Keeping It Real Through Facts!
I want this investment to pay off as soon as possible but wanting it to happen because someone says it is without the facts, to me is a waste of yours and my time.
The fact is, the Iraqi Parliament and the Council of Ministers amended the Custom Tariff Laws so they could be implemented in three stages for several reasons and here are just a few:
World Trade Organization Full Accession – Iraq needed to implement tariffs as soon as possible because it is a major part of the process of full accession, but they were not ready yet to implement them all, so what better way but to implement them in stages.
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This way they could get their full accession and gain more time to complete the things needed prior to the revaluation of the dinar.
You should all know by now that tariffs, when “all” get implemented will increase the value of all goods that will then increase inflation. If a balance is note made prior to all tariffs being implemented through an adjustment in both purchasing power of the dinar and Iraq’s Monetary System the tariffs will be counterproductive and all Iraqi’s will be harmed.
Other reasons that Iraq needed time before they could implement all the tariffs and raise the value of the dinar:
Demonstrators that are protesting for change are still active, how can the CBI with the help of the GOI revalue the Iraqi dinar with this going on?
The answer is, they can’t because the success of the Iraqi dinars future trading on the global market depends on the Forex investor’s belief that the dinar will gain value over time after it revalues and once it goes international.
The worth of a countries currency in a major part is perceived value and driven by not only that countries GDP percentage of growth but most importantly what people think about the stability of the country and its ability to govern itself! Perceived Value!
The fact is there are still laws that need to be amended or voted on, like and not limited to:
Economic Reform Law, the reason this is still not voted on can be answered by asking a simple a question, why should it? Let me explain by answering that short worded question:
Why should they vote this in when other things need to be resolved first, like the 2014 Budget?
The laws that encompass the Economic Reform Law itself and will enable the Reform Laws to work properly, like the amendments to the Investment Laws and the Banking Laws just to name a few. These and a few others must be done as well before we can see the Economic Reform Law voted on and implemented. One cannot happen without the other, is my point.
Here is a new one but we should all understand by now that Iraq is surrounded by chaos and that things are going to pop up, another reason for the additional time needed for things to get implemented.
Al-Qaeda and the Daash terrorist parties – like I commented on in response to Dr Tom’s questions earlier. On Dec. 22 the Iraqi Army tried to bring order to the Syria Iraqi border by taking on terrorist strongholds through consciences of all tribal and religious elders. Even though it did not work the way they wanted it too, it did bring these insurgents to the surface for all the world to see. Iraq may now get the real support they have needed to help them stand on their own, which in my opinion will help (if successful) the value of the future dinar as well.
Again, perceived value being a clue to the future investors of the Iraqi dinar once it goes international.
TIME – there are other reasons that the tariffs were amended to be implemented in three stages but I believe the main reason is that they need TIME, time to work out all the issues or at least the ones that affect the implementation of Economic and Currency Reform, two that go hand in hand.
If you have been in this long enough, you know that they tried to implement the tariffs ever since the law was passed in 2010 and the law was to be completely implemented by June 2012, hence the amendment.
Tariffs increase price of goods, revaluation of the dinar will balance the project out, floating the dinar on the world Forex will help increase the value over time as long as Iraq continues to grow, prosper through good governance but Iraq must complete the right things before any of this can take place, thus the stages of tariff implementation.
The great news folks is, the timetable has started and we all should be very, very grateful for that because unless an all-out civil war breaks out, I don’t believe there will be any more delays in the implantation of the tariffs.
Every day of every month in 2014 will tell us how Iraq is tracking for success. I know, I know, many will say we have heard this all before but the ones that follow the facts know better.
Have a great conclusion to a great day folks, Stryker