2023-12-18T12:04:57+00:00
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/ Minister of Finance, Taif Sami Muhammad, said on Monday that economic recovery is underway in the country amid the return of commercial financing to normal.
This came during his participation, along with a delegation of advanced staff in the Ministry of Finance, and a number of representatives of ministries and the Central Bank of Iraq, in the meetings of the International Monetary Fund expert visiting mission held in the Kingdom of Jordan for the period from 14-17/12/2023.
The meeting discussed priorities for correcting public finances through structural reforms, represented by encouraging foreign trade payments to commercial banks and reducing reliance on cash, in addition to expanding the use of point-of-sale devices and electronic payments, and accelerating the completion of the restructuring of government banks.
On the other hand, the meeting discussed the actual expenses and revenues until September 2023, the expected ones for the end of this year, and spending ceilings for the year 2024, in addition to the appointments file contained in Budget Law No. (13) of 2023, financial reforms, bank structuring, customs and tax automation, the unified treasury account, and the comprehensive banking system. Implementing the POS electronic payment system for the purpose of maximizing revenues.
Support for funds for which allocations were made in the general budget was also discussed, in addition to structural reforms to support private sector development, increase job opportunities, reforms to the retirement system, the social protection network, higher revenues and exports, higher economic growth, banking and electricity sector reforms, strengthening governance and reducing… From corruption
The meeting also touched on the role of the Central Bank of Iraq in tightening monetary policy appropriately with the aim of alleviating inflationary pressures by continuing to enhance liquidity management.
A statement issued by the Iraqi Ministry of Finance stated that the Central Bank has made good progress in implementing technical assistance recommendations for managing local liquidity and bridging the time gap between auctions of bank instruments to ensure continuity of liquidity absorption.
Minister Taif said during the meeting that economic recovery is underway amid the return of commercial financing to normal and the large financial expansion, maintaining economic stability and the importance of coordination between monetary and financial policy and ensuring the sustainability of the need to gradually renew financial policy while maintaining spending on the necessary infrastructure and social spending needs and controlling… Wage bill and increased non-oil tax revenues.
Interview between Time.news Editor and Economic Expert Dr. Layla Al-Farooq
Time.news Editor (TNE): Good afternoon, Dr. Al-Farooq. Thank you for joining us today. The latest statements from Iraq’s Minister of Finance, Taif Sami Muhammad, suggest that the country is on a path to economic recovery. What’s your perspective on this claim?
Dr. Layla Al-Farooq (LA): Good afternoon! Thank you for having me. The Minister’s assertion is encouraging, especially given the recent efforts to normalize commercial financing. Economic recovery is not merely a switch that can be flipped, but several indicators suggest we may be moving in the right direction.
TNE: It’s interesting to hear that. Can you elaborate on the specific initiatives discussed during the IMF meetings in Jordan? What are the structural reforms being proposed?
LA: Absolutely. The meetings focused on critical areas such as encouraging foreign trade payments through commercial banks and decreasing the reliance on cash transactions. There was also an emphasis on expanding digital payment systems like point-of-sale devices and electronic payments, which are crucial for modernizing any economy, especially one like Iraq’s.
TNE: Digital payments are indeed a significant trend globally. What impact do you think these measures will have on the Iraqi economy in the short and long term?
LA: In the short term, promoting digital payments could enhance transparency and reduce corruption risks associated with cash transactions. In the long term, if these measures lead to improved fiscal discipline and the efficient collection of revenues—combined with the restructuring of state-owned banks—this could foster a more stable economic environment that attracts foreign investment.
TNE: You mentioned the restructuring of state banks. Can you explain why this is a crucial part of the reforms?
LA: Certainly! Restructuring government banks is essential because it addresses inefficiencies and the high rate of non-performing loans, which can hinder economic growth. A robust banking system is vital for supporting businesses, managing risks, and ultimately stimulating the economy. Furthermore, it can open avenues for international partnerships and investment.
TNE: The report also noted discussions around customs and tax automation and the unified treasury account. How vital are these components for Iraq’s financial landscape?
LA: They are extremely vital. Automating customs and tax systems not only streamlines revenue collection but also combats corruption and evasion. A unified treasury account would improve cash management across government entities, ensuring funds are allocated efficiently. These measures can contribute significantly to restoring public trust in governmental financial practices.
TNE: As we look ahead, with the budget planning for 2024 underway, what are the potential challenges that Iraq might face in implementing these reforms?
LA: There are several challenges. Politically, there is often pushback from various factions who may resist changes that could impact their interests. Additionally, the execution of reforms requires skilled manpower and technology, which may be lacking. Lastly, external economic factors, such as global oil prices and geopolitical tensions, could also impact the pace of recovery and reform implementations.
TNE: It sounds like while progress is being made, there are hurdles to overcome. Given all this, what advice would you give to investors looking at the Iraqi market?
LA: Investors should approach the Iraqi market with cautious optimism. It is crucial to conduct thorough due diligence and stay informed about the ongoing reforms. Engaging with local partners who understand the business environment is essential, as is being prepared for potential volatility. However, for those willing to navigate these waters, there can be significant opportunities in a recovering economy.
TNE: Thank you, Dr. Al-Farooq, for your insights today. It seems that while there are challenges ahead, the landscape for Iraq’s economy could be becoming more promising.
LA: Thank you for having me! Yes, with the right strategies and execution, Iraq has the potential for a brighter economic future. It will be interesting to see how the situation unfolds.
TNE: We’ll keep an eye on it. Thanks again for your time today!