His money and what he owes… everything about the Iraq-China agreement and the extent of its “danger and usefulness” » Baghdad News Agency today

Baghdad today-Baghdad

Although Iraq’s agreement with China, known as “oil for reconstruction”, came into effect through a project to build 1,000 schools in various Iraqi provinces, many economists have questioned the feasibility of projects arising from this agreement and the extent to which its provisions can be implemented. .

The Iraq-China agreement was first announced during the time of former Prime Minister Haider al-Abadi, and then when former Prime Minister Adel Abdul-Mahdi visited Beijing in September 2019, as the agreement includes areas of energy, reconstruction, bridges, housing projects, etc. but the first steps of the agreement were translated on the ground during the rule of the government of Mustafa Al-Kadhimi through the project to build 1000 schools, which came into force in the past few months of this year.

Chairman of the Education Committee in the House of Representatives, Jawad Al-Ghazali, believes that the agreement came late and that the reality of education needs new allocations within the next budget to ensure the elimination of the acute deficiency in the preparation of schools, and even double. and three shifts.

Al-Ghazali said (Baghdad Today), “The agreement for the school project is facing difficulties, since there are provinces where work has already started, and there are those that are waiting for the allocation of suitable land for the project, as is happening in Najaf province , which is still waiting for this award, but the project will cover the needs of the provinces.” according to the settings you need.

And between supporters and opponents of the idea of ​​the agreement itself, especially since there are those who see that Iraqi oil is mortgaged to Chinese will and that it is the beginning of the completion of China’s Silk Road. Others wonder about the possibilities of implementing the terms of the agreement, as seen by the government’s financial and economic advisor Mazhar Muhammad Salih.

Salih (Baghdad Today) said that “there is no concern. The sale of Iraqi oil to China and the countries of East and South Asia is generally based on pure and accurate commercial grounds, and China is an important customer for Iraq, but the problem is in the implementation of the agreement, because the first part refers to the financing from the export revenue that normally takes place, but the other part, which refers to credit financing (borrowing), requires the availability of legislation for the general federal budget, and this is what we expect in the budget for 2023 projects that will be included and implemented at the expense of the framework cooperation agreement between the two countries in order to maintain the agreement.

He continued: “The goal of the agreement is for projects to be implemented by agreement between government agencies in the two countries without the intervention of intermediaries and beneficiaries, and the goal of this is to avoid the phenomenon of inflated costs of contracting implementation in Iraq, which unfortunately became a common phenomenon after 2003 and was called ( price of Iraq) by one of the gates of attrition.” Public funds through increasing implementation costs.

He added: “The agreement is the key to cooperation through oil policy and financing in exchange for the reconstruction of Iraq. The first two parts include the use of proceeds from oil exports to China amounting to 100,000 barrels per day of the total daily amount of Iraqi oil exports to China, which exceeds 800,000 barrels per day, as the proceeds of 100,000 barrels are earmarked for spending on construction projects in Iraq through competition with Chinese companies, including the 600 Schools Project, Nasiriyah Airport, Al-Bidaa Canal, and a number of water and sanitation service projects As for the second part, these are favorable loans given by Chinese banks under the guarantee of the China Export and Credit Guarantee Agency (Synosure), which is spent on electricity projects and others, according to the investment budget, with payments in the amount of 1 .8 billion dollars each, with the credit line not exceeding $10 billion over the 20-year term of the agreement.

And the visions of skeptics about the feasibility of the agreement and even its harm to the Iraqi economy go to the idea that it is not built on fixing the price of oil or subjecting it to changes in the global market, which could lead the government to commit another mistake against the Iraqi economy or revive it .

Economic researcher Ahmed Eid believes that the Iraq-China agreement was built according to political vision and personal interest, far from the supreme interest of the Iraqi state.

And that “there are many questions about the value of this agreement and the amount of interest arising from it that Iraq must pay in the future, which could lead to the depletion of monetary resources in the central bank, as well as leaving an additional accumulation of Iraqi economic problems, with the price not being disclosed barrels of oil.” In the agreement for a period of 10 years, which raises a clear question about the price of oil and the amount of interest that Iraq must pay during these ten years.

He also explained that “if the sale of oil is subject to the global market price, then this issue is considered positive from the economic side, but if the contract is signed at a fixed price for a period of ten years, then this is considered an additional fatal failure committed by government in its economic policy, and in any case, China will not be considered a losing party at any point, regardless of the paragraphs, it basically works and strives to strengthen relations with everyone in the region to ensure the security and smooth installation of the new Silk Road that it has been on for years worked, and this is one of the most important reasons that prompted China to sign that agreement.