_kaperoni: Today’s chat is from my Arabic translator friend. This chat is very compelling because it gives us an “inside” look at what is really going on in regards to the CBI’s efforts to move forward with the “delete 3 zeros” event.
kaperoni: My Arabic translator looked at the following article and subsequent audio recording. This information details the events in recent weeks between Parliament and the CBI. The frustration, the discussions and the political bureaucracy slowing down this event.
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kaperoni: Let’s get started…
kaperoni: Tonight’s information is based on this article first, then my translator discusses the subsequent audio interview/recording posted alongside the article…
kaperoni: Expert calls for a "real revolution" to change the economic laws - 8.11.2011 http://www.iraqhurr.org/content/article/24384630.html
kaperoni: These are his words...
Read More Link on Right
kaperoni: Hey Kap, Just took a look at the article and listened to the audio, and it all seems to be similar to what we've seen before. The new piece of information is stating that the draft bill to remove the 3 zeros from the currency was submitted by the CBI to both Parliament and the GOI for approval. The CBI states that, of approved, it would take them about 1 year to full transition from the old bills to the new bills.
The article talks about the same disputes back and for of why the change of removing the 3 zeros is necessary and beneficial to the Iraqi Economy in terms of monetary cash availability, decreased inflation, and increased purchasing power. The article states that CBI completed an advanced study for the 3 zeros project and included all that information with the Draft Bill that they sent to Parliament and the GOI.
However, the article states that there are still representatives that are unconvinced that the 3 zero removals would be beneficial and state that it would be better to wait for times of greater economic and political stability in the country to consider the project. The CBI and the author of the article state that these are just representatives that have their own political agenda and are opposed to the project for other personal reasons and are hiding behind that argument to gain certain benefits of not removing the 3 zeros.
The article talks about Representative Najiba Najb, who seems to be the head of the Parliamentary Finance Committee, and states that she is not convinced that the project is appropriate and that other things could be done by the CBI to stabilize the Iraqi economy and help to bring increased value to the Dinar, such as more investment projects, etc and she feels that the removal of the 3 zeros is unnecessary. Moreover, she states that she is not sure if Parliament will even get to discussing the bill this year due to their preoccupation with formulating the 2012 Budget.
The only other thing in the article states that there are many economic experts and advisors that back up the CBI in their vision for the removal of the 3 zeros and argue that those that are opposed to the project are simply not well versed in the workings of economics and have many unfounded concerns and that they, as well as CBI, assure the people that this is not a change to be feared and that it won't have a major effect on their daily lives, other than positive benefits to the economy.
In the audio, they interviewed Najiba and she states that she is requesting a new study to be executed by the CBI to be presented to the Finance Council regarding the benefits of removing the 3 zeros and she states that the Finance Council is concerned that the CBI is wrong in their position and that removing the 3 zeros would lead to an increase in the inflation rate from 7% to 14% and so she is not convinced that CBI is acting appropriately.
Saleh's rebuttal to her remarks was that the Finance Council is completely ignorant in the workings of the Iraqi economy and that CBI understands that this is the best option for the country and does not see the need for a new study again because they have already conducted many regarding the feasibility of the removal of the 3 zeros.
As the interview continued, Saleh sounded very irritated and aggravated and said that CBI was hoping to get the approval on the draft law because this is a concern that involves the economic affairs of the country and the GOI, and that's why they wanted to have everyone on board for the project.
A key piece in the audio was when Saleh addressed the deterioration of the value of the Dinar, discussing how 25 Dinar used to be worth well over $75 US Dollars (Meaning a Rate of $3+ Dollars) and now it is practically worth nothing and that is not good for economic development (which is what we've known all along and have been hopeful to hear someone state it in that manner) and that the removal of the 3 zeros would help to bring greater value to the Dinar.
The economic expert that was backing up CBI's position stated that it would be beneficial for all the reasons we know and it would reduce the Iraqi money supply for 27 Trillion Dinars to just about 15 Million Dinars, which is a massive reduction and would indicate greater value and purchasing power.
The audio goes back to Najiba and she states (as I said earlier) that she didn't think there was any chance of this bill being passed or even considered in 2011 because too many parliamentary representatives were scared of the potential negative consequences (especially those of counterfeiting the currency) of removing the 3 zeros and just don't want to deal with this highly contested issue at this time because they are busy working on the 2012 Budget and after they get that done, there will be a vacation break for Parliament (As if they haven't already had enough vacations for doing NOTHING!!)
The audio flips back to that economic expert and he again stresses that their fears are unfounded, etc. He goes on to say that he has studied the new currency in detail with the CBI and assures people that there were many problems with the development of the 2003 currency that lead to it being easily counterfeited and that the decreased value and massive availability and size of the money supply made it easy for people to counterfeit the 2003 currency but that the new currency has the latest technology and safeguards and that it is printed by foreign companies and would not have any issues with counterfeiting and such.
The end of the audio interviews regular Iraq citizens and they voice their concerns about prices going up after the removal of the 3 zeros and voices concerns about how the new currency would work and about equivalency factors with debts (So if someone owes a debt of 200,000 Dinars or whatever, what would that change to after removing the 3 zeros, and other such concerns).
My opinion on this is that, if all this conversation and fanfare is to be believed (as this could all be smoke and mirrors since we have seen hundreds of previous articles saying the same thing and that the bill was sent to Parliament and Saleh has re-stated the same things millions of times before) then it clearly shows the disparity and ignorance that is rampant in the GOI.
For the head of the Finance Committee to come out and say that removing the 3 zeros would INCREASE inflation and that it would be bad for the country???
Where did she study economic exactly and how is she the head of the finance committee? Moreover, and this is even more troubling, is the fact that it is clear that CBI has been completely ineffective in educating not only their own GOI and Iraqi Parliament members about the true nature of the 3 zeros project, but in educating the people as well.
They aren't going to convince anybody with just having Saleh do radio interviews and press statements every few weeks. They need to go into Parliament, doing some kind of logical explanation in front of all the Parliament members, and explain to them how economics works and how the 3 zeros project would work and address any concerns that they may have and give them concrete explanations.
It is almost like giving someone a book written in Greek to read when you know that they can't read Greek, yet you force them to take the book anyway. I don't know why CBI is even bothering to get anyone's approval, because with the situation that they are facing in the Iraqi Parliament, it is clear that these representatives have no clear understanding of the basic workings of an economic system and are going on incorrect folklore and popular street understandings that are completely incorrect and that they need someone to come in and explain it to them step by step.
They should have just gone ahead and done this long ago, and I am sure that Shabibbi is kicking himself to high hell for not acting on this long ago when they have such incompetent people in Parliament.
So, in the end, it is positive that CBI is trying to go ahead with the bill but highly disturbing that these are the people that they are trying to get approval from. If it is true that they must get approval from Parliament before changing the currency/increasing the rate, I am sad to say that we may be waiting for a long while based on the discussions and positions coming out of the Iraqi Parliament.