Update: Progress of Reform Laws
1)Islamic Banking Act, passed by the House of Representatives at its meeting on Thursday 10/1.
This banking act ensures that banking transactions are not inconsistent with the provisions of Islamic Sharia law, whether in the field of accepting deposits and providing other banking or in the field of finance and investment. Also the usefulness of banking services and practicing financing and investment are based on non-basis interest in all its forms.
2) second reading of the Law of the Three Presidencies
Two term (8 year) limit for each of the three president positions in Iraq meaning the speaker of the house, the formal president and the prime minister. I believe this law is not needed for RV but surely puts more nails in the political future of Maliki in Iraq. It does add to the political stability of Iraq.
We have already seen the Parties Law passed in parliament in mid August and I feel this presidencies law goes hand in hand with it. This week we heard that the 60 day implementation deadline for the Parties Las is coming up soon (mid October) and so they are once again telling all the parties to file and what the procedures and criteria for a legitimate political party will be in the next elections. No excuses and can’t say we did not know!
3)We are told that the Investment Law also is done but we still await the formal announcement (much needed for the RV).
4)We still wait for the National Guard, Amnesty and Accountability and Justice laws (high priority and critical prior to any RV)
Update: Cleaning Up the CBI
Next below I am presenting 2 articles today written about Dr Sinan Shabibi as he discusses the past and current financial situation in Iraq. I have to ask myself why now? Dr Shabibi has been very quit for a very long time. So why now does he decide to speak out?
I believe it is because he feels safe and less threatened by the goons of the past Maliki administration. The atmosphere is the government is slowly changing. He feels the Abadi administration is different and is making real reforms to create the political stability he needs to operate so now they can realistically address the monetary and fiscal policies needed to bring Iraq out of this economic crisis.
So the first article is very long and hard to read if you are not heavily into financial policy. It talks mainly about the state of Iraq’s economy and the role of the CBI. But most importantly it continues to talk about “STABILITY” and mentions it in the terms of the monetary (CBI management of the currency) and fiscal (responsible government spending) policies. Dr Shabib does not talk directly about the physical stability of the nation (fighting ISIS and militias) in this article but we know from past articles the CBI is very much concerned also about this aspect.
So I have been saying all along and emphasizing that the CBI needs STABILITY prior to any RV. Do you get it now? Read how many times he uses the word STABILITY in this article.
In the second article we once again see the corruption by former prime minister al-Maliki. I believe this is another exposure to the average citizen of what he has done to squander the wealth of Iraq. They are of course preparing the people for what is yet to come for this man and his goons. They must get political support away enough from him.
I quote from the article – “Director of the money laundering department allocate money laundering Iraq in favor of the ruling party and legal director gloss upon the Director of the banks control traders taking sold dollars to private banks associated with the ruling party and the prime minister, less than the market amounts making Iraq millions of dollars because of this lost daily corruption and the smuggling of the government's budget funds abroad in favor of al-Maliki and Gelaozath.
This is also very interesting on the magnitude of the money they are talking about that was squandered. You can see now why again they must clean up this money laundering and prevent it from happening in the future prior to any RV.
I quote from the article – “al-Maliki receive more money than all the rulers of the Republic of Iraq ‘together 'of Abdul Karim Qasim leader Saddam Hussein, it was being investigated by any unfinished mention the Iraqi people and homeland, it was enough to build a new home according to the latest international standards can accommodate up to 30 million people live in the well-being and stability of the security of all human beings in the world in which to live.”
Dr. Sinan Shabibi
The Central Bank supervises the cash flow in a way that prevents inflation, this is the main objective of the Bank, which did not fall within his or her duties or terms of financing productive projects (agricultural or industrial), these long-term projects, the Central Bank focuses its work in the short term. The basics of the work in the Central Bank.
It may be argued that lending to finance so it projects through banks, but lending is not possible without the initiative of the Central Bank to provide funds for banks. That lending to productive sectors, and payment period may take a long time and can interfere with the short-term nature of monetary policy.
If we are talking about the Central Bank's contribution to development is targeted by the Central Bank recently it mainly a financial contribution, to the followers of monetary policy not to under-estimate the contribution of development to the Central Bank such as price stability and financial stability and regulation of credit, according to article 3 of the Bank Act the Bank in line with its objectives to promote sustainable development. But the objectives of price stability and fiscal priority in all circumstances. That monetary policy makers to appreciate the importance of the relative weight of both stability and development, which goes for details of monetary policy and indicators. The issue of choice between stability and development are of particular importance when carrying the country's resources. We would like to point out here that when the Central Bank refused to lend the Government years ago did not have the Government choose between stability and development and the Government did not need real resources from the World Bank.
The Central Bank serves development and creates an appropriate environment through monetary and economic stability, the Central Bank's reserves is to support exchange rate stability and to economic stability, we are not just talking about savings, the cash reserve is used only when government resources are depleted or are on their way to disappearing, either saving it uses when there are no sufficient resources.
To illustrate this point we hash the article 3 of the law on the Central Bank between the goals of stability, development, article that ((the main objectives of the Bank stability of domestic prices and work to maintain steady financial system based on competition in the market. the Bank is in line with the above-mentioned objectives to promote sustainable development, employment and prosperity in Iraq)). This article includes part a stabilizing development part, deposits of banks in various bank facilities remain at the Central Bank and not Bank launched to the market (by tightening monetary policy and restricted) because the inflationary situation in this market there is a need for economic stability. But these deposits will go to market (by easing monetary policy) if there are deflationary situation as the situation of the Iraqi economy at present.
This transaction between the Bank and the market determined indicators of monetary policy used by the Bank as a policy. I reacted harshly difficulty to move the resources to market banks due to the security situation which has only one road access in the foreign currency market. The Government and the private sector to provide appropriate conditions in the market, both politically and economically, even moving some resources from the Central Bank, if the Bank decided to cut interest rates in various facilities, applicants will move into the market.
The latest Central Bank action, which aims to lend to banks and then sectors can come through the conversion of local currency through facilities provided by the Central Bank, the problem in this method using resources that could have a role in making monetary policy and expand its role and increase its flexibility. The global financial crisis has led to enter the Central Bank in the field of quantitative management policy matter which head the Central Bank to print money and lend to banks. This is not linked to specific sectors, and encourage this policy is the prevailing recession, that makes the goal of monetary policy, the Central Bank's transition from fighting inflation to growth.
The Central Bank's contribution to development is by easing monetary policy and the lack of emphasis or through creating conditions for financial facilities for developmental use as the Central Bank tries to date in Iraq. Inflation occupies a lower importance thus lending or financial assistance and generated growth acquired greater importance.
The World Bank lending for projects is long running, however any developmental nature of monetary policy must be driven by policy and not money, wrote me low interest rates, for example, or reducing the legal reserve. You should be careful of exhaust, it will require a reduction in the value of the dinar.
World Bank initiative should focus on monetary policy too lenient, allowing banks to funds used for development. In this case, the Central Bank will remain faithful to the monetary policy. There is no detail on how the resources will be provided as a result of the initiative of the Central Bank, but organizers have resorted to printing money, or use up or loosen monetary policy volumes, resulting in the loss of essential elements used in the fight against inflation, and for every undesirable consequences, notably weak purchasing power and exchange rate weakness.
The Central Bank should not lose its ability to protect the exchange rate and domestic price stability. Therefore there is a need for coordination between monetary and fiscal policy. For these recent policy must reduce the deficit considerably so you must steep austerity budget. Borrowing may be necessary, but most importantly is the ability to borrow shot, taking into consideration new circumstances in Iraq.
FORMER CENTRAL BANK DIRECTOR SHABIBI FORMER PRIME MINISTER NURI AL-MALIKI ORDERED THE APPOINTMENT OF FOUR MEMBERS OF HIS RULING PARTY IN THE BANK TO CONTROL THE MONEY LAUNDERING DEPARTMENT.
He explained that the al-Maliki appointed four of singled out his ruling large positions within the central bank and they are not with jurisdiction until the central bank influenced and took random hit Otunabh They Director-money laundering department, and director of the Legal Department, and Director of the banks control, and Director of the Economic Department ', pointing out that' Taking rampant corruption within the central bank by colleagues in the party al-Maliki. " He pointed out that 'the Director-money laundering department' allocate money laundering Iraq in favor of the ruling party and legal director gloss upon the Director of the banks control traders taking sold dollars to private banks associated with the ruling party and the prime minister, less than the market amounts making Iraq millions of dollars because of this lost daily corruption and the smuggling of the government's budget funds abroad in favor of al-Maliki and Gelaozath '.
And between that, 'then appointed al-Maliki cousin named Ali al-Moussawi, the governor of the central bank to plunder every provision of the Iraqi state in the amount of $ 67 billion in the last days of his dominance on the government to hand over power to Ebadi and the budget for Iraq empty and the Reserve Central Bank ravished to enter Iraq in a major financial crisis can not advancement which after a decade even if oil prices improved today '.
He added Professor Kadhim Jawad, quoting Professor Shabibi: The 'al-Maliki receive more money than all the rulers of the Republic of Iraq' together 'of Abdul Karim Qasim leader Saddam Hussein, it was being investigated by any unfinished mention the Iraqi people and homeland, it was enough to build a new home according to the latest international standards can accommodate up to 30 million people live in the well-being and stability of the security of all human beings in the world in which to live.”
Till next time…. Auf Wiedersehen!
Peace and Luv To Ya All,