[tlm724] Good morning everyone, we have some very important information to share with you today. Yesterday afternoon (8/13/2013) it was confirmed on the COM website and NINA News that the following Federal Economic Reform Law was approved by the Council of Minister's.
Cabinet approves draft law on the federal economic reform.
Baghdad/ NINA /-- The Council of Ministers approved in its 35th meeting headed Prime Minister Nuri al-Maliki today the draft Law of the Federal Economic Reform.
According to a statement today, the Council of Ministers also approved the draft law to amend the regulation and legislation Law , noting that the two draft law has been referred to the Parliament./End
Read More Link On Right
[tlm724] We needed to find out what was in this draft law and we started our research as we always do. What we found was truly extraordinary ! The information we will share with you comes from a "DRAFT" document dated JANUARY 2013 and is titled " REPUBLIC OF IRAQ PRIME MINISTER'S ADVISORY COMMISSION ~ PRIVATE SECTOR DEVELOPMENT STRATEGY OF IRAQ 2013 - 2030 " Here is the link : LINK
[tlm724] This is a 17 year plan for Iraq and this "draft" comes straight from the Prime Minister's adviser's ! It is his road map to economic success and the success of Iraq as a country. This document essentially mirrors the World Banks plan for Iraq written February 2006 REBUILDING IRAQ:
ECONOMIC REFORM AND TRANSITION
[tlm724] Of course Iraq has made progress since 2006 when the World Bank made their plan, with that said , I will take a few minutes to show you the relevant parts of this draft REPUBLIC OF IRAQ PRIME MINISTER'S ADVISORY COMMISSION ~ PRIVATE SECTOR as it pertains to the above Economic Reform Law. We will study this document further over the next few days but for today lets look at a few important sections within this 95 page document to better understand the economic reform:
18.104.22.168. Economic Reform and Decentralization
87. While the economic reform process constitutes the overall framework for the growth of the Iraqi economy and for all key reforms in the different areas of the economy, it still needs to be properly institutionalized and formally adopted by the GoI.
88. For this purpose, a draft Law of Economic Reform law was drafted by UN agencies, approved by the Cabinet and sent to the State Shura Council in February 2011 for review. The draft is still pending as of December 2012.
[tlm724] So at the time this was written, Jan 2013, this law was still not ready, but now it's all systems go ! Also please note this quote "For this purpose, a draft Law of Economic Reform law was drafted by UN agencies" written by the UN
89. The draft law aims specifically at defining the principles based on which the economic reform policy in Iraq should be formulated in order to comply with Article 25 of the Constitution by which the State guarantees the reform of the Iraqi economy in accordance with modern economic principles to ensure the full utilization of its resources, diversification of its sources and the encouragement and development of the private sector,
ensuring the transition of the centrally planned Iraqi economy towards a market economy by giving the Private Sector a fundamental role in the development and the market growth of economic enterprises and in reducing the financial burdens on the federal treasury in particular and on the national economy in general, improving the efficiency of economic projects, increasing their productivity and competitiveness and putting an end to the waste and dissipation that have badly affected the economic resources of the Iraqi people.
[tlm724] FYI Article 25 of the Constitution states this:
Article 25: The State shall guarantee the reform of the Iraqi economy in accordance with modern
economic principles to insure the full investment of its resources,diversification of its sources, and the encouragement and development of the private sector. http://www.iraq-lg-law.org/en/webfm_send/1351
[tlm724] "ensuring the transition of the centrally planned Iraqi economy towards a market economy" Iraq is moving into a free market economy. The economic reform in Iraq should also create job opportunities in the country thereby engaging the workforce. This would to a great extent minimize poverty in Iraq. There are two more sections in the document to show you:
91. The draft addresses, among its objectives, the
decentralization of the economic governance by granting more significant roles to local governments in economic planning, public investment and public-private partnerships as well as fiscal decentralization to secure the financial capacity of governorates to fund economic development needs.
92. The GoI is committed to accelerate the final review process, adoption and enforcement of this fundamental law, along with specific regulations that will need to be prepared especially for decentralization processes and establishment of a governance system fully consistent with the PSD Strategy. Also, Local Governments shall be encouraged to adopt a set of measures to improve the local business environment to create innocuous competition climate among governorates.
[tlm724] Read this carefully please "The GoI is committed to accelerate the final review process, adoption and enforcement of this fundamental law, along with specific regulations that will need to be prepared especially for decentralization processes and establishment of a governance system fully consistent with the PSD Strategy."
"along with specific regulations that will need to be prepared".
It is my opinion that they are referring to the many laws waiting to be read and passed in Parliament, Infrastructure, Investment , HCL, Border law etc... These laws, the basket of laws as BondLady has explained to us, IMO cannot go forward until this Economic Reform law is presented. "noting that the two draft law has been referred to the Parliament"
and finally this :
22.214.171.124. Access to Finance
94. As outlined by the WB CPS (2013 - 2016), the GoI has recognized the importance of improving the performance of the financial sector, including creating a level playing field for non-state banks, improving access to finance for micro, small, and medium Enterprises (MSMEs),
and improving financial sector regulation and governance. Iraq’s financial sector is underdeveloped and dominated by state-owned banks, weak private bank participation and access to finance by firms.
The system is not aligned with international standards and governance structures are weak. Going forward, it will be important to accelerate the current reform program, including clarifying the roles of state-owned banks, restructuring the two largest banks – Al Rafidain and Al Rashid–
and removal of barriers for private banks in doing business with the state-owned banks and put in place concrete measures to create a level-playing field between private and public banks. It will also be important to create a better enabling environment to allow access to finance, including improving credit systems, contract enforcement, and bankruptcy regulations.
[tlm724] Here is the quote that caught my eye " removal of barriers for private banks in doing business with the state-owned banks and put in place concrete measures to create a level-playing field between private and public banks "
I'd like to wrap up my part of this chat by showing you two more things from the forum if I may. The article's are from June 24th and June 25th ,2013 :
Maliki meets with Citigroup President
MONDAY, JUNE 24, 2013 14:15
Prime Minister Nuri al-Maliki, on Monday, a comprehensive reform of the economy, increased oil and gas production in the country.Maliki said in a statement issued by his office obtained “Twilight News” a copy of it during his meeting with the President of the company (City Bank) Dance Avelanery, who announced the opening of an (Citigroup) office in Baghdad that “Iraq plans to double its production of oil, gas and do a comprehensive reform of the economy so as to enhance its resources and makes them more diverse. “
He pointed out that “the increase in resources will be reflected on other segments of the economy in agriculture, industry, tourism, and other services.”
The Prime Minister called for a “more active participation and effectiveness of the Bank (City Bank) in the Iraqi market.”
For his part, the President of company Dance Avelanery “We are determined to to be partners in the development of Iraq and سنساعده in the advancement of its economy,” noting that “there are many international companies willing to invest in Iraq, and we will be supportive of her”
[tlm724] The next article is similar to the above :
Conducted an inspection tour in medicine
Prime Minister Nuri al-Maliki for the determination of Iraq to double its production of oil, gas and do a comprehensive reform of the economy so as to enhance its resources and makes it more versatile, while conducted an inspection tour in medicine on Monday afternoon and met Bmlakha administrative, medical, and had a look at the level of services provided to patients are asleep.
Prime Minister said: "Many of the hospitals which was scheduled to be completed is still not completed for reasons of administrative, technical or because of the type of corruption or for political reasons." and vowed to pursue Multi hospitals uncompleted construction despite the passage of the periods specified for work, calling to keep the effects of political and non-political for the medical profession being a humanitarian profession, and to be patient service is the foundation and above all other considerations. Moreover, met al-Maliki in his office official said on Monday President (City Bank) Dance Avelanery who announced the opening of an office in Baghdad.
called on the prime minister to more active participation and effectiveness of the bank in the Iraqi market, indicating that the increase in resources will reflect on the pieces of the economy other agriculture, industry, tourism, and other services.
[tlm724] “Iraq plans to double its production of oil, gas and do a comprehensive reform of the economy so as to enhance its resources and makes them more diverse".
So Maliki was telling us right there that he had the economic reform plan and was moving forward with it's development which also included this line from the above PSD document
" removal of barriers for private banks in doing business with the state-owned banks and put in place concrete measures to create a level-playing field between private and public banks "
City Bank seems to be fulfilling that part of the plan and it's evident that City also has an extremely important role within this plan.
the President of company Dance Avelanery “We are determined to to be partners in the development of Iraq and in the advancement of its economy,” noting that “there are many international companies willing to invest in Iraq, and we will be supportive of her"
Here are Shredds comments:
[Shredd] In reading through this, I see a few key highlights. First, we all know Iraq is moving towards becoming a free market economy and this is proof of that. A free market economy is one that allocates resources based on supply and demand. What is even better is this; in a free market economy, it is not a controlled market with state intervention ! Prices are determined by supply and demand and here's the biggie....in a free market economy, exchange rates move freely based on supply and demand.
So, I fully agree miss timmy that this legislation is huge. Work still needs to be done such as diversification into multiple industries but like the article you sent me yesterday states, Iraq boasts a large workforce which will be the underpinnings of Iraq's future economy.
[Shredd} There is also work to be done on the banking side:
"Iraq’s financial sector is underdeveloped and dominated by state-owned banks, weak private bank participation and access to finance by firms. The system is not aligned with international standards and governance structures are weak. "
We've read that banking laws still need to be passed and here we see alignment to international standards and governance (like SEC Acts ) is needed, but remember to see the big picture...Iraq continues to move forward and its no question that this Economic Reform Law will show substantial progress!
[tlm724] Thank you Shredd ! It is so exciting to see this coming together. Parliament is due back on the 20th and I am ever optimistic that we will see these laws addressed now that the corner stone, the Economic Reform Law, has finally been presented to Parliament. As more is revealed to us we will adjust as Iraq is truly evolving everyday, we will continually strive for the truth and we will always share it with you. Thank you !