Thread: Archive Latest News - Think Tank - 16/08/07 - 03/11/07

Iran-Iraq trade on the rise

97 percent of the $2 billion worth of bilateral trade with Iraq consists of Iranian exports to that country, Iran's envoy to Baghdad says.

Iran has a significant potential to participate in Iraq's reconstruction, the Iranian ambassador, Hassan Kazemi Qomi said, adding that presently the contracts to build Baghdad's 300 Megawatt power plant and 2 pipelines to transfer 350 thousand barrels of crude oil per day from Basra to Abadan are also underway.

The 400 Megawatt electricity power transmission line from Abadan to Al-Hares is among the most important projects being implemented by Iran, Kazemi Qomi said.

Iran's ambassador to Iraq noted that Iran's Pars Wagon Company has adequate capabilities to have a positive role in development of Iraq's rail network.

Signing 65 other technical cooperation documents for the expansion of Iraq's railroad is among the future cooperation in this field.

The Iranian envoy referred to these projects as a clear sign of Iran's willingness to contribute to Iraq's reconstruction, mentioning that Iranian pilgrims visit to Iraq by train is another important issue.

Iran-Iraq trade on the rise | Iraq Updates

Lagging oil output slows Iraq economic growth: IMF

The International Monetary Fund said on Tuesday economic growth in Iraq has been slower than expected as the violence-wracked country struggles to ramp up oil production above the current 2 million barrels a day.

"Economic growth has been slower than expected at the time of the last (IMF economic review) mainly because the expected expansion of oil production has not materialized," the IMF said in its annual review of Iraq's economy.

Iraq's economic prospects hinged critically on an improvement in the security situation, the fund added.

The IMF estimated that Iraq's gross domestic product growth would reach 6.3 percent in 2007, slightly up from 6.2 percent in 2006.

The United States has added 30,000 troops to its forces in Iraq to try and stem sectarian violence, which has pushed the country to the brink of civil war.

The United States hopes that the troop increase will quell the daily bloodshed in Iraq as the government tries to kick-start the economy and lure investment especially in the oil sector.

The country sits on the third largest oil reserves in the world and depends on oil sales for almost all of its foreign currency earnings. Its oil profits are key to rebuilding the country after years of international sanctions and conflict.

The IMF said that while inflation had come down in Iraq, it remained high, in part because of shortages of fuel products.

It said annual consumer price inflation increased to almost 65 percent at end-2006 from 31.5 percent at end-2005 mainly due to supply bottlenecks, in particular of fuel products.

Core inflation, excluding fuel and transportation, was also high at about 32 percent, it added. Policy efforts to bring inflation under control and ease the fuel shortages have since lowered inflation to about 46 percent in June 2007, while core inflation decreased to 19 percent.

"Key to fighting inflation would be to continue restraining public spending pressures and stepping up efforts to reduce shortages, especially by actively supporting private sector fuel imports," the IMF said.

It praised efforts by the authorities to keep current spending in 2007 within the budget's limits and said it supported the government's decision to contain the wage and pension bill.

The IMF said it generally supported the Iraqi central bank's policy of allowing a gradual appreciation of its currency through to the end of 2007, which would help reduce inflation and ease the use of dollars in the economy.

Lagging oil output slows Iraq economic growth: IMF | Iraq Updates

Sharp drop in demand for dollar in daily auction

Demand for the dollar fell sharply in the Iraqi Central Bank’s auction on Wednesday, reaching $63.645 million compared with $106.170 million on Tuesday.

In its daily statement the bank said it had covered all bids, including $10.625 million in cash and $53.020 in foreign transfers, at an exchange rate of 1,240 dinars per dollar, unchanged for the fifth session in a row. None of the 16 banks that participated in Wednesday’s session offered to sell dollars, the first time in more than 15 sessions.

Ali al-Yasseri, a trader, told the independent news agency Voices of Iraq (VOI) that the government's urgent remittances in the past two sessions decreased bids to sell dollars in this session, voicing belief that this could also extend to tomorrow’s session unless there was a price change or urgent government remittances. The Iraqi Central Bank runs a daily auction from Sunday to Thursday.

Sharp drop in demand for dollar in daily auction | Iraq Updates

"Neighboring Countries Should Stop Undermining Iraq's Security" - UK Envoy

Outgoing British Ambassador to Iraq Dominic Asquith has accused Iraq's neighboring countries of trying to create chaos and continue the cycle of violence in the country in order to protect their interests by being lax and allowing foreign fighters to enter Iraq illegally through their common borders.

The Ambassador believes that these neighboring countries do not want the Iraqi democratic experiment to succeed out of fear of it spreading to their nations.

Speaking exclusively to Asharq al-Awsat before leaving his post in Iraq as the United Kingdom ambassador, Asquith said: "Neighboring countries must respect the Iraqi Government's legitimacy and must deal with this elected government in a positive way and prevent their territories from being used in any action against Iraq and its government. At the same time, it is the Iraqi Government's duty to reflect and demonstrate to the neighboring countries that it is working seriously and credibly to create a common vision that brings all the parties together and achieves everyone's interests."

The ambassador stressed that some countries are allowing foreign fighters to enter Iraq through their borders together with weapons supplied to them and the training they were given by elements inside these countries which are trying to impose a political situation in Iraq suitable for their own interests. He added: "Some of the equipment and weapons are used in other parts in the Middle East and we know that some of them were sold to some countries in the region."

On the British forces' role in Basra Governorate, Asquith said: "We handled the four southern governorates for which we were responsible very seriously and responsibly. Our aim from the start was to hand responsibility for these governorates back to the Iraqi authorities' sovereignty and we succeeded in returning three governorates and will hand over the responsibility for the Basra Governorate to the Iraqis very soon." He held the political parties in the governorate responsible for the deterioration of the situations in the city and said: "The diligent political discussion in Basra in particular steered clear of the general public interest and focused on the particularity of the city with the Shiite majority. Political rivalry between all the parties and political figures in the governorate is going to be stronger and more acute than their counterparts in the other governorates due to the governorate's unique character and its economic position."

Regarding the date for handing over security and leadership in the governorate to local Iraqi authorities, the British ambassador said: "It is a process similar to the ones that took place previously in the three southern governorates. The handover will be made in accordance with a joint decision by the multinational forces and the Iraqi Government when the two sides reach the conclusion that the security forces and local authorities are ready and capable of normalizing security in the governorate." He added: "There is no time ceiling or specific date for this handover. When we reach a date for handing over the responsibility, then we will carry out the role of the observer of what happens in the governorate."

On the accusations that the British Government is abandoning the local employees and translators who worked with its forces in Iraq, he said: "Neither Britain nor any of the coalition countries would have succeeded in its mission or did the work it had done without the help of the expertise and participation of local employees who worked with it during the past years and are still continuing to work." He added: "In view of the dangers to which these employees are subjected and which are quite often greater than the dangers that we the foreigners are subjected to, my government is looking into and examining the issue of these people positively after I explained to it the importance I attach to this issue and our gratitude to them for the great services they have rendered to us."

"Neighboring Countries Should Stop Undermining Iraq's Security" - UK Envoy | Iraq Updates

Talabani on oil law development

Although Iraqi Kurds are now opposing changes made to a draft oil law, their top envoy to Washington says there's time -- though not without end -- to reach a compromise on key issues.

"I doubt we'll veto the law based on a few scattered changes," Qubad Talabani, son of Iraqi President Jalal Talabani and the Kurdistan Regional government's representative to the United States, told United Press International at his Washington office. "However, we still need to ensure we stick within the guidelines outlined in the constitution."

KRG and federal government delegates have been negotiating since last summer the law governing the world's third-largest oil reserves. At issue is how much control the federal government has over exploration, development and production of oil versus the regions or governorates.

Last week the Council of Ministers approved a draft of the law -- which had already been opposed by oil technocrats, unions and Sunni parties seeking a stronger central government arm -- and sent it to Parliament.
Sunni and some Shiite parties opposed to Prime Minister Nouri al-Maliki's government are alternately threatening to boycott Parliament or return to oppose the law.

before the approval of the council, which further changed it.

"Some substantive changes were made," Talabani said. "Some language that we had put in has been taken out. Now whether it has been taken out with malicious intent or whether it has been taken out because it was deemed not legal language is what we're trying to determine."

A team from Baghdad has been in Kurdistan to discuss the issues, which Talabani said would be ironed out in talks, not bluster. "In a friendly atmosphere, not raising a stink about it," he said.

Kurds take a somewhat hard line in talks about the future of Iraq to ensure there's no repeat of their pre-2003 treatment, where investment was kept from them and the brutality of Saddam Hussein was in full force. They've been semi-autonomous since 1992, however, and are keen on retaining that, if not strengthening it.

"It's concerns that we have that are a result of history. And neglect. Mismanagement throughout its history. It's made us as Kurds very insecure that future governments in Iraq will mismanage the resources," Talabani said.

He points to the Iraqi Constitution, approved in 2005, that requires the federal government to work "with" regions and governorates to develop the oil sector. Exactly how that takes shape is at the crux of the federalism dispute.

Talabani said the oil law should be the instrument to further flesh out the constitutional vagueness.

"We want to have a say in how the south is developed, how the west is developed, how Baghdad is developed," he said.

"If we are partners, if we are Iraqis, then we want to be full partners. It's a fair request. It shows our willingness to be part of this federal Iraq." And vice versa with other factions in the country, he said.

Iraq has 115 billion barrels of proven oil reserves, nearly all located in the Shiite-controlled south or Kurdish north (though a large oil field near the KRG zone is considered a disputed territory). Iraq needs investment in its sector to fix and modernize its current infrastructure so it can increase production. Last month Iraq averaged less than 2 million barrels per day, according to the global energy information firm Platts, a drop from the month prior and far below the 2.6 million bpd before the war.

Opponents of the oil law want to limit the access of foreign oil companies to Iraq's nationalized sector, though the Kurds are pulling for more of a free-market model.

The oil law is to be one of four laws in a general hydrocarbons regime package. Iraq sent an average of 1.6 million bpd to market last year, bringing in enough money to fund 93 percent of its federal budget. A revenue-sharing law that will determine how proceeds from Iraq's oil sales will be redistributed throughout the country -- and how much -- was agreed on by KRG and federal government negotiators and sent to the Council of Ministers, which has yet to take it up.

"The fact that we could overcome our differences and come to an agreement on that means that the prognoses for the other three components are good," Talabani said. Laws governing the Iraqi National Oil Co. and the Ministry of Oil round out the hydrocarbons package.

Meanwhile, the KRG makes progress on its own. It's relatively less violent than the rest of the country. Daily flights in and out of the capital, Irbil, have increased and Talabani said he saw an "entrepreneurial spirit" during his recent visit.

The KRG has signed five deals with foreign oil companies, which the Iraq oil minister said will be brought in line with the eventual federal oil law. The KRG is moving forward with its own regional oil law, also aligned with the federal law.

That's if the federal legislation is approved.

"It's difficult to say how long we will wait," Talabani said. "We know that this is part of a much larger picture and we don't want to do something that could upset the larger picture.

"We've been patient up until now. I think we'll continue to be patient. We'll continue to be pragmatic. We can't have an all-or-nothing policy and we've seen this throughout the negotiations, there are things that are going to upset us as Kurds, there are things that are going to upset our Arab brothers," he said.

Talabani on oil law development | Iraq Updates

KRG responds to AMS statement
The regional government cites AMS's "political motivations."

The Sunni Association of Muslim Scholars recently issued a statement claiming the Kurds have "no right to handle Iraq's oil wealth, which belongs to all Iraqi citizens."

The official spokesman for the Kurdistan Regional Government (KRG) said that the approved oil and gas law came within the Iraqi Constitution, noting that political motivations stand behind the Iraqi Sunni Association of Muslim Scholars' (AMS) rejection of the law.

"We made this law, related to the region, within the Iraqi Constitution, and Kurdistan Region is a recognized entity and has the right to make its own laws," said Khalid Saleh.

"Political motivations stand behind the AMS's rejection of the law," he asserted.

Meanwhile, Hiwa Mirza, secretary of Kurdistan Islamic Union (KIU) politburo, said the AMS statement doesn't serve the people of Iraq and Kurdistan and will only create more disputes in Iraq.

"Kurdistan Region has the right to approve its oil and gas law," said Mirza. "The Association of Muslim Scholars should not interfere in a subject unrelated to them. The Iraqi Constitution gives rights to Kurdistan Region to approve its oil and gas law and every Iraqi should respect the Constitution."

Zana Rosta'i, a lawmaker in Kurdistan Parliament and member of the Kurdistan Islamic Group Movement bloc, said that Kurdistan Region has its own Association of Muslim Scholars, which supports the Kurdistan oil and gas law.

Rosta'i concluded that the Iraq AMS has overstepped its boundaries and has no business in Kurdistan Region's affairs.

The hard-line AMS issued an Internet statement rejecting the Kurdish oil law and called on foreign firms not to invest in the area. It said Kurdish leaders were part of the U.S.-led "occupation" in Iraq and therefore had "no right to handle the oil resources of Iraqis," warning that foreign firms could face compensation demands in the future.

The AMS, sometimes called the Association, is headed by Sheikh Harith al-Dhari.

Iraqi President Jalal Talabani once called him a hard-liner with "nothing to do but incite sectarian and ethnic sedition."

KRG responds to AMS statement | Iraq Updates

INL to participate in summit if government sends official invitation – MP

The Iraqi National List (INL) said on Wednesday that it would accept the demands of Iraqi President Jalal Talabani and the President of the Kurdistan region Massoud Barazani to take part in the political leaders’ meetings only if it receives an official invitation.

“We are ready to participate in the meetings if we receive an official invitation from the government,” INL member of parliament Iyad Jamal el-Din told the independent news agency Voices of Iraq (VOI) on Wednesday.

“We appreciate the positions of President Talabani and Barazani and their calls for the importance of the INL’s participation in the summit because of its political and ethical weight in the Iraqi political arena,” he added.

“There is a need to create an atmosphere of harmony among all politicians to solve political problems,” he also said.

“The INL has to be part of these meetings to save the country from repeated crises and its demands must be studied as they are not factional national demands,” the lawmaker explained.

The parliamentary bloc ordered its five ministers last week to boycott cabinet sessions because of the government's failure to implement its program.

The ministers of science and technology did not comply with the decision.

Former Iraqi Prime Minister Iyad Allawi's INL has 24 seats out of the 275-seat parliament.

INL to participate in summit if government sends official invitation – MP | Iraq Updates

Iraqi political leaders' meeting captures Baghdad press

Iraqi newspapers on Wednesday focused on the meeting of Iraqi political leaders scheduled for today, during which solutions to controversial issues are expected to be debated.

On its front page the government-funded al-Sabah newspaper published a main headline that read, 'Meeting of political leaders launched today, Talabani, al-Maliki head the talks.' Quoting Iraqi Prime Minister Nouri al-Maliki, the newspaper said that the meeting aims to solve the Iraqi political crisis and tackle obstacles to the political process. Citing the laws on oil and municipal elections as an example, the prime minister said that his government will move decisively on a list of issues that may impact the Iraqi parliament's work.

Quoting an informed source, the newspaper said that an agreement was reached between the Shiite Unified Iraqi Coalition (UIC) and the Kurdistan Coalition (KC) to form a parliamentary majority government that will include independent ministers if ministers from the Sunni Iraqi Accordance Front (IAF) and the Iraqi National List (INL) hold to their decisions to withdraw from the government. "Ministers from Anbar, Diala and Salah al-Din provinces will be nominated to fill in for the IAF's ministers," according to the source.

Under the headline, 'Senior officers attend leaders' meeting. Bloc's leaders draw up new agenda in al-Talabani's residence,' the London-based al-Zaman newspaper said that top military commanders and officers from Baghdad's operation room were invited to a lunch meeting at al-Talabani's residence to discuss a number of unresolved issues.

In an article entitled, 'Families urge government to reveal destiny of their detained sons,' the newspaper said that several families called on the Iraqi government to reveal the whereabouts of their sons detained in U.S. and Iraqi prisons.

The daily al-Ittihad newspaper, issued by the Patriotic Union of Kurdistan (PUK), published a front-page headline that read, 'Alaa Makky: IAF agrees to article 140, Kurdistan's federalism.' MP Alaa Makky from the IAF expressed his front's support for article 140 of the Iraqi constitution on the normalization of the situation in Kirkuk, and for a federal Iraqi Kurdistan.

Iraqi political leaders' meeting captures Baghdad press | Iraq Updates

White House says no limits on Iraq testimony - Summary

Washington - The commanding general in Iraq will testify in public about a crucial mid-September report on the war's progress, the White House said Thursday. Questions about whether the Bush administration is trying to shield US General David Petraeus arose after the Washington Post reported the White House had proposed having him testify to Congress behind closed doors.

A White House spokesman, Gordon Johndroe, did not dispute the newspaper report. But he said the session with Petraeus and Ryan Crocker, the US ambassador to Iraq, would be public, as required in the law that mandated the report.

They will testify publicly "about the conditions on the ground in Iraq, what they see, what they think are some recommendations about the way forward," Johndroe told reporters in Crawford, Texas, where Bush was vacationing at his ranch.

The White House plans to have Petraeus and Crocker testify before the report's official September 15 release, but they will likely "offer a very candid assessment" already then, Johndroe said.

The September 15 deadline for the report has loomed large in the sparring between the Democratic-led Congress and the Republican White House over the future course of the war.

Bush's popularity in the US has slumped because of the war and many in Congress, including some Republicans, want to set a deadline for withdrawing troops from Iraq.

But Bush, who ordered some 20,000 extra troops to Iraq this year has repeatedly asked for patience until Crocker and Petraeus deliver their update, which will be pivotal in determining whether the strategy has made progress.

White House says no limits on Iraq testimony - Summary :

Quartet summit to concentrate on fundamentals – spokesman

The official spokesman for the Iraqi government said on Wednesday that the quartet summit scheduled for today will concentrate on fundamental subjects, not draft laws.

“The fundamentals are: political agreement among parliamentary blocs, possible reforms to the government and reviewing the government’s program,” Ali al-Dabagh told the independent news agency Voices of Iraq (VOI) by phone.

“The summit will not discuss oil and gas draft laws and the debaathifcation law,” he affirmed, saying “these issues could be tackled after discussing the fundamentals, so as to end this aggravated political crisis, which flared up after the withdrawal of some political blocs from the government.

He reiterated the government’s keenness to hold talks with all blocs within the framework of the constitution.

“If the Iraqi Accordance Front preferred to come back to the government it is welcome, and if it preferred to stay as opposition in the parliament it is welcome also,” the spokesman noted, stressing that “some blocs' boycotts would not hamper the political process.”

Quartet summit to concentrate on fundamentals – spokesman | Iraq Updates