Thread: Archive News - Iraqi Dinar Think Tank - 01/10/09 - 27/03/10

A preliminary draft for the protection of Iraqi funds deposited in the Fund "DFI"

completed the Special Committee in charge of developing mechanisms to ensure the protection of Iraqi funds deposited abroad after the mandate of the Development Fund for Iraq money (DFI) in the preparation of its final report for submission to the Council of Ministers.

According to a statement released Wednesday by the Office of the Deputy Prime Minister Nuri al-روژ Shaways: The commission, headed by Shaways reached after a series of meetings to draft a preliminary report includes the provision of a work plan and timetable to ensure that the transition mechanism subsequent to the Development Fund for Iraq by the end of the year.

The project also includes a government plan for the consideration of debt and compensation claims inherited from the former regime and the liquidation of its files, and the committee will send its report to the Council of Ministers to be approved and submitted to the UN Security Council through the Committee on the Iraqi financial experts prior to the date when the first of next April in implementation of paragraphs (4 , 5) of the UN Security Council Resolution 1905.

The statement noted that the committee considers the draft report contained in the current proposals and recommendations can be fulfilled at the present time the obligations of Iraq over the UN Security Council resolution to complete the rest of the procedures and obligations of the Government in the coming months of this year.

This Committee was formed under the decision of the Council of Ministers on the nineteenth of last month, headed by Dr. روژ Nuri Shaways Deputy Prime Minister and membership of the Ministers of Foreign Affairs and Finance, Planning and oil, Justice and Central Bank Governor and Chairman of the Financial Inspection Office and Advisor to the Prime Minister of Legal Affairs.

The committee set up a mechanism to ensure the protection of Iraq's money had started its work in the twenty-atheist from January last year.

http://www.iraqfiels.com/index.php?o...-04&Itemid=280

Iraqi funds between the escape, smuggling
Smuggling of funds from the problems faced by any country. He spoke of this phenomenon for various reasons including lack of confidence in the national economy or the deterioration of security conditions.

In Iraq had been smuggling of funds practiced primarily within the narrow circle associated with the head of the former regime and its cronies. But after 2003 started to practice a wider withdrawal of money. May be the phenomenon of illegal capital flight are recorded in the books of the company or individual that is the transfer process and usually return the profits realized from the investment of such funds to their place of origin.

The smuggling illegal purpose is to hide the money, to erase any record within the country and achieve capital of the profits abroad do not return to the country of origin.

In Iraq, like any other country, is worsening security situation and political instability and rampant corruption breeding ground for the departure of laundering and smuggling.

Radio Free Iraq met with the Advisor to the Governor the Central Bank of the appearance of Mohammed Saleh, who returned to recall that the capital is known as a coward.

Counsel drew the appearance of Mohammed Saleh to the scarcity of information about the size of the problem in Iraq and rely on estimates that the smuggling of money the unforeseen, referring to Iraqi capital invested in real estate sector of Jordan, for example.

The Iraqi capital is concentrated in the neighboring countries, especially Jordan, where he works about three thousand companies that have commercial activity in Iraq, too, as Advisor to the Governor said the Central Bank of the appearance of Muhammad Salih.

And as adviser to the Central Bank of the size of the expatriate Iraqi capital of twenty billion dollars expected to return for the most part in the event of availability of suitable investment incubator. He considered that the most important conditions foster the right investment to reduce the scourge of corruption, admitting that administrative corruption is still a major problem and an obstacle to luring Kode capital. Mohammed Saleh expressed his confidence that the provision of suitable investment capital will restore the Iraqi diaspora is also encouraging foreign investment capital to enter Iraq when what I said risks.

The money stolen from the Iraqi people and smuggled abroad, confirmed the appearance of the central bank adviser Mohammed Saleh, said that this is a phenomenon linked to situational transition through which Iraq will end to nation-building strong institutions.

Theft of public funds take many forms, including in-kind form of smuggling subsidized fuel and oil and livestock.

Contributed to the audio file colleague Khalid Walid, who conducted the interview with the appearance of the central bank adviser Mohammed Saleh

http://www.iraqhurr.org/content/article/1970032.html

Sinan Al-Shabibi - CBI Governor says current exchange rate reasonable

The governor of the Central Bank of Iraq (CBI) on Monday said that the current exchange rate (1,170 Iraqi dinars per dollar) is reasonable, adding that the bank has enough foreign reserves to defend the exchange rate.

“The CBI is adopting a managed floating policy of exchange rate, through which a reasonable exchange rate is fixed,” Sanan al-Shubibi told Aswat al-Iraq news agency.

“The current exchange rate is reasonable and stable and can be defended by our vast foreign reserves, totaling $43 billion U.S. dollars at the moment,” Shubibi explained.

http://en.aswataliraq.info/?p=127815

CBI sells $93m on Monday

The Central Bank of Iraq’s (CBI) dollar sales dropped to $93.665 million in its daily auction on Monday, compared to $102.642 million in the previous session.

“The demand hit $8.240 million in cash, covered at an exchange rate of 1,183 Iraqi dinars per dollar, and $85.425 million in foreign transfers outside the country, covered at an exchange rate of 1,173 Iraqi dinars per dollar,” according to a CBI news bulletin received by Aswat al-Iraq news agency.

None of the 12 banks that participated in today’s session offered to sell dollars.

http://en.aswataliraq.info/?p=127811

High election turnout expected outside Iraq

Independent High Electoral Commission set Monday March 1 as the last deadline for political coalitions to substitute their banned candidates.

Justice and Accountability Commission decided meanwhile to allow Iraqi Republican Party to stand in elections in the name of its Secretary General Hashem Al Haboubi.

Election observers on the other hand expected the participation of about one million voters in elections outside Iraq which will start on Friday.

Iraqis outside the country will likely mark high turnout in elections that will take place in 16 countries, they said.

All preparations for elections outside Iraq have been completed, member of the committee supervising elections abroad told Al Sabah Newspaper.

Elections high security committee sent a prompt memorandum for all military and security forces announcing a state of utmost vigilance and banning days off for recruits starting Tuesday March 2 at 6 am till next Tuesday, March 9, an informed source told Al Sabah Newspaper.

http://www.alsumaria.tv/en/Iraq-News...side-Iraq.html

IMF E.xecutive Board Concludes 2009 Article IV Consultation with Iraq
Public Information Notice (PIN) No. 10/34
March 1, 2010

On February 24, 2010, the E.xecutive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Iraq.1

Background

The Fund has been closely engaged with Iraq since 2003. Initial work focused on providing policy advice, mainly on monetary and fiscal policies, and technical assistance to rebuild essential economic institutions. In September 2004, the Fund approved Emergency Post Conflict Assistance for Iraq, which—in combination with a debt sustainability analysis—paved the way for an agreement with Paris Club creditors. Since then, Iraq successfully completed two precautionary Stand-By Arrangements whose main objectives were to achieve macroeconomic stability; promote growth; and continue the process of structural reforms.

Substantial progress has been made since 2003, despite the difficult security situation. Inflation has been reduced to single digits, the international reserves position has improved markedly, and direct fuel subsidies were eliminated, while the pension system was put on a sustainable footing, which created room for priority spending on investment and the social sectors. Several steps have also been taken to strengthen public financial management, improve transparency in the oil sector, and rebuild capacity at the central bank, and the authorities have initiated the restructuring of the two largest state-owned banks. In addition, important advances have been made in attaining long-term debt sustainability. In 2004, Paris Club creditors agreed to reduce Iraq’s external debt by 80 percent in net present value terms. Also, bilateral debt agreements with several non-Paris Club creditors have been concluded, although this process is yet to be completed.

Iraq’s economic performance was strong in 2008, aided by record oil prices and improved security. Oil production rose to 2.3 million barrels per day (mbpd), the highest level since 2003. As a result, real GDP is estimated to have grown by 9½ percent in 2008, up from 1½ percent in 2007. Crude oil export receipts reached $61 billion in 2008—65 percent higher than in 2007—and the current account recorded a large surplus.

The government budget registered a lower-than-expected surplus of 1½ percent of GDP in 2008. This reflected a significant increase in government spending that more than offset the higher-than-budgeted revenues. This increase in government spending reflected in part a large wage adjustment to compensate for the erosion in real wages that had taken place in previous years.

Following the strong economic performance in 2008, more recently the Iraqi economy has been seriously affected by the drop in oil prices from their peak levels in mid-2008. Also, oil production and export volumes have not risen as much as planned due to insufficient investment; production reached 2.4 mbpd. As a result, Iraq’s external position weakened in 2009, with oil export proceeds falling to $39 billion and both the external current account and the overall balance of payments shifting into large deficits. With oil export receipts accounting for about 85 percent of government revenues, the lower oil prices had a similar impact on the government’s budget, which is estimated to have recorded a deficit of over 20 percent of GDP in 2009. The CBI’s international reserves fell by almost $7 billion in 2009, to about $44 billion by year’s end, reflecting the use of government deposits at the CBI to finance the budget deficit. Growth is estimated to have slowed to 4 percent in 2009, even though oil production improved towards the end of the year owing to efforts to address infrastructure bottlenecks.

Iraq’s longer-term economic outlook is strong as oil prices and production are projected to increase markedly in the coming years. However, based on conservative oil price assumptions, the external current account and the overall balance of payments are expected to remain in deficit in 2010 and 2011. Similarly, Iraq’s fiscal position is projected to record significant, albeit declining deficits in both years, before returning to a surplus position in 2012. Financing the budget deficits in 2010–2011, would require additional financial support to fill a financing gap projected at almost $5 billion, even after mobilizing substantial amounts of domestic financing and utilizing the recent SDR allocation amounting to the equivalent of about $1.7 billion.

Against this background, the authorities have designed an economic program for 2010–11 that aims to maintain macroeconomic stability during the period of political transition (parliamentary elections are scheduled for early March 2010) and deepen structural reforms, particularly in the areas of public financial management, the financial system, and oil sector transparency. In support of this program, the authorities have requested a new Stand-By Arrangement from the IMF in the amount of SDR 2,376.8 million (about $3.6 billion). This amount, together with disbursements from the World Bank under a Development Policy Loan and support from some donors, is expected to cover the financing gap for 2010–11. An important objective of the authorities’ fiscal program is to contain current spending in order to gradually reduce the budget deficit and make room for additional investment. Specifically, current spending in both 2010 and 2011 will be kept broadly unchanged in nominal terms at 2009 levels. At the same time, given the urgent need to improve infrastructure and basic public service delivery, a significant increase in capital spending is planned for 2010, following an under****ution of the 2009 capital budget due to administrative capacity constraints associated with security incidents that affected the Ministry of Finance towards the end of the year. Monetary and exchange rate policies will continue to aim at keeping inflation low in 2010 and 2011.

E.xecutive Board Assessment

Directors commended the Iraqi authorities for the progress in rebuilding its economy under extremely difficult security and political conditions. While the medium-term economic outlook remains favorable as oil prices and production are expected to increase in the coming years, major challenges lie ahead. Large fiscal and balance of payment gaps are projected for 2010 and 2011, caused by the lower oil receipts and infrastructure bottlenecks. Directors also noted considerable risks associated with security problems, oil price volatility, and capacity constraints. They welcomed the authorities’ strong commitment to consolidate macroeconomic stability and advance the structural reform agenda, particularly in the areas of public financial management and the banking sector. Directors underscored the importance of steadfast implementation of the economic program, which would help unlock much needed resources from other donors and multilateral development banks.

Directors considered that the 2010 budget, based on conservative oil price assumptions, is consistent with the program’s objectives. They highlighted the need to contain current spending, in particular through rationalizing the government wage bill and streamlining the in-kind Public Distribution System and transfers to state-owned enterprises. This would create room for targeted social safety nets and for essential investment and reconstruction projects, including improving public service delivery and infrastructure in the oil sector. Directors encouraged further reform efforts aimed at improving budget preparation and ****ution through developing a medium-term budget framework, and broadening the revenue base by introducing a general sales tax.

Directors welcomed the authorities’ continued commitment to strengthen governance and improve transparency in the hydrocarbon sector. Completion of the oil metering system would help facilitate the full reconciliation of oil flows with financial flows between the state-owned oil companies and the budget. Directors congratulated Iraq on becoming a candidate for membership in the Extractive Industries Transparency Initiative. They encouraged the authorities to establish a successor arrangement for the Development Fund for Iraq with the similar standards of transparency and accountability.

Directors supported the central bank’s objective of aiming monetary and exchange rate policies at keeping core inflation in single digits. They called on the authorities to remove the remaining exchange restrictions under Fund jurisdiction. Directors also encouraged the central bank to fully implement the recommendations of the previous safeguards assessment and looked forward to its update. The need to preserve central bank independence was particularly emphasized. Further steps are necessary to strengthen reserve management, banking supervision and prudential regulations, and the AML/CFT framework.

Directors welcomed the authorities’ good-faith efforts to conclude debt agreements with the remaining official and private creditors. They encouraged the authorities to continue to work with non-Paris Club creditors, with a view to securing debt relief on terms comparable to those of the 2004 Paris Club Agreement.

While welcoming Iraq’s participation in the General Data Dissemination System, Directors called for continued efforts to improve the quality, coverage, and timeliness of macroeconomic statistics.

http://www.imf.org/external/np/sec/pn/2010/pn1034.htm

Internet in Iraq, promising market and new opportunities

Despite the negative effect of the recent financial crisis on many market sectors, the internet in the Arab world has grown by 3,567% between 2000 and 2009.

54 million Arabs use the internet, and 300,000 of them are Iraqis. However, the number of internet users in Iraq has grown by 2,300% in the last nine years, and the number of internet cafes is increasing quite fast, which explains why companies like Google and Twitter visited the country to explore business opportunities there.

Mr Haydar Al-Rikabi, the manager of RadioDijla.com referred the growth of the internet in Iraq to the enthusiast of more than 60% of the Iraqi population, whom their age is under 35, to explore the internet. Also, there is a strong will to break out from the isolation of many earlier decades.

"Iraqis are very keen to express their views", said Al-Rikabi from RadioDijla.com, "We are taking this into consideration as we are developing our web portal, which includes discussion forums, chat, voice mail, commenting on articles and participating in polls."

The weak operational infrastructure poses a serious challenge for the development of the internet sector in Iraq.

The Ministry of Communications there has signed many contracts with foreign companies to overcome the current issues related to the internet.
The need for improvement has sparked a hot competition amongst companies of various backgrounds that are interested to get the biggest possible share of the market.

The manager of RadioDijla.com explained that "Iraq has a good purchasing power and a great need for various products and services. This situation creates a healthy environment for the advertising industry to grow and prosper."

He added, "Being a successful web portal in Iraq, we are sure to provide the best medium for those willing to reach out to the Iraqi market."

http://www.zawya.com/Story.cfm/sidZA...0opportunities

Iraqi minister says oil deal with Japan failed: report

Iraqi Oil Minister Hussein al-Shahristani has said that talks over a huge oil development deal with a Japanese energy consortium had broken down, a leading Japanese newspaper reported Tuesday.

Baghdad would "promote the development (in the Nasiriyah oil field) centred around an Iraqi state-owned company", he was quoted as saying by the Asahi Shimbun.

The field is expected to produce 600,000 barrels a day, which would equal 10 percent of Japan's crude consumption.

But a spokesman for Nippon Oil Corp, one of three Japanese energy firms in the consortium, said "the company believes the negotiations are still going. We don't understand what the minister really meant by his remarks".

Nippon Oil said in August the talks were "in progress toward an agreement" that would have set a new production volume record for Japanese companies.

Japan, the world's second-largest economy, has few natural resources and is almost entirely dependent on the Middle East for its oil.

Iraq held an oil field auction in December which increased its projected production to 12 million barrels per day within seven years.

During the auction, Baghdad awarded a deal to Malaysia's Petronas and Japan's Japex to develop the Garraf oil field, also in southern Iraq, which has known reserves of 863 million barrels of oil.

The Asahi said the Iraqi government of Prime Minister Nuri al-Maliki, who faces elections Sunday, has been criticised for granting too many concessions to foreign oil companies and was reluctant to give more deals to foreigners.

http://www.zawya.com/Story.cfm/sidAN...ed%3A%20report

Iraq names first envoy to Kuwait in two decades: report

Iraq has named Mohammed Hussein Bahr al-Ulum as its first ambassador to Kuwait since Saddam Hussein's 1990 invasion of the emirate, a senior Iraqi official was quoted as saying on Tuesday.

Foreign ministry under-secretary Mohammed al-Haj Homud told the Kuwaiti daily Al-Jarida that Baghdad was waiting for Kuwait's approval to send the envoy, with Ulum expected to take up his post within the next two weeks.

Ulum is a son of senior Iraqi cleric Mohammed Bahr al-Ulum and brother of former oil minister Ibrahim Bahr al-Ulum.

Kuwait appointed a former army chief of staff, Ali al-Momen, as ambassador to Iraq in October 2008.

Iraqi troops invaded oil-rich Kuwait in August 1990 before they were driven out seven months later by a US-led military coalition. Saddam himself was toppled in the 2003 US-led invasion of Iraq and later e.xecuted.

http://www.zawya.com/Story.cfm/sidAN...es%3A%20report

Iraq says it wants better Syrian ties

Iraq's vice president said in Damascus on Tuesday that his country wanted to improve relations with its neighbour, which soured following last year's massive bomb attacks in Baghdad.

In a meeting with Syrian President Bashar al-Assad, Tarek al-Hashemi delivered "a message from the Iraqi government expressing its commitment to developing bilateral relations in all fields," the Syrian Arab News Agency (SANA) reported.

In turn, Assad said he hoped Iraq's March 7 legislative elections would "return security and agreement among all components of the Iraqi people," the state news agency said.

It said that Hashemi, who arrived Monday, expressed appreciation for "Syrian support for the Iraqi people, especially by accommodating Iraqi refugees on its soil."

Bilateral relations between the two neighbours effectively collapsed last August after the countries withdrew their respective envoys in the wake of massive twin truck bombings in Baghdad, which Iraq says were orchestrated from Syria.

Baghdad accuses Syria of harbouring loyalists from the deposed regime of Saddam Hussein, who was toppled in the 2003 US-led invasion and later e.xecuted.

Hashemi, from the Iraqi National Bloc headed by former prime minister Iyad Allawi, told hundreds of Iraqi refugees in Syria Monday that the Iraqi government was slow in responding to their plight.

The United Nations High Commission for Refugees in Syria has registered 220,000 Iraqis in the country, according to Iraqi officials.

The size of the Iraqi refugee community in Syria is a sensitive issue, with Syria's Deputy Foreign Minister Fayssal Mekdad in January putting their number at more than 1.5 million and accusing Baghdad of failing to provide sufficient financial aid.

The Iraqi election is seen as key to consolidating Iraq's fledgling democracy and ensuring a smooth exit of US combat troops by August ahead of a complete American military withdrawal by the end of 2011.

Iraqi refugees in many countries, including Syria, are expected to vote in the elections through out-of-country polling stations.

http://www.zawya.com/Story.cfm/sidAN...0Syrian%20ties