Thread: Iraq/Dinar News. 09/05 to 01/14/07

Iraq seeks oil sector consensus

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BAGHDAD, 13 December 2006 (Associated Press)

Iraqi legislation intended to resolve the politically charged question of distributing the country's oil wealth is nearing completion, the chairman of a panel drafting the law said Saturday.

The distribution of oil revenues, the mainstay of Iraq's economy, is at the heart of some of Iraq's most contentious political issues, including the push by Shiite leaders to allow the oil-rich south of Iraq to set up a self-rule region similar to a Kurdish one in the north.
advertisement ''We have reached important agreements. I cannot put a timeframe on when it will be ready, but we are very keen on achieving that as soon as possible,'' Deputy Prime Minister Barham Saleh, a Kurd who chairs the committee, said. ''We hope that we will reach a comprehensive agreement that will enhance the oil sector and make oil a unifying factor to all Iraqis.''

He said, however, that key issues still need to be resolved, including ''the administration of the oil sector, deals and contracts.''

Oil Ministry Spokesman Assem Jihad said the government hoped that the oil legislation would encourage foreign investment in the oil sector.

Saddam, aides to be executed immediately after verdict confirmed

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13 December 2006 (BBC Monitoring)

Iraqi judicial sources have said that the death sentences handed down against former Iraqi President Saddam Husayn and two of his aides in the Al-Dujayl case will be executed immediately after the Court of Appeal confirms the verdicts.

The sources added that the judiciary will study the appeal presented in the case of the former president to either endorse or nullify the verdict handed down against him; his half-brother Barzan Ibrahim al-Tikriti; and Awwad al-Bandar, head of the former Al-Thawrah [Revolution] Court.

The sources noted that the court is considering the possibility of executing Saddam, Barzan, and Al-Bandar simultaneously and on the same day

Iraqi foreign minister affirms talks with Kurdish region on oil, budget

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13 December 2006 (BBC Monitoring)

Iraqi Foreign Minister Hoshyar Zebari has affirmed that the negotiations between the Iraqi central government and the government of the Iraqi Kurdistan region on the issues of oil and the government budget "are not stalled, because they are continuing". He noted that Kurdistan is part of Iraq and depends on Baghdad. Therefore, talks should take place about the general budget and the region's share in this budget.

In an interview with Al-Hayat during a visit to Morocco, which coincided with the meeting of the Investment Forum, Zebari explained that there is disagreement about the budget share of the regions. The political agreements granted 18 per cent of the general budget to the regions, while currently they are receiving no more than 13 per cent only.

Regarding the Kurdistan region's signing of oil contracts with some international companies recently without consulting the central government, Zebari affirmed that talks are taking place between Arbil and Baghdad to "reach a compromise solution acceptable to both sides." He said that the solution is for the central government to be represented in these negotiations and no negotiations to take place with any company without the participation of the central government.

Zebari said that the negotiations regarding the oil contracts also stipulate that "the region's government is responsible for resolving any disagreement pertaining to the oil contracts." However, he stressed that according to the Iraqi Constitution, "the oil wealth is the property of the people."

Responding to the fear expressed by some Arab officials that the signing of oil contracts by Kurdistan and the southern Iraqi region could lead to the partition of Iraq and thus could affect the oil sector in Iraq and the world, he said, "No one is demanding separation or partition. The political system endorsed by the Constitution gives the right to the region's government to have a sort of independence on the oil issue. The Constitution also gives the region the right to manage the revenues from oil, if this oil is produced in this region."

Zebari attributed the decision of international oil companies to invest in Kurdistan and not in any other part of Iraq to the fact that the region was not facing security problems like those the central and southern Iraqi regions were facing.

Source: Al-Hayat website, London

Sorry if already posted

Commercial exchange retreats between Iraq and Jordan

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12 December 2006 (Iraq Directory)

The substantial decline in commercial exchange between Iraq and Jordan during the last nine months of the current year is due to the difficulty of dealing with the road linking Baghdad to Amman, where goods are looted and trucks are stolen by armed outlaws, as economic experts say.

According to figures of the Jordanian General Statistics Department, the commercial exchange has declined between the two countries during the first nine months of this year, to about 335.1 million dinars compared with 388.4 during the same period last year; that is by 13.6%.

The imports from Iraq fell by 72.6% during the first nine months of the current year, up to 4.9 million dinars, and that is lower than the imports of the same period last year which were 17.9 billion dinars. The figures also showed retreat in the Jordanian exports to Iraq during the first nine months of this year to around 258 million dinars, compared with about 293 million dinars during the same period last year; that is by 11.9%.
The main exports to Iraq were: oils and vegetable gee, soap and washing formulas, as well as aluminum products.

In this context, the Secretary-General of the Jordanian Ministry of Industry and Trade, Dr. Montasser Al-Uqla, said that the rapid change in the prevention or permit of the passage of certain goods was one of the reasons that have affected the decline in Jordanian exports to Iraq, as well as the absence of a safety on the roads of truck and convoys destined for Iraq.

He explained that the government had asked the Iraqi side to revive a new trade protocol between the two countries, also submitted a proposal for signing a free trade agreement; however, both proposals are under study.

Al-Uqla said that the Convention will provide the legal framework for trade exchanges, and give a strong impetus to bilateral trade, as well as stimulating the private sector in both countries to establish investment projects in various fields.
He pointed out that both countries are members of the Great Arab Free Trade Convention, which gives them the opportunity to benefit from the full exemption from customs duties of a similar effect among all the Arab countries that are members in the Convention.

The Iraqi - Jordanian trade relations are under a trade protocol renewed annually, and include goods needed by Iraq from Jordan over the full year in return for oil received by Jordan from Iraq at preferential prices.

Despite the decline in the commercial exchange between the two countries, Iraq still maintains his position as the second on the list of trading partners to Jordan after the United States.

Sorry if already posted

Raising the value of the dinar against the dollar by the Central Bank, welcomed by economists

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12 December 2006 (Iraq Directory)

Many specialized economists in finance and monetary considered raising the rate of the dinar against the dollar sale by the Iraqi Central Bank an important step to control the volume of inflation.

They emphasized the importance of raising the interest rate up to 12% to curb inflation, which would lead, in the short term, to stabilize the price prevailing in the Iraqi market.

A depression and confusion in the stocks of selling and purchasing the dollar in most of the banking stores in Baghdad may accompany this procedure. Thus, it is necessary to follow up this dangerous turn in the Iraqi capital market. In press statements, a number of those concerned emphasized the importance of this remarkable step towards reducing inflation, raising the value of Iraqi dinar and reducing prices of goods and services.

The minister of planning, Ali Ghalib Baban, said that the Central Bank's decision, which came after extensive study, aimed at encouraging capital owners as well as the citizens in general on saving.

On his part, Governor of the Central Bank, Sinan Shabibi said that: "The aim of the Central Bank currently is limited in the fight against inflation, which reached about 76% and reduce its heightening, through the provision of better conditions for economic development, improving the performance of the banking sector and providing stability in it".

Shabibi said that among the reasons of inflation is the increase in cash circulation, which made it necessary to follow a new monetary policy, aimed at improving the dollar's exchange rate towards reducing its price several points in the auction, organized by the Central Bank every day to sell the dollar, to withdraw currency from circulation.

Director General of Researches at the Iraqi Central Bank, Dr. Madhhar Mohamed Salih, said: the Iraqi Central Bank is responsible, according to the law No. 56 of 2004, for dealing with inflation and reduce its levels. This principle forms the main objective adopted by the monetary policy in performing its duties. Accordingly, the Central Bank must set the priorities of its policies; meaning, the monetary policy to fight inflationary activities using the tools available.

He pointed out that monetary policy faces intermediate variables or objectives that show the relationship between the impact of these variables to reduce the general level of prices and the containing inflation. Among these variables are the stabilizing interest rates "the long-termed" and the stabilizing or real exchange rate. It is noted that these variables can not be controlled directly, unless they are targeted by similar variables which are considered as signals or informative means used to influence stability in the cash market. Among these signals is what is known as the interest rate of the Iraqi Central Bank; it is an indicator price which is considered as a compass influencing the behavior of interest rates and determining what the Central Bank lends to banks, and what banks deposit in the Central Bank.

Whatever the sources of inflation were, it is, in the end, considered to be a monetary phenomenon. Accordingly, the priorities of stability are necessary to build and stimulate the economy.

Thus, inflation is the main reason of speeding up money circulation and spending them, leading to less demand for cash and more demand for goods and services. In order to maintain the cohesion of demand and maximize cash levels in order not to turn into strong spending on goods and services, all the Central Bank had to do is to use its tools in raising the interest rate to stimulate the interest rate structure and maintain the coherence of savings and maximize their purchasing power which will help monetary policy to deal with the high levels of liquidity and contain it within the cash or " banking" market, without becoming a cash bloc drifted towards commodity and services. In light of what have previously been mentioned, several questions arise: Can the Central Bank procedure curb inflation and control the volume of cash? What is the use of raising the level of interest against the high prices?

Economists stressed the importance that the Central Bank will continue this approach to curb inflation, which now threatens the stability of the entire situation in Iraq, including security, social and economic situations.

The observers speculate that the rise in the value of the Iraqi dinar against the dollar would reduce inflation and revive the economic situation of Iraqi families, who has suffered greatly because of the high rate of inflation, which is the cause of deteriorating the level of savings as well. Thus, the Central Bank had to take this action, which many observers consider it a step towards a comprehensive reform of Iraqi economy.

A plan to raise oil industry
A plan to raise oil industry in Iraq
13/12/2006
Source: Al-Sabah

Ministry of Oil prepared a plan to raise oil industry in Iraq and increase exports of crude oil and gas, an authorized source at the ministry said.

He added that among suggested recommendations to increase exports is reacting of Iraqi National Oil Company's law to achieve best administration of oil activities and acceleration issuing needed laws at field of oil wealth and investments to ensure participation of world companies to develop productivity abilities and increase exporting within a system balance between state's goals and achieve best conditions for investment and competition.

Originally Posted by railroad

Just trying to figure this thing out....it seems since Nov 2 we have been in a drop in the dinar. Running from 1 to 3 dinar per auction. It's almost like mixing paint, just a little drop at a time and then see what you get. I wonder if this drop will increse to 4 and 5 an auction and hopefully even more per auction in the near future? It does seem that the Iraqis are testing the waters between auctions. Have'nt posted in a while, I,ve been lurking and reading threads. Also noticed a little hostility in some of the threads. Seems strange that someone would invest in something and turn around and trash it. I personally would not invest in something and not have faith in it. Be it a good investment or not you must have faith.

When people feel thwarted from their desires it seems to generate a lot of rage. I don't know if the PIPS threads are archived somewhere or not, but if you want to read through some just vicious, black, homicidal stuff, go there. And like the dinar, the Rolclub forum for Pips was the nicer place to be! It's just humans I guess. Pretty strange lot entirely.

Japan to provide USD 710 million loan to Iraq
Japan to provide USD 710 million loan to Iraq
13/12/2006
Source: Kuna

Japan will provide an JPY 82.64 billion (USD 710.6 million) loan to Iraq to help improve the country's crude oil and electricity-related facilities, the Foreign Ministry announced Monday.

The loans carry an interest rate of 0.75 percent and must be repaid over 40 years,[COLOR="Blue"] including a 10-year grace period[/COLOR](Isn't this exactly what the investment law says too), and will be offered through the government-affiliated Japan Bank for International Cooperation, the ministry said in a statement.

Of the amount, JPY 50.05 billion (USD 430.4 million) will be used for the construction of a pipeline to export oil from the southern Iraqi city of Basra. The remaining JPY 32.59 billion (USD 280.2 million) will be used to stabilize power transmission across the nation.

The loan is the latest batch of the up to USD 3.5 billion worth of low-interest loans which Tokyo pledged for Iraq at the international donors' meeting in October 2003 in Madrid. Japan, a key donor to Iraq, has pledged to provide Iraq a total of USD 5 billion in aid for its reconstruction for a four-year period from 2004 to 2007, including USD 1.5 billion in grants.

13 December 2006 (BBC Monitoring)
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Iraqi judicial sources have said that the death sentences handed down against former Iraqi President Saddam Husayn and two of his aides in the Al-Dujayl case will be executed immediately after the Court of Appeal confirms the verdicts.

The sources added that the judiciary will study the appeal presented in the case of the former president to either endorse or nullify the verdict handed down against him; his half-brother Barzan Ibrahim al-Tikriti; and Awwad al-Bandar, head of the former Al-Thawrah [Revolution] Court.

The sources noted that the court is considering the possibility of executing Saddam, Barzan, and Al-Bandar simultaneously and on the same day.

Originally Posted by boomcreek

The positive info is that compared to six months ago, we have made progress. If my memory serves me correctly, the value was at 1470 then or there abouts, and today it is at 1414. The CBI isn't there to please those of us who are invested in their currency, they are there to make sure the economy in Iraq remains strong, and if possible, gets even stronger. That knowledge in and of itself should be good news to us all. Patience is a virtue, unfortunately, microwave ovens have spoiled us all and we have a tendency to demand whatever it is NOW. Sometimes, the best approach is to use a "slow cooker". For instance, have you ever tried Bar-B-Cued Ribs that have been cooked too fast? They're tough and hard to eat, and if there's anything that is difficult to enjoy it's tough "baby-back ribs". It's the same way with a good roast. It's best to set the oven at a lower temperature, and give it a little more time, then the meat melts in your mouth. Man......is it lunch time yet? Hey....Lunch time will get here, same as the appreciation of this investment...it's on a slow cooker, but there will be a time to take it off the slow cooker. Sometimes, your guests show up before the roast is done, and the way mom always handled that was she would put out a plate of appetizers, that way she didn't have to interrupt the roast and take the chance of it turning out tough. Our hors d'oeuvres, if you will, are the small incremental changes in the value of the roast, sorry, dinar....man, is lunch time here yet.

Very Good points...thank you.