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

This article is about the GCC...


Hopes light up for revaluation

Published: September 10, 2007

Dubai: The Gulf central banks' collective decision to pursue independent monetary policies to quell the surging inflation has re-ignited hopes of revaluation of some of the region's currencies, especially the UAE dirham and Qatari riyal.

Governors of the GCC central banks, who met in Saudi Arabia on Saturday, said the 2010 currency union target is difficult while allowing the GCC member states devise individual strategies to deal with domestic inflation.

Although central bank governors of Saudi Arabia and Oman clarified later that independent monetary policy measures would involve only interest rate adjustments, analysts said yesterday that some GCC governments would opt for something more concrete than interest rate adjustments such as revaluation or even depegging to deal with inflation.

"Initially, the independent monetary policy is likely to mean largely interest rate adjustments. However, the move has increased the expectations on a possible revaluation of currencies or a move to a more flexible currency regime," said Monica Malik, an economist with EFG-Hermes, a regional investment bank.

In the context of the US Open Market Committee's concerns over a slow down, a rate cut in the US is widely anticipated on September 18. UAE central bank governor Sultan Bin Nasser Al Suwaidi declined to comment when asked whether he was considering changing the reference rate of the dirham.

"A US rate cut leaves the UAE and Qatar with limited choices: They can continue to follow US monetary policy, lower interest rates and risk an uncontrollable inflationary trend; or they can follow Kuwait's footsteps and free their currencies from the dollar," said Reem Mansour, an analyst with Cairo-based HC Securities.

A common target of achieving the monetary union by 2010 has been the prime motive for having a monetary policy convergence in the region. "A decision to have independent inflation policy would mean lack of uniformity in monetary policies of GCC states, which would make it difficult for the region to achieve currency union any time soon," said Malik.

Gulfnews: Hopes light up for revaluation

Analysis: Deeper than an oil law in Iraq

Published: Sept. 10, 2007 at 12:01 PM

DUBAI, United Arab Emirates, Sept. 10 (UPI) -- Both Iraq’s federal government and the Kurdistan Regional Government are upset by each other’s efforts in reaching a deal on a national oil and gas law and have announced moves to develop the oil sector without it.

Neither has given up, however, on the hydrocarbons law, a tool that will both govern development of resources that bring in nearly all the government’s revenue and allow various factions to air their wants and find a compromise.

“If for any political reason the law is delayed, we’ll go ahead and start discussions with international oil companies,” Iraqi Oil Minister Hussain al-Shahristani said Saturday at an Iraq oil conference in Dubai, United Arab Emirates.

On Sunday, on the sidelines of the Iraq Petroleum 2007 summit, organized by The CWC Group, he said tenders for projects in Iraq’s vast oil and gas sector “will be announced in due time.” He didn’t say exactly which fields or exploration blocks, but they are included in the first phase of a five-year plan he outlined over the weekend, he said.

“The Ministry of Oil is entitled to sign any contract that is for the best benefit to the country,” he said. The government has been holding out for the federal law, but it appears pressure is wearing the patience thin.

The same goes for the KRG, which on Saturday announced it signed a production-sharing contract with an Iraqi-based subsidiary of Hunt Oil Co. of Dallas and Impulse Energy Corp.

“Any contract that has been signed by anybody other than the Ministry of Oil now before the new law is legislated has no standing as far as the government of Iraq is concerned,” Shahristani said Sunday of the deal. The KRG has signed a handful of oil and gas exploration and development deals with private firms, all of which have been condemned by Baghdad.

Shahristani said only the first four deals, struck prior to reaching agreement on a federal oil law, would carry any water with him. They would be reviewed by a federal oil and gas council established by the law to ensure they comply with it.

“We are not really looking for any blessing from others because we don’t need any of it,” KRG Natural Resources Minister Ashti Hawrami said in a telephone interview from Iraq. “Instead of undermining KRG’s achievements we would like to encourage others to work with us on the federal law to make some real progress in all the country.”

Without a new federal oil law, which has been in negotiations for more than a year, Iraq relies on legislation instated in the 1980s, which Shahristani says gives him the right to sign new deals. Hawrami said the 2005 constitution gives the Kurdistan region the right to pass its own oil law, which it did last month, and sign deals as well.

“Our recently enacted regional oil and gas law has nullified any other law before it. That is our constitutional right and we have done that,” he said, adding more deals are in the pipeline. “But, that only applies to the Kurdistan region, and the rest of Iraq is still governed by the old laws.”

The debate is more complex than merely negotiating laws and interpreting a constitution. There are layers of mistrust and fear fomented by decades of violent, strongman power wielded mostly along sectarian lines by Saddam Hussein. Such tension has been exacerbated by the past four plus years of an occupation that sought to use sectarian categories or roles to bring a slice of power to Iraq’s Shiite and Sunni Arabs and Kurds. But succeeding in being inclusive, the new form of government is also fractured along such identities.

The oil law, in turn, is not simply legislation governing the third-largest proven reserves of oil in the world. Oil sales funded more than 90 percent of government last year, so the oil is a base for power in Iraq. Agreeing on how to share and/or divvy that power (the extent of federalism in the new Iraq) and best develop the crude source of the power (the extent international investors can enter the longtime nationalized oil sector) is a litmus test.

The Bush administration and Congress included passage of an oil law as a benchmark for Iraq’s government (although the benchmark language referred to an oil law that decides how the oil revenue is to be shared, which will be decided in a separate revenue-sharing law). They said passing the law would lead to reconciliation.

As negotiations over the law turn tense, widening the gap between political players and creating the real or perceived need for unilateralism, it appears the law itself could be the proving ground for intra-Iraqi cooperation. It’s a decisive and divisive issue for Iraq, suffering from daily violence and a dwindling quality of life; it may not fit in an occupying power's cynical timeframe.

Indeed, backroom talks have seen successes. But soon after surfacing, deals break down or are found to be incomplete. In February an agreement was announced, but now neither the Kurds nor the central government can agree on changes each side wants or has made. Both still say they want to find a solution. That’s a feat considering the pressure being applied not only by the United States, other governments and institutions like the International Monetary Fund, but internally as well.

The Iraqi government is becoming weaker every day citizens experience long hours without electricity, long lines for fuel and hopes of restored healthcare, water, sewage and education systems. That, along with the violence, is spurring fighting between parties, even those allied by ethnicity or religion.

The oil unions in the south are so worried they’ll lose jobs and the country its natural resource that they vowed Sunday to strike if the law passes. They feel it gives too much to the international oil companies, which are putting pressure on the government as well. Thousands of top officials of the global oil industry attended two Iraq energy conferences in Dubai over the past eight days, urging attending Iraqi government officials to move faster.

“Iraqis have yet to agree on the shape of the country they live in. They need to agree on how to share resources and how to share power,” Yahia Said, director of Middle East and North Africa at the Revenue Watch Institute, said during the final panel discussion at Sunday’s summit. “It’s a matter that needs to be discussed and debated. … Iraqis need time and space to do that.”

United Press International - International Security - Energy - Analysis

Iraq to Export Crude Oil to Iran

10 Sep 2007

TEHRAN (Fars News Agency)- Baghdad is to export 100,000 barrels of crude oil a day to Abadan's refinery in south of Iran, the Iraqi oil Minister said.

In return, Iran is to provide Iraq with oil products to meet its demands.

The Iraqi petroleum, planned to be transported to the oil refinery in Abadan by trucks, would be priced according to international rates, Iraqi oil Minister, Hussein al-Shahrestani said.

Shahrestani stated that Iran was expected to export 1.5 million metric tons of kerosene and 1.5 million tons of gasoline to Iraq in return.

De****e the shortage of oil products in Iraq that has emerged since and as the result of the US invasion of 2003, Baghdad has not yet been able to meet its domestic demand.

Fars News Agency :: Iraq to Export Crude Oil to Iran

Govt. launches economic and social projects

10 September 2007 (Al-Sabaah)


The Govt. strengthened its plan of reconciliation by launching wide projects aim to take part in economic and social life and its stability.

These projects include national campaign which adopted by PM Noori Maliki to marry thousands of youth from all sects and races and provide big money grants for them as well as employing many unemployed in provinces besides giving loans to create small projects, Dr. Aboud Waheed, PM's advisor of tribes' affairs and member of the national reconciliation committee said.

Govt. launches economic and social projects | Iraq Updates

Iraq: Partition is imminent

This article is response to “Jonathan Steele, The advocates of partition in Iraq only makes things worse”. By Mufid Abdulla

10 September 2007 (KurdishMedia)

The article should have been named ‘Playing at God/Allah/Abba’: because even the name of that deity is to be made as uniform as the size of our Euro-tomatoes if the press are to be believed whilst it also describes what we in the West are actually doing in reallocating the birth rights of another nation. De****e all that has, and is happening, that nation, the Kurds, has maintained a relatively dignified face.

The article tone is resigned: resigned apparently to the people of Kurdistan remaining a sub-race. That partitioning is acceptable: this de****e the lessons we should have learned over 60 years ago with regard to the India and Pakistan experience. Lessons we should have learned further whilst watching brother fight brother in the former Yugoslavia which was then divided and is now crumbling economically whilst the larger family of Slavs is still internally at war. It is not necessarily partitioning that is required rather an acceptance of the claims and rights of the Kurdish people which has been presented and proven over many years.

Steele begins by recognising the outrageous atrocity which resulted in the devastating deaths of a small but important community of Kurds in Northern Iraq. Let us examine that last statement: the people killed were Kurds. That they had a religion that dictated their everyday lives has nothing to do with the reason for this attack. They are described as a small (and therefore separate) community because they do not follow what is popularly believed to be the ‘usual’ religion followed by Kurdish people: Islam and Muslim. This can be compared to the experiences of the people of Iran which is now known as ‘The Islamic Republic of Iran’ where the oldest and still (secretly) practised religion is Zoroastrian.

The Yezidi people of Kurdistan have worshipped in their own, non-aggressive, way quietly and safely since Middle Eastern prehistory. People had recently been travelling to the area in which the Yezidi had been settled because it represented a haven of safety free from what is Iraq at war. Considering their peaceful attitude, apart from the fact that life is precious, it is a travesty that they have been sacrificed because of a misguided idea that they could ‘tip the balance’ should a referendum decide the future partitioning of Iraq: partitioning which would ‘allow’ Kurds to have their own piece of land ‘carved up’ and presented by an, as yet unnamed, cartographer.

Now let us examine the word ‘partition’. According to the on-line Thesaurus it translates as ‘rift’, ‘crack’, ‘fracture’ and ‘rupture’. These definitions are important as they really do describe the result of a division of a people. The Kurdish people are as one. The Kurdish people do not require outside assistance to draw their boundaries. The Kurdish people are very definite about what constitutes their country: please note the use of ‘country’ and not ‘state’. They do not want to be a state of that country, Iraq, which has treated them with little respect but rather their already declared and historically proved right to land that, is by right theirs and includes Kirkuk.

Let us begin the article again. How could this happen? Why were the borders not protected? The reasons for this are obvious. There is no border control. The Kurds, who would protect their borders and those who live within them whether they be black, white, green, Muslim, Christian, Jewish, or any other culture, religion or creed have been denied that right. It has been said that the Kurds cannot be a nation due to the many different dialects: thus if they do not share a common language they cannot possibly share a national responsibility. This is an absolute nonsense which can be simply likened to this country, the UK, which shares not only a mass of dialects inherited through invasion throughout history, and, as for dialect: a lump of cooked dough is named as a bun, barm cake, muffin, bread bun, bap…...etc. Dependant on which part of this small island race it is made!

The Kurds are a peaceful, tolerant and intelligent people. Why then do the American Democrats advocate maintaining an armed presence in Kurdistan? As Steele points out, the referendum looms closer and yet there is less stability in Iraq than before the invasive interference of the western powers. Should the Kurdish people attain status as a country and be enabled to govern fully, then that country would grow to equal Dubai. The elements are there to enable it to emerge as a shining example of a newly free people who have been frustrated by their isolation and enclosure within a country, Iraq, to which it has been securely attached for many fraught and frustrated years.

Perhaps it is now time for those of us in the West to realise that we are different. We think differently. We are comparatively safe. We have a fairly assured sense of identity. We are very lucky. It is not for the West to legislate how others should think or feel about their identity. Considering this, Steele’s parting shot that they (the Kurds) should be satisfied with what they have now is patronising and unnecessary.

The Yezidi have been made scapegoats, not because of their religion but because it was conveniently easy to target them not just because their resistance was low due to their peaceful nature, but also geographically. The area attacked is adjacent to Mosul which can be and is generally regarded as one of the major hotbeds of the Sunni terrorist. The Yezidi can now be added to the long list of victims annihilated by terrorist activities in the name of a peace that is too long in coming.

Until the borders are defined and globally accepted; until that land is declared a country in its own right; these and other such atrocities will continue. It will not make things worse as Steele believes; rather it will allow the people of Kurdistan to regain their common identity and grow proud again.

Iraq: Partition is imminent | Iraq Updates

Real estate activity

10 September 2007 (Iraq Directory)

Real estate activity at Baghdad's Al-Rusafa has witnessed remarkable steps led to a gradual rise in real estate prices when selling and renting, and especially renting which was more active than selling; this prompted the return of the owners of companies and real estate offices in most regions of Al-Rusafa to work, and this indicates the recovery of real estate activity. Some observers attributed this to the relatively stable security at Al-Rusafa, which made the population flee and congregate in those areas and this is natural, but it may lead to unnatural repercussions represented in the high real estate prices when renting and selling and the imbalance of the theoretical number of the population with the size of municipal services, health and education, which burdens those service institutions and requires them to take into consideration the exodus of the population from Karkh in Baghdad and the surrounding areas to work on providing services commensurate with the amount of their numbers. Although real estate movement throughout Baghdad were and still linked to the security situation, however, it did not indicate any stable or positive feature but rather confusion in most aspects of economic life because of the deterioration of security and its negative points; de****e the active real estate movement in the areas of Al-Rusafa, however, this movement was marked with higher prices and rents on an irregular basis, without specific levels that can be followed by economic analyst for the real estate sector in Baghdad .. This confusion... This imbalance would cast a shadow over the economic cycle which the housing sector makes an important and vital pillar of it.

This active movement of housing at Al-Rasafa is linked to the security situation throughout the capital, which means that Al-Karkh may witness the same active movement if the security situation became better; however, this can not be regarded as positive, even though it had a positive impact on the owners of companies and real estate offices. According to the economic perspectives, this situation is confused and chaotic that will soon fade and disappear along with the security situation.

Real estate activity | Iraq Updates

Iraq needs $20-25 bln for refineries-oil official

10 September 2007 (Reuters)

Iraq will require up to $25 billion in investment to expand its refining capacity over the next five to seven years, an Iraqi oil official said on Saturday.

Dathar al-Khashab, director-general of the state-run Midland Refineries Co, said that estimate included expanding Iraq's five existing refineries and building four refineries, as well as the cost of crude pipelines, product pipelines and depots.

"The huge surge of prices in construction costs means this figure could be moderate," he said on the sidelines of a conference in Dubai.

"This could be done from internal financing and the other way is through joint ventures, inviting international companies to come in and offering a lot of incentives to do so."

Iraq has the world's third-largest proven oil reserves but its refineries have suffered from a decade of sanctions and four years of violence since the U.S.-led invasion of 2003, which has hampered investment.

In 2002, Iraq had total installed refining capacity of some 590,000 bpd, operating at 90-95 percent, Khashab said. The refineries were operating at 60 percent in 2005, when Iraq suffered a gasoline shortage of 10-12 million litres, he added.

While that has eased, Khashab said, demand was likely to rise again if the security situation improves. The shortages have already resulted in a thriving black market in fuel.

Khashab said each of the existing refineries, would cost $1.5 billion to expand.
Plans were also afoot for the construction of a new 300,000 bpd refinery in the southern city of Nassirya and three 150,000 bpd refineries in Amara, Kerbala and Kirkuk, though the projects are mostly still at the consulting stage.

"The one in Kerbala we have done some engineering on and the FEED package is going to be tendered in the next few weeks," he said. "We are having problems with the new pricing. The main thing that is hampering us is the misunderstanding from companies... It is not like before. We are now transparent."

Some foreign companies have been wary of entering Iraq amid daily violence, a lack of transparency and a legal vacuum in some areas. Many international oil companies are awaiting the passage of a new federal oil law that will regulate the sector.

The much-anticipated bill has been approved by the government after months of talks but has yet to be passed by Iraq's parliament.

Iraq needs $20-25 bln for refineries-oil official | Iraq Updates

Pentagon planning base near Iraq-Iran border: report

10 September 2007 (Reuters)

The Pentagon is preparing to build a military base near the Iraq-Iran border to try to curtail the flow of advanced Iranian weaponry to Shiite militants across Iraq, the Wall Street Journal reported on Monday in its online edition.

Quoting Maj. Gen. Rick Lynch, the commander of the Army's 3rd Infantry Division, the Journal said the Pentagon also plans to build fortified checkpoints on major highways leading from the Iranian border to Baghdad, and install X-ray machines and explosives-detecting sensors at the only formal border crossing between the two countries.

The base will be located about four miles from the Iranian border and will be used for at least two years, according to the report. U.S. officials told the paper it is unclear whether it will be among the small number of facilities that would remain in Iraq after any future large-scale U.S. withdrawal.

The report comes on the same day the top U.S. commander in Iraq and U.S. Ambassador Ryan Crocker present a progress report to Congress on the war.

U.S. President George W. Bush, under mounting pressure to change course in Iraq, plans a prime time speech on the war this week. He is unlikely to unveil a major shift in strategy in the 4-year-old war that has claimed the lives of more than 3,700 U.S. troops and tens of thousands of Iraqis.

Early Monday morning, Pentagon spokesman Lt. Col. Jonathan Withington told Reuters he could not comment on the specifics of the report, but said: "Coalition and Iraqi partners will continue to put pressure on the enemy, including disruptions of any supply lines, in an effort to reduce violence and to protect the Iraqi people."

Lynch told the paper, "We've got a major problem with Iranian munitions streaming into Iraq. This Iranian interference is troubling and we have to stop it."

U.S. officials accuse Iran of fomenting violence to destabilize Iraq and of seeking to build nuclear weapons under cover of civilian nuclear program, charges Iran denies.

Maj. Toby Logsdon, the U.S. officer overseeing the project, told the Journal that the new outpost will have living quarters for at least 200 soldiers, who could arrive in November.

"Iran will know this is here -- they will have to rethink how they do things, and the smugglers will have to rethink how they do things," Logsdon told the Journal.

Pentagon planning base near Iraq-Iran border: report | Iraq Updates

Petraeus says directives achievable slowly

U.S. Army Gen. David Petraeus said Monday he believed U.S. directives in Iraq would be met, cautioning that there are "no easy answers or quick solutions."

Petraeus, providing a legislatively mandated assessment to the U.S. House of Representatives Foreign Affairs and Armed Services committee, said he believed U.S. combat troop levels could be pulled back to pre-surge levels by next summer, based on a number of factors, including an overall reduction of security incidents, as well as a lower number of civilian and ethno-sectarian deaths, even though the numbers are "still at troubling levels," he said.

He said Iraqi forces were taking on responsibilities, "albeit slowly," in military operations.

He said "tribal rejection" of al-Qaida has spread throughout Iraq.

While saying he believed the United States could "achieve our directives in Iraq over time," it would be neither quick nor easy.

"It will take time," he said

He prefaced his remarks by saying his testimony hadn't been cleared or shared with Pentagon or White House officials until it was distributed.

Petraeus says directives achievable slowly : US World

Iraqi PM inaugurates 2nd Iraq's neighbors' conference

Baghdad, 10 September 2007 (Voices of Iraq)

Iraqi Prime Minister Nouri al-Maliki on Sunday inaugurated the 2nd conference for Iraq's neighbors in Baghdad with the participation of more than 19 states and organizations, stressing that his government "is resolved to regain security and uproot terrorism in the country."

"Iraq is resolved to regain security and stability and the government is determined to uproot terrorism," Maliki said in his speech to the participants.

The Prime Minister added "the Iraqi government is making progress in all fields and is working to invest the country's riches properly."

Maliki received recently heavy criticism from U.S. officials and congressmen on the stalled progress towards passing what they described as "essential draft laws for achieving national reconciliation and wealth sharing."

"Iraqi institutions nowadays work according to the constitution that was approved by the Iraqi people in a general referendum. Among the major principles mentioned in that constitution are establishing good relations with neighbors, non-interfering in other countries' internal affairs, adopting dialogue as a means to solve problems and combating common challenges," Maliki told the conference.

The Iraqi premier who appreciated the presence of the participating delegations said "holding the 2nd conference in Baghdad has many implications, chiefly among them, showing support to Iraq and desire to establish sincere ties with it."

Maliki expressed his government's keenness on overcoming the challenges posed by what he branded as "forces of evil, terrorism, gunmen and militias."

"The Iraqi government acts towards rebuilding the country's economy after the damage sustained due to the Iraqi invasion of Kuwait in 1991," Maliki also said.

Iraqi Foreign Minister Hoshyar Zibari, on his part, urged, in his address, Iraq's neighbors to exert more efforts to help regain security and stability in the war-torn country.

The conference was scheduled to be attended by 22 states and organization but the delay in the arrival of some delegations caused it to convene with the participation of delegations representing 19 states and organizations.

Iraqi PM inaugurates 2nd Iraq's neighbors' conference | Iraq Updates