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

Budget in 2010 .. The most controversial & magnitude of the deficit in the history of Iraq
Specialists disagreed on the plug without negative effects on the economy

After that created a sensation in government and parliamentary elections, the Presidency Council approved the 2010 budget, which is the largest in the history of Iraq, in the amount exceeded the 84 trillion dinars (approximately the $ 71 billion), which are divided by 23.6 trillion dinars for the expenses of the investment projects and the amount of $ 60.9 trillion for operational expenditure.

In spite of the magnitude, but the current year's budget deficit is also regarded as the most, as it does not exceed the revenues of 61,5 trillion, compared to a deficit of about planned 23 trillion dinars, which is the most innovative being included clauses that were not present in the budgets approved after 2003 , most notably giving the border provinces and producing oil and gas specific ratios of Aadiat oil and customs revenue that is contributed by the State.

The budget is also the most controversial, has approved the provision of 115 new job opportunities in government jobs, but provided for the freezing of these posts until the formation of the Federal Civil Service Council, which will only be achieved after the elections quite some time, according to expectations.

Considered leaders of the Iraqi National Coalition, led by Ammar al-Hakim that the purpose of the freezing of posts is to prevent the exploitation of the political blocs career appointments during the campaign. "In his view, Congress rival Shi'ite Alliance, a coalition led by the rule of law Nuri al-Maliki, to restrict the release of jobs would deprive the unemployed career opportunities for a period of several months, which will increase the suffering. "Maliki said that" paying citizens to complain, and to say that the government is unable to serve."

It is supposed to cover the budget deficit this year, some $ 23 trillion dinars, through three methods, first by the amounts retained from last year and achieved a result of high oil prices to more than $ 70 a barrel after it has been calculated out of the budget on $ 50 a barrel , as well as internal and external borrowing.

It seems that the specialists differed in advance for the possibility of such methods to fill the gap without causing negative effects on the Iraqi economy. The most likely Vice-President of Oil and Gas Committee of Parliament Abdul Hadi al-Hassani said "cover oil imports for the current year, in addition to the amounts retained from last year's budget, financial resources disbursed for the year 2010.

It was made clear Hassani: "It is expected that the record price of oil, no retreat, but it may also rise, so the deficit will not be much about the price of oil, which was adopted by the government, a 62.5 per barrel (the current rate of more than $ 75)."

On the other hand, sees the Institute of economic reform is contrary to the goldsmith, "to meet the shortfalls in the budget, depending on oil prices is just not true, as the circumstances of linking global supply and demand and thus presents the budget to the negative impacts, citing the example of" what happened during the global financial crisis of 2008, which negative impact on the budget for 2009."

Does not encourage the government to use the goldsmith to pay the budget deficit through foreign loans, saying that "the disadvantages of more positive aspects, even if payment for long periods," because the jeweler sees this as "tying the country's capabilities and it is linked with the outside world which would lead to great paradoxes."

He jeweler conviction that Iraq is "in need of economic policies that contribute to the development of the economy in general in the future in terms of increasing the gross domestic product, and not reliable to rely on international potential."

And authorized the budget law for 2010, the Federal Minister of Finance the power to borrow from the IMF up to $ 4.5 billion and using special drawing rights SDR It's up to $ 1.8 billion (which is a global organization consisting of 186 countries intervene to lend any of them suffering from dementia balance of payments), and the World Bank up to $ 3.8 billion (which is a global organization specializes in providing financial and technical assistance to third world countries with low interest rates and concessional terms and with a view reduce poverty in middle-income countries and poor), to cover the projected shortfall in the federal budget, in addition to the domestic borrowing by the treasury transfers.

He warns many economists Iraqis that foreign borrowing would not be feasible to Iraq, because it will under the pressure of restructuring which is one of the most important conditions of international borrowing, under which support is to reduce the size of certain proportions to ensure repayment, which will show the ration card system, which depends by Iraqi families to meet their food since 1990, to the reduction.

According to specialists, the budget for 2010 has not prejudice the positives from the new obtained by some provinces, accounting for in Article 42 of the budget law allocated 5% of the total revenue actually border points (land, air and sea) with the exception of sovereign revenues, to offset the border provinces As will be converted one dollar for every barrel of crude oil producer in the province or have been refined in the refineries, and for each 150 cubic meters of natural gas produced from its territory, to the budget of the province in accordance with Article 43.

The approval came in view of the article are his oil-producing provinces of the serious environmental effects as a result of some greenhouse gases from oil fields and the need for projects to prevent these effects, which contribute to mitigating the effects of environmental pollution and development of health care workers in the oil fields and the inhabitants of those provinces, according to the statements governmental organizations

http://www.uragency.net/index.php?aa=news&id22=5208

Allawi, the Americans will be making a terrible mistake if Iraq is no longer the most important issue for your foreign policy, and the atmosphere of the elections did not promise a fair election

With the approach of the Iraqi legislative elections scheduled on the seventh day of March,

Which is supposed to be a starting point for a political process together lift Iraq from the dilemma and sectarian quotas, and place it on the path of unity and the establishment of the national State, the number of crises have begun to threaten this process after a decision taken against the exclusion of hundreds of candidates, which was considered by Iraqi parties that are the insistence on revenge is not justified, especially as a large number of respondents exclusion is not "Saddamists" and not covered by the law "de-Baathification."

This decision, which threw into question the future of the political process in Iraq, discussed "the G c for me" with a number of party leaders in an attempt to clarify the picture and stand on the opinion of the parties. Prime "block Iraq," Ayad Allawi, that the issue of exclusion of candidates used for the liquidation of political opponents by the parties the window away from the constitutional and legal grounds, accusing the Iraqi government to raise these files in order to cover up the failure that accompanied the work in a lot of important files. He warned the former prime minister in an exclusive interview with "Gulf" from the atmosphere now prevailing in Iraq, saying it does not work in an atmosphere conducive to transparent and fair elections because of marginalization, exclusion and eradication practiced by some in the Iraqi state. And, consequently, the dialogue:

Elections are imminent has surfaced several issues, how do you see the status quo?

Remarkably, before the Iraqi parliamentary elections, the presence of, among other issues, specifically regarding the issue of exclusion of candidates from participating in elections, as the first question indicate that the eradication has to deal with more than 500 people as if they are Baathists have been convicted and this is a dangerous precedent , because we know according to the laws of the accused is innocent until proven guilty, while stressing "the accountability and justice" that they belonged to the Baath is not permitted to participate in elections, and the second issue asserts that the Iraqi constitution was clear in the case of de-Baathification, affirming in two on how to deal with the Baathists. The first point refers to the "Baathist loyalists" who have been affected by ideas of Saddam Hussein. The second point require fair trials for those accused of committing crimes against the Baathists, the Iraqi people. The third issue related to a large section of those who were excluded had contributed Bmgarap the former regime in Basil, An example on this issue involving the deputy governor of Babylon, Iskandar and berries, which shares led an uprising in the province against the regime of Saddam Hussein in 1991 and gave 18 members of his family, including Two of his brothers who were ****uted by the former regime, as well as the bulldozing of his home and his family as well as homes with heavy, but achieved a great achievement in provincial elections that took place early last year, despite all the sacrifices and impressive record in fighting Saddam's regime is now subject to eradication and exclusion. What does the candidate to prove his position? It is intriguing and far from legal procedures, constitutional and moral values. The fourth issue refers to the issue of eradication is addressed to political opponents and not the perpetrators of crimes during the former regime. Therefore, we have warned and warned us long ago from the phenomenon of indiscriminate eradication, and we distinguish between the Baath and the Baathists. Baath Party is a phenomenon ended and difficult due to the phenomenon of one-party and the ruling party and the vanguard and the elite will not be happening even with the other parties whether they want to follow on from the Baath Party. We're talking about the Baathists as persons who arrived in number in the millions. DeWalt of those who committed abuses and crimes must be punished harshly for these crimes, while the bulk of the Baathists were forced to belong to this party and another section they are insured on an issue. And these may not be punished if they did not commit crimes.

Elimination of Liabilities

Why in the strained atmosphere of the country just before the elections?

That the context in the country and friction also believe is aimed at the elimination of political opponents as a first principle, while the second principle aims to cover up the disadvantages of the political system and government forces and parties in force at present, and an example on a Scandal explosives detectors exposed in the channel "BBC" as revealed by "Newsnight." This documentary, which aired a special episode of the detectors, explosives imported by Iraq, while showing that the British government had banned export, because it failed and corrupt. Speaks of this program these devices failed, saying it is that has killed hundreds of innocent Iraqis by the inability of the Iraqi government and based on this deal, and talks about the cost of the contract, which reached $ 80 million, while the real price of these devices does not exceed 1% of the value of the amount mentioned. This failure is which led to the bloody days in Iraq, while the government did not act to address this failure only after the program has mentioned exposing the truth? Has now begun to form a commission of inquiry on this issue. But is this the Commission could re-lives of Iraqis who were killed? Or restore to the Iraqis who are maimed well-being. This is very significant failures by the government as a whole and not one person.

Cover up failure

Do not you think that there are those who promote the ideas of the Baath Party and former regime excluded?

I can not say that none of this issue of promoting the Baath Party and his ideas. But even settles the white thread on black thread must have a clear interest and against the exclusion of the respondents so that I can not believe these decisions. But now we do not hear charges excluded, not even know the charges that led to their exclusion. So I think that this process is to cover the abysmal failure in a lot of important files such as services, increased unemployment, poverty and landslides security and financial and administrative corruption at the same time for the liquidation of political opponents. As we de-With murderers and criminals from carrying all thought Saddam Hussein, because the thought Saddam Hussein was relying on the exclusion, marginalization, murder and terrorism. So why now we want to repeat this thought? Why should the people of marginalization, exclusion, fear and intimidation? The constitution emphasizes the Baath and Saddam thought Saddam, so that the Iraqi President Jalal Talabani stressed the need to distinguish between Saddam and the Baathist regime, which belonged to the Baath Party. Therefore, the answer to this question says that those who have ideas from the list of Saddam's Baath excluded, which exceeded Alkhmsaip people are individuals as young as the fingers of one hand. Frankly, this number is not a firm may be fewer than the fingers of one hand. So against the way in which the exclusion of this very large number of candidates we might find on the exclusion of many personalities, according to charges ready is to promote the Baath Party and Saddam thought, while there is now promoting the ideas of possession and domination, and the one-party one, marginalization and exclusion. This Promotion is not something different from the ideology of Saddam Hussein, note that the word mop internationally prohibited, how we use and we are seeking to establish a democratic system?

Do you fear the use of paper exclusion after the election results?

Not to defend anyone, but we proved with the law as against any person that he was accused should be punished to take legal. But how convinced that the MP Saleh Al-Mutlaq, one of the participants in writing Iraq's constitution, the law covered by the exclusion? Why is the discovery now? But as I said that this issue was used for the liquidation of political opponents and the directory that Alexander and berries imposed on him to choose between two things, the first non-coverage exclusion if pulled out of the Iraqi bloc. And second if he stayed it would be among the excluded. But the man refused to obey only his conviction that this block is the mass of an Iraqi national. Therefore, these facts confirm that the exclusion of candidates has been politicized too dangerous. Therefore I expect that the charges will continue to take off at random and randomly Cetkal to get rid of political opponents.

What is your position as a bloc if Iraq were excluded candidates?

I do not think that people cancel the existence of another person of Iraqi society, and this is done only by Saddam Hussein. But it may get cancellation of some of the sites before you account for the authority, as Saddam did. But even if I got the process of elimination, the excluded will remain loyal to the fighters and the Iraqi people and defending their rights. Therefore, the political action does not belong to the accountability and justice or to its members, nor shall they also owned by the person of people from officials in government. But they may be able to stop us from state functions and this we did in Iraq. Or they should root out the person from society and its people, this would not happen. I have tried the forces of demagoguery as well as dictatorial powers to stem the Iraqis, but could not Tjtthm of their community and their people, and I tried to Saddam Hussein that Ijttni through a process which miraculously survived the assassination, but it led to getting stranded in the hospital for a year and a half. But he could not Extirpative of the Iraqi people not able to Ijttni of the road of struggle against it. That is why the question of de-excluded in this way, we do not believe and does not recognize them. Also, excluded from the Iraqi bloc do not believe in this thing and stay activists, defenders of the rights of the Iraqi people.

Big disappointment

Do you become your participation in the elections will, for sure?

Frankly, this topic is still on the table for discussion, because we believe that the electoral process is part of the political process and feel that this way the political process was a big disappointment and there is a tendency to frustrate this process by this unjust and arbitrary actions against Iraqis who fought against the regime of Saddam Hussein firmly and valiantly. They have burned through these actions of the democratic process which can be a great model in the region, where we say we want to work in Iraq, title and address of the democratic political process that respects the Iraqi citizen. But where is this process of these titles? It is respected outside Iraq, as the United States by making the political process in Iraq has described the major newspapers of this process the process doomed to failure.

How do you view Iraq's airspace just before the elections?

I see a harsh and tense atmosphere in terms of the mop-up and pursuit of elements of Sadr and members of the Awakening and the marginalization of terrorist bombings and the separation and lack of clarity. This environment is healthy and cloudy do not know what will happen on election day? So I think that this atmosphere is not borne by the Electoral Commission, and I see this as an important symbol in the Office of the democratic process. And who bears responsibility for failure in the elections is the Iraqi government.

Are busy in Afghanistan

Do you believe that the U.S. administration is serious about its withdrawal from Iraq and how they see the future of Iraq after the withdrawal?

Will tell you a nice paradox. I was several months ago in America at the invitation of the U.S. Congress and delivered a speech. He was talking to the Americans focus on you as Americans will be making a terrible mistake if Iraq is no longer the most important issue for your foreign policy. I told them "with great respect for all nations of the world if you think that Afghanistan, Somalia and Sudan are the most important and you are dreaming, Even more important is Iraq, and stability of Iraq is located in the stability of the broader Middle East from Afghanistan to Morocco. Therefore disorder that would be done Iraq would be extended to the broader Middle East as a whole. Vnasiani you and I have letters written later in this trend to the leaders of America to see Iraq return to the first site in your interest to maintain the political to the political process in Iraq and support Iraq to stand on its feet so that it is an oasis of stability in the region because the political geography of Iraq is distinct from other States, as that the wealth in Iraq and link these resources with the outside world make of Iraq in a location other than the location of other States ".

And what was their answer?

They said yes, but we are busy in Afghanistan. But on February 3 present, there is someone I respect his thinking a lot, but I think this person politically is another matter. This person is Henry Kissinger, U.S. secretary of state and adviser to national security, and I consider this one of the most strategic person in the world, because he has a terrible strategic thinking too, where Kissinger wrote an article advising the U.S. President Barack Obama, regardless of the issues of Afghanistan, Somalia, and Palestine, and calls attention to Iraq. He says in this article, "that if Iraq did not settle will not settle the broader Middle East", this is my personal opinion about the future of Iraq.

The question of the withdrawal of U.S. troops from Iraq, I was, who reject the security agreement signed by the Iraqi government with the U.S. government end of 2008 because of three reasons: the readiness of the Iraqi armed forces and political reform in Iraq and the existence of Iraq under Chapter VII of the United Nations, and I told the Americans that If Iraq did not come out of Chapter VII and protecting Iraq's assets abroad, and if were not ready for the armed forces and internal security forces and if there is no political reform process in Iraq through the document we have contributed writing and approved by the Iraqi parliament, the security agreement will be deduced from the Iraqi people and the deduced the stability of Iraq. The talk was formally with the Americans, the presence of the Iraqi List, was a battle ensued between myself and former U.S. Ambassador to Iraq Ryan Crocker and I told them: You bear a moral responsibility, moral and political because you are from Iraq is occupied and you have that you would have happened in Iraq, and now you are not required to stay, but you are required to be verified a prompt and full sovereignty in Iraq, but according to these standards. " The fact that the list approved by Iraq's adoption of the convention security, because most of its members, even though I wanted the Convention against it, however, say that Iyad Allawi is not a democracy! I committed to it, despite the opinion of a conservatory Profile of the Convention. And now we are really under Chapter VII. We asked in a document of political reform and the protection of the integrity of the upcoming Iraqi elections, he said the Americans themselves. "We will protect the election and assure its integrity and safety" through official letters, I received a copy. Therefore, the current Iraqi government is approved security pact with the United States which adopted the survival of Iraq without the rule under Chapter VII. And it does not rule out U.S. involvement in Iraqi affairs, because this intervention is at the heart of the security agreement, as it is taken from the decision not me or the Iraqi people.

So I think that the question of U.S. withdrawal from Iraq is an important issue, but if there were not ready for the Iraqi security forces as well as political reform, and the time is still a room. In my opinion, that political reform starts from the integrity of elections and provide the peaceful environment and health to them. The atmosphere now prevailing are not suitable and not commensurate with the holding of fair and transparent elections, as well as us, we open up to the Iraqis that the whole world, not just America. And even neighboring countries in this direction.

How do you see the next phase?

I think it is very important, because, inter alia, the American withdrawal from Iraq and the constitutional requirements with a tense situation in the country both in terms of political or sectarian as well as the absence of genuine institutions in the country. But if we got out of Iraq and we look to the region to have seen that inflamed from Afghanistan to Somalia, from Yemen to Lebanon to Sudan to Palestine. And this inflammation is not confined to their own countries, but will interfere, and I think that the situation in Iraq helping to regional tension and this tension is fueling the regional situation in Iraq. Therefore, these reasons combine to make the issue of the upcoming elections are very important because it will shape the future political stage in Iraq and maybe, if the slide continued in this way, "God forbid" it would threaten Iraq's political development.

In this sense, as I believe will be a conflict between the civil power, which provides an Iraq a modern, powerful, and free from any kind of quotas and Iraq fit for all his sons and Iraq to respect the religion and the doctrines of religion and rituals and respect for all national affiliations. Of this conflict was supposed to take the cultural and moral typists. But unfortunately there is slippage in this situation has led and will lead to fuel political and social conditions.

http://www.baghdadtimes.net/Arabic/index.php?sid=58620

The role of investment law in a renaissance of development depends on the extent of its effectiveness in stimulating the private sector

Many questions are raised these days about the feasibility of the investment law to enhance the process of development and economic and effectiveness in the development of the reality of the private sector, especially as there are some very discouraging the adoption of the investment approach at the present time.

Dr. Nofal Rasheed of the Center for strategic and economic studies at the University of Mustansiriya that much interested in the subject of investment and they see there has a magic wand to change the case to his best at the moment of time.

This is a great fallacy, having witnessed a lot of similar experiences in the countries experienced political stability, security and economic obstacles many objected to the laws of investment, including Egypt, Turkey, UAE, Malaysia and others, have not yielded the fruits of the investment process, but after a while Amrfait a logical and realistic thing a lot, but otherwise we see this scene in our country and after the issuance of the necessary legislation before the law and make some amendments announced by repeatedly find that some voices were raised strongly about the importance and feasibility of this law, which Nataath law was not appropriate at the appropriate time is not forgetting its importance in the economic process, development and revitalize the role of the private sector

He adds that many of the countries with economies similar to our economy, always in need of investment and foreign capital to revive the economy from recession and stagnation of economic progress in accordance with the conditions experienced by the abundance of natural resources, infrastructure and the means of production, etc. In contrast, the importance of investment in activating the private sector in their countries and move the production process and the establishment of factories and the recovery of various industries and land reclamation for agriculture and the organization of manpower and others.

In our country, Those factors combined are available during the current phase and add to other things as we need financial resources to the private oil prices began to fluctuate on world markets because of the intensity is affected by economic and financial crises that occur in the world

And the urgent need for additional financial resources that can revitalize the local economy, hence the need for investments and the entry of foreign capital, especially as Iraq is now exporting countries for hard currency, not the opposite in that a large impact on the available balance of foreign currency in the Central Bank or the individuals in general, and to begin work on a supplementary budget for fiscal blocking funding for some projects and service strategy by reducing the financial budget for last year. Besides giving a greater role for the private sector because the downsizing of government contributions to these projects and delays in completion are disturbing the usefulness of the effectiveness of government agencies and continue to do those projects after the reduction in the budget and postpone work on a lot of stages to later periods and to allow paid for the private sector to take a leadership role here and start a new phase have a larger role here than the public sector.

Dr. Falah dry, director of reconstruction and development of Iraq was one of civil society organizations to suggest that the imbalance is not perhaps in the investment law or in the amendments made to it later, but in the application that is witnessing the occasional reluctance is unjustified and attributed some to the security effects that have occurred in Baghdad and other provinces and the extent of its success, which is closely linked to improved security conditions, which is a factor encouraging investors to enter into Iraq.

He believes that other current solutions available are limited to no doubt give his opinion in the real role of the Iraqi private sector to actively participate in the investment process and to overcome obstacles and difficulties to him during the current stage marred by some security breaches, and these solutions several positive data, including activating the private sector, who have suffered and still and stimulate investment and encourage investors to speed up the entry in the field of investment and create some kind of competition between everyone, something that would develop the development process and economic development in Iraq and advancing the reconstruction and development in all areas.

http://www.alsabaah.com/paper.php?so...page&sid=98578

Dabbagh: the financial and banking sectors are required to secure an attractive environment for investment

Dr. Ali Dabbagh, spokesman of the Iraqi government the need to create an investment environment that actively ending a plague that left more local and foreign investors.

Dabbagh said in an interview with the economic Sabah: to activate the investment law and the amendments approved by the Cabinet to the fact we need a new investment compatible with the next stage because the investment environment currently available do not serve the majority of global investors at a time when the government work for the issuance of multiple changes in the investment law, but this work needs to activate the rings associated with the law in order to reach an environment suited to the realities of investment and encourage investors to come to Iraq and the implementation of projects in all sectors amid favorable climate.

The reality of most of the sectors associated with the operation of investment needed to modernize and develop and commensurate with the countries of the developed world, noting that the sectors of banking, insurance and commercial arbitration mechanisms needed to serve new and evolving global companies and local investors, pointing out that the private sector to the day in a state of left, hoping to develop the construction industry, which is an important industry and affects a large segment of our society as it helps to contain a wide range of hands idle because the country is in need of housing projects in all governorates, which makes it imperative for institutions to work towards the revitalization of this sector and to provide possible support for its activation. Meanwhile, Head of National Authority for Investment Sami Araji: There is a great desire by companies and investors to venture into the investment process within the country now more than ever, and we felt this through seminars and indicators as well as communication through mutual visits. He continued: The investment process is not affected by the election, because this economy, and often imposes conditions on the economic policy despite the existence of the impact of policy on the economy but the impact of the economy over politics more. He said there are still a major problem in the diversification of the investment committees where there is a national investment as well as by investment in the provinces and the provincial councils as well as the investment in the various state bodies are investing all of these ramifications may be a reason not to apply paragraphs of the investment correctly.

http://www.alsabaah.com/paper.php?so...page&sid=98576

IMF givs iraqe almost 600 mil usd to help restor iraqe

Originally Posted by simen1

IMF givs iraqe almost 600 mil usd to help restor iraqe

International Monetary Fund approved a loan worth 3.6 billion dollars for Iraq

The International Monetary Fund on Wednesday on the loan program worth 3.6 billion dollars to Iraq to fill the needs of the balance of payments.

The IMF said it would pay on the spot segment of approximately $ 455 million of the loan me the Iraqi authorities.

The loan comes as Iraq prepares for crucial parliamentary election in the seventh of March.

http://ara.reuters.com/article/busin...**N16T20100224

Statement from International Monetary Fund

IMF E.xecutive Board Approves US$3.6 Billion Stand-By Arrangement for Iraq
Press Release No. 10/60
February 24, 2010

The E.xecutive Board of the International Monetary Fund (IMF) today approved a two-year Stand-By Arrangement for Iraq for an amount equivalent to SDR 2.38 billion (about US$3.64 billion) to cover the country’s balance of payments needs. The Board’s approval makes an amount equivalent to SDR 297.1 million (about US$455 million) immediately available to the Iraqi authorities.

The new arrangement follows a 15-month program supported by a Stand-By Arrangement, which was approved by the E.xecutive Board on December 20, 2007 and expired on March 18, 2009 (Press Release No 07/301). The successor arrangement is designed to support Iraq's economic program over the next 24 months through February 23, 2012.

Following the E.xecutive Board's discussion of Iraq, Mr. Takatoshi Kato, Deputy Managing Director and Acting Chair, said:

“Iraq has made substantial progress in rebuilding its economy and consolidating macroeconomic stability under difficult security and political conditions. The economy was severely affected in 2009 by the drop in international oil prices. The current account and the overall balance of payments are expected to remain in deficit in 2010 and 2011. Similarly, the fiscal position is projected to record large, albeit declining, deficits in both years, before returning to a surplus position in 2012.

“Against this background, the economic program for 2010 and 2011 aims at providing a sound macroeconomic framework during a period of economic and political uncertainties. Consistent with this program, the 2010 budget adopted by parliament seeks to contain current spending while increasing investment to address Iraq’s large rehabilitation needs and improve public service delivery. Monetary and exchange rate policies will continue to aim at keeping inflation low.

“The economic program will also help the authorities move forward with their structural reform agenda. Strengthening the public financial management system is critical to improving the allocation and e.xecution of public resources, as well as enhancing transparency and accountability in the management of the country’s natural resources. The program also incorporates banking sector reforms, including a restructuring of state-owned banks, with a view to improving the financial services required by a growing economy.

“The authorities intend to treat the new Stand-by Arrangement as precautionary should oil prices turn out to be significantly higher than envisaged, or investment e.xecution be lower than budgeted.

“The authorities have made significant progress in their external debt negotiations with official and private creditors. They remain committed to completing the restructuring of remaining non-Paris Club claims,” Mr. Kato stated.


ANNEX

Program Summary

The main objectives of the program are to maintain macroeconomic stability during a period of high economic and political uncertainties (parliamentary elections are scheduled for March 7, 2010), and to provide a framework for deepening structural reforms.

While Iraq’s medium-term economic outlook remains favorable because oil prices and production are projected to increase in the coming years, based on conservative oil price assumptions the current account and overall balance of payments are expected to remain in deficit in 2010 and 2011. Similarly, Iraq’s fiscal position is projected to record large, albeit declining deficits in both years, before returning to a surplus position in 2012.

Against this background, the authorities have designed an economic program for the period through end-2011 and have requested the Fund to support it with a new two-year Stand-By Arrangement. The authorities view the new program primarily as a way to provide a sound macroeconomic framework during a period of high economic and political uncertainties. The authorities’ fiscal program seeks to contain current government spending while catching up on much-needed investment spending. The budget deficit is targeted to decline to 19 percent of GDP in 2010 and further to 6 percent in 2011, before shifting back into surplus in 2012. Monetary and exchange rate policies will continue to aim at keeping inflation low.

The new program will also aim to advance key reforms in the areas of public financial management (PFM) and financial sector development, in close coordination with a Development Policy Loan (DPL) provided by the World Bank. Both operations focus on advancing PFM and bank restructuring action plans prepared by the authorities during 2008 and 2009 with the assistance of Fund and World Bank staff.

IMF EXTERNAL RELATIONS DEPARTMENT

Extending Our Stay in Iraq

IRAQ’S March 7 national election, and the formation of a new government that will follow, carry huge implications for both Iraqis and American policy. It appears now that the results are unlikely to resolve key political struggles that could return the country to sectarianism and violence.

If so, President Obama may find himself later this year considering whether once again to break his campaign promises about ending the war, and to offer to keep tens of thousands of troops in Iraq for several more years. Surprisingly, that probably is the best course for him, and for Iraqi leaders, to pursue.

Whether or not the elections bring the long-awaited political breakthrough that genuinely ends the fighting there, 2010 is likely to be a turning-point year in the war, akin to the summer of 2003 (when the United States realized that it faced an insurgency) and 2006 (when that insurgency morphed into a small but vicious civil war and American policy came to a dead end). For good or ill, this is likely the year we will begin to see the broad outlines of post-occupation Iraq. The early signs are not good, with the latest being the decision over the weekend of the leading Sunni party, the National Dialogue Front, to withdraw from the elections.

The political situation is far less certain, and I think less stable, than most Americans believe. A retired Marine colonel I know, Gary Anderson, just returned from Iraq and predicts a civil war or military coup by September. Another friend, the journalist Nir Rosen, avers that Iraq is on a long-term peaceful course. Both men know Iraq well, having spent years working there. I have not seen such a wide discrepancy in expert views since late 2005.

The period surrounding the surge of 2007 has been misremembered. It was not about simply sending 30,000 more troops to Iraq; it was about using force differently, moving the troops off big bases to work with Iraqi units and live among the people. Perhaps even more significantly, the surge signaled a change in American attitudes, with more humility about what could be done, more willingness to listen to Iraqis, and with quietly but sharply reduced ambitions.

The Bush administration’s grandiose original vision of transforming Iraq into a beacon of democracy that would alter the Middle East and drain the swamps of terrorism was scuttled and replaced by the more realistic goal of getting American forces out and leaving behind a country that was somewhat stable and, with luck, perhaps democratic and respectful of human rights. As part of the shift, the American commander, Gen. David Petraeus, also effectively put the Sunni insurgency on the American payroll.

Looking back now, I think the surge was the right thing to do. In rejecting the view of the majority of his military advisers and embracing the course proposed by a handful of dissidents, President Bush found his finest moment. That said, the larger goal of the surge was to facilitate a political breakthrough, which has not happened.

All the existential questions that plagued Iraq before the surge remain unanswered. How will oil revenue be shared among the country’s major groups? What is to be the fundamental relationship between Shiites, Sunnis and Kurds? Will Iraq have a strong central government or be a loose confederation? And what will be the role of Iran (for my money, the biggest winner in the Iraq war thus far)?

Unfortunately, all of these questions have led to violence in the past, and could again just as the Obama administration’s timeline calls for troops to leave areas that are far from quiet. The plan this year is to pull out about 10,000 troops a month for five months, beginning in late spring. That will halve the American military presence, with the remainder (other than a “residual force” of unspecified size) scheduled to be withdrawn in 2011. The withdrawal plan was written on the assumption that the elections would be held late in 2009 or early in 2010. Under the plan, troop numbers would be kept level to ensure stability in a vulnerable period, especially if the Sunnis were to feel that the electoral process was unfair, or if they were not given a role in the new government commensurate with their success at the polls.

But given the changed timetable, just as Iraqi political leaders are struggling to form a new government, American military leaders will be distracted by the myriad tasks of supervising major troop movements. On top of that, the deeper the troop withdrawals go, the more potentially destabilizing they will be — because the first withdrawals will be made in areas that are considered more secure, or where Iraqi forces are deemed more reliable or evenhanded.

By June, American troops may be leaving areas that are far from quiet, and where new tensions may be brewing as a result of the elections. Once again, the United States would be rushing toward failure in Iraq, as it did so often under the Bush administration, trying to pass responsibility to Iraqi officials and institutions before they are ready for the task.

By late summer, the Obama administration could find itself in the uncomfortable position of reconsidering its vows to get out of combat in Iraq by August and to remove all troops by the end of next year. This will be politically difficult for the president, but he has shown admirable flexibility in his handling of Iraq. My impression is that the American people now wish they had never heard of Iraq, but understand just what a mess it is and are willing to give the president a surprising amount of leeway.

Extending the American military presence will be even more politically controversial in Iraq, and for that reason, it would be best to let Iraqi leaders make the first public move to re-open the status of forces agreement of 2008, which calls for American troops to be out of the country by the end of next year. But I think leaders in both countries may come to recognize that the best way to deter a return to civil war is to find a way to keep 30,000 to 50,000 United States service members in Iraq for many years to come.

These troops’ missions would be far narrower than during the surge era; their primary goal would be to train and advise Iraqi security forces and to carry out counterterrorism missions. (It is actually hard to get below 30,000 and still have an effective force; many troops are needed for logistics, maintenance, medical, intelligence, communications and headquarters jobs, and additional infantry units are then needed to protect the people performing those tasks.)

Such a relatively small, tailored force would not be big enough to wage a war, but it might be enough to deter a new one from breaking out. An Iraqi civil war would likely be a three- or four-sided affair, with the Shiites breaking into pro- and anti-Iranian factions. It could also easily metastasize into a regional war. Neighboring powers like Turkey and Iran are already involved in Iraqi affairs, and the Sunni Arab states would be unlikely to stand by and watch a Shiite-dominated regime in Baghdad slaughter the Sunni minority. A regional war in the middle of the world’s oil patch could shake the global economy to its foundations and make the current recession look mild.

In addition, a continued American military presence could help Iraq move forward politically. No one there particularly likes having the Americans around, but many groups seem to trust the Americans as honest brokers. And there would be a moral, humanitarian and political benefit: Having American soldiers accompany Iraqi units may improve the behavior of Iraqi forces, discouraging relapses to Saddam Hussein-era abuses, or the use of force for private ends and feuds. Advisers not only instruct Iraqi commanders, they also monitor them.

As a longtime critic of the American invasion of Iraq, I am not happy about advocating a continued military presence there. Yet, to echo the counterinsurgency expert David Kilcullen, just because you invade a country stupidly doesn’t mean you should leave it stupidly. The best argument against keeping troops in Iraq is the one some American military officers make, which is that a civil war is inevitable, and that by staying all we are doing is postponing it. That may be so, but I don’t think it is worth gambling to find out.

http://www.nytimes.com/2010/02/24/op...l?pagewanted=2

Sadrists reject Iraq oil deals

A powerful political group contesting Iraq's parliamentary vote next month says it may challenge the validity of multi-billion-dollar oil deals the country has signed with foreign firms. Hazim Al-Araji, a senior member of Shiite cleric Moqtada Al-Sadr's political movement, also intends to oppose the return in the next government of incumbent prime minister and poll candidate Nuri Al-Maliki, under whom the deals were signed.

There were great mistakes. The people in Maliki's government are politicians and not technocrats, and are working in the interest of their party... The contracts were between companies and a party, and not between companies and a state," Araji said in an interview. He gave no details of what measures his faction may take to alter the deals, signed with firms such as BP and Royal Dutch Shell in two auctions for bids to develop lucrative Iraqi oilfields last year. Ten contracts were awarded. The Sadrists are a key player in a Shiite-led coalition taking part in the March 7 national vote, and are likely to be influential in Iraq's next parliament, if not in government.

Analysts have said Iraq's next leaders are unlikely to challenge the oil deals, given that they were signed with an unusually high level of transparency for the Middle East, and because the terms are weighted in Baghdad's favor. Iraq, which has the world's third-largest oil reserves, is keen to boost output to fund reconstruction after years of war. The Sadrist movement has wide support, mostly among the Shiite poor in the oil-producing south and deprived urban areas such as Baghdad's Sadr City slum.

NEW PRIME MINISTER?

As a result of party negotiations, the movement will occupy at least a quarter of any seats won by the Iraqi National Alliance (INA), an election coalition led by the Supreme Islamic Iraqi Council (ISCI), a powerful Shiite party. The two groups have sparred in the past, but now appear united in their desire to diminish Maliki's power. Maliki, the Sadrists and ISCI were once allies in parliament's largest bloc.

Maliki is contesting the March election as head of the State of Law coalition, and is not expected to do well enough to cling to power without building alliances with other groups, a process that could take months and leave a power vacuum in Iraq. A Sadrist wish to see Maliki removed from office could complicate and draw out negotiations. "We are advancing towards change, and that means a change of government and prime minister. We have no problem with Nuri Al-Maliki as a person, but we have a problem with his program and his actions," Araji said.

In 2008, Maliki launched crackdowns on Sadr's Mehdi Army militia, which once controlled parts of southern Iraq and Baghdad. For the most part, militiamen have been ordered to lay down their arms, but Araji said the militia was not disbanded. Statements from Sadr in the last two years had indicated his desire to shift his followers' efforts from armed struggle to cultural and religious activities. Even though the Sadrists object to Iraq's new oil deals, the Mehdi Army will not target foreign contractors who
have started to arrive in the southern oil hub city, Basra, Araji said.

The Mehdi Army is there, but only to fight the occupiers. There will be no activities against anyone but the occupiers, who are the US forces, not civilians or foreign companies." Contrary to persistent rumors that Moqtada Al-Sadr has been in Iran for years pursuing his clerical studies, Araji said the Shiite leader was in Iraq. He declined to comment on whether Sadr would make an appearance during the election campaign. "We never said that Sadr was abroad. He is in Iraq, but the security situation means we cannot say where. Sure we need his presence, but our interest is to protect him," Araji said.

http://www.kuwaittimes.net/read_news...d=Nzg4NDIyMDY0

Vatican to finance big housing project in southern Iraq

The government of the Vatican will finance a project to establish 5,000 housing units in southern Iraq, a local source in Basra said on Thursday.

“Negotiations with a UAE company delegation have tackled the implementation of the project in Basra province…,” the source told Aswat al-Iraq news agency.

The project will be conducted by the UAE Tech Group in cooperation with an Iraqi company and will be supervised by a Swiss firm, the source potined out.

http://en.aswataliraq.info/?p=127631