Wednesday, 6 February 2008 | By Aiyob Mawloodi

Ministry of Planning in a conference about the mechanism of improving the banking system.

As part of the long-term strategic planning for the Iraqi Kurdistan Region, the Kurdistan Regional Government's (KRG) Ministry of Planning organized a conference about the mechanism of improving the banking system in the region in a way that all the public and private sector could do their daily transactions through their bank accounts instead of using cash.

The conference was attended by experts in the field of financial markets and banking system, government officials and representatives from the Region's Central Bank and some other private commercial and investment banks in the region.

The conference elected a committee to follow the issue up and consult experts and prepare a report for the ministry for action.
After some investigations, they made some recommendations for the reestablishment of a modern banking system in the region with international standards.

According to Dr Sabah Toma, advisor to the KRG Ministry of Planning and member in the KRG High Economic Committee, the recommendations were approved and forwarded to the Region's High Economic Development Committee.

According to Toma, the committee is currently working on the recommendations.

"Some of the recommendations are about implementing credit-card system for public employees as well as for government institutions' purchases," Toma told The Kurdish Globe. "Others were about encouraging businesses and organizations to do all their transactions through banks.

Besides, recently the Minister of Trade signed an agreement with the American Enterra Solutions Company to establish a Business Center in the Region's capital city of Erbil. According to the agreement, Enterra is to implement several projects in number of sectors around Kurdistan among which was banking system and insurance sector. The company is planning to bring some specialists to do researches in Kurdistan on which the company is to set up its projects.

On the other hand, there are also plans to establish an E- government in the region with the help of several reputable international organizations specialized in Information Technology.

Lack of a dependable financial and banking system along with lack of an effective and well functioning e-government have been major drawbacks in the region and factors in delaying the economic development in the region.

The old and conventional way of governance and operation of institutions in the region have been the major reasons behind the excessive bureaucracy currently existing in Kurdistan.

"Lack of computerized system of governance and the bureaucracy has facilitated corruption in almost every institution in Kurdistan, private and public," said KRG official on the condition of anonymity. "There are people who benefit from this chaos and hate computerized systems, and they are powerful enough to be serious hinders on the way of computerizing the government."

Toma believes that this will be helpful in fighting bureaucracy and corruption.

"Any new procedures using IT help improve the situations," he said.
Many private banks have been established in Kurdistan in the past few years. However, they haven't yet been quite successful in attracting people's trust, thus still people prefer holding cash rather than depositing their money in the banks. On the other hands, still most of the supermarkets and stores in the market only accept cash for payments. Therefore having a credit card is considered unpractical in Kurdistan currently.

"Encouraging the businesses, organizations and institutions to use bank accounts for transactions and payments is one of the recommendations made by the committee," says Toma.