Monetary and fiscal policy between the illusions and economi
Posted: Wed Oct 05, 2011 12:08 pmMonetary and fiscal policy between the illusions and economic
Past week has seen an upsurge in competition on the right monetary and fiscal policy in Iraq.
It is worthwhile as long as the faltering observed in these policy was still a factor impeding development and economic reform and improve the desired standard of living of the population. There is no true dependence on oil revenues only an introduction to overlook the great dilemmas facing the proper functioning of economic life in all its branches.
I did not want to talk about this subject, about the collision of political, media, which appeared here and there. It’s not a formality, as some people imagine, and the national interest requires that the controversy is the construction of obstacles, Iraq built on a new economic environment, or it is building on this experience in the skies of a new renaissance of the Interior and the major shifts in the region and the world.
He encouraged me to express an opinion is what some media on the call for reforms that have been raised during the meetings of the World Bank and International Monetary Fund recently in America and considered the task of increasing importance to break the current impasse in the case of fiscal and monetary Iraq, and should here refer to Helms on the matter of the testimony specialists in the economic world:
• Monetary policy in Iraq remains volatile and suffer from procrastination in all its aspects.
• the financial sector is the most prominent barriers to achieve higher rates of sustainable growth in general.
• criticism of the dominance of government banks on the overall financial transactions and inventory of bank transactions for small things do not live up to the work of international banks.
• criticize the collision laws in the above institutions and lack of ability to achieve growth rates than is the case in the region. “Al Sabah” on 09/26/2011.
These comments are important, in addition to the controversy internally, on monetary policy in Iraq, imposing reminder of the most important facts and economic criteria that generated and evolved in the context of global economic thinking.
What is the first monetary policy? What are the basic types and their features?
In the modern economy, there is a Nation Books. Two monetary policy Monetary and fiscal policy Fiscal. And tends These policies interrelated and affect each other.
Fiscal policy concerned with several things including: the kinds of tax collection and government spending, credit or debt related.
The monetary policy is looking at the money supply in the economy, often targeting interest rates and how to manage Rates of interest.
In order to promote stability and economic growth, ie, that official targets for monetary policy focused on securing stable prices and low unemployment.
It is noted here that there is a strong correlation between monetary policy and development goals such as combating unemployment and raising living standards. Means that there is an urgent need to direct monetary policy to achieve development and economic growth and providing job opportunities and the like.
A review of economic history, also reveals that the monetary policy concept and practice have emerged at the end of the nineteenth century in order to protect the gold standard Gold Standard, which was used then for a long time in the cash transactions. Also notes that the historical record of monetary policy confirms the existence of two types of this policy.
They are:
• expansionist policy Expantionary
• deflationary policy Conctractionary
Politics is “expansionist” aims to accelerate the money supply more than usual. As for politics, “deflationary” target the money supply in a way slower then that the “expansion” includes the fight against unemployment by lowering interest rates, and facilitate access to bank loans to encourage economic activity and expand it.
The “deflationary” aims to reduce inflation to avoid distortions and fluctuations in the value of financial assets. That the link between fiscal and monetary policy have evolved and separated from each other since the seventies.
Even before that date, the Bretton Woods agreements have called for a separation between the political blocs since 1946. It is known that these agreements and concepts of operation was approved at the time and become a window into the policies, “the World Bank and International Monetary Fund.”
After the meetings of the many countries in the world in the city of Bretton Woods the U.S.. And now have to take a light on the events in the evolution of monetary policy in Iraq.
It is known that such a policy, was developed in 2003 as part of the Governing Council who was contributing to policy formulation and review a number not a few of the laws and legislation in Iraq.
The representatives of the “Coalition Provisional Authority,” playing a key role in approving the new amendments, including the replacement of monetary policy and the restructuring of the Central Bank of Iraq on a new basis. And was at the forefront of them, Mr. David Oliver Devid Oliver official budget, as well as Mr. Mikferson Mekferson economic advisor to the director of “Coalition Provisional Authority.”
Ironic that tell here what was in the book, Dr. Ali Allawi, is marked by “the occupation of Iraq: winning the war and the loss of peace,” which was then Minister of Trade, where he says “that Mr. David Oliver gave a brief description of the state finances the Iraqi Governing Council and in early August 2003. then adds d. Allawi that” Power Coalition “has withheld necessary information about the” governing council “that was supposed to be adopted in study and the drafting of the budget for that period.
With the political change, the great who grew up in the year 2003, with direct support from the United States and its allies, was the general direction of the path of this change, is to get rid of the various policies of old, to the former regime, and the establishment of a market economy replaced the planned economy and authoritarian prevailing at that stage .
The monetary and fiscal policy are located at the center of the measures and new measures. and there was a keen and declared support for the private sector in all its branches and to enable as playing a direct role and head in the processes of change and the establishment of a free economy again.
Perhaps the most important foundations and methodological principles that should have been based are the properties of the national economy at the time, which is reflected Ba_i_ra phenomenon of inflation because of the rush mindless to issue paper currency and the deterioration of the value of the currency in the context of the international embargo and sanctions imposed on Iraq, as well as an economy distorted Rei, and the one-sided, and the lack of diversity of economic activities.
In addition to the dominance of public sector dominance is almost complete the activities and structure of the state as a whole. The Central Bank of Iraq has lost any kind of independence, a follower and was part of government institutions Almatmrh order of leadership in the country.
The subordination of the central bank to lead the country one of the highlights of the economy, which had to be treated quickly and seriously as an important part of the ongoing measures to shift the great work to a free economy and free from the phenomenon of inflation.
The first measures is a new law of the Central Bank, and confirm its independence and monetary policy fit with the new features of the economy and Strutijeth declared at the time.
There is no doubt that reducing inflation was still a major factor in the selection of monetary policy is appropriate, such as if one of the two policies that we have mentioned before (expansionist policy or deflationary).
That the stability or change any of them depends on the evolution of the economic situation in the country, is that what happened is the insistence of American representatives to adopt a deflationary policy, which is expected to contribute in the fight against inflation as well as promoting development and reducing unemployment and others. The fact is that the subsequent path of this policy, did not achieve these expectations, but with certain restrictions.
Can not in this case that we accept a scientific and practical discrepancy observed between the State’s keenness on the fiscal policy “expansionary” call to raise the rates of investment, economic development, between central bank policy-oriented further contraction and strengthening constraints banking facilities to the private sector, which brought paralysis of economic life are required. that inflation (rising prices and high cost of living) is the subject of worrying without doubt.
But the search in the clashes and mechanisms of inflation is something the other needed clarifications and explanations convincing. Perhaps the most important questions regarding the identification of the body that specializes in measuring inflation. In fact, the “Central Bureau of Statistics and Information Technology” of the Ministry of Planning was still the main source of information on the measurement of inflation.
It was not the central bank’s role well known in this area. As the inflation figures and data that declare the need to impose a monthly check her grandfather. Are these facts covering the movement of prices in the market a comprehensive and holistic or is it limited to the acquisition of information is incomplete and perhaps inaccurate prices of some goods and services.
Then there is another important question, is that the figures declared monthly inflation data covering the whole country, or is it limited to the parts of them. I felt very sensitive about this issue when you are in the responsibility and I have shown serious reservations about the integrity of this process.
That follow the movement of prices in the national market, do not provide alone give an encouraging picture, so perhaps many notes that most of the prices of foreign goods and services today are cheaper than the prices of domestic goods and services.
Where lies the fault? Is it safe to figures announced on inflation? Then raised another important question about the role and contribution of private banks (civil) in the process of money supply (monetary policy) level and is it required?
Many of the men involved in the affairs of banks and the banking sector believe that they are out of the picture completely.
There are now about (36) civil strife as well as banks (7) state banks, including “Rivers” and “good.”
According to statistics available, that some (90) percent of bank deposits settle in the hands of government banks, which are authorized to formally deal with financing government cash.
That any monetary policy, of any kind, especially in countries with the basic approach in a free economy and to encourage constructive competition, must be careful banking facilities to the private sector. It is a mistake and miscalculation, that investors remain Alahleon deprived of any controls in encouraging banking.
So we find that one of the reasons for the reluctance in the development of the private sector, the absence or weakness of the official controls required in the banking industry. Perhaps the most important of these controls is to provide a reasonable interest charge, to enable investors Alahliyn of starting the internal construction, solving the problems facing the national economy.
Eight winning confusion in trade policy, especially the absence of customs tariffs, was and still is another serious obstacle for the development of the private sector (manufacturing in particular). Can not continue to protect the country from non-serious, that would provide proper safeguards to encourage the Iraqi investors and industrialists, especially in the face of open and indiscriminate import of goods and services from abroad. The re-confirm and national protection is an important element to assume Iraq and the economic situation is acceptable at the regional level and globally.
A catalyst to accelerate the acceptance by Iraq of a full World Trade Organization. At the end of 2003, held a consultative meeting with senior Iraqi businessmen in Dubai, on the occasion of the annual meeting of the World Bank and International Monetary Fund. And made possible a number of Iraqi ministers, to attend the consultative meeting was the most important issue in the debate is to emphasize the interests of the Iraqi businessmen and the private sector.
As stated in the recommendations of that meeting as follows: -
Not valid status of Iraqis and foreign investors on an equal footing. It does harm the Iraqi side. The private sector was entitled to recover a lot behind the high walls of customs tariffs and import licenses and open markets.
This is the premise of principle and practice of the renaissance of the national economy, and evaluate the fiscal and monetary policies and put Iraq on the right track of economic freedom, competition and diversification among various events.
http://www.alsabaah.com/ArticleShow.aspx?ID=14669
Past week has seen an upsurge in competition on the right monetary and fiscal policy in Iraq.
It is worthwhile as long as the faltering observed in these policy was still a factor impeding development and economic reform and improve the desired standard of living of the population. There is no true dependence on oil revenues only an introduction to overlook the great dilemmas facing the proper functioning of economic life in all its branches.
I did not want to talk about this subject, about the collision of political, media, which appeared here and there. It’s not a formality, as some people imagine, and the national interest requires that the controversy is the construction of obstacles, Iraq built on a new economic environment, or it is building on this experience in the skies of a new renaissance of the Interior and the major shifts in the region and the world.
He encouraged me to express an opinion is what some media on the call for reforms that have been raised during the meetings of the World Bank and International Monetary Fund recently in America and considered the task of increasing importance to break the current impasse in the case of fiscal and monetary Iraq, and should here refer to Helms on the matter of the testimony specialists in the economic world:
• Monetary policy in Iraq remains volatile and suffer from procrastination in all its aspects.
• the financial sector is the most prominent barriers to achieve higher rates of sustainable growth in general.
• criticism of the dominance of government banks on the overall financial transactions and inventory of bank transactions for small things do not live up to the work of international banks.
• criticize the collision laws in the above institutions and lack of ability to achieve growth rates than is the case in the region. “Al Sabah” on 09/26/2011.
These comments are important, in addition to the controversy internally, on monetary policy in Iraq, imposing reminder of the most important facts and economic criteria that generated and evolved in the context of global economic thinking.
What is the first monetary policy? What are the basic types and their features?
In the modern economy, there is a Nation Books. Two monetary policy Monetary and fiscal policy Fiscal. And tends These policies interrelated and affect each other.
Fiscal policy concerned with several things including: the kinds of tax collection and government spending, credit or debt related.
The monetary policy is looking at the money supply in the economy, often targeting interest rates and how to manage Rates of interest.
In order to promote stability and economic growth, ie, that official targets for monetary policy focused on securing stable prices and low unemployment.
It is noted here that there is a strong correlation between monetary policy and development goals such as combating unemployment and raising living standards. Means that there is an urgent need to direct monetary policy to achieve development and economic growth and providing job opportunities and the like.
A review of economic history, also reveals that the monetary policy concept and practice have emerged at the end of the nineteenth century in order to protect the gold standard Gold Standard, which was used then for a long time in the cash transactions. Also notes that the historical record of monetary policy confirms the existence of two types of this policy.
They are:
• expansionist policy Expantionary
• deflationary policy Conctractionary
Politics is “expansionist” aims to accelerate the money supply more than usual. As for politics, “deflationary” target the money supply in a way slower then that the “expansion” includes the fight against unemployment by lowering interest rates, and facilitate access to bank loans to encourage economic activity and expand it.
The “deflationary” aims to reduce inflation to avoid distortions and fluctuations in the value of financial assets. That the link between fiscal and monetary policy have evolved and separated from each other since the seventies.
Even before that date, the Bretton Woods agreements have called for a separation between the political blocs since 1946. It is known that these agreements and concepts of operation was approved at the time and become a window into the policies, “the World Bank and International Monetary Fund.”
After the meetings of the many countries in the world in the city of Bretton Woods the U.S.. And now have to take a light on the events in the evolution of monetary policy in Iraq.
It is known that such a policy, was developed in 2003 as part of the Governing Council who was contributing to policy formulation and review a number not a few of the laws and legislation in Iraq.
The representatives of the “Coalition Provisional Authority,” playing a key role in approving the new amendments, including the replacement of monetary policy and the restructuring of the Central Bank of Iraq on a new basis. And was at the forefront of them, Mr. David Oliver Devid Oliver official budget, as well as Mr. Mikferson Mekferson economic advisor to the director of “Coalition Provisional Authority.”
Ironic that tell here what was in the book, Dr. Ali Allawi, is marked by “the occupation of Iraq: winning the war and the loss of peace,” which was then Minister of Trade, where he says “that Mr. David Oliver gave a brief description of the state finances the Iraqi Governing Council and in early August 2003. then adds d. Allawi that” Power Coalition “has withheld necessary information about the” governing council “that was supposed to be adopted in study and the drafting of the budget for that period.
With the political change, the great who grew up in the year 2003, with direct support from the United States and its allies, was the general direction of the path of this change, is to get rid of the various policies of old, to the former regime, and the establishment of a market economy replaced the planned economy and authoritarian prevailing at that stage .
The monetary and fiscal policy are located at the center of the measures and new measures. and there was a keen and declared support for the private sector in all its branches and to enable as playing a direct role and head in the processes of change and the establishment of a free economy again.
Perhaps the most important foundations and methodological principles that should have been based are the properties of the national economy at the time, which is reflected Ba_i_ra phenomenon of inflation because of the rush mindless to issue paper currency and the deterioration of the value of the currency in the context of the international embargo and sanctions imposed on Iraq, as well as an economy distorted Rei, and the one-sided, and the lack of diversity of economic activities.
In addition to the dominance of public sector dominance is almost complete the activities and structure of the state as a whole. The Central Bank of Iraq has lost any kind of independence, a follower and was part of government institutions Almatmrh order of leadership in the country.
The subordination of the central bank to lead the country one of the highlights of the economy, which had to be treated quickly and seriously as an important part of the ongoing measures to shift the great work to a free economy and free from the phenomenon of inflation.
The first measures is a new law of the Central Bank, and confirm its independence and monetary policy fit with the new features of the economy and Strutijeth declared at the time.
There is no doubt that reducing inflation was still a major factor in the selection of monetary policy is appropriate, such as if one of the two policies that we have mentioned before (expansionist policy or deflationary).
That the stability or change any of them depends on the evolution of the economic situation in the country, is that what happened is the insistence of American representatives to adopt a deflationary policy, which is expected to contribute in the fight against inflation as well as promoting development and reducing unemployment and others. The fact is that the subsequent path of this policy, did not achieve these expectations, but with certain restrictions.
Can not in this case that we accept a scientific and practical discrepancy observed between the State’s keenness on the fiscal policy “expansionary” call to raise the rates of investment, economic development, between central bank policy-oriented further contraction and strengthening constraints banking facilities to the private sector, which brought paralysis of economic life are required. that inflation (rising prices and high cost of living) is the subject of worrying without doubt.
But the search in the clashes and mechanisms of inflation is something the other needed clarifications and explanations convincing. Perhaps the most important questions regarding the identification of the body that specializes in measuring inflation. In fact, the “Central Bureau of Statistics and Information Technology” of the Ministry of Planning was still the main source of information on the measurement of inflation.
It was not the central bank’s role well known in this area. As the inflation figures and data that declare the need to impose a monthly check her grandfather. Are these facts covering the movement of prices in the market a comprehensive and holistic or is it limited to the acquisition of information is incomplete and perhaps inaccurate prices of some goods and services.
Then there is another important question, is that the figures declared monthly inflation data covering the whole country, or is it limited to the parts of them. I felt very sensitive about this issue when you are in the responsibility and I have shown serious reservations about the integrity of this process.
That follow the movement of prices in the national market, do not provide alone give an encouraging picture, so perhaps many notes that most of the prices of foreign goods and services today are cheaper than the prices of domestic goods and services.
Where lies the fault? Is it safe to figures announced on inflation? Then raised another important question about the role and contribution of private banks (civil) in the process of money supply (monetary policy) level and is it required?
Many of the men involved in the affairs of banks and the banking sector believe that they are out of the picture completely.
There are now about (36) civil strife as well as banks (7) state banks, including “Rivers” and “good.”
According to statistics available, that some (90) percent of bank deposits settle in the hands of government banks, which are authorized to formally deal with financing government cash.
That any monetary policy, of any kind, especially in countries with the basic approach in a free economy and to encourage constructive competition, must be careful banking facilities to the private sector. It is a mistake and miscalculation, that investors remain Alahleon deprived of any controls in encouraging banking.
So we find that one of the reasons for the reluctance in the development of the private sector, the absence or weakness of the official controls required in the banking industry. Perhaps the most important of these controls is to provide a reasonable interest charge, to enable investors Alahliyn of starting the internal construction, solving the problems facing the national economy.
Eight winning confusion in trade policy, especially the absence of customs tariffs, was and still is another serious obstacle for the development of the private sector (manufacturing in particular). Can not continue to protect the country from non-serious, that would provide proper safeguards to encourage the Iraqi investors and industrialists, especially in the face of open and indiscriminate import of goods and services from abroad. The re-confirm and national protection is an important element to assume Iraq and the economic situation is acceptable at the regional level and globally.
A catalyst to accelerate the acceptance by Iraq of a full World Trade Organization. At the end of 2003, held a consultative meeting with senior Iraqi businessmen in Dubai, on the occasion of the annual meeting of the World Bank and International Monetary Fund. And made possible a number of Iraqi ministers, to attend the consultative meeting was the most important issue in the debate is to emphasize the interests of the Iraqi businessmen and the private sector.
As stated in the recommendations of that meeting as follows: -
Not valid status of Iraqis and foreign investors on an equal footing. It does harm the Iraqi side. The private sector was entitled to recover a lot behind the high walls of customs tariffs and import licenses and open markets.
This is the premise of principle and practice of the renaissance of the national economy, and evaluate the fiscal and monetary policies and put Iraq on the right track of economic freedom, competition and diversification among various events.
http://www.alsabaah.com/ArticleShow.aspx?ID=14669