Update: Economy of Iraq
IRAQ CALLS FOR SWITZERLAND TO TRANSFER FROZEN FUNDS TO THE DEVELOPMENT FUND
BAGHDAD / JD / .. demanded that Iraq from Switzerland to transfer frozen his assets to the Development Fund for Iraq, while stressing the importance of the signing of memorandums of understanding between the two countries in many areas.
According to a Foreign Ministry statement received / JD / copy of it: Foreign Minister Ibrahim al-Jaafari received the Swiss Secretary of State for Foreign Affairs, Yves Rossier and his accompanying delegation in his office in Baghdad, and discussed with him bilateral relations and open up more prospects of joint cooperation between the two countries, the two sides touched upon talk about the great sacrifices offered by Iraq in the war against terrorist Daash gangs.
Jaafari and eighth positions of Switzerland and its support for Iraq in many areas, pointing out that Iraq is looking to establish better relations with various countries of the world to activate common interests and face common dangers serve all peoples.
He said that Iraq faces Daash terrorists who came from more than 100 countries, and is still in need of humanitarian aid, especially as it passes exceptional circumstances The economic challenge, and lower oil prices, the cost of the war against terrorism.
And he demanded transfer of Iraqi funds frozen in Swiss banks to the Development Fund for Iraq, and continue to support Iraq, and its support in various fields.
Jaafari called for coordination with one of the embassies of Europe in Iraq to facilitate the granting of entry attributes (Visa) for Iraqis wishing to visit Switzerland, stressing the importance of the signing of memorandums of understanding between the two countries in many areas, the most important industry, trade, and transportation, as well as to urge the Swiss companies investment in Iraq.
For his part, Minister of State for Foreign Affairs, the Swiss continued his country's support for Iraq, noting that he will discuss providing more humanitarian assistance to the displaced families with Iraqi officials.
So what do you think the USA will want in return for its guarantee of these loans?
AMERICA STANDS READY TO PROVIDE GUARANTEES FOR LOANS FROM THE WORLD BANK IRAQ
Twilight News / announced that the Iraqi Ministry of Finance on Tuesday that the US has indicated its willingness to contribute to provide guarantees for loans from the World Bank Iraq.
According to a statement issued by the ministry today responded to Twilight News, Finance Minister Hoshyar Zebari met with his entourage with Jacob if the Secretary of the Treasury and a number of experts in the US Treasury Department in Washington, adding that he was at the meeting to emphasize the cooperation between the two countries especially in the field of finance and economy relations.
The statement said US Treasury Secretary affirmed the continued support provided by the United States to Iraq directly in the framework of the international financial institutions, particularly with regard to reaching an agreement between Iraq and the International Monetary Fund on the standby credit arrangements.
The statement continued that the Treasury Secretary also stressed his country’s readiness to contribute to the loan guarantees, and mobilize support for the demands of Iraq during the next meeting of finance ministers from the Group of Seven, as well as at the summit meeting of the group which will be held during the last week of next May.
The statement pointed out that the other side has been to emphasize the need for cooperation between the two sides in the fight against corruption and money laundering, particularly with respect to drain Daash terrorist entity and prevent the arrival of the money to him resources.
The statement continued that the US Treasury Secretary said the support of the Iraqi economy and the fight against terrorism Kirkizin foundations for the stability of the country.
The statement concluded that it was also reviewing the delegation talks with senior International Monetary Fund and World Bank officials.
Update: Currency Reform
I included a recent article talking about the history of the Iraqi currency and the “project to delete the zeros”.
From this article we learn that they plan to delete the zeros by the year 2017. We learn about the obstacles now facing Iraq as to why they have not already completed the project. We also learn that the gap between the official exchange rate (dinars to the dollar) and the price of the parallel market reached 18% and this was unacceptable. The CBI managed in the recent years to reduce this gap to 6% and now they are telling us that possibily an acceptable level is around 7%.
This is interesting because, if you remember, last January I included a MOU between the IMF and Iraq on what they called the “MCP” (multiple currency practices). At this time the IMF wanted a gap no more than 2%. In fact I included an entire news letter mostly to this subject back in January too.
So this recent article is talking too about finally getting the MCP gap down however they now are realizing due to the security, political and economic challenges facing the country this 6% may be an acceptable gap and they are maintaining below the new standard of 7%.
At least we are seeing articles on this topic to delete the zeros and they have not given up on it. This is all good for us because this is where our money is going to come from as investors in the currency.
Please read article below. I tried to underscore and highlight the important parts for you.
IRAQI DINAR OIL BETWEEN THE HAMMER AND THE ANVIL OF POLITICAL CONFLICTS!
In the fifteenth of October / October 2003, the Iraqi dinar was born again in the true sense of the word. On that day, banks and banking started distributing the new currency and withdrawing dinars Saddam Hussein from circulation, especially that she was in a sorry state.
Not only it is limited to the replacement of the currency, but also extended to the adoption of a new monetary policy based on the principle of the independence of the central bank as a basis for any sustainable development, a qualitatively new and rare twist on the level of the Arab region , where monetary policy is usually a government.
Despite security and political conditions extremely complex central bank succeeded in subsequent years to achieve great achievements, most notably raising the value of the dinar against the dollar almost doubled and maintain the stability of Sarabv and the accumulation of large reserves of currencies Alognih reached in 2014 about $ 77 billion, up from $ virtually zero . This contributed to restore the confidence of citizens in the national currency.
However , the Iraqi dinar was soon faced economic and political storms it has lost a large part of its luster. Exchange rate between flexibility and consistency of what happened in mid - 2014 , it did not enter the country only in a severe financial crisis, but monetary policy also put in front of a difficult test, the collapse of oil prices mean record deficits large in the state budget, this is in addition to the increasing burden on the balance of trade and balance of payments.
Developments like a depletion of foreign currency, one of the most important pillars of the stability of the national currency reserves. Although Iraq 's success in raising oil production at high rates and reliance government in the hope of price recovery, but the reality is clearly says that the country is facing a structural imbalance will not go away soon.
Even assuming the success of the government - Abadi in the application package declared in the fight against corruption and the rationalization of expenditure, the bypass this imbalance will not be achieved without taking other radical reforms, including a review of where and exchange rate policy and give them greater flexibility. It is true that the diversification of sources of national income and the elimination of the phenomenon of the state sponsor overcome this imbalance, but this is a long - term goal is not incompatible with the use of instruments of monetary policy. The CBI has observed in mid - 2014 , increasing pressure on the dinar by the widening gap between the official exchange rate of the time (1.116 dinars to the dollar) and the price of the parallel market (1.397) to reach 18%, which opens the door to speculation in the currency.
Against the backdrop of these concerns the central bank announced at the end of last year , reducing the value of the dinar against the dollar by about 6% in the first step of its kind since the spring of 2003. Instead of 1.116 dinars Bank has recently started selling the dollar to 1.182 the same time raising the price of buying the dollar to 1.180 Dinara.
The bank hopes behind the reduction of the official exchange rate of the currency (or lift the dollar exchange rate) to reduce the demand for foreign currency on imported goods and the reduction of the decline of the dinar in the parallel market. Indeed , the gap between the two rates has recently dropped to 7%, the ratio seems acceptable.
Another effect is just as important to reduce the dinar exchange rate and is to get the Ministry of Finance on higher revenues. For every dollar of oil exports sold to the Central Bank will get the most dinars. The important question now is: Will this reduction is sufficient to overcome the suffocating crisis? It is clear that this measure is not enough, given that the structural imbalance requiring the Central Bank to adopt greater flexibility commensurate with the new circumstances surrounding the ethnic economy and to take further steps to reduce the value of national currency. And here it must be taken into consideration that the demand for the dollar witnessed a significant increase, not only for the financing of imported goods and investment projects, but also due to other factors that are considered fairly new, including personal remittances abroad.
Tens of thousands of Iraqis abroad retirees and others livelihoods depend on the funds that prevent them from Iraq. Iraqis also discovered again fun to travel abroad which means extra demand for foreign currency. All of these factors lead inevitably to the withdrawal of foreign reserves and declining balance, and this is what is already happening. Nor can the central bank in such circumstances the adoption of the principle of "Spend what comes to you in the pocket of the unseen!". Betting on the return of oil prices to normal is risky. And it may not be, of course, as some have sometimes suggested, thinking back to the state monopoly of foreign currency because it is the policy of outdated and represents one of the core aspects of the totalitarian state.
Hence can not be the central bank sufficiency administrative procedures to better monitor the currency auction and the fight against money laundering and others, but that the actual developments of the Iraqi economy imposed by taking other steps thought to reduce the dinar exchange rate in order to reduce the demand for hard currency. In addition to the positive effects of such a decision on the balance of payments and the state budget, it can also contribute to improving the competitiveness of local goods versus imported, while acknowledging that this effect will remain limited due to the weakness of the flexibility of domestic production towards the exchange rate policy.
However , the central bank does not still swearing by embarking on a further reduction in the exchange rate because of the political and social fallout expected such a decision. Any reduction in the exchange rate of the local currency would lead automatically to raise the price of imported goods, which covers the bulk of the domestic demand , which could trigger social protests. Of course, there is a populist political forces lie in wait, surely they will exploit any popular resentment potential as acard in its power struggle without any regard for the fate of the Iraqi economy.
Here it must be said that the lack of a unified political will is considered one of the key obstacles to the implementation of the necessary economic reforms.
A fact known to the central bank also during the controversy sparked by his project to delete several zeros from the Iraqi dinar. Struggle for "zeros" when calculating the value of the dinar against the dollar is currently number appears difficult to understand because it includes a number of zeroes after the comma. This decline is due to the extraordinary collapse in the value of national currency in the era of the tyrant Saddam Hussein. It is seen on the Iraqi state budget needs to be high abilities in mathematics and arithmetic in order to understand the millions and billions and trillions astronomical numbers it contains.
Even the authors of the budget in the wrong unit of measurement is sometimes confuse billion and a trillion. This situation is not uncommon , and also affect the cash trading efficiency and increases costs, as is often forced ordinary citizens to carry their money in large bags, let alone traders.
In such circumstances , it is natural (that embarked upon by many countries suffered from hyperinflation) be replaced with new ones currency more valuable. This is what the leadership of the central bank thought the era of former CBI president Shabibi, when preparing for the high professionalism of the project to delete the three zeroes, with an eye to raising the value of the dinar to become nearly one dollar. A move that would facilitate cash trading and financial accounts process and strengthen confidence in the national currency. It is also not a purely technical step loser nor winner and the only beneficiary is the Iraqi economy.
But the project quickly inset in the corridors of political and sectarian conflicts and raised about controversial phenomenon careful interest of the country and inwardly settle personal scores, especially since this period saw the aggravation of the dispute between the central bank and the executive as part of an effort for me arms crowned fabricated the charge of corruption of the leadership of the former Central Bank and the overthrow by way damaged the reputation of Iraq.
Following the appointment of a new leadership of the bank put the current governor and the agency on the Keywords project again pledged to implement it at the beginning of 2017, but there on the ground for what promises this, leadership of the central bank is well know that they are going in a minefield.
After trimming toenails former leadership seems that the bank became finds it difficult to maintain the independence and turned to self - defense and the site is obliged to justify any move offers them. This also reflects the currency during put 50 thousand dinars a class late last year. This step is very normal also raised a "political" debate and "economically" dominated by exaggeration and hype and shuffle the cards. In the midst of this controversy it seems that some people have forgotten that the new paper does not exceed the value of only $ 40, so the contribution to solving the problems of monetary circulation in Iraq remains limited.
Hence IT IS NECESSARY TO GO SERIOUSLY TO REVIVE THE PROJECT TO DELETE THE ZEROS AS A NECESSARY STEP FOR THE REHABILITATION OF THE IRAQI DINAR AND THE ISSUANCE OF MORE VALUABLE BANKNOTES IN ORDER TO FACILITATE PAYMENT FOR PURCHASES AND SALES.
But this goal will not be fully achieved without the development of the banking system and reduce the cash payment operations for the benefit of bank transfers and other forms of payment credit. But that requires a first - class citizen persuasion advantages of the banking system, an issue that seems difficult because of the security, political and economic challenges facing the country.
Update: Fighting ISIS
DAASH LEADERS FLEEING MOSUL IN POSSESSION OF LARGE AMOUNTS OF MONEY
04/17/2016 17:49 pm (Baghdad time)
Security sources reported that the leaders of al-Daash fled the Iraqi city of Mosul into Syria, with large amounts of money and property.
The sources pointed out that "the so-called Sheikh Osama, the chief of operations in the organization Daash near Mosul Dam, has fled to Syria with a large amount of money."
It was also pointed out that "the commercial director of the office of Daash known as Abu Hazim is the other had fled from Mosul with a large amount of cash and others like Abu Omar did and Abu Hajar two Kiedian prominent in the organization also had fled from Mosul and possession of big money."
In a related development, it is early in the month of March, a senior lawmaker Ahmed al-Jubouri revealed station FNA that the terrorists Daash were fleeing from the city of Mosul to the Syrian border, while joint operations to Iraqi forces in the provinces of Anbar, Salahuddin began to prepare to attack Mosul.
(Today, Iraqi aviation dropped thousand of leaflets over Mosul)
Most importantly please, please, please let’s not forget to keep praying for the success of THESE IRAQI AND COALITION SOLDIERS. I believe our prayers are in part some of the acceleration of the process we are now witnessing. Even though we may not hear much news about the fighting, I can assure you it is still ongoing and not yet resolved. Mosul is not yet fully cleared of ISIS.
Remember too to pray to the princess of peace – Our Blessed Virgin Mary. She has the ear of Christ and she can intercede in heaven and bring us the peace we all desire here on earth. We can not do it alone. I believe that if we all make this our daily prayer you will see change. It is already working even in the short time since I have been publishing this prayer section. It does not matter what religion you believe, if you pray then to your oven beliefs entity it is still the same powers and good for all of mankind. Ultimately it is all the same God anyhow.
“Lord, protect Abadi and all who stand with him in righteousness, the Iraq and coalition soldiers who are fighting the good fight against terrorism, that they would be shielded from the enemy and would be victorious against them in the battle for Mosul! We ask that the victory comes swiftly and healing of the Iraqi peoples and all whom have been effected by these evil doers can begin!
We pray for the swift reconstruction efforts of the bombed out areas once held by the enemy and that peace may prevail in Iraq;
We pray for the speedy process of all reforms against gov’t lead corruption and that all those responsible in the past are brought to justice;
We pray for currency reform, the full implementation of the Iraqi economy to full international status and the bringing of prosperity and wealth to its people“ Amen!
Till next time…. Auf Wiedersehen!
Peace and Luv To Ya All,