(Thank you George for emailing this so Recaps can post it.)
UU6862 – “ While We Wait for Iraq’s Next Move ” by Mnt Goat
This ongoing RV process is like one big saga, something like sitting down and playing a nice long game of chess. Who will make the next move? What will the move be? Can you predict it?
Back in late October of 2015 I told you Iraq was about to make a major move of some kind in the currency reform process. I said this because all indications were showing us this was the case and all looked very good. Then we heard nothing but great news for almost a month. Then just as we got the good news came, they clammed up just as quickly. Our heads were spinning as we asked “what was that all about”…..lol…lol.
Then in late November we were disappointed when they told us they were “postponing” the launching of the 50k notes. Since they already previously told us these 50k notes were meant to “pave the way for the project to delete the zeros” we assumed they were very close to a major shift in currency reform. They told us they would be launched in early December.
So “here we sit broken hearted, thought we were going to exchange but it never started”…..lol…lol…
Then in late December they confirmed to us all these needed laws that remained and their priorities. They were setting us up for the next parliamentary session in 2016 that would begin soon. These articles confirmed so much to us. They gave us priorities and a sequence as to how they would mover forward and handle all these much needed laws. But no real timeframes. It appeared they would move very aggressively when they came back into session on Jan 19th.
Then in early January the IMF published their version of a news media MOU explaining what they were doing with Iraq in many aspects. We witnessed agreements were made concerning removing of all barriers to going global with the Iraqi currency. Most importantly dates were given and seemed to migrate towards February targets. But in reviewing these goals and referencing back to older articles, we can see that many of these goals were in fact already accomplished all but one. This was the necessity to standardize the dinar rate inside Iraq – market rate, auction rate (used in global trade), street rate and rate in Kurdistan. We were not surprised to read this since Parliamentary Finance member Tamini had been telling us this already for months in articles it was a major problem and one they needed to resolve. Now we read it was also the IMF telling them the same.
So recently there has been much news but no more major “chess moves” on the part of Iraq, at least the onese we watch and hope for. We still wait for their next move and I fully believe it is going to be BIG when it happens.
Am I saying this event(s) is going to be the RV?
NO- but it could as anything is possible at this point. However if you want my personal opinion I would have to say NO. We are looking more at some event in dealing with ISIS (start of the battle for Mosul) and/or the passing of some of the more significant new laws we wait for or perhaps more news of WTO and IMF actions upon Iraq.
Today is Wednesday January 27th 2016 and just 4 more days remaining in January.
Parliament is now in session over a week already and we have not yet seen much on the needed laws we have been waiting for.
Earlier this week we heard confirmation that the Amnesty law is agreed upon by all and ready for a final vote. Will they vote on it soon?
The 2016 budget has also been passed, ratified and in the gazette. It is now open for spending allocations, but no RV(as I said it is NOT any indicator of the RV anyhow, it was not in 2012, 2013, 2014, 2015 and it is not in 2016).
The problem of a huge deficit for 2016 still lingers as Abadi and parliament try to find ways to fill the gap. Now recent news that they are at least considering under study of increasing the value of the currency as an alternative solution.
Update: Needed Laws
NASSIF CONFIRM THE EXISTENCE OF A FULL AGREEMENT TO PASS A GENERAL AMNESTY LAW
Special - scales News
He confirmed a member of the House of Representatives for high Nassif, on Thursday the National Alliance, there is full agreement to pass the amnesty law in the new legislative term, indicating that there is a partial agreement on the Federal Court Act.
Nassif said, L / scales News /, that "there is complete agreement between the political forces in the House of Representatives on the amnesty law," noting that "this law possible to pass in the new legislative term."
She added that "there are some partial agreements on the Federal Court Act in order to also passed in the current legislative term," pointing to "the need to amend the election law and amend the law of parties, which did not emanate to figure out where you this, O Party, which may not reach some kind of consensus between the Political forces".
The House of Representatives last Tuesday for its first session of the second legislative term to Thursday.
We still await word on all the other needed laws.
Update: Currency Reforms
So I bring the article below which I believe is a very good summary of just where Iraq is now in their economy. Seems they know the problem with the economy but do not have the solution. The interesting part of the article is that this is the third time already we are hearing about the study underway of increasing the value of the dinar as an alternative to bridging the gap in the deficit. Sorry for the bad translation.
PARLIAMENTARY ECONOMY: CENTRAL BANK HOSTED BY THE PARLIAMENT SOON
January 25, 2016
BAGHDAD / News Network Iraq confirmed member of the Committee of Economy and parliamentary investment, that "the support of the Iraqi dinar and maintain the stability of its price against the dollar should not affect the reserve Iraq of hard currency", noting, "The committee will be directed inquiries on reserve Iraq of foreign currency and the way the central bank deal with this issue. "She committee member, Najiba Najib, Monday:" Parliament in the process of hosting the Central Bank after the resumption of its meetings to discuss the bank's actions towards the economic crisis experienced by Iraq, "pointing out that" Iraq is facing a financial crisis due to the sharp decline oil, in terms of financial budget for this year with a total expenditure of more than 105 trillion deficit accounted for 22.8%, and total revenues reached the 81 trillion and 700 billion dinars. "
THE GOVERNMENT PLANS TO RECONSIDER MONETARY POLICY TO COPE WITH THE CRISIS
BAGHDAD / JD /
The parliamentary finance committee revealed the intention of Parliament to discuss its proposal by the Government to reconsider monetary policy in Iraq to counter the financial crisis.
The decision of the Committee MP Ahmad Haji told / KD / The committee has prepared a set of proposals to address the threats to the country, including the financial crisis the government to reconsider the monetary policy of the country, noting that the House of Representatives after the end of the parliaments of the Islamic countries conference will discuss this proposal for submission to the Government.
He added that the Finance Committee and some of the relevant committees in the House of Representatives will hold a meeting with the officials in the government, especially Prime Minister and Minister of Finance, Planning and economic advisers and experts TO DISCUSS A NUMBER OF PROPOSALS TO ADDRESS THE FINANCIAL CRISIS.
Iraq has suffered from a major financial crisis because of falling oil prices to its lowest level since the Iraqi federal budget by 93% dependent on oil revenues, the Iraqi economy will inevitably be affected by oil prices.
Update: Abadi’s Ongoing Reform Program
Don’t know if you remember the package of reforms Abadi’s cabinet submitted to parliament for legislative process reforms. This was his first round of reforms for the new year. I included information on this in my recent news letters a week ago (LINK).
Looks like now another round of Abadi reforms coming up. I am not sure if I like the decision for replacement of finance minister Hoshyar Zebarai. There has to be a politica reason and so let’s see what the future news will tell us. Be on the lookout for it. Could it be he was not going along with the currency reform process?
Most of what Abadi is doing on this second round of 2016 reforms seems to be to save money on salaries. Looks like he is eliminated altogether three ministers by combining or eliminating them. We all know this is well overdue since there are way too many fat cats in that government that literally do almost nothing and get paid very well.
Recently we also heard news of the 28 abandoned presidential palaces from Saddam Hussein’s government era. These are property of the Republic of Iraq. They told us these are now being occupied by some government officials including one for Maliki and among others Iyad Allawi and Osama Najafi and Transport Minister Baqir Jabr. They still retain Palace each one of them.
They now have a file from this investigation in the Parliamentary Finance Committee for Real Estate of the state, including presidential palaces under investigation. It shows that there are some irregularities in the occupation of these buildings and that some titles for them have been transferred to some politicians through fraud and forgery. It is hoped that the presentation of the results of these investigations very soon.
In this regard, said the parliamentary finance committee member Majda al-Tamimi in an interview with Baghdadi News , "The Real Estate State file to finish and will display the results of investigations which show the extent of corruption and fraud in this file, including the presidential palaces file and will be displayed in front of the media Over the next few days.
These palaces are huge extravagant buildings. I might add that Abadi hopes to turn these palaces into museums to attract tourism in the future as part of the diversification process. So is the point of the investigation of the status of them.
My opinion – Abadi wants Maliki out of the palace since he still at times represents himself as a VP. So once again, Abadi is using the tactic of not singling out any one individual since many others too will have to move out of the palaces they also occupy. It will be interesting to see how this all works out. This is part of the power struggle going on and abatement of corruption.
ABADI REVEALS A FORTHCOMING RESHUFFLE IN HIS GOVERNMENT
IRAQ NEWS AGENCY (INA)
Written by INA Date: 01/25/2016
Baghdad - INA / detect Prime Minister Haider al-Abadi Nan an intention to reshuffle prospective in his government.
He stressed Abadi during a meeting this evening a group of media analysts and politicians, that "are untrue to be traded from the feminine to the government but also there is a cabinet reshuffle."
The press sources she noted earlier this month to some leaks about cabinet reshuffle prospective government, Haider al-Abadi, including pay and Education Minister Hussein al-Shahristani, to the post of Foreign Minister instead of Ibrahim al-Jaafari, and the REPLACEMENT OF FINANCE MINISTER HOSHYAR ZEBARI, Deputy former Prime Minister [Almrhq Rose Nuri Bhawess.
She added, "are also changing the interior minister Mohammed Ghabban Prime mass Badr parliamentary Qassim al-Araji, with the integration of the Ministry of Electricity with Oil in one ministry, the Ministry of Transport with the Ministry of Communications to take over Hassan Rashed this position and assume Bloc solution Chairman Mohammed al-Karbouli the position of the Ministry of Commerce, and the abolition of the Ministry of Youth, Sports and turn it into a body after the transfer of powers to the provinces.
Link to Part 2