AdminBob Site Owner: Iraqi economist Mohammad Saleh appearance of time live market breakdown and impasse of 2014 is not valid for Exchange
July 29, 2013 Interviewed by khodayyir Abbas Abdul Jabbar
Back talk these days of the deletion of three zeros from the Iraqi currency against the backdrop of Iraq out of Chapter VII sanctions as achieves positive goals, and contribute to the reform of the management system, and strengthen the confidence of citizens in the national currency at the expense of the dollar and the other effects of the subject project opponents have doubts on the timing and implications and forgeries and attendant corruption and money laundering.
On 17 may 2013 President Barack Obama to extend protection to the Development Fund for Iraq to continue for an additional year until mid-2014, this is already a decision Iraq out of Chapter VII sanctions for more than a month, the question what is the Iraq Development Fund money?
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Does the UN resolution 1483 remains valid under which established the Development Fund for Iraq, which indicates that the Fund be used for the benefit of Iraq, but did not indicate that it belonged to him? Does this still valid resolutions after Iraq from Chapter VII sanctions.
There are requests to lawmakers on the background of the increase in Iraq of foreign currency reserves which stood at 76 billion dollars as well as 30 tonnes of gold bullion reserve investment.
These questions and others interviewed some time known Economist Dr. Mohammad Saleh appearance and follows the Development Fund for Iraq as it is currently a quality economic necessity and what does this have to do with the renewal of protection by u.s. President Obama?
Let's start from the fact that Iraq under resolution 687 of 1991 had all the costs of the war to invade Kuwait, and its result, and thus carry historic responsibility for this Iraq war, part of the arrangement, while Iraq signed a memorandum of understanding of the oil-for-food and drug administration in 1996 with Kofi Annan and this program aims at two things:
first, to alleviate the suffering of partial and provide food and, more important, the aim of the oil revenue, go to fund 30 covers that The payment of compensation to Kuwait plus 4 pay the costs of the inspection teams,
and for the success of this program, the mechanism by which open account in the name of UN Secretary-General Kofi Annan, French Bank in New York, Kofi Annan, is to pay, and supervised by, a stirring account.
Iraq exports oil and oil revenues are deposited in this Bank and the Secretary-General, Iraq begins with the opening credits for the purchase of food, medicine and materials allowed and prohibited masks, for example as to prevent import of pencils.
Companies and demanding Iraq confirms receipt of the material and the Secretary General directs the corporate payments processed through appropriations.
All these funds under the control of the Secretary-General not to Iraq the right to dispose of the AED.
The former regime put him opposite the after-sales services, companies must take into account open at a Lebanese banks $ 10 of the contract amount, interest amount oversized here began financial and administrative corruption as emerging, for example, tons of buckwheat b $ 350 inflated for up to $ 600 according to the mechanism of corruption and economic book price $ 30 to $ 300 for the Iraq account
The Ministry of higher education. Deposited 10 companies account for Iraq under fictitious names, and then start the embassies in Beirut and Damascus, Iraq and Oman collects these funds cash and send them to the Central Bank of Iraq, so the system could collect more than $ 2 billion.
In an account registered as presidential, after the change in 2003 issued meise resolution 1483 several closed oil-for-food programme.
So it has to be a new mechanism is more flexible than the previous mechanism was established for the account of the Central Bank of Iraq at the Federal Reserve Bank rather than a French Bank
in this Bank all imports of oil, gas and petroleum products, and any other frozen funds are released, deposited in this Bank, but keep oil revenues is essential in this Bank,
and will be subject to this account as follows Iraq Government ActObjects through the guidance comes from the Central Bank and the Prime Minister,
at first it was Bremer's Coalition Provisional Authority Chief and Finance Minister and then the Prime solution which gave Cabinet Secretary instead and Finance Minister in the Iraqi Government, coming as paper payments, any payment order includes a convert to Iraqi bank,
for example, to create the Iraqi dinar, dinar issued this way and built its reserves or convert to that. PHP. Any T.B.I TBI founded the Bank to finance imports by the Government, for example, to pay the Department of Commerce or health needs.
Money in the Bank is a subsidiary of the Ministry of finance, managed by the Central Bank of Iraq on behalf of the Ministry of finance. Now the mechanism easier for us but what changed?
The decision in 2004 to establish a State Council to control and check this Board that Iraqi oil is sold to international standards, and is not sold at the price too high and low.
In terms of price and marketing. In order to ensure proper position of funds within the Iraq account, and the funds drawn by the Iraqi Government are for the benefit of the Iraqi people.
This Council consists of a representative of the United Nations and a representative of the Arabic League and said Iraqi finance representative to the Iraqi Government wanted to create a mimic of the Shura Council called the Committee of financial experts, chaired by the President of the Committee of Kofi Office of financial supervision and accompanied by three financial experts.
The State Council has its international accounts ttdkik company accounts in accordance with international standards, each year to check invoices, payment orders, and the health of the breasts, and where did they come from? How behavior?
And the Committee of the Shura Council by Kofi mimic the same mechanism continued this course to 15» 12» 2010 as issued resolution 1956 on the Development Fund for Iraq for the protection money, while the registered account, Kofi Annan, were 100 percent protected, and such funds as long as they are registered in the Development Fund for Iraq is also protected 100 percent,
but this does not prevent it may be subject to seizure in accordance with the laws of America, given the implications of America's responsibilities as the occupying power of Iraq there is validity to the US President to release Ommar emergency or To protect u.s. national security, whereby it is possible to exclude any State funds into America from any court decisions on the protection of the funds and called this presidential executive order by Bush since the establishment of the Development Fund for Iraq in 2003 until the present renewed each year.
What do you mean by protection money and threatening this protection?
Protection means no complaints come from commercial creditors on Iraq and they are many, those whom have judicial decisions to seize Iraqi money where and whom in the process of the courts, and many of them have fake claims dust war hopes luck and had to take the compensation and trying to get it again, imagining there is no know. These forms and types.
AdminBob Site Owner: Private sector debt And fears of
The size of the private sector debt on Iraq and fears a catastrophic or dramatize her there?
These creditors are unknown, it is expected that the external indebtedness of the foreign private sector constitutes 20 of external debt on Iraq, those who complain, in fact had been the settlement of debts in 2006 when Iraq announced to each creditor debt settlement process aims to adjustment of debts to the Paris Club agreement if, for example, large indebtedness of $ 35 million,
Iraq gives him internationally and support this bond can earn interest through 5.8, in two instalments per year, 20 years after the grant 20 of any amount deducted under the mediation of 80 such machinery deducted 80 debt estimated at $ 17 billion to $ 2.7 billion debt and most of these bonds were sold on world markets, and is now in circulation,
in the beginning when the bond was sold, the dollar sold for 60 cents and currently sold by 90 cents is an indication that the Iraqi economy is moving in the right direction, as you point this increase at the same time, that Iraq is theSaniva trust, is now the default classification about my way of this classification, such as classification, Iraq does not have credit, but this approach, if Iraq Trust workbook.
The Security Council resolution No. 1956 in 15» 12» 2010 noted that United Nations resolutions ending 30» 6» 2011 no protection to the Development Fund for Iraq if the circumstance in this case available to each individual claim that driven.
There is debt less than $ 35 million, giving them a 10 from the Iraqi Government indebtedness cash these are junior creditors amounting to some $ 10,000 debt gives over 1,000 dollars, a ratio approaching Paris Club terms, calculated in accordance with the financial account with net present value benefit of 20 stretches for 20 years, those up to 4.5 billion indebtedness turned into $ 450 million in spite of all this, there are trade creditors insist on advancing their claims to obtain full Their debts, because each has a final rulings under which requests as well as the amount.
So those waiting for opportunities to seize Iraqi funds wherever you are to sign the seizure and execution to get their debts from Iraq.
What is the value of these debts have not been subject to adjustments and the owners insist they meet?
These debts are unknown, this mobile part not control so far, official Iraqi financial entities have their estimates, which did not disclose to the precautionary reasons, that this has not resolved yet, but by my calculations, the amount is not big and not fear him, but the allegations are feared.
There are prosecutors who we described them with job seekers luck understanding. Practically nothing left is important, partly because it came out of the books of account, because companies don't wait 20-year debt, accounts with more than 5 years.
If my personal is a modest amount of concern, and no country in the world, no complaints from the private sector until the United States exposed to it. In Iraq there is a legal Committee of the Ministry of Justice and the Council of Ministers, the foreign debt on Iraq and complaints with international lawyers are watching the movement maintains its permanent secretariat and work with discipline,
they work with professional financial experts, lawyers, and judges of the Ministry of Justice, and where movement claim they were responsible for its response, Iraq has received plenty of spurious litigation.
The extent to which the protection of Iraqi funds and fear?
United States at the request of Iraq, the protection of Iraqi funds, most applications will be completed by mid-2014, which now is protecting the Development Fund for Iraq funds that we run it and approach it, but has the same mechanism,
deduct 5 from each barrel of oil sells for Iraq, the question here is what is the nature of the Development Fund for Iraq?
Is a normal bank account works on the Opera called this account consists of two upper section lower section, the upper number involving oil revenues to the specified automatically deducted from day 5 to go to the United Nations Compensation Commission, for the transfer to Kuwait to pay compensation of $ 52 billion and the remaining $ 11 billion at the present time and the afternoon fall in 95 the Development Fund for Iraq in the open account in the name of the Central Bank of Iraq for the benefit of the Republic of Iraq.
The reason for this is the United Nations request for a single account to pay reparations to Kuwait, now out of Chapter VII sanctions, such compensation can be settled through bilateral dialogue between Iraq and Kuwait.
Some say this Fund was established to protect the funds of Iraq and did not say that it belongs to Iraq what your interpretation of this vision?
No, this money belongs to the Republic of Iraq in my opinion tolerates it another interpretation, not how we behave now funds within the account of the Central Bank of Iraq? The resolution, in accordance with the 1956 Act of 12» 5» 2010 money in the Development Fund for Iraq, are the property of the Republic of Iraq.
Today's proposals are raised regarding the deletion of three zeros from the Iraqi currency against the backdrop of Iraq out of Chapter VII sanctions and will have many positive effects and there are those who believe that the circumstance and timing is not suitable as it will provide an opportunity for a broader process of money laundering and currency smuggling what likok?
All civilized nations when circumstances or situation of acute conflicts or runaway inflation, then we see a small number of significant financial category value, Iraq went from 25 JD 1980, equivalent to $ 75, equivalent to 300,000 dinars at this time, to 25,000 dinars for the category is not tantamount to only $ 21 at this time and became a huge cash and block number arithmetic, Iraq moved from inflation as well as 9 to 12 billion to trillion.
The currency increasing proportion and fit with economic activity and economic growth, if continued growth wezdadt of oil revenues and the value of the currency and as such, there is a possibility we turn to ACE 15 and go to the post number is computational trillion then complicated time deals Iraq country alsghirbalkwantlion.
Question here or monetary policy monetary policy management reform, the reform process is the availability of two conditions: first, the availability of economic stability, which now gets, there is economic growth and a large block of foreign currency and the exchange rate relatively stable and, secondly, the availability of political stability and political will, the question if economic stability is whether political stability exist?
This question is difficult to answer. So the process entailed reform of my account, which will delete the three zeros from the currency, and when it will change all books, instead of typing 1000 will overwrite the start also need 1 of the fiscal year, which begins the general budget, the largest in the State budget, comprising 73 expenditure of GDP, Iraq is one of the largest countries in the world by public expenditure of the GDP, we are big States any bigger size of the State in the economy, it spending in the United States between 21 to ttrah 23 and State domination, if so the process to delete zeros should start with the beginning of the fiscal year, if we started to change the currency on 1» 1» 2014 is appropriate is time, the political climate helps.
The answer is, no, it's the year parliamentary elections, and not in political stability, replacing the currency in 2014 is questionable.
Any resolution needs a historic moment which corresponds to the political and economic stability in conjunction with stability.
All reported as well as the political will and on the monetary policy we need to switch all books, there will be two currencies at the same time for example, if someone gave you 1000 dinars, we hit the new dinar account so will calculate the new currency.
The process is very complex, plus historical references, as well as data on computers, and programs all will change digital Yeh Hassa when due to old accounts, you must delete the three zeros for the switch, in a country like Iraq not easy, going into so difficult and complex process, need the will and efforts of artistic, political and economic imperative of high class.
Only see necessary at the moment?
Necessary future accounts, you need a historic moment as I said earlier, either on the fear of counterfeiting and smuggling currency and hype exaggerated size.
I tell you this country from anarchy and stability even when counterfeiting and smuggling operations of this magnitude catastrophic? I think it's exaggerated perspectives and unreasonable and illogical, why? If you underestimate the ability of the Iraqis to this degree?
It is possible that the violation occurs here or there, but not to this degree of hype. And frankly may be behind some personal motives to undermine the project.
The question is that an appropriate time next year to switch currency say no, but my optimism project, so only the suggested projects in its currency rise and soar to the improvement and acceleration of economic growth, there is no country in the way, too, seeks to swap its currency, does not offer the only lucid thought, in a country with rapid economic growth.
Is said to cover the currency in Iraq now equals vulnerability, what does that mean?
This is part of the philosophy of economic stability required replacement, pain spreading above the need for economic stability, monetary stability, Iraqi currency stable, which covered more than doubled and that's a good thing.
For example, a Central Bank can pull all the Iraqi currency and replace it with foreign currency. This is part of the required stability, growth and economic development and help to accomplish such projects.
There are deputies consider that the high volume of foreign exchange reserves in Iraq to 76 billion dollars as well as 30 tonnes of gold bullion and exit Iraq from Chapter VII makes it necessary to invest this large reserve while the bank laws do not allow disposal of Iraqi reserves since your comment?
Central Bank reserves are part of the philosophy of sovereign wealth funds, but usually more liquidity to return the once large amounts of reserves it is possible to enter into investment beat return on liquidity, meaning that enters the greater financial investments, real investments, in the thoughtful does not threaten the safety and liquidity of such investments.
In this case use of the reserve is fully or partially?
Use are partly estimated as needed, a Central Bank reserves are a debt owed by the Central Bank by Iraqi dinar holders, sovereign wealth funds were surplus from the public budget.
In countries such as Kuwait and Saudi Arabia are getting funds from oil and gas revenues, than about their needs, and the surplus go to sovereign wealth funds, they react emotionally by return on liquidity, for example in real estate and other investments.
And they call it in financial diversification, financial diversity process at home if you can't invest agriculturally and industrially invested in sovereign wealth funds like you invest in real investment sector in other countries.
Not fear these funds from financial and administrative corruption?
Here the question, need external financial professional, efficient management, and the International Monetary Fund has a Permanent Committee for guidance with regard to sovereign wealth funds, where there are 30 countries in the world have sovereign wealth funds.
AdminBob: Monument and its sovereign
Does Iraq possess sovereign wealth funds?
Iraq does not have sovereign wealth funds, government revenue, two-thirds of its revenue into his salary and wages of dinar and one third of the foreign currency remains open it for the purpose of financing trade, such as the Ministry of Commerce to import ration, Ministry of electricity imports, the Ministry of health.
And the rest goes to other budget, the remaining so-called sovereign wealth Fund is simple possible stabilization fund called evolve to protect the budget from fluctuations in oil prices and is part of sovereign wealth funds.
World Bank commends the draft reform of the banking sector in Iraq. What happened and what its impact on the economic situation in Iraq?
The International Monetary Fund and World Bank concerned with development the sector in Iraq, mean by financial markets, banks, Government or private, and the Iraq market for securities as a secondary market for the capital market.
The theme of praise, they sometimes express negative remarks on the performance of the banks, but this does not mean that the sector is evolving and not the level of ambition, and it is not reasonable that the banking and financial sector has not developed, the number of accounts increased and set up branches there, and then the private sector external trade funded and managed by why this trivialization?
The banking sector is the only sector that runs and drives the market, despite all its shortcomings honestly is most active in the country there are flagrant and exaggerations by encroaching on the private banking sector, but this is not exempt from him some of the problems and abuses,
it is on the right track with some irregularities but they are routing and processing through the accumulation of expertise and experience.
Generally are selling and errors occur in all countries of the world and it's not disastrous banking sector has seen more liberal market transition in Iraq
The Central Bank of Iraq asadertalimat in the year 2012 that enables private banks to import foreign currency including USD, who owns the import right is right?
Yeah, right. Updated time banks experience applied because of the lack of b-cache why don't we import our existing world applications, especially for tourism purposes, in the Iraq Central Bank sells dollar cash unit however finished and published in the Iraqi Gazette help in the middle of last year allowing private banks after scrutiny by the State Council, import foreign currency reserves or assets out of Iraq,
but with conditions and pass through the Monetary Authority, and scrutinizes and sold an action against Money laundering, there are instructions on the facts, join this work but the Bank is selling the dollar to banks.
Can you explain to us the difference between the concept of money laundering, smuggling of funds?
Iraq under the Convention on the International Monetary Fund and in accordance with resolution 1483, which demanded that Iraq return of normalcy to the International Monetary Fund and the World Bank Hrralhassab current balance of payments, which means the balance of goods and services and transfers from one end of any restrictions and the right of any individual to import whatever he wants and issued what he wants from without any restrictions,
so the Iraqi Central Bank canceled the circle of foreign exchange controls, and canceled all the instructions that restrict foreign remittances, created for that anti-money laundering department.
It is your right to be converted for the purposes of claiming to be for trade, provided that such funds clean subject to Law No. 93 of 2004 the law against money laundering and funds crime and terrorism and established a department to combat money laundering within the central bank and founded a department to combat money laundering in banks and other outside banks, in security At the national Interior Ministry and Interpol .. Cooperate with each other to combat money laundering.
Money laundering means there money is being handled at home or abroad, the money resulting from a crime such as money selling drugs or arms trading funds .. A broad and long series of other methods of money laundering.
The question here, is in Iraq to the Iraqi capital to invest abroad outside of national incubation Center, for example, can the investor that comes out $ 1 million to invest outside Iraq in Sudan or buy a factory in Somalia are allowed?
This question is answered, does Iraq harrhasab a head money of the balance of payments or not edit it? There is no answer. So who wants to leave his money rely on import under the pretext of trade, and this behavior falls within the smuggling of funds. It swelled the list price that way evade.
In the general context of the Iraqi State and Constitution of the Iraqi economy is a market economy but in government departments and institutions is under a central economy permeated engaged in Iraqi economic identity?
The problems and foul up a large part of the Central thought of the directions we are clear in our economic policy, so weak economic identity. We are in fact living trouble part market.
The Iraqi Government should consider two things, study the subject of the Iraqi capital, and a law to enter the Iraqi capital protection and a law governing the exit correctly and protected.
It is OK if the Iraqi businessman to come out $ 1 million to build a factory, for example in Somalia under the auspices of the Government, and part of the profits tax is paid to the Iraqi Government, there is nothing wrong with so why demand entry of capital into Iraq, and don't allow the Iraqi capital invested abroad.
What type of interest derived from the investment in Iraq and protect capital?
This freedom paid Iraqi capital abroad, to come to Iraq, while reassuring capital freedom of entry and exit of capital which allows creating comfortable investment climate, but this current repressive economic climate in Iraq in such a way that full of fears, and presentations like that comes out of the capital will not return, then will not come to Iraq to capital as such laws anthelmintics capital, thus we have contributed over existing laws to expel capital.
Smuggling money abroad
There are funds coming out and what your comment?
This is true, but to say exaggerated, today money out through money laundering from criminal offences, we vigorously pursued these issues as well as international law is international cooperation in this area is limited, and may not be exaggerated.
Overall profit opportunity today is in Iraq, it is not logical to take out money from Iraq and betting opportunities are scarce and research about the benefits of a simple reach 1, you will starve to death, the question of any crazy out money from Iraq, leaving profit opportunities enormous Aikarf curve that does not have a semi-any country in the world where the commercial market is open and profit margins are enormous,
generally those traders their money out and back, but they fear part of their money in foreign banks, as some concerns, such as tomorrow there is no money stopped transfers and according to the unstable security situation,
they do notreassured and this part a little of it while the bulk of $ 85 is an investor in the trade the 15 remaining are who deserted from Iraq must escape his money to buy him a house there and this case applies to more than three million Iraqis migrated or abandonment of Iraq
Those ofcertainly they have well and money properties .. How they described? How Iraqis lived in Syria after the change and the events of 2005 and 2006? Then there are transformations taking place across the Rafidain Bank for retirees.
According to the economic growth and the fulfilment of international obligations Iraq is it possible to classify Iraq credit?
Opportunity and possible entry into Iraq, and begins with the credit rating of bonds sold in the international market, as it can give a picture of the economic situation in Iraq which the creditworthiness of Iraq especially after graduation from Chapter VII and through credit rating can be obtained.
Kaperoni Moderator: This is a really good article Bob. Thanks. Its going to take some time to digest it...Anyone is welcome to chime in. What I see initially, Saleh is stating they need to move forward with the currency reform.
And if the excuse is "political stability" next year is an election year and they will use that as an excuse as well. He also says at the end, that the GOI is afraid to open the economy because they are afraid they will take all their capital and leave Iraq. Saleh said that is non-sense since their is such potential for success and profit in Iraq.
I also like this quote...
"Is said to cover the currency in Iraq now equals vulnerability, what does that mean?
This is part of the philosophy of economic stability required replacement, pain spreading above the need for economic stability, monetary stability, Iraqi currency stable, which covered more than doubled and that's a good thing.
For example, a Central Bank can pull all the Iraqi currency and replace it with foreign currency. This is part of the required stability, growth and economic development and help to accomplish such projects. "
This implies to me that they will use the currency auctions to pull all the dinar off the streets in Iraq and dollarize (replace with foreign currency) prior to implimenting this event. That is how they will reduce the money supply. He finishes basically saying that is part of the plan.
This should be a good thread over the next few days with Enorrste, Tlar and others commenting.
2COLLECTG: this is the statement that is awesome!
Iraq under the Convention on the International Monetary Fund and in accordance with resolution 1483, which demanded that Iraq return of normalcy to the International Monetary Fund and the World Bank Hrralhassab current balance of payments, which means the balance of goods and services and transfers from one end of any restrictions and the right of any individual to import whatever he wants and issued what he wants fromwithout any restrictions, so the Iraqi Central Bank canceled the circle of foreign exchange controls, and canceled all the instructions that restrict foreign remittances, created for that anti-money laundering department!
i bought this stuff for a penny i just want to sell mine back for a dime!
2COLLECTG: normalcy 1,5,10,20,50 &100 denominations! great artical adminbob!!
--i bought this stuff for a penny i just want to sell mine back for a dime!
ZenMav Moderator: I think another misunderstanding that has been exposed in this article is the notion that the DFI would in some fashion be used as a direct fund for rebuilding Iraq, like en escrow account that would pay for infrastructure as needed. But, it appears that the design & intention of the DFI has been to join the reserves of the CBI to assist the CBI in maintaining & defending the rate of the dinar as it rises in value.
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