kaperoni: Today’s chat is a “where are we at?” chat. These chat usually review previous articles or documents and also any events that may have occurred. kaperoni: Let’s get started…
kaperoni: The first article tonight is…
kaperoni: International report: bureaucracy and poor financial performance hinders the development - 06.11.2011
kaperoni: “confirmed the recent report of the International Finance Corporation, the investment arm of the World Bank that despite the lapse of almost eight years to move from a totalitarian economy to a market economy and the passing of legislation are still important economic bureaucracy and the weakness of the financial performance of the main obstacles to development projects in Iraq.”
kaperoni: This quote is pretty telling…that after almost 8 years since the war ended, there is still issues with “economic beaurocracy” and “financial performance” and that these are the “main obstacles” preventing development in Iraq. So once again, we can see, the World Bank is in charge of these reforms, and they are not happy with the pace of the work getting done. And we know why…as the world waits.
Read More Link on Right
kaperoni: Here is another quote…kaperoni: “mohammed Saleh on the report, saying that "the major problem experienced by the Iraqi economy and based almost entirely on imports of sale of crude oil to make both the Rafidain and Rasheed government dominate more than 90% of turnover in the banking market with 86% of the national cash flow, although they can not to this day to enter the global market. "
kaperoni: This is a great quote! Yes, they confirm that Oil is the main source of income, but more importantly, the economy is stuck because “they can not to this day to enter the global market” If you did not know before, you all should know, that the RV is preventing Iraq from transitioning to a free market economy. And income from not only oil, but agriculture and manufacturing within Iraq.
kaperoni: Another quote from Saleh when referring to these banks…
kaperoni: "overwhelmed by a large number of employees and treat each other bureaucracy far more difficult than the process of dealing between them and the customers as to the supervisory authority of the Central Bank on them and pressed toward the reformed are still weak, the data hinder the whole of any activities for development "
kaperoni: And another…
kaperoni: “As Saleh pointed out that "there is a process of re-structuring and reform of the system by which the banks, Rafidain and Rasheed with the support and partnership of international agencies and local government but this process is still moving very slow because of the resistance expressed by the two banks at the change in the status of the work."
kaperoni: Now this is my favorite quote...
kaperoni: “central bank to make a significant change in the near term at the reality of this sector which is still operating according to regulations and laws that do not fit and the development process.”
kaperoni: Ok…so we know what the problems are…. And we see about they are asking the CBI to make changes…and the result will be this below…
kaperoni: "allow access to international banking institutions to the country in order to move the wheel of development, particularly in the banking sector, where government policies and the transformation of existing systems without any achievement of concrete projects."
kaperoni: Ok…now this is where it gets real good…did you all see this article from Friday?
kaperoni: Central Bank of Iraq presents a project to decode overlapping jurisdictions - Friday 4/11/2011 6:15
kaperoni: Here is the quote…
kaperoni: “central Bank of Iraq, on Thursday, he put forward a project to separate legislation, laws and overlapping jurisdictions in the government institutions that hinder the promotion of economic development and reduce the administrative bureaucracy.”
kaperoni: Now we have confirmation. No only does the World Bank say there is a problem, the CBI admits it and is preparing laws to get things moving along. It is pretty clear, that this is “holding up the RV.”
kaperoni: Still not sure? Here is a quote from Saleh…
kaperoni: "The central bank will be put project on the Iraqi government to lift the interlocking laws that hinder economic development in the country and the abolition of the old instructions that do not fit with the direction of Iraq to expand the investment projects. "
kaperoni: Now you all can read RV today, or RV tomorrow, but here is hard evidence that there will be no RV until the CBI summits these changes and Parliament passes them. When does Parliament return? It is my understanding sometime around Nov 20th.
kaperoni: Here is another quote…which confirms everything…
kaperoni: " released by IFC is a true reality and diagnosed by the Iraqi government, which requires a comprehensive reform of the laws, regulations and overlapping jurisdictions that impede the implementation of economic projects."
kaperoni: This is simply stating the IFC (World Bank) has diagnosed the problem (because they are in charge of this) and told the CBI…you need to pass these laws which are impeding your economic reforms and RV. This is about as straight forward as you will ever get and it is substantiated by not only the CBI, but the World Bank.
kaperoni: The IFC (world Bank) also this week made another recommendation…from this article …
kaperoni: CBI Emphasizes that the need for the opening of branches in all governorates of the country - 04/11/2011 09:32
kaperoni: Here is a quote..
kaperoni: “The International Finance Corporation, the Central Bank has called on Tuesday to the opening of branches in all governorates of Iraq to control monetary policy and maintain a balance with political finance.”
kaperoni: Saleh’s response was this quote…
kaperoni: “Saleh told the Kurdish news agency (Rn) that "there is no need to open branches of the Central Bank of Iraq in Iraq's provinces,"
kaperoni: This is good news for us. They feel they are in good shape and can manage monetary policy without new CBI offices in these governorates. As they say, the region at some point will have Rafidain and Rasheed banks and are more than sufficient as these are government owned. This is good news. IMO, if the CBI would have agreed, it could have significantly slowed the RV until these were offices were on-line.
Kaperoni: One more point, I believe these recommendations came out over a month ago…in the World Bank Report (and conference in Washington). But parliament has not been in session. So, as these past few weeks have proven, nothing has happened. These recent articles Imo are just pointing out what was already knew.
kaperoni: To wrap up tonight’s chat…let’s look at this article…
kaperoni: CBI confirms that it will intervene strongly to curb inflation if arrived at two places decimal places - 11/06/2011
kaperoni: I see many have talked about it already….and that is great as it is getting the word out that Inflation is our “RV asset” and the CBI's biggest concern.kaperoni: Let’s take a look at a few quotes…
kaperoni: “Central Bank of Iraq announced that it would intervene strongly to curb inflation if arrived at two places decimal places,”
kaperoni: Meaning 10% or higher…they will step in.
kaperoni: Next quote…
kaperoni: “saleh told a news briefing Sunday that Iraq has not seen since the 20-year decline in annual inflation to the level of one decimal place only during the year 2011,”
kaperoni: This is again confirmation of how proud they are of Shabibi and his work to lower inflation.
kaperoni: He continues with this quote…kaperoni: “He added that the benefit of inflation in Iraq in most facets importer due to the importation of food and rising global oil prices, in addition to higher pay rent houses internally, "pointing out that the bank is able to tackle inflation through the use of tools the bank cash correctly to bolster the Iraqi currency by controlling the levels of cash flow and enhance the purchasing power of the Iraqi dinar by using the signals of exchange and interest rate.”
kaperoni: This is again confirmation that the kind of inflation they are experiencing is “import inflation” due to goods coming into Iraq. And they can “enhance the purchasing power of the Iraqi Dinar” to fix this.
kaperoni: Admin –Bob posted today in the forums, a chart which reflected an anomaly today. That chart shows the New Iraqi Dinar appreciated about 39 points today from close last Friday. The exchange rate was 1208 : $1 and is now 1170 : $1 This may be a result of CBI action or it may simply reflect a strengthening in the USD.
Bob is checking into this more. You can monitor this on the Dinaralert homepage.
kaperoni: So, to end this chat, we can see the CBI does not want to sit idly by and watch their hard work lowering inflation be destroyed.
kaperoni: And yet, they confirm that there hands are “somewhat tied” in what they can do, until the reforms (including laws) are in place which will open and expedite the plans to a free market economy and international trade.
kaperoni: IMO, we are still a few weeks out at best…and possibly a few months out. Let’s hope late Nov or Dec Parliament achieves what is asked of them and gets this done.kaperoni: Done