From WealthWatch.World Forum
This from Butifldrm is in response to Sczin11 earlier post -- LINK
GM scizn Rolleyes . Iraq including the CBI is a HOT MESS! I made a comment in your chat thread about my feelings. I will bring it over here just to reiterate.
Great post OOTW and you bring some very interesting points. Iraq is a hot mess. There has been much discussion about the competency of Keywords, and you know my feeling about Maliki's abrupt appointment of Mohsen's position as the Head of the Central bank.
Days before Abadi took office Maliki took advantage of the situation. Mohsen was his Pawn.
There has been much discussion by Jobouri and parliament about these appointed positions, and the ability to form a technocratic government. Very few of these positions have been changed. Truly, everyone knows these positions were used/abused by the Maliki, for a government of corruption.
In my opinion no one in Iraq has the guts to do the right thing because of guilt,corruption and/or sectarianism, if so Maliki would not be walking the streets.
Iraq needs National Reconciliation and the Parties Law to move forward. Iraq needs to the be ability to persecute the guilty and institute some Rule of Law. Iraq will not be whole or successful until these things are achieved. Iraq is controlled by too many external influences.
Iraq is a Pawn not only of the US, but of Iran and other Middle Eastern influences, including ISIS. This is a sad state for any country. So let me get back to the CBI.
Now, this brings me to one point. Maliki, being a legend in his own mind, for one reason only, appointed a dolt like Mohsen to cover up his corruption. Ali Mohsen was appointed to the head of the CBI only as a tool.
Yes, OOTW you are right the CBI reserves before Mohsen were reported to be around the equivalent of $80 B Dollars in 2013. So where did that money go?
Did the CBI waste the reserves on the sale of the dollar or was it lost due to money laundering by the corrupt or both?
To compound the sadness the finance and economic committees have no clue. Seriously, the dismissal of Shabibi was a sectarian decision, and under Turki and Mohsen , the CBI still has the same problems.
Initially the Economic/finance committees were sure Shabibi was responsible for the loss of reserves because of money laundering, when the in truth there was and still is a lack of control of the borders.
Mohsen is supposedly going to be questioned again Sunday by the Finance/Economic committee about the spread between the CBI rate and the Market rate. The exchange tax for purchase of the dollar.
Shabibi spelled out the cause before and did so again this week. The CBI has to be independent under IMF rules. I don't see how the IQD could become an internationally traded currency until these things are achieved.
The Iraqi government cannot govern over the CBI limiting the sale of the dollar to 75M per day. The judiciary needs to come back ASAP with their judgement on this subject.
We still the majority of people in the government which are Shia and very much loyal to Iran. Iran is supposedly going to come out of economic sanctions at the end of June.
I know this is a far stretch, but when Iran comes out of economic sanctions maybe the money laundering and loss of reserves may be controlled. So here comes something else we need to understand.
The majority of economic intellectuals in Iraq have been removed. Iraq has elected people within the government who have no education in economic reform.
If Iraq chooses to play the IMF game, the government has to loose control of the CBI. There can be no limit on the CBI's ability to control the Market exchange rate.
Now do I believe that Mohsen is the right man ? Of course not! These people have no clue how the CBI should run. They/the GOI, believe the Iraqi constitution gives them the right to control the CBI.
The CBI banking Laws give the CBI the right of independence. There has to be some adjustments in the constitution for clarity, if they, the government of Iraq choose to be under the rule of the IMF.
It appears that the GOI of Iraq feels the CBI is depleting reserves to protect the IQD exchange rate, and I would have to agree. So they attempted to stop the sale of reserves by limiting daily sales of the dollar to $75M/day.
So what happened? They live in a supply and demand economy. The Cost of the dollar went up. You limit the dollar and the price goes up.
Recently, the CBI has allowed for more exchanges to trade the dollar and increase supply and guess what? The spread is even higher. It's the same old story. Let government try to control a market in any economy and watch things get out of control.
IMO, until Iran comes from under sanctions the GOI will do nothing to protect the borders or money laundering. Iran needs the dollar/hard currency and this subsequently drives the secondary/black market in Iraq. Iraq and Iran are supposedly signing agreements concerning money laundering and trade.
We will have to wait to see if these agreements have any impact on the black market. Somehow this all has to come together for this Iraq.
Those of us willing to study, will hopefully see Iraq move into an internationally traded currency with the value it deserves. I believe it's not going to happen tomorrow or any time SOON, but I'm still hopeful.