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

Country Report No. 07/301:

Iraq: 2007 Article IV Consultation, Fifth Review Under the Stand-By Arrangement, Financing Assurances Review, and Requests for Extension of the Arrangement, Waiver of Applicability, and Waivers for Nonobservance of Performance Criteria - Staff Report;

Public Information Notice and Press Release on the Executive Board
Discussion; and Statement by the Executive Director for Iraq.

Published August 2007

http://www.imf.org/external/pubs/ft/...07/cr07301.pdf

C. Monetary and Exchange Rate Policy

34. The CBI will continue to manage the exchange rate with a view to reducing inflation and reversing dollarization, and monetary policy will be further tightened, if the inflation situation required this (SMEFP-3,¶11). While the recent appreciation of the dinar has been successful in helping to reverse dollarization and contain inflationary pressures, the authorities agreed that inflation needs to be further reduced. To this end, they are committed to allow the exchange rate to appreciate gradually in the coming months, while closely monitoring the effects of this policy and adjusting the pace of appreciation as needed.

35. The authorities intend to maintain the link of the dinar to the dollar.

In the absence of an effective monetary transmission mechanism and indirect monetary policy instruments, the CBI will continue relying on the exchange rate as the principal nominal anchor for the economy. While the exchange rate will remain the main policy instrument, it will be backed up, as needed, by adjustments in the policy interest rate.

36. Due to data limitations and many structural changes in the economy, it is not possible to estimate the equilibrium real exchange rate.

Also, since Iraq is an oil economy, it is difficult to interpret real exchange rate developments based on simple intervention analysis and developments in Iraq’s current account data. However, the improvements in the terms of trade over the past three years and higher current government spending in 2006 have most likely resulted in an appreciation of the equilibrium real exchange rate. With the nominal exchange rate fixed to the dollar for most of the past two years, the adjustment of the real exchange rate to its new equilibrium was reflected in persistent high core inflation. With the policy of allowing the exchange rate to appreciate and the subsequent drop in inflation, the undervaluation of the exchange rate has been significantly reduced. Nevertheless, the real exchange rate likely remains somewhat undervalued as core inflation is still high. Therefore, the authorities agreed that the nominal exchange rate should appreciate further, which should also help to contain inflationary expectations. This policy of gradual appreciation is believed to have a minimal impact on competitiveness, given that Iraq’s main export commodity is oil, and that to achieve lasting gains in competitiveness it is essential to improve security and implement productivity enhancing structural reforms.

37. Iraq continues to maintain a liberal exchange regime.
The authorities confirmed that in practice there are no restrictions on current and capital transactions as long as underlying transactions are supported by valid documentation. However, it remains unclear whether Iraq maintains exchange restrictions subject to Fund jurisdiction as the review of exchange regulations by staff is ongoing. As part of this review, the authorities have submitted exchange regulations and recently provided clarifications requested by staff.

Partial lifting of curfew in Karbala

Karbala, Aug 31, (VOI)- A partial lifting of the curfew imposed on the city of Karbala will be in force on Friday, the chief of Karbala operations said.

"A partial lifting of the curfew will be in force in the city of Karbala from 4:00 pm till 9:0 pm," General Othman al-Ghanemi told the independent news agency Voices of Iraq (VOI).

"Another curfew will be imposed on the city on Saturday from 9:00 pm till 6:00 am everyday and until further notice," he noted.

"Vehicles carrying foodstuffs are allowed to enter into the old city even during the curfew hours," the general affirmed.

Karbala witnessed a series of fierce clashes between gunmen and police forces, where scores of people were killed and injured.

The clashes took place in Karbala while the Shiite city was receiving hundreds of thousands of Shiite pilgrims heading to the shrines of imams al-Hussein and al-Abbas as a prelude to celebrating the birth anniversary of Imam al-Mahdi on Tuesday night and Wednesday morning.
Karbala is 108 km southwest of Baghdad.

Aswat Aliraq

US ready to move into Basra as British pull out

The Pentagon has said it will deploy troops to Basra if necessary to fill the vacuum left by a British withdrawal.

Brig Gen Richard Sherlock, deputy director for operational planning at the Pentagon, was adamant US forces would not allow any security advances in southern Iraq to be squandered, even if it meant running the risk of weakening American efforts elsewhere in the country.

He said the US command would “reposition forces with the battlefield geography in mind so that they don’t give up gains that they’ve made in different areas, including in Basra and the south”. He added: “As the UK forces reposition ... all that will be taken into account.”

The uncertainty about how quickly Gordon Brown will take troops out of Iraq has raised tensions with Washington ahead of a progress report by the US commander in Iraq, Gen David Petraeus, to be delivered soon to Congress.

In recent weeks US military analysts, former generals and unnamed Bush administration sources have suggested that British forces have failed in Basra and are set to flee just as they are most needed, as their US allies finally appear to be making some headway in improving security and most other members of the coalition have quit.

In response Des Browne, the Defence Secretary, and David Miliband, the Foreign Secretary, have taken the unusual step of writing a rebuttal to those claims on the comment pages of the Washington Post.

“Recent weeks have brought a lot of misplaced criticism of the United Kingdom’s role in southern Iraq. It is time to set the record straight,” they wrote.

“The question some people have asked is: Have British forces failed in Basra? The answer is no.”

They said the goals of setting up democracy and functioning government institutions had been achieved.

“There is no anti-government-insurgency, and very little evidence of an al-Qa’eda presence in southern Iraq,” they wrote, while admitting there was frequent violence between Shia groups.

Britain has 5,500 troops in Iraq - 5,000 at a vast airport complex outside the city and the remainder in an old palace in the city centre.

There are plans to pull the 500 at the Basra Palace out of the country soon.

Most British troops in Iraq are on what the Government describes as “overwatch”, protecting their bases, training Iraqi forces and responding to threats only if attacked.

They also protect US supply routes from Kuwait.

The question facing the Government is when to hand over security for Basra and how quickly to then start reducing the 5,000 troops without upsetting the Americans, or a public weary of the war.

That decision may be made easier if pressure grows on Mr Bush within the US military to reduce the 160,000 US troops serving in Iraq.

The president has heard deep concerns from leaders of the Army, Navy, Air Force and Marines about strains that are building on the force - and on troops’ families - as a result of lengthy and repeated tours in Iraq.

Two independent assessments of the situation in Iraq already have been previewed this week - the latest finding that Iraq’s national police force is so corrupt and influenced by sectarianism that it should be scrapped and replaced with a smaller force.

An independent commission established by Congress to study Iraq’s security forces will recommend reforming the troubled 25,000-member force, a Pentagon official said.

The sense of isolation around President Bush and the Iraq mission has increased by the prospect of Australia pulling out its 500 troops in Iraq if Labour candidate Kevin Rudd defeats John Howard, a staunch Bush ally, in a forthcoming election.

Mr Bush told Sky News ahead of a visit to Australia that he would ask Mr Rudd to keep troops in Iraq and 'consider conditions on the ground’.
“What matters is success. And I believe we can be successful,’ he said.

US ready to move into Basra as British pull out - Telegraph

Gordon Brown won't set Iraq pull-out timetable

Gordon Brown firmly rejected calls to set a "pre-determined exit timetable" for British troops to leave Iraq last night, insisting they would stay as long as necessary.

The Prime Minister's remarks, in a letter to Sir Menzies Campbell, the Liberal Democrat leader, were aimed at ending speculation rife in Washington that he may order a rapid pull-out of Britain's remaining 5,500 troops.

American military commanders have voiced concern in recent days over Mr Brown's reluctance to speak out about the Iraq crisis and expressed fears that Britain might order a complete pull-out from the southern city of Basra, leaving the United States to fill the void.

Mr Brown told Sir Menzies that Britain had obligations both to the Iraqi government and the United Nations to stay the course until the country's own security forces were ready to deliver stability across the whole of the south.

Decisions on troop deployment and other military issues would be taken on the basis of advice from commanders "on the ground", he said. His comments came as new figures show the total cost of the Iraq war has soared to £6.6 billion, making it the most costly conflict since the Second World War.

"I believe that we continue to have clear obligations to discharge," the Prime Minister said. "We are there at the express invitation of the Iraqi government, implementing a UN mandate renewed last November.

"We, together with the rest of the international community, have undertaken to support the country's political and economic development through the UN-led International Compact for Iraq. These are commitments it is not in our interests simply to abandon."

The stronger language will reassure the White House that Mr Brown is not planning any major departure from the policy pursued by Tony Blair, his predecessor.

On Afghanistan Mr Brown said "dangerous and difficult" tasks remained. But he stressed it was vital that the international community did not allow the country once again to become a "failed state".

He said there was "much to do" and that progress would be measured in a wider sense than mere military successes against the Taliban. It would be judged according to the stability of government in the country, reconstruction, economic development and the building up of local security forces.

The figures revealing the cost of the war in Iraq are based on the latest Whitehall departmental spending figures. They show that when aid, debt relief and security costs are taken into account, the total is £1.6 billion higher than the £5 billion outlay admitted by the Treasury.

Experts say the £6.6 billion figure still underestimates the true total because it does not take into account hidden costs such as extra salaries and the long-term care for soldiers who have suffered mentally and physically.

The costs of regular trips by politicians, diplomats and others to the region are also not included.

Although the figures, calculated by the Financial Times, are dwarfed by the £200 billion-plus spent by the US government in Iraq - where American forces outnumber Britain's by 20 to one - their publication is certain to fuel calls for a speedier withdrawal of British forces from the combat zone.

The number of British troops has already been reduced from 7,200 at the start of this year to 5,500 now. It is due to fall to 5,000 next month and Mr Brown is bound to face calls at the this year's TUC Congress and Labour Party conference to accelerate exit plans.

The Iraq war has already proved more expensive than the Falklands conflict which, in today's prices, cost £4.2 billion. The Forces spent £956 million in Iraq in 2006-07 and £738 million in Afghanistan.

Gordon Brown won't set Iraq pull-out timetable - Telegraph

White House Press Secretary Snow Resigns

WASHINGTON — White House spokesman Tony Snow announced Friday he will step down Sept. 14 and will be replaced by deputy press secretary Dana Perino.

Snow, who has been undergoing chemotherapy, said his decision was not related to his health.

"I ran out of money," said Snow, who was a well-paid conservative pundit and syndicated talk-show host on Fox News Radio before taking the job in April 2006.

"As far as my health, I'm doing fine," he said. "Cancer has nothing to do with the decision."

President Bush, who joined Snow in the White House press room for the announcement, praised him for being able to talk about issues "in a way that the American people can understand."

"He's smart, he's capable, he's witty," Bush said.

The president said Tony's successor, Perino, was also smart and capable.

"She can handle you all," Bush told reporters.

Perino, 35, has served as Snow's principal deputy, filling in for him when he was away after surgery and at other times. Before joining the press office, Perino worked as associate director of communications at the White House Council on Environmental Quality.

Snow, a 52-year-old father of three, said he planned to give speeches and write books, particularly on dealing with illnesses. He also said he would stay involved in politics.

"I'll be going around the country and talking about things I care about," he said.

In 2005, Snow had his colon removed and underwent six months of chemotherapy after being diagnosed with cancer. This March, he underwent surgery to remove a growth in his abdominal area, near the site of the original colon cancer. Doctors determined it was a recurrence of his cancer.

He was out of work for five weeks, then returned and underwent chemotherapy treatments that only recently concluded and have left him thinner, grayer and with less hair.

Snow had little experience as a press secretary before joining the White House team. He worked in the White House under Bush's father as a speechwriting director and spokesman for regional issues. As a pundit, he had been sharply critical of Bush at times.

Snow, who succeeded Scott McClellan as Bush's third press secretary in six years, brought a smooth, often humorous, style to a relationship with the media that had undergone considerable strain.

Snow, who makes $168,000 a year as news secretary, said he took a considerable pay cut to come to the White House.

"I really wish I had the resources to be here until the final day, but I don't," he said.

Snow is the latest in a string of White House officials to resign in recent weeks. Friday was the last day of work for political strategist Karl Rove. Others who have left since Democrats won control of Congress are counselor Dan Bartlett, chief White House attorney Harriet Miers, budget director Rob Portman, political director Sara Taylor, deputy national security adviser J.D. Crouch and Meghan O'Sullivan, another deputy national security adviser who worked on Iraq.

http://www.usatoday.com/news/washing...-resigns_N.htm

Originally Posted by Wm.Knowles

This is the kind of BS that keeps many of us from participating in the forum.

You of all people shouldn't be calling anyone's post bs.....and Goldraker has the right to post his opinion whether you agree with it or not.

Wm.knowles.

Such postings from your side are not welcome here... If you want to stay away, then please do so, but do not dictate to the rest of us what can be/can't be posted by our members, in terms of their personal views....

Admin

Originally Posted by Lunar

You of all people shouldn't be calling anyone's post bs.....and Goldraker has the right to post his opinion whether you agree with it or not.

This msg was edited. It seems more like it was a personal message and kindly use the PM system to convey such messages please.

Regards
admin

Sunni clerics condemn Iranian president's statements to fill Iraq vacuum

Baghdad, Sept 1, (VOI) – The Sunni Association of Muslim Scholars (AMS) condemned statements by Iranian President Mahmud Ahmadinejad in which he said his country was ready to fill the security vacuum in Iraq in case U.S. forces withdraw.

"Iranian President Ahmadinejad's statements have caused concern to all groups of the Iraqi people," according to an AMS statement published on its web site on Friday.

"These statements would not be understood by the Iraqi people as a form of help. Iran's interference in Iraq since the (U.S.) invasion was negative and not in line with good neighborliness," it read.

The AMS, the largest organization for Sunni Muslims in Iraq, is outspokenly opposing foreign military presence in Iraq and the governments that ruled the country successively since the U.S.-led invasion of Iraq in march 2003.

The AMS also supports armed operations targeting foreign troops in Iraq.
"Statements of the Iranian officials during the past period were not encouraging to establish good neighborly relations because they involved maximizing the supremacy of a nation at the expense of another," noted the statement.

It pointed out that the Iranian statements also "would make the occupation forces linger in our country by keeping their military bases under the pretext of lessening Iranian interference and influence."

Aswat Aliraq

U.S. army hails Sadr's decision to freeze Mahdi Army

Baghdad, Sept 1, (VOI) – U.S. forces in Iraq welcomed Shiite leader Muqtada al-Sadr's decision to freeze his Mahdi Army militias for six months, calling on all Iraqi factions to boost the initiative, a U.S. army statement said on Saturday.

"The recent declaration by Muqtada al-Sadr calling on all members of Jaysh al-Mahdi [Mahdi Army] to end their violence is encouraging. It is particularly notable that Sadr gave his word of honor that Jaysh al-Mahdi will stop attacks," read the statement that was received by the independent news agency Voices of Iraq (VOI).

"The Multi-National Force-Iraq joins the Government of Iraq in welcoming Sadr's commitment to peace. If implemented, Sadr's order holds the prospect of allowing Coalition and Iraqi Security Forces to intensify their focus on al-Qaeda-Iraq and on protecting the Iraqi population, as well as on helping Iraq rebuild its damaged infrastructure and improve basic services, all without distraction from Jaysh al-Mahdi attacks," according to the statement.

"An end to Jaysh al-Mahdi violence would also be an important step in helping Iraqi authorities focus greater attention on achieving the political and economic solutions necessary for progress and less on dealing with criminal activity, sectarian violence, kidnappings, assassinations, and attacks on Iraqi and Coalition Forces. We call on all parties and all elements to support and enforce this new initiative," the statement indicated.

"Muqtada al-Sadr's declaration holds the potential to reduce criminal activity and help re-unite Iraqis separated by ethno-sectarian violence and fear. We look forward to confirming the reduction of violence that will result if those involved fulfill their commitment to following Sadr's direction," it concluded.

Sadr announced the freeze of his Mahdi Army militia after recent bloody incidents in the holy city of Karbala, 100 km south of the Iraqi capital Baghdad, during the past couple of days.

Scores of security men and civilians were killed or wounded during the rituals of a Shiite pilgrimage called al-Ziyara al-Shaabaniya, or the mid-Shaaban visit, to commemorate the memory of the birth of Imam al-Mahdi, the 12th holiest figure for Shiite Muslims.

Iraqi officials had accused the Mahdi Army militias, loyal to Sadr, of involvement in the armed clashes with Iraqi security forces in Karbala, which was flatly denied by Sadrist leaders

Aswat Aliraq