Eco
The financial advisor to the Prime Minister, Mudher Salih, revealed today, Friday, five options to address the shortage of financial revenues and restructure the Iraqi economy, in light of the challenges resulting from the decline in oil exports and the closure of the Strait of Hormuz.
Salih said, according to the official news agency, that "Iraq faces a financial gap estimated at about 9.5 billion dollars monthly as a result of the decline in oil exports," noting that "the Ministry of Finance is moving towards preparing a triple emergency plan that includes internal and external borrowing, in addition to measures to maximize non-oil revenues through taxes, fees, and financial reforms."
He explained that "internal borrowing represents a quick solution to cover salaries and operational obligations, but it may lead to withdrawing liquidity from banks, increasing the cost of local financing, and weakening the financing of the private sector, while external borrowing provides liquidity in dollars and relatively maintains monetary stability, but it is linked to reform conditions and increasing debt service burdens."
He added that "maximizing non-oil revenues represents the most strategic option in the medium and long term, through controlling border crossings and customs, automating the tax system, reducing the informal economy, and improving collection without harming economic activity," pointing out that "the implementation of the Integrated Financial Management Information System (IFMIS) contributes to enhancing financial oversight, reducing waste and corruption, and raising the efficiency of managing public spending."
Salih stressed that "reforming the banking sector, especially the Rafidain and Rasheed banks, is a necessity to develop developmental financing, digital and credit services, as well as the importance of reforming private banks to achieve financial inclusion, support small and medium enterprises, and attract investments."
He indicated that "activating the partnership law between the state and the private sector would ease the pressure on the general budget and create new job opportunities, provided that a stable legal environment, investment guarantees, and the fight against administrative corruption are provided," emphasizing "that any emergency plan will not succeed without real financial reform that includes controlling operational spending, reducing waste in government contracts, and adopting spending priorities linked to production and development."
Salih explained that "the current crisis represents a real test for the structure of the Iraqi economy dependent on oil," stressing that "accelerating financial and banking reforms and diversifying the economy will enhance the state's ability to face geopolitical and economic shocks."
