CBI between corruption and ambiguity

The central bank in any state is the responsible institution for the control and guidance of the banking system, and aims in general to maintain monetary and financial stability in the country and contribute to the strengthening of economic growth and controlling inflation and reducing unemployment.

In Iraq, it seems to be different and completely ambiguous, where many citizens if they were questioned about the Central Bank and the mechanism of its work, their answer would be to shaking the head, a symbol of the lack of understanding of what is happening inside the corridors of this massive national institution, as if it has become a puzzle that confused Iraqis regarding to the mechanism of its work and what applies to the bank applies to the entire Iraqi economy.

Recently, harsh criticism has been directed for the Central Bank of Iraq and its administration and the mechanism of its work, and what is related to the auction of daily currency sale and cash reserves of the Bank and other matters of interest to the citizen.

We mentioned in a previous article about the extent of corruption and waste happening in the currency auction carried out by the Central Bank of Iraq, noting that the total sales of the central bank of the currency in the first two months of this year exceeded 5 billion and 821 million dollars, also a document issued by the Finance Committee in the House of Representatives revealed that the total sales of the central bank of the currency during the months of January and February of this year has exceeded oil revenues in the same period.

As for the central bank sales of foreign currency for the month of January , it amounted to 3 billion and $ 318 million, as the bank’s sales in the month of February amounted to two billion and 503 million dollars.

Here we refer to the statement of the parliamentary finance committee that the continuation of central bank of the dollar selling in larger quantities of Iraq’s revenues from foreign currency as a result of the export of crude oil is a service for the corrupt.

And the economic reports published that the Iraqi Central Bank sold more than $ 44 billion in foreign currency during the auction last year. According to fake contracts, amid of the silence of the previous governments on these abuses, where many economists and parliamentarians warned to the planned looting in the central Bank and the governmental negligence is a sign that the parties and political figures and influential individuals involved in these processes, noting that the Banks constitute interfaces to the politicians and the corrupt.

Reports indicate that since the establishment of the Central Bank auction to sell the dollar to banks and banking corporation in 2004, central bank sales amounted to more than $ 312 billion since its inception, valued at 1180 dinars to the dollar, it has transformed 80% of these funds out of Iraq, while 20 percent have entered into the market .

Iraq has reaped from all previous corruption, a deficit of 25% of the total budget “, and the economy completely collapsed, and the rise of poverty and unemployment.

And recently was the reduction of its credit ratings to “negative” by the global agency “Fitch” .

The Iraqi government is trying to ease the size of the economic crisis experienced by the country, accompanied by a complete blackout and ambiguity in revealing the real economic figures , and blackout on the mechanism of action inside the corridors of its institutions and ministries, including the central bank.

“Standard & Poor’s” Foundation for Credit Rating “report included figures for Iraq’s debts that have reached $ 30 billion during the year 2015 which were added to the list for the first time” and it was expected a continuation to rise this year.

Here, the Iraqi government is talking that the central Bank have reserves of more than 50 billion dollars, the figure agreed upon by many observers, but with the continuing the economic crisis that has exhausted the treasury Why the government do not expect that it could resort to withdraw from the reserves in the event of having to do that?

The absence of strict control over the banks produced a state of insecurity among investors with banks on their money, which makes it difficult for banks to be a protector of the money of its customers, and thus will increase the distrust of the Iraqi economy, either internally or externally, and what applies on this from the impact of the economic consequences .

The rise of the poverty rates in Iraq to more than 22 percent, according to official statistics, means that there is the equivalent of 7 to 8 million poor ones , a very large proportion compared with the number of the general population.

Despite the talk about reforms within the central bank, but it is still there abuses and thefts and suspicious transactions, which produced a class of the wealthy as a result of these thefts and fraud, and the effective censorship can save to the state millions of dollars, and reduce the bleeding of money that was tampered by the corrupt.

CBI case is like the case of other state institutions that witnessed a state of widespread corruption and the absence of oversight that may be the most important factors for the failure and collapse of the economy , and with this bitter reality , the hopes of the Iraqi citizen are fade for any desired economic reform, and here the government should be more serious in dealing with the questions of the Iraqi citizen about situations experienced by the country.

Rawabet Research and Strategic Studies Center