Thread: Archive Latest News - Think Tank - 01/01/08 - 14/04/08

Oil giants are poised to move into Basra
Brown's business envoy says that investment is the next step in bringing stability to the region

Western oil giants are poised to enter southern Iraq to tap the country's vast reserves, despite the ongoing threat of violence, according to Gordon Brown's business emissary to the country.

Michael Wareing, who heads the new Basra Development Commission, acknowledged that there would be concerns among Iraqis about multinationals exploiting natural resources.

Basra, where 4,000 British troops are based, has been described as 'the lung' of Iraq by Prime Minister Nouri al-Maliki. The region accounts for 90 per cent of government revenue and 70 per cent of Iraq's proven oil reserves. It has access to the Gulf and is potentially one of the richest areas in the Middle East, but continues to be plagued by rival militias.

Wareing, international chief executive of KPMG, was asked by Brown to help kick-start business in the Basra region in the hope that prosperity will bring stability. On his first visit last week, he met officials and business leaders but a sandstorm forced him to cancel a flight to Baghdad to meet Maliki and General David Petraeus, the US's commanding officer in Iraq.

In the first interview since his appointment, Wareing, 53, told The Observer that security had improved significantly in recent months and was no longer an issue for investors. 'If you look at many other economies in the world, particularly the oil-rich economies, many of these places are quite challenging countries in which to do business,' he said. 'Frankly, if you can successfully operate in the Niger Delta, that is a very different benchmark from imagining that Basra needs to be like London or Paris.'

Iraq's parliament has yet to pass a hydrocarbon law setting out the terms oil companies will operate on and how profits will be split. 'My sense is that many of the oil companies are very eager to come in now, and actually what they're waiting for is the hydrocarbon law to be passed and various projects to be signed off. That is what is causing them to pause, rather than the security position,' he said.

Wareing declined to name names but it is thought that Shell, Exxon Mobil and dozens of others are watching closely. The role of American corporations in Iraq has been hugely sensitive since the US-led invasion in 2003, which some critics said was motivated by the Gulf state's oil wealth.

Wareing acknowledged: 'If you look at any oil-rich country in the world today you will find there are real concerns in terms of how those energy assets are developed between the role of the multinationals and what is for the benefit of the local people. You'll find that very much in Russia, for example. You can imagine in the future that is something the Iraqis will be focused on, but I haven't really seen much evidence of that at all to date.'

Basra fell largely under the control of Shia militias after the ousting of Saddam Hussein and has witnessed a violent turf war, as well as high rates of murder and kidnapping. Corruption is rife, residents are afraid to use banks in case they are robbed and smuggling of oil and other goods helps fund militias and criminal gangs. Unemployment has been put at between 30 per cent and 60 per cent, and the agricultural sector is in serious decline as cheap imports grow.

The commission, funded by the Department for International Development, is a crucial part of Britain's strategy in Iraq, following the handover of power in Basra to Iraqi forces last December. Ports, airports, agriculture and banking are also seen as possible investment areas. The commission has organised an investor conference in Kuwait next month, targeted at Iraqi expats among others, and will stage an event in London in April for European and possibly US companies.

Wareing, a father of six from Worcestershire, has often travelled to 'challenging' locations in his role with KPMG, and was asked to take the unpaid position by Brown, whom he describes as 'a persuasive man'.

He said: 'The security and prosperity of Iraq isn't just about Iraq, it's about the Middle East and probably wider than that as well. To be asked to play a small part in that isn't something you get asked every day of the week.'

Oil giants are poised to move into Basra | World news | The Observer

Baiji-Baghdad-Anbar railway under works

Iraq is revamping a railway enabling the shipment of oil and other goods from Baiji to Baghdad and on to Anbar province.

"This line will mean there can be much faster exchange of goods around the country," a top transportation adviser to the Iraqi government told the Middle East Economic Digest. "The work should be completed in 45-60 days."

The more than 621 miles of railway is part of a $250 million project to restart all five of the country's rail networks. The passenger line between Baghdad and Basra, Iraq's oil and former cultural capital in the south, has recently restarted.

The track from Baiji will link the country's largest oil refinery south to Baghdad and then west into Anbar province. Oil, and perhaps products, will be able to be transported to other areas of the country in need.

Anbar province, like much of Iraq, is in need of more movement of such goods, as well as cement and fertilizer, to help boost the various economies.

Baiji-Baghdad-Anbar railway under works - UPI.com

c-view,

you seem to be the last beacon of optimism concerning the dormant iraqi dinar, and certainly the champion of continuing posts. through them all, i wonder about the politics behind the economics.

while it is clear that the oil is the force behind the economics, it is unclear what the basis of the functioning, or dysfunctioning, politics are, that hinders the stablility of the whole formula. your reports constantly highlight pending economics actions, yet the daliy US news reports only grind out the number of bombings or civilians kill. what will it take for the politicians and civilians to realize that its times for the belief in a different if/then logic statement for the whole situation?

something more like... that prosperity brings peace and peace brings prosperity.

still wishing us all success (and the prosperity of peace)

harrisomi

Originally Posted by harrisomi

c-view,

you seem to be the last beacon of optimism concerning the dormant iraqi dinar, and certainly the champion of continuing posts. through them all, i wonder about the politics behind the economics.

while it is clear that the oil is the force behind the economics, it is unclear what the basis of the functioning, or dysfunctioning, politics are, that hinders the stablility of the whole formula. your reports constantly highlight pending economics actions, yet the daliy US news reports only grind out the number of bombings or civilians kill. what will it take for the politicians and civilians to realize that its times for the belief in a different if/then logic statement for the whole situation?

something more like... that prosperity brings peace and peace brings
prosperity.

still wishing us all success (and the prosperity of peace)

harrisomi

Seaview, you good ,man.(i REALLY MEAN THAT , NOT SARCASM)

You create a fertile ground in our mind by your tenacity.
I was just thinking about war..2 wars in a region could be enought
but 3 would make some good money. So the value right here is war, then
some one opens the money gate. there is profit traded for a mental condition.

One that every one can deal with, talk with, and agree upon. (those in control).

So peace is an inside job, you know what I mean, some people or at odds with there mothers inside. So since the inside is not in demand it is uniformity not unity, so why not money since it really can distract from reality if you have it. Every body will get their profit, yes up until the very day the people realize that money is really not the profit at all.

night all

Maceman

Originally Posted by harrisomi

c-view,

you seem to be the last beacon of optimism concerning the dormant iraqi dinar, and certainly the champion of continuing posts. through them all, i wonder about the politics behind the economics.

while it is clear that the oil is the force behind the economics, it is unclear what the basis of the functioning, or dysfunctioning, politics are, that hinders the stablility of the whole formula. your reports constantly highlight pending economics actions, yet the daliy US news reports only grind out the number of bombings or civilians kill. what will it take for the politicians and civilians to realize that its times for the belief in a different if/then logic statement for the whole situation?

something more like... that prosperity brings peace and peace brings prosperity.

still wishing us all success (and the prosperity of peace)

harrisomi

Harrisomi,

I think if the Economics is sorted out the Politics will take care of itself.

With prosperity, comes more peace and goodwill.

Deputy premier urges U.S. to support Iraq turning into free economy

Iraqi Deputy Premier Burham Saleh on Wednesday called on the U.S. to support Iraq to turn into the free economy, stressing on the importance to focus on the economic file.

Addressing the inauguration ceremony of the Iraqi-U.S. Dialogue Forum in the economic cooperation field, Saleh, who is also the head of the Iraqi delegation, said "I call on the U.S. side to help Iraq to turn from the state-control economy into the free one, mainly after the great improvement of the security situation."

"Talks with the U.S. side will continue for two days," Saleh explained, noting that he asked the economic office' secretary to follow up the two-day forum's recommendations to implement them.

He stressed on the importance to focus on the economic file and citizens' living conditions, mainly after the improvement of the security situation in the most of the Iraqi provinces, especially Baghdad.

For his part, Iraqi Minister of Planning and Developmental Cooperation Ali Baban underlined the importance of the Iraqi-U.S. talks in the economic cooperation field to highlight U.S. commitment towards supporting Iraq, pointing out talks is a first step to discuss economic, political and technical issues.

Meanwhile, Finance Minister Baqer al-Zubeidi said his ministry concentrated while preparing the 2008 budget on the investment projects.

A press conference will be held on Thursday after the closing session to announce the joint recommendations.

Most of the Iraqi ministers, U.S. Ambassador to the country Ryan Crocker as well as senior American officials attended the forum.

Deputy premier urges U.S. to support Iraq turning into free economy | Iraq Updates

Iraqi Government selects Net1's UEPS Technology

Net1 UEPS Technologies, Inc. announced that it has signed a contract with a consortium comprising the Iraqi government and local Iraqi banks for the use of Net1's UEPS technology in Iraq.

Under the contract, Net1 will provide a customized UEPS banking and payment system to the consortium.

The consortium, International Smart Card LLC, selected Net1 as its partner to assist with the challenges currently encountered with the payment and distribution of cash disbursements in Iraq. It is expected that the UEPS technology will also be utilized by Iraqi citizens living abroad, via bank branches in other countries.

The deployment of the UEPS will provide a ubiquitous platform for retail payment transactions in Iraq by providing interoperability between automatic teller machines, point of sale devices and bank branches. The UEPS technology will provide offline and online transaction processing solutions to enable affordable products and services to be offered to Iraqi citizens irrespective of where they reside. Projects identified include the payment of social grants to war victims, employee salary/wage payments, banking products and financial services. The first project will pilot the solution for the distribution of social grant payments to war victims.

'This contract is further proof of the versatility and strength of our UEPS technological offering,' said Dr. Serge C.P. Belamant, chairman and CEO of Net1.

'Our solutions will allow the Iraqi government to provide a national payment system that can deliver secure, flexible and affordable financial services to the Iraqi people. We look forward to working with our partners to assist with the upliftment of the Iraqi citizens' lives.'

Net1 expects to commence this project in the fourth quarter of fiscal 2008 and expects to generate revenue from this contract in the first quarter of fiscal 2009. Under the agreement, Net1 will receive ongoing transaction and license fees, as well as payments for the provision of outsourcing services and the sale of hardware.

Brenda Stewart, Net1's Senior Vice President Sales and Marketing, added, 'Net1 is extremely proud to provide Iraq with its technology, which will prove beneficial to all participants including financial institutions, government departments, the private sector and, most importantly, the citizens of Iraq.'

Iraqi Government selects Net1's UEPS Technology | Iraq Updates

Stable demand for the dollar in daily auction

Demand for the dollar was stable in the Iraqi Central Bank's auction on Wednesday, registering at $62.250 million compared to $62.610 million on Tuesday.

"With the absence of cash bids for the first time this year, the demand was all for money transfers outside the country, which the bank covered at an exchange rate of 1,210 Iraqi dinars per dollar, the same for the 16th session in a row," according to the central bank's daily bulletin and received by Aswat al-Iraq - Voices of Iraq - (VOI).

The nine banks that participated in the auction offered to sell $12 million, which the bank bought at an exchange rate of 1,208 Iraqi dinars per dollar.

Speaking to VOI, Ali al-Yasseri, a trader, attributed the absence of cash bids to the recession in the local markets, which he credited to the Shiite Arbaeen pilgrimage, scheduled for tomorrow.

The Iraqi Central Bank runs a daily auction from Sunday to Thursday.

Stable demand for the dollar in daily auction | Iraq Updates

EU-Iraq agreement negotiations kick off

The 4th round of negotiations for the trade and cooperation agreement between Iraq and the European Union started on Tuesday in the Belgian capital Brussels, a foreign ministry statement said on Wednesday.

"The agreement comes as part of the EU's plan to support and assist Iraq in establishing development and political stability and its efforts towards reconstruction, and to achieve an EU-Iraq economic fusion," Read the ministerial statement that was received by Aswat al-Iraq, Voices of Iraq, (VOI).

"The under secretary for legal affairs and multiparty relations, Muhammad al-Hajj Hammoud, led the Iraqi delegation, which also included several representatives, experts and technicians from the concerned ministries," the statement indicated.

"The agreement aims to boost trade relations between Iraq and the European Union and to further enhance cooperation in the fields of economy, industry, agriculture, science, human rights, energy, security, transport, education, training, environment, culture, and archeology," the statement added.

During the opening session, the participants reviewed the progress made during the 3rd round and outlined the main topics that will be addressed during the new round.

Meanwhile, Hammoud stressed the Iraqi government's keenness on establishing the best relations with the union, describing the agreement as a "distinguished step on the way to improved relations."

EU-Iraq agreement negotiations kick off | Iraq Updates

Presidential Council issues budget, general amnesty laws

The Presidential Council on Wednesday issued the federal budget and the general amnesty laws and sent them to the Justice Ministry to be published in the official newspaper.

"The council did not reach a consensus on approving the law of provinces not classified within a region and returned it to the parliament to consider the articles being objected to," the council said in a statement received by Aswat al-Iraq – Voices of Iraq - (VOI).

The council also asserted its commitment to hold the provincial councils elections on time on Oct 10, 2008.

The parliament had approved the three laws last month and referred them to the Presidential Council.

Presidential Council issues budget, general amnesty laws | Iraq Updates