deprived of housing" will lead to facilitate government borrowing from global financial markets, and a wide range indeed. It is worth mentioning here that what had previously put forward by the government within the draft supplementary budget law which Avhalh parliament a month ago and only one was around $ 10 billion of extra spending for this year. The non-government spent most of the latter to expand the security services, as mentioned in advances.
In my opinion, humble, it will be better than all this political debate before the next election that our government esteemed Bottiyavha different submit a law to set up a fund for the reconstruction and maintenance of the infrastructure to monitor him this year surplus of what will remain of the 10 billion dollars this and then you after three months, in January 1 next monitor nearly another $ 15 billion from the general budget for 2013 (after the rationalization of spending) to become the capital of the Fund referred to $ 25 billion will enable the government to initiate contract to set up a lot of infrastructure with minimal debt (on credit). There is no doubt here that this amount first few to contract with companies (sober) will ask the government, and sovereign Dmantha, pay an initial batch usually 10% of the total contract. As most projects can be implemented years could range from two to 5 years, the continue Brphi fund proposed another $ 15 billion in 2014 will raise the paid-up capital to about $ 40 billion currently required from the government to its project and without costly borrowing from abroad. In case of low oil revenues in the coming years if shook prices, as happened in 2009, in the Iraqi banking system, both private and public (as a bank Rafidain and Rasheed Bank of the Ministry of Finance and Trade Bank of Iraq's Council of Ministers) and deposits huge financial and high liquidity allow government borrowing facilitator for the establishment of Banana infrastructure. Also, as noted by Dr. Superficial inch within the deliberations of the network of Iraqi economists, [4] state Fbamkan by this proposed fund, and guaranteed by the Ministry of Finance, the issuance of bonds for development and sold to citizens. This last option is very useful because such a special bond reconstruction will absorb small proportion of large liquidity currently in the hands of many people in order to limit the expansion of private spending. The rapid expansion of spending, whether private or public, stimulate, and must, tendencies inflationary in the Iraqi economy is necessary prepare from now, and in this way among other ways, to ease inflation by withdrawing liquidity and direct savings in the banks, in addition to the money hoarder in houses, some lanes development investment.
Will not give payment on credit companies, discreet and non-discreet together, Iraq loans concessional hoped that saw him behave like a state has declared bankruptcy. The global financial markets that will go forth payment on credit companies that will provide, and indirectly, greater percentages of those on credit and loans that will fund the work of these companies, which means that the terms of our lending which became the government hopes often only as financial and reputation of our economy. This reputation, in addition to security concerns and the problems of corruption in the government departments will determine these banks and companies degree of risk when lending. In the absence of a companion domestic financial noticeable, like we are proposing here in the reconstruction fund and sustain the infrastructure, these companies will ask Iraq under oil wealth as collateral for the payment of future which is dangerous will have to be avoided at all circumstance, or they will resort to raising interest rates on loans payment on credit to reflect the biggest risk factor. On the other hand, some companies may resort also to raise the prices of its contracts that you can not raise interest rates for one reason or another.
Of course, the prices and cost contract this will be affected by the capabilities Iraqi negotiator and the extent of preparedness, study the technical and detailed economic projects intended residence will also be influenced degree of competition and style the bid higher the number of companies competing in any tender whenever managed Iraqi negotiator to get better terms.
Therefore, will need for Iraq not to use the style of direct contracting without competitive bidding as this will be the Pope to impose these big companies capabilities in monopoly us.
If that happens due to direct contracting this, you will get these companies on monopolistic profits and plentiful at the expense of Iraq.
Experimented with Iraq in the eighties of the last century method of payment on credit this when building its military industries and likely efforts of the crew and functional government still influence government decisions reduce this day which may be the same crew that tends more to the behavior of the State of method of payment on credit which we explained disadvantages.
The wire Iraq the same way in building its military industries reminiscent of the last century, and the result was Dfnaha debts from the mouths of the current generation and future generations.
So,
We first and foremost to initiate a law to establish a fund reconstruction of infrastructure and maintenance to be followed by the establishment of this fund and support it with money from the budgets of Iraq annual As of Iraqi banks and bonds developmental first and at the same time preparing serious studies and detailed priorities reconstruction program infrastructure and studies engineering and economic professional and thorough in order to avoid costly mistakes in costs and contracts, as the companies that will be contracted to look for interests in profit bumper before trying to build our infrastructure best and fastest way possible and whenever our readiness weaker, the greater their profit and tell payoff Iraq of these infrastructures, which he hopes the Iraqis please Macoda.
When you are not sure that these studies desired has been on our side before resorting extraordinary government,
Which came بصفحتين only, to view the draft law referred to the House of Representatives, I have reservations, as an economist Iraqis, the speed of this proposal and Ajalth excessive and lacking financial resources allocated from the public budgets of the country which سيدخلنا foreign debts not urgently needed after abundance that we documented digitally exports Petroleum and state resources. What is required now and in the next budget is to use these resources prudently and allocate a significant proportion of the investment structures in Iraq and maintenance of infrastructure.
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