Mnt Goat: In a very recent interview from Iraq about the topic of the Project to Delete the Zeros from Baghdad by the academic and expert Economist Dr. Safwan Qusay and Dr. Ahmed Hal, Professor of Economics, at Al-Mustansiriya University.“the issue of deleting zeros, is positively reflected in the issue of withdrawing liquidity from people and the market , and thus going to Iraqi banks (inclusion)”. –“so people today are forcedto replace their old money with new money, and they are forced to go to the bank, thus replacing this money or depositing it, perhaps at this time, means the withdrawal process.
How will inclusion ever be successful without the Project? Two main issues discussed at length by both economists – 1. Inclusion 2. Re-pegging from the sole dollar peg. They talked about other pros and cons of the Project and short-term and long-term ways to control the dollar. This is a long read but a VERY good read and shows us that this subject is taking a new light and they are trying to find solutions to the control the dollar in order to move it ahead.
I tried to put my comments throughout the translated dialogue and to bring attention to the interviewer’s questions. Then I tried to isolate the answer given by the economist. I hope this makes it much easier to read and understand. Basically, if you want to know what is holding up the Project to Delete the Zeros, thus the following reinstatement you must read these notes and try to understand.
Here is the full video of the interview:
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English Transcript of the Video is below:
Welcome, dear viewers, toa new episode of the Economy in a Week program. Again about the project to remove zeros from the Iraqi dinar and also issue a new currency. This project is a procedure that several countries resorted to, including Turkey in 2005 and also Venezuela in 2021, but can this project be implemented, the project to remove zeros from the Iraqi currency.
Currently, countries usually resort to adding zeros to confront waves of inflation and rising prices during periods of wars and crises, which of course lead to the erosion of the value of the currency, so the deficit in government budgets is financed through the issuance of cash, but the defenders of this idea pointed out that the large number of zeros weakened the Iraqi dinar against other currencies.
As for economic experts They believe that deleting zeros requires restructuring the banking sector
First, improving the tax system, second, in addition to encouraging investments. The Finance Committee Parliamentary indicated that the project will cost the state budget huge sums, as the size of
The printed money supply in Iraq is over 992 trillion dinars, while the one in circulation is 45 trillion dinars. So, the topic of deleting zeros and issuing a new currency, we will discuss it with our guest, but
To talk to our viewers about this topic, we are joined from Baghdad by the academic and expert Economist Dr. Safwan Qusay Dr.
Welcome to the Economy in a Week program on Screen
Change Welcome Doctor.
If the project to delete zeros today from the uncle of our viewers
Dear ones, welcome Doctor.
The project to delete zeros from the Iraqi Umrah is it still existing, I mean every period we hear about this topic but we do not see anything on the ground.
The reality of course from the theoretical point of view the project is still existing. The truth is Iraq suffered after 1991 as a result of the economic blockade to weakness in the value of the Iraqi dinar and the previous governments resorting to the subject of printing money after 2003 This currency was changed to a new currency and the old currency was withdrawn and this currency in circulation was issued currently
The subject is linked to several circ*mstances for sure, meaning the process of replacing the currency and deleting the travels requires an environment to make such a decision by the Central Bank and the government currently.
It invests in attracting the monetary mass that you referred to, the 92 trillion or more, to within the banking system, meaning the process of tracking the value of the Iraqi dinar requires knowing who owns this Iraqi dinar, and therefore perhaps Dr. Talj today the Iraqi government will resort to the Central Bank’s path to automating transactions and moving towards Ronnie cards and so on.
That is yes, it is the subject of financial inclusion, one of the government’s tools in the subject of moving the monetary mass
towards the banking system so that we know where this printed Iraqi dinar is, who owns it.
This real dinar, interest rate policy and the possibility of moving interest rates, I noticed that the Central Bank raised interest rates to balances on fixed deposits, which contributed to withdrawing part of this monetary mass into the banking system, so when we want to implement this procedure, we need to cancel the money paper money and convert it into money within the banking system within credit cards, and then we can think about this subject, but in the current period, any reference to this subject.
It means that the Iraqis who own this free cash dinar are doing by replacing it with other assets, this issue leads to weakening confidence in the value of the dinar, which is traded on the boycott, meaning this issue, the issue of deleting zeros, is positively reflected in the issue of withdrawing liquidity from people and the market, and thus going to Iraqi banks, the Central Bank of Iraq specifically, until it is replaced, so people today are forced to replace their old money with new money, and they are forced to go to the bank, thus replacing this money or depositing it, perhaps at this time, means the withdrawal process and means getting rid of this printed money needs a system, meaning it does not resemble suspicion, suspicion of the mass of money in circulation, and tearing it up or destroying it and then replacing it with new currency requires that we be careful about where this money came from Iraqi section of those who hold the dinar.
The Iraqi is trying to launder money, meaning where did this Iraqi dinar come from, from this person. The problem is that there is a monetary mass outside the banking system, which may be drug trafficking, illegal trade. So when we say replacement at this time, it means allowing them to carry the dinar illegal to enter circulation through replacement, so we need to track the movement.
The Iraqi dinar also does not mean raising the prices of goods because whoever owns a free dinar is certainly with these events and with this news, he may resort to buying assets with this dinar, which leads to an increase in the value of assets, so I think that the timing is not appropriate. The appropriate thing is to plan to add value.
For this dinar, the dinar is well-printed, meaning it is not subject to
counterfeiting. The Central Bank is keen to replace damaged currency, but the tools of the Central Bank Banks Iraq needs to be developed so that we encourage the dinar holders to enter the banking system
and re-inject this money into income-generating projects.
Of course, we also need to spread the culture of point of sale and credit cards and expand the subject of cash transactions. Yes, track the movement of the dinar currently. The hard currency has been controlled, but the dinar cash that is in circulation. We do not know who is the owner of the final dinar. The serial number available to the Iraqi dinar when it enters the banking system, we know who is the person who withdrew this paper currency and where he spent it so that we do not have a market for money laundering. Does the Iraqi government have?
Today, Dr. Safwan, a specific and specific number for the monetary mass present in Iraq from the local currency or does it not have this information means the truth of the monetary mass. It rose from 45 trillion to 82 trillion. And you mentioned 92 or more, meaning in my estimation it is around 100 trillion, the level is supposed to
transparency at the Central Bank is to announce the printed currency, of course, if we assume that it is 100 Trillion, the 100 trillion needs a dollar cover of no less than 65 billion dollars, which is what the Central Bank has in addition to the gold reserve in addition to covering the debts
Internal and external debts, the cash issued by the bank was released.
The Central Bank, yes, it was issued, but its recapitalization from
during internal borrowing, it leads to an increase in the liabilities on the Iraqi dinar, meaning the bank.
The Central Bank does not only cover the value of the issuance, but it also covers the liabilities on the dinar. The current government is indebted to the banks Civil and also to pardon the government banks and internal debts of about 45 trillion as well as external debts.
So when we say that the Central Bank has reserves of 113 billion dollars, it is enough to cover the value of the issuances and internal and external debts, okay, great, so no problem today.
So if the government wanted to take such steps today, I mean from the beginning of our conversation, Doctor, on this topic, we are talking about the negative side, the negatives that this carries or carries the project, what about its positives with regard to the Iraqi economic situation if we want to delete today zeros, similar to many countries that faced economic crises, and there is a country that is not far from Iraq, which is Turkey, as you know, yes, the truth is the topic, meaning the positives:
1.Certainly, from the accounting point of view, currently the numbers are, I mean, S12 I mean records accounting is not enough for numbers, big numbers, in facilitating the task of numbers, big numbers, for sure.
2.It also needs to be narrowed down, the subject means the return of Iraqis to their memory in the seventies and the eighties when one dinar was equal to 3.3 dollars, as is the Kuwaiti dinar today, the riyal Saudi, this means restoring confidence in the prestige of the dinar, so the subject has a positive side.
3.But is the printed money mass issued by the Central Bank really inside Iraq Is it with people who have the legitimacy to obtain this dinar, so I think we have to think. Balley, who is the holder of this dinar? Financial inclusion achieves this subject.
The dinar printed within the banking system, we are assured that the holder of this dinar is legitimate because there are certainly those who bet even from neighboring countries on the Iraqi dinar, but outside the system.
The banker when we say, “Ah, Dr. Safwan” I mean, an Iraqi citizen who owns a local currency, an Iraqi dinar, how can he come or obtain this Iraqi dinar, if it is not included in the data of the Central Bank of Iraq and the serial number, as I mentioned, is it counterfeit? I mean, is it
printed outside the Iraqi government system?
No, the truth is, there are no fears of such a thing, despite the counterfeiters’ attempt to counterfeit. The value of the dinar or the printing of the dinar, but the Central Bank is keen to withdraw any counterfeit currency, but when we say, for example, that there are exports from sanctioned countries to Iraqi territory in exchange for a dinar Iraqi, is this dinar the Iraqi dinar that these countries have has been converted into foreign currencies or is hoarded by some merchants from these countries.
When we say replacement, it means that we have started the process of financing these countries with a new currency. We need to make sure that the printed monetary mass in the latest European printing presses is under control within the scope of the Iraqi. There are some Iraqis who are fronts for companies or countries that are sanctioned. The problem is not with the nationality of the holder of the dinar. The problem is where he got this dinar from. In order to be reassured that this dinar is legitimate, we have to establish the issue of financial inclusion so that we can move later to adding the value gradually and not directly. I mean, I tend not to delete the zero or two zeros or three zeros, but rather to gradually enhance the value of the Iraqi dinar, meaning that the central bank when it rises dollar reserves by purchasing the Iraqi dinar, of course, from the citizens.
During the increase in bank reserves or by replacing it with new financial instruments, thus reducing the money supply and gradually the Iraqi dinar can recover, meaning there was a plan promoted within the corridors of the Central Bank that the Ministry of Finance, if it could not fulfill its internal debts, which are around 45 trillion, by transferring real estate ownership to the Central Bank reserves or using the surplus of the Ministry of Finance to settle debts the Interior, to raise the value of the dinar so that 1 dollar is equal to 1000 dinars and gradually.
We can do this task without changing without changing the paper
currency in circulation, yes, and I mean, does that affect the value of the currency, Dr. Safwan or the amount originally existing when people delete a zero or two zeros or even three zeros, it means the 000 dinar note is replaced if we delete three zeros it is replaced with a Dinar note. Will the value of this amount be affected for people or not? The value of the value remains.
The purchasing power is the same. No, the truth is definitely the purchasing power for assets, it does not decrease by the same value as the dinar. That is, someone who owns, for example, a million dinars, it is replaced by 1000 dinars. The value of assets valued at a million will not
decrease by the same percentage. That is, for example, a property worth 500 million. A dinar is not sold. The owner of the property cannot sell the property for 500,000 dinars. So now, the decrease is sharp on the banknote and gradually on the rest of the goods until the subject.
Profit is the subject of the difference between the selling price The costs cannot be reduced by the seller, for example, from a million dinars or 500,000 dinars per day to 500 dinars, he cannot absorb this, so
usually does not decrease at the same rate as it decreases the value of the paper currency, yes, okay, if Iraq wanted, meaning one day it decided to delete zeros from the Iraqi currency, Doctor based on what is determined how many zeros should be deleted from the currency, meaning currently the Iraqi currency is linked to the US dollar, meaning the price the fixed 1320 dinars is equal to 1 dollar, so if a decision was not made to link the value of the Iraqi currency to the US dollar, meaning and bye-bye, there may be reserves to cover this decision by deleting the difference between the two prices and compensating for it, meaning, for example, the Kingdom Jordanian The Jordanian currency is now pegged to the pound. The sterling is currently pegged at a fixed price level of 1320, so we must determine whether we are doing an open market operation for the value of the dinar or a closed market and linking it in a unified manner with its currency
Specific Iraq does not have sources to support the value of the dinar so far other than oil revenues. We need economic diversification. We need to increase the transparency of the dinar holders in order so we can remove the zeros and determine the fair value of the Iraqi dinar if, for example, the dinar Iraqi is covered by oil, meaning one dinar, for example is equivalent to one barrel or half a barrel. It is possible to link the currency to something specific, so it is determined from during this thing with gold, with oil, of course, with revenues other than
oil, there will be a fair value for this dinar, and we can thus decide how much ratio.
The reduction that we can resort to by deleting zeros, yes, based on data and reality.
The Iraqi economy, Dr. Safwan, and as you mentioned, the Iraqi economy is based on sales of Oil, in light of this data, will Iraq succeed if it wants to delete some zeros today from its local currency?
You mentioned that there are proactive steps for any country that wants to delete its zeros should be the first of them today, economic diversification, revenues from various sectors today in light of this data in the Iraqi economy, even if we remain on the rentier economy, will it succeed?
This idea, if it is not implemented, or will it actually fail, meaning that the Central Bank is supposed to have a strategy in determining the value fair for the Iraqi dinar, and where do we go with this value? Are we, for example, with integration with Turkey with the Hashemite Kingdom of Jordan with the Gulf dinar In terms of the environment surrounding Iraq?
I think that if there is a thought to have a qualified trade volume because we link the Iraqi currency to stable economies, such as the US dollar as the yen the Japanese as the sterling pound or even the Chinese yuan through the Gulf currency, the currency.
(Mnt Goat – he tells us they would need a basket of currencies of stable developed countries to link the dinar to. )
The unified Gulf needs a harmonious economic infrastructure
integrated that produces a kind of monetary integration means that we do not think about adding value, but rather link this value to the economies of a system, of course this subject requires developing the tools of economic integration between these countries so that the value
of the currency corresponds to the value of the production of these countries and also imports and thus we create a state of additional confidence in the Iraqi dinar, the Iraqi dinar in the fifties was linked to the sterling pound. The original point of the matter is to return to the pound sterling and if there is another vision from the Central Bank to link the Iraqi currency for example with the Gulf countries, we must start now to determine economic paths for integration so that
we have a specific time. I believe that the Gulf countries have postponed this matter more than times to have an Arab currency unified or a unified Gulf currency, we defend the economies of these countries and support confidence.
(Mnt Goat: This unified concept has been kicking around for a while but will not happen until we are out of this investment. We can see just by the Iranian attitude this is not going to happen any time soon.)
By keeping this currency, I want to thank you very much, Dr. Safwan Qusay, and you are the academic and economic expert for all these clarifications.
You were with us from Baghdad in our second file, dear viewers, the problem of fluctuating exchange rates and the collapse of the value
of the Iraqi dinar against the dollar, the most prominent challenges facing the Iraqi economy.
The reasons are different and the result is one, which is the purchasing power of low-income people and the stagnation of the markets
And negative effects, of course, on the Iraqi economy. After relative stability during the week and the weeks past, the rise in the exchange rate has returned to the forefront again, and the Central Bank confirmed that this rise is temporary because Iraq has a reserve of hard currency that enables it to achieve balance. We will discuss more about this topic later.
The report has become the stability of the dollar exchange rate against the dinar, the greatest wish of Iraqis for about three years, due to the consequences and successive crises caused by the large price jumps that cast their shadows on the markets in general and low-income people in particular, despite the measures of the Central Bank to preserve the value of the Iraqi dinar and prevent the monopoly of hard currency from before Traders and speculators, but the crisis did not end, as the cause and instability did not subside.
Its pace for a short period until it rises again, causing confusion for citizens and paralysis and stagnation in the markets between the electronic window and travelers obtaining dollars exclusively from airports.
And forcing traders to deal in Iraqi dinars in their local transactions, the gap between the official price set by the Central Bank and the parallel market price is still large in light of the continued violations leading to the leakage of the currency to countries sanctioned by the Governor of the Central Bank, and during his hosting by the Parliamentary Finance Committee, he indicated that what Iraq has of reserves of hard currency is sufficient to achieve market balance, but he attributed the widening gap between the official price and the parallel to illegal trade and its effects by withdrawing large amounts of currency in illegal ways.
While a meeting with the American side was revealed in New York at the end of the month current to discuss the file of the sanctioned banks and the aspects related to the external transfer process.
Many factors control exchange rates, such as the increased demand for the dollar to finance imports. And the economic and political crises that burden citizens and require taking measures and solutions that ensure the stability of exchange rates in the long term.
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For more, our viewers, on this topic, Dr. Ahmed Hal, Professor of Economics, joins us at Al-Mustansiriya University, Dr. Welcome to the Economics in a Week program on the screen change, if Dr.
We are talking about hosting the governor the Central Bank in the Iraqi Council of Representatives. In your opinion, did the Central Bank of Iraq fail today in managing the issue of the dollar exchange rate and also the sanctions on some banks Iraqi?
In the name of God, the Most Gracious, the Most Merciful. Greetings to you, my dear brother, and to the viewers of Al-Taghyeer Channel
Your Excellency, welcome. The beginning of the exchange rate crisis is a succession and not a spur of the moment, but
It worsened after 2023 due to the implementation of the
US Federal Reserve platform and forcing the Central Bank to use this platform for transfers Foreign Affairs. Many economic circles and many officials Governmental, whether in the Ministry of Finance or the Central Bank or financial institutions and economic specialists in the exchange rate issue believe that the platform will lead to pressure on foreign transfers, but unfortunately during the year 2023 and 2024 after the growth large with electronic payment cards and forcing society to use the payment card electronic and forcing merchants and companies to use electronic payment in dinars Iraqi and internal transactions also in Iraqi dinars and it did not work with these methods but rather exacerbated the exchange rate crisis because many transfers through
these cards and electronic wallets as well as transfers launched by banks including called direct transfer that occurs between the clearing house between internal banks some banks internal and external banks did not work for example the closest example to the issue of inflation
sales at the central bank and this is something the prime minister himself mentioned that it means in the past before the position is available the prime minister said that more than approximately 30% is correct that it means the transfer from these 100% ratio is that 30% of the external transfer is correct and the rest is smuggling, meaning it is
the same and what he mentioned, but in fact he and many officials in the economic field did not understand the real problem of the exchange rate.
(Mnt Goat – so what is the real problem with the exchange rate according to this economist?)
The real problem of the exchange rate has multiple dimensions, meaning today I do not want to exonerate the Central Bank and say that it is not the responsibility on its shoulders nor Law No. 56 of 2004. The main goal of the Central Bank is to maintain monetary stability. This is the first goal of the Central Bank, and after that the intermediate goals
and the final ones fall, but I remind you that there are multiple dimensions to the issue of the exchange rate and not one dimension
represented by monetary policy, but rather or let me remind you so that we do not leave this point this week.
The interest Sunday the Central Bank sold $281 billion a thousand
281 million yes a dollar a million dollars and the bank or two banks that own 95% of the platform through external transfers are only two banks 95% what are these two banks.
The reasons what is the work of the rest of the banks what is their work what is their work is it that they work discounting transfers. The treasury and that means buying transfers from the Ministry of Finance as well.
Loans are an initiative of the Central Bank and so on and this is a fact that does not develop the banking system and is reflected on the real sector today, Monday, the Central Bank sold $279 million also one bank is the governor.
Dominating this issue Tuesday $283 million and this is the largest sales for the bank. The Central Bank during this period, meaning during the current government, meaning it is assumed that the Prime Minister gave a clear plan and vision in the curriculum. The government, but it really did not control and was shocked by some things on Tuesday 283 million and on Wednesday 274 and also on Thursday 69 total sales during the past week. One billion and 386 or 1,386,000,000 for the week. This means this amount is real if compared with the invoices that came out of the platform and the goods corresponding to these invoices. We will find a huge difference between what entered Iraq of goods and services.
(Mnt Goat, meaning goods and services in the physical do not add up to the money spent on them. So where did the other money go?)
It could be in kind and it could not be possible to be material and immaterial goods and services that make up this amount. We mean by it games, but there must be a percentage and proportion, meaning always when they were talking about this point, Doctor, is the role of the Customs Department in this matter, the Tax Department is also in this?
The subject is if there is any import license given to any merchant or any bank imports a certain commodity from outside Iraq and you know that Iraq is based on imports by more than 90%, so here perhaps lies the biggest problem, so it must come with invoices or official papers proving the value of these goods with what was taken from dollars, our dear professor, let me explain to you, excuse me, that these sales 95% are not the real target, which is the merchant, meaning there are things that fall within the platform that we do not know about the citizen, the Prime Minister himself does not know about them, he may know about them himself, the Prime Minister Council of Ministers because there are technical things related to banking aspects and these have orders and specialized technical issues minutes so that it is easy to transfer large quantities of dollars and store these quantities in a group of countries that control this dollar and then this person or this bank or
this company sells this dollar through a black market clearing. Notice, the target is the real one who sells the dollar, not benefiting from this dollar, but benefiting from it from the black market. Yes, in this case, in this case, Doctor, when these parties obtain these large amounts in dollars and transfer them outside Iraq by any means, meaning to transfer legal or even illegal, unless it is disclosed to the Iraqi government or to the US Federal Reserve to know that this party
that transferred the dollar, then these banks were subject to sanctions, no, no, they are them, they transfer legally.
I will ask you how, how is it stored invoices are a small group of traders, we call them the unorganized trade, trade active inside this country needs dollars to finance imports, which means real trade?
As for these traders, there are companies registered with the Ministry of Commerce that collect shipping bills large, meaning that if this trader applies to a bank or a bank that is not financing his internal trade, no
he gives dollars for the purpose of financing his internal trade, and this means that these traders constitute 70% of domestic trade, note that 70% of domestic trade constitutes these people put pressure on the domestic market. Look, we are coming to convert 95 to 97% of this externally.
The Central Bank and Customs are organizations. We said a long time ago that the problem is not related only to the Central Bank. There must be financing and exemption for trade Interior for business owners, small traders for a period of five years from the tax first, I until the exchange rate stabilizes from the tax first, and until we reach the real target and what the bank needs only is.
The one who controls this issue, we exempt from taxes for a period of five years and we exempt from fees for a period of five years and we issue him a merchant card that enables him to easily import what he needs through his card electronic payment via the Internet and we impose on this merchant a shipping policy from customs that matches what is transferred to him of the dollar and this merchant that I am talking about represents a large segment of small traders
And it represents great pressure on the exchange rate in this way, we can reduce the exchange rate level and it could reach the forties, meaning it could reach 40, and this is an acceptable condition as long as Banks the current one or two banks as well as a group of companies
The I and B companies only control and monopolize the foreign exchange and give great privileges for the foreign exchange. The exchange rate will rise later. In addition, whenever government spending increases, the size of the budget increases, and oil prices rise, this will lead to a very large increase in the exchange rate because we said at the beginning of the episode that the problem is the exchange rate.
It is only related to the Central Bank. It is related to the industrial sector, which is destroyed for us. Almost 70% of Iraqi factories are destroyed. This pressure on government spending goes to imports, and whoever goes to imports, we will put pressure on the domestic market that requested the dollar so that we can cover trade.
The domestic market is only large traders and large companies with large capitals. They are first they themselves also evade taxes because of the deception between them and the tax officials, meaning there is a very large percentage of tax evasion and also taking out dollars or sending dollars to abroad in exchange for goods and services that are not real, meaning there are goods and services that are not worth what came out of the dollar and therefore there are figures controlling the issue of the currency or the platform, is this a fault of the government,
Doctor, is this the fault of the government, meaning when you said a little while ago that there is a bank or a party or two parties that we call it that control most of the sales of the currency auction in the bank today , the central bank?
Is this the fault of the government or the fault of the central bank or is the central bank selling the countries of the dollar to which party today buying it from the legal aspect, the central bank tells you that I am what I receive a request from the dollar is food until I reduce the gap between the official price and the price the parallel, but this has become a national security problem and a social problem, I mean, and an economic problem?
And a political problem that greatly affects the country. Who are we? Answer: The Central Bank is the only one who finances and feeds the existing demand is one of the mistakes. Really, how can we finance these imports, most of which are non-domestic imports with a policy that imposes a tax on them that is less than the tax imposed on the same goods from the ports border from the south or from the air border ports.
Okay, so in addition to that, excuse me, regarding your question, in addition to the government, because this is considered one of economic crimes. I mean, who is now prosecuting the government for its mistakes? I just want to know I mean, who is prosecuting me because this 20% difference is a very big difference that is coming to bear on the citizen means that among the goods, food goods are also high in price.
If you notice the reports of the Ministry Planning, there are goods that constitute the food basket, the big thing for the Iraqi citizen, their prices are also high, real estate prices are also very high inflation has increased, yes, inflation in general, so the problem does not lie in a shortage today, Doctor.
The dollar in the Iraqi market, the Central Bank pumps dollars into the central market, but there are some procedures taken by the weak-willed or some merchants or some whales, call them what you want
exploit the dollar and the price difference and go in the end to the black market if we wanted today as a government.
I mean, in fact, we said at the beginning that the methods are to reduce and raise the exchange rate and impose on the citizen to deal in the dinar and impose on the citizen to take the card Electronic.
I mean, these are issues, unfortunately, media issues that we can use as media to cover up a very difficult problem, I mean, these are the tools that can be saved from using the dollar based on the use of the dollar in the country, the problem is bigger than this can solve.
These tools are sterile tools and have become a thing of the past, the government cannot solve the issue of the exchange rate. The exchange rate is this simple, if it wants two solutions, there are on the short-term and on the long-term.
First, the banks and the A&B companies are happy, of course, on these profits that I mean, I don’t see a specific bank increasing its profits or its assets, the assets increasing from 500 billion to 5 trillion in five or six years, what is this business?
Shamad, depending on the auction of Uncle Doctor Of course yes, the dollar is the dollar and bonds the Treasury, the interest on Treasury bonds and the Central Bank initiative loans, these are the three things that the banks are supposed to do, and they are supposed to do a very large development work, finance projects.
The industrial and agricultural projects are supposed to be exclusively financed by these banks, by working in the real sector.
What made me leave 81 banks operating in the country, and these 81 banks benefit either from the auction currency or through the Central Bank’s population initiative and through auctions and Treasury transfers.
The American, even if it stopped and it has been working for very long years, meaning huge capital the banks’ money is one of the reasons for it, the government decisions that support these banks support them
to a large extent, but the banks did not produce a real economy, and this is the goal of the bank and development in Iraq.
(Solutions: )
Back to the Ma’rouf issue, yes yes I said two solutions, two solutions:
1.One on the short-term level, limit the 70% of foreign trade with trade facilities.
The internal, excuse me, which concerns the owners or small traders, these coordinate with the Baghdad Chamber of Commerce. As I said, tax exemption, a merchant card, an import card, and so on details yes because in any case, first they bring in imports through tax evasion, they are tax evaders, and second they come to pressure the market, they buy dollars, so they keep buying dollars.
So that they can finance their foreign trade, this is on the short-term level, I give them credit facilities
Unlimited and I demand them with a large-scale policy, meaning I make myself a branch of the bank branches, for example, TBI, a recognized bank with it and it has a large correspondence It’s easier for these traders and then the other second solution which is in the short term.
2.Traders and then the other second solution which is in the short term
I will create a sub-department within the General Authority of Customs and within the land border crossings and the air and all the crossings and the northern ones in particular because there are companies that are coming to register in the north and have not paid taxes to and are practicing their work in Baghdad and have not paid the tax to Baghdad, they pay it to the north.
Consequently, the north (the Kurdistan region) and the region will not give the taxpayer as stipulated by the law (the money of the taxes into the general budget fund) the budget, but the government will continue to finance the public expenditures in the region, this is on the short-term level on the long-term level, impose on these banks that if you want, banks, whether private, investment, industrial or agricultural, I will give you credit facilities.
Very large if you finance me, for example, a factory for consumer goods that is coming It consumes it and I made it self-sufficient in the industrial sector with these goods, meaning that I direct every bank to a specific industry.
What will this do? This will limit imports because there is a commodity for a commodity foreign and with credit facilities, so it will reduce the level of total demand and thus the demand for imports and then the demand for the dollar and then the demand for reserves at the
Central Bank, which is the prestige of the Iraqi economy, the truth is that international reserves if they decrease.
Today the Prime Minister may be very lucky, but his results are really negative and we are here to monitor the data and we are here to monitor the indicators and give him that we tell him these indicators are negative despite the large economic and political presence that it enjoys, it was not able, unfortunately to achieve very big results, for example, on the exchange rate level and the financial level Economics.
Excuse me, my time is up, Dr. Ahmed Hall, you are a professor of economics at Al-Mustansiriya University. I want to thank you very much for your presence and for these clarifications and information. Thanks also to you, our dear viewers, for following the episode another next week,
(Mnt Goat – after reading Dr. Ahmed Hall interview comments you can now tie this to the new strategy of the economic model. You can read more about this new model they are doing in the article titled: “PRIME MINISTER’S ADVISOR: THE GOVERNMENT HAS ESTABLISHED A ROADMAP FOR THE ECONOMIC MODEL IN IRAQ”.Theeconomic model is a mathematical model used to represent the economy and analyze the behavior of various economic factors, as these models are used to understand how economic elements interact,” You can see how this new model is coming direct from the economists)
