Al Ubaidi: Iraq needs foreign assistance
Iraqi Defense Minister Abdul Qader Al Ubaidi stated that Iraq will need foreign military assistance to defend its borders up to ten years as it is not able to preserve its national security until 2012. Visiting Iraqi Defense Minister to the United States affirmed that Iraq will be capable starting the first quarter of 2009 until 2012 of taking the upper hand of its internal affairs. However, Al Ubiaidi ruled out Iraq’s capacity to control its borders and respond to external threats before 2018.
Alsumaria Iraqi Satellite TV Network | Iraq News | Al Ubaidi: Iraq needs foreign assistance
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16-01-2008, 06:50 PM #341
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16-01-2008, 06:51 PM #342
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Al Hakim and Barzani confer about Kurdistan
Sayyed Abdul Aziz Al Hakim discussed with Kurdistan leader Massoud Barazani political and security developments in Iraq mainly issues concerning Kurdistan in addition to the security progress attained in the region and around Iraq. During the meeting, Al Hakim stressed the necessity of holding similar meetings to forge the political process ahead.
Alsumaria Iraqi Satellite TV Network | Iraq News | Al Hakim and Barzani confer about Kurdistan
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16-01-2008, 06:52 PM #343
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Iraq Minister of Construction and Habitat working to receive new loans
The Minister of Construction and Habitat Bayan Dazza Yi announced that the ministry is working hard to receive new loans from the world bank and draw in Arab and Foreign investments in order to begin the project of national habitat and start land distribution to beneficiaries. Iraqi Minister stressed the necessity of opening branches for Habitat Fund in all Iraqi Provinces in order to ease the process of lending citizens and start building residential compounds.
Alsumaria Iraqi Satellite TV Network | Economics News | Iraq Minister of Construction and Habitat working to receive new loans
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16-01-2008, 06:53 PM #344
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Major projects set forth to improve Baghdad sewage networks
Baghdad sewage department related to the secretariat’s capital set a plan to implement major projects in 2008 after gathering required amounts. The proposed plan includes a project to implement main networks, lines and new pumping stations for sewage networks with the rehabilitation of old pumping stations at a cost of 35 billion Dinars in addition to a project to improve sewage networks in old regions of Baghdad at a cost of 40 billion Dinars as well as other major projects to which are allocated more than 83 billion Dinars.
Alsumaria Iraqi Satellite TV Network | Economics News | Major projects set forth to improve Baghdad sewage networks
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16-01-2008, 06:54 PM #345
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Bush welcomes increasing oil production
US President George W Bush said that increasing oil production by OPEC will contribute to alleviate the burdens due to energy prices rise on consumers, thus increasing pressures on Saudi Arabia to act on reducing prices.
Bush warned that increasing energy costs could unfavorably affect the US economy.
On the other hand, Saudi Petroleum Minister Ali Al Nuaimi said that Saudi Arabia is working hard to provide oil market balance. He added that competitors add up the oil barrel price by 20 to 30 dollars.
Alsumaria Iraqi Satellite TV Network | Economics News | Bush welcomes increasing oil production
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16-01-2008, 07:05 PM #346
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New IMF Report - January 2008
Iraq: Request for Stand-By Arrangement and Cancellation of Current
Arrangement—Staff Report; Staff Supplement; Press Release on the Executive Board
Discussion; and Statement by the Executive Director for Iraq
http://www.imf.org/external/pubs/ft/scr/2008/cr0817.pdf
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16-01-2008, 07:20 PM #347
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IMF Sees Sharp Rebound In Iraq Economic Growth In 2008, 2009
Iraq should experience a sharp rebound in economic growth over the next two years as oil production continues to recover, though the outlook will depend on the precarious security situation in the country, the International Monetary Fund said Wednesday.
The IMF expects Iraq's gross domestic product to expand by more than 7% this year and next, said Mohsin Khan, director of the Middle East and Central Asia Department.
"Of course, all this is conditional on oil production expansion, and most importantly, on the security situation continuing to improve," he told reporters on a conference call.
The IMF's initial estimate for 2007 growth is 1.3%, although the final figures may come in above that level due to stronger-than-expected non-oil activity, he said.
The Iraqi government's failure to make much progress on its public investment program and ongoing unrest has kept oil production below anticipated levels, but a recent improvement in output is the main reason for the IMF's more optimistic growth outlook, said Khan.
The fund estimates oil production of 2.2 million barrels a day, up from an average of about 2 million barrels a day in 2006 and 2007.
Despite the production shortfalls, record-high oil prices have boosted the country's international reserves, rising nearly $7 billion in 2007 to $27 billion. Reserves are expected to reach $34 billion this year.
Last month, the fund approved a new $744 million credit agreement for Iraq, after the previous $471 million loan was paid off. The new standby agreement is "precautionary," said Khan, so the government doesn't plan to use it.
The new agreement will run through March 2009, and successful completion will trigger a further 20% reduction in debt owed to Paris Club creditors. To assist in recovery efforts following the war, the creditors agreed to a rescheduling of the approximately $42 billion that Iraq owed, of which 60% has already been canceled.
Progress is going more slowly on the nearly $77 billion owed to non-Paris Club countries, mainly China and Gulf countries, but Khan said he is optimistic those will be resolved, as well.
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16-01-2008, 09:08 PM #348
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I've taken this from the ********** website (a dinar dealer website). I'm not sure where they got it from as there is no link. But thought it worth a read. Quite long, but interesting.
Iraqi dinar will see the high value of 2008
Experts Iraqi economy was likely to continue to rise in the value of the Iraqi dinar against the dollar during the year 2008, in the event of continued policy of the Central Bank of Iraq in the activation of open auctions and withdraw liquidity.
These experts agreed that the gap between the financial and political cash is the motivation behind Ascending careful of the value of the Iraqi currency, and warned of the danger of inflation on the real value of the Iraqi dinar, and the need to find radical solutions to reduce the impact.
The financial and economic expert Dr Majid picture, that "the adoption of Iraq to cover the need for goods and services through imports, led to the resort monetary policy to support the Iraqi dinar exchange rate even reached 1216 dinars to the dollar."
He told the Independent News (Voices of Iraq) that "it is expected to continue to support Pacific Iraqi dinar value as long as inflation factors were continuing."
He added that "the basis of the weakness of harmony between monetary and fiscal policy in general, is the absence of clear economic policy, it is trying to hand monetary policy pressure on the money supply in circulation and supporting monetary unit, while fiscal policy to encourage ongoing expenditure policy."
It was that "the presence of the clear economic policy will lead to harmony between policies and all other factors relevant economic development."
Image stressed the need for "economic policy is the promotion of productive expenditure at the expense of consumer spending being."
However, he said, "regrettably the budget in 2008 to removed emphasizes the ongoing non-productive expenditure, which represents 72.7% of total spending, while investment spending 27.3%, this is in addition to the fact that most investment spending for projects and service projects Aantegeh not."
Economic Iraqi scientist Abdul Jabbar Alafi, finds that "the high value of the Iraqi currency would continue year 2008, and that this increase stems from the policy of the Central Bank, which he described as flexible policy since in 2004" saying that the explanation that " Iraq is a dollar put incorrect, and that the bank amendment because the Iraqi currency is a national symbol, and it must be achieved real value, a policy of the Central Bank managed to correct the exchange value of the dinar to the dollar, which was dominant to the price of the dinar since 91 almost, and I think it succeeded calendar policy prevailing price of the dollar over the long years, The dollar's worth a thousand Dinreetraci soon, God willing. "
Iraqi businessman, J. Aradi, speaking l (Voices of Iraq) on the pros and cons of the policy of financial support to the Central Bank of ERA selling the dollar and the currency was withdrawn from the market by granting private banks profits estimated proportion (20-25) percent said "the Central Bank of Iraq currently supporting Iraqi currency largely through the sale and purchase of the dollar auction of hand, and the withdrawal of currency from the market by granting profits 20% of the fixed deposits which contributed to withdraw a large part of the cash from the Iraqi market. "
But he pointed to the seriousness of this situation that the "banks prefer to transfer all assets of cash to the Central Bank instead diverted to the labor market and Iraqi production because profits content between 10% and 12%, which led to the suspension of the role of these banks in the domestic investment."
Aradi noted that "disruption of the investment that led to the weakness of Iraqi products and the adoption of Iraq to foreign products led to the strengthening of the currency in digital and not real," and said "the prices of goods and services despite the depreciation of the dollar against the Iraqi dinar, which calls for measures economic and financial consolidation and strengthening of local and foreign investment to raise the value of the Iraqi dinar, which measured the quantity of real goods and services obtained by the citizen and not a numerical value of the currency and curb inflation. " Commenting Iraqi economic thinker Dr. Ismail Obeid that the warning of increasing interest rates, which leads to lack of investment, considering that this misguided policy action at all, pointing out that raising the price leads to the result of falling into the so-called Bfaj liquidity, which is the way of risk economically.
He added: "We need a constitutional amendment, so it can build an economy subject to development without a clear and transparent laws determine the course of economic changes, and can only deal with inflation dismissed commodities markets, or increase the supply of goods produced, but that we address inflation through trap this means stopping liquidity increased production capacities and foreign investment, which is also affected. "
He said that "the lesson is not strongly Iraqi dinar officially, but strength against other currencies" noting that it is not "only to find the so-called Silhouette prices that presupposes the existence of an information base on imported goods as a kind of border prices and compares them once domestic prices."
Economic researcher Hossam Acommok sent from the anticipated decrease the value of the dollar against the Iraqi currency, but it explained to (vote for Iraq) that this reduction "will be the well-being of the Iraqi citizen, contrary to what was expected, due to increased inflation rate derived from the great imbalance in the economic structure of Iraq The lack of coordination between sectors of the government and the Central Bank in its policies, which has made great sacrifices in order to raise the value of the Iraqi dinar, but it failed to achieve tangible results because of indiscriminate actions contradict one another. " He added Acommok "at the time the withdrawal of the Central Bank liquidity despite our reservations on the measure, rose Oil Ministry prices of oil derivatives by reached (2150) double what it was before 2003 and put forward this two hundred billion dollars rising inflation." He concluded his speech by saying "what the monetary policy in Iraq is good, but it is inconsistent with the reality of the situation is correct structure of the Iraqi economy to serve the Iraqi people who have not benefited from reduced practically the dollar."
The Minister of Finance, the Iraqi statement said Zubaidi Jabr told media recently that the Iraqi dinar today much better than some global currency, because behind large amounts of gold and hard currency, noting that the proposal to delete the three zeroes of the Iraqi currency after assuming office in the Ministry of the Week and presentation this proposal to officials in the monetary policy of the Central Bank. He said that the Central Bank at the time was reluctant to accept this idea, but it became a strong dinar, the idea will be discussed by the Central Bank, and that there is a positive atmosphere to the idea.
For his part, the bank denied the existence of such intentions currently, and will remain current currency is adopted in local dealings, but in the faith of all coins withdrawn from circulation and replaced but the same categories of paper and include categories of (25,50,100) dinars.
http://www.**********.com/226.htm
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17-01-2008, 02:14 PM #349
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Transcript of a conference call: Report on Iraq's Request for New Stand-by Arrangement
MR. BUENEMANN: Good morning everybody, in the American time zone it's 10:00 a.m., and good afternoon or good evening to those who are farther eastward. I am Niels Buenemann of the IMF External Relations Department. I am here with Mohsin Khan, Director of the Middle East and Central Asia Department, with Erik De Vrijer, Mission Chief for Iraq, and with Adam Bennett, Senior Adviser.
This is a conference call on the staff report dealing with Iraq's request for a Stand-By Arrangement and cancellation of the current arrangement. The staff report was made available to you already three hours ago and this report and also the contents of this conference call will be embargoed until 12:00 noon Washington time which is in 2 hours from now. I should now like to give the floor to Mr. Mohsin Khan for introductory remarks.
MR. KHAN: Thank you very much, Niels. As Niels said, I am Mohsin Khan. I am the Director of the Middle East and Central Asia Department. Thank you very much for participating in this conference call related to the publication of the report on Iraq's request for a new Stand-By Arrangement with the IMF. The IMF's Executive Board approved this arrangement on December 19, 2007.
The new Stand-By Arrangement supports Iraq's economic program for 2008 and builds on the achievements made under the previous arrangement which was approved by the IMF's Executive Board on December 23, 2005. This new arrangement which amounts to SDR 475 million, or about $744 million, will be treated by the authorities as a precautionary arrangement, meaning that they do not intend to draw on these resources, and it will cover a 15-month period through March 2009.
Iraq's performance under the first Stand-By Arrangement that covered 2006 and 2007 was very impressive. In fact, it is quite remarkable that the program has held together in light of the very difficult security circumstances on the ground. A major accomplishment was the sharp reduction in inflation which had jumped to 65 percent in 2006, in large part because of security-related fuel shortages. Inflation was brought under control in 2007 with a policy package including exchange rate appreciation, tightening monetary policy, fiscal discipline, and measures to reduce fuel shortages. Helped by declining black market fuel prices, consumer prices increased by only 4 percent during the period January to November 2007.
While the government successfully contained current expenditures, the implementation of the ambitious public investment program fell short of expectations. This, together with the difficult security situation, prevented oil output and economic activity generally from expanding as much as we had hoped. Our growth estimate of 1.3 percent for 2007 is therefore quite low. However, for the non-oil sector, this estimate was based on indicators that were available when we wrote the report, namely only for the first half of the year. With the improvement in security during 2007, and particularly in the second half of 2007, non-oil activity in the second half of the year may well have picked up. If so, overall growth in 2007 might turn out to have been higher than the 1.3 percent we mention in the report, but we really cannot take a view on this until we have data on the indicators used to estimate real sector development for the second half of 2007.
Rising oil export prices more than offset the production shortfall, thus boosting the accumulation of international reserves by close to $7 billion. The amount at the end of 2007 was $27 billion, some $6 billion higher than projected. In light of the strong international reserve position, Iraq made an early payment of the full amount outstanding under the Emergency Post-Conflict Assistance (EPCA), which preceded the 2005 Stand-By Arrangement and was approved by the IMF Executive Board in September 2004. This EPCA arrangement amounted to SDR 297 million or about $466 million. The original terms of the EPCA envisaged repayment of half of this amount in 2008 with the balance due in 2009. Instead, Iraq repaid the full amount on December 12th of last year.
Aside from achieving macroeconomic stability, progress was also made with structural reforms. A very important achievement was the significant increase in domestic official fuel prices which enabled Iraq to eliminate direct subsidies on all fuel products, except kerosene. This released much-needed resources for reconstruction and reduced the incentives for smuggling. Other achievements included liberalizing private-sector fuel imports to reduce shortages; amending the new pension law to make the pension system fiscally sustainable; modernizing the payment system; starting the modernization of budget management; and strengthening the accounting and reporting framework of the Central Bank of Iraq.
The main objectives of this new 2008 program are to maintain macroeconomic stability, facilitate higher investment, and move forward with reforms and institution building. The program aims to contain inflation in 2008, building on the success in bringing inflation down in 2007. The program is also seeking a higher implementation ratio of the government's investment program so that economic growth can start to accelerate. We are projecting growth to be over 7 percent in 2008.
Key structural reforms in the program include the strengthening of public financial management and the accounting framework of the Central Bank of Iraq; the restructuring of the two largest public banks, Rafidain and Rasheed; and strengthening governance in the oil sector. With the favorable oil price outlook and a gradual increase in oil production and exports, the overall fiscal position should be sustainable. Also, debt sustainability would be achieved with the third and final tranche of the Paris Club debt rescheduling (20 percent in net present value terms) which would be triggered upon completion of the final review under the Stand-By Arrangement before the end of 2008.
To conclude, good performance under this new stand-by arrangement would constitute an important step forward in consolidating macroeconomic stability and placing the economy on a higher growth path. Of course, for this to happen it will remain critical as it has in the past that the security situation continues to improve and that political consensus is strengthened. Thank you.
QUESTIONER: I was wondering what you see generally for the growth outlook for Iraq. I know you say that it could be higher. You are saying that security is improving, has that improvement — things seem to stabilize a little bit more, what do you think the growth potential could be of Iraq?
MR. KHAN: Thank you. As I am saying, I think for 2008 we are expecting a significant jump in growth, to be a little over 7 percent. And I think the big change of course is going to be in—what we are also hoping for—in oil production. Beyond that, for 2009 we also expect growth to be within the 7 to 8 percent range. Of course, all this is conditional on expansion in oil production, and most importantly, on the security situation improving—continuing to improve.
QUESTIONER: Could you just clarify on the growth expectations? What I understood is you just said 7 to 8 percent, but for the year that just ended you are saying it was 1.3 percent but you think it might be stronger because of the second half of the year? Can you clarify that?
MR. KHAN: Yes, of course. We based our growth estimates for 2007 on indicators that ran through the middle of last year, 2007, and on that basis we projected that growth overall would be 1.3 percent for the year as a whole. Now it turns out that we are looking at some of the data that is coming through for the second half of the year and that looks to be stronger than we had originally expected. So in the end, I think growth may well turn out to be higher than the 1.3 percent we projected.
QUESTIONER: But yet in this year you are expecting much higher growth, correct?
MR. KHAN: That is correct. We are expecting much higher growth, and it is really coming from the fact that we expect oil production to be higher. Oil is 70 percent of GDP and we expect oil production to go up by at least 200,000 barrels per day. We also think that the government will be—if the security situation continues to improve—that the government will be able to fulfill its major investment plan in the oil and the non-oil sectors, so we expect a significant jump in the growth rate in 2008 up to, as I said, over 7 percent from the low number that we had projected for 2007.
QUESTIONER: I have a few questions, actually. Are you already seeing that the improvements in security have already boosted the economy in some ways or is that still early to determine? Then the follow-up I have is: is there any update you have on the debt cancellation from non-Paris Club members and when do you think that that could come through?
MR. KHAN: We have some anecdotal evidence and evidence from reports on the ground that in the second half of last year, of 2007, there was an improvement in economic activity. That is really the basis on which we are saying that our growth numbers may be too conservative for 2007, that the actual growth rate may be higher. Unfortunately we do not have good indications yet, but we certainly do have anecdotal evidence that says things are getting better in the economy.
QUESTIONER: Are you talking mainly about economic activity, trade and setting up small businesses or is it something broader?
MR. KHAN: No, I think partly it is oil production looking to go up in the second half of the year. October and November were good months. So this last quarter in the oil sector was good.
In addition, I think people talk about evidence of services improving, retail services improving. We have not seen any major investment yet, but there is a lot of anecdotal evidence now that the last quarter in particular was probably the best quarter of the year.
On your update of the debt cancellation, the discussions are continuing. I assume you are talking about non-Paris Club debt?
QUESTIONER: Yes, correct.
MR. KHAN: One interesting piece of news was that just very recently, on January 10, the debt with former Yugoslavia was settled. It amounted to $2.5 billion. But big debts, that is basically Saudi Arabia and Kuwait, those are still being discussed and I understand that discussions are taking place as we speak with Saudi Arabia on this. So we are optimistic that there will be a resolution and I think the issue that most people have accepted and most countries have accepted is that it will be at least on Paris Club terms.
QUESTIONER: The other one is on the budget. Do you feel that Iraq is currently fiscally able to sustain itself in many ways or does it still need large contributions of aid?
MR. KHAN: I think from a fiscal standpoint, at the moment we gauge the fiscal sustainability by also looking at the fiscal balance including grants and including aid. The country still will continue to need aid particularly I expect in the security area, but the fact of the matter is we have a very conservative fiscal projection, because we base it on a pretty low price of oil and I think the Iraqis do this by design. So the oil prices we are assuming for example in 2008 is $57 a barrel, which is obviously much, much lower than the world price. So I think even on that basis they are fiscally sustainable. If in fact we factor in today's price, then the fiscal picture looks very, very good.
QUESTIONER: I just wanted to confirm the figure that you mentioned about foreign exchange reserves. You said that they jumped by $7 billion to $27 billion. Could you clarify which period that was over?
MR. KHAN: Yes. I will give you the figures. At the end of 2006, they were $20 billion. At the end of 2007, they were $27 billion.
QUESTIONER: I just wanted to clarify on the oil production issue when you were talking about oil as 70 percent of GDP, you said in this year you expect it to go up by at least 200,000 barrels a day, so that it goes up to what? I expect maybe in the release it talks about what it is now, but I do not have that in front of me.
MR. KHAN: Production has been running in 2006 and 2007 at about 2 million barrels a day. And in 2008 we expect it to jump by another 200,000 barrels, so to 2.2 million barrels a day.
MR. BUENEMANN: It seems that there are no further questions, so it just remains for me to thank you all for participating and please be reminded that this was an on-the-record conference call with an embargo for 12:00 noon Washington time. Thank you very much and until next time.
Transcript of a conference call: Report on Iraq's Request for New Stand-by Arrangement
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17-01-2008, 07:15 PM #350
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Opium fields spread across Iraq as farmers try to make ends meet
The cultivation of opium poppies whose product is turned into heroin is spreading rapidly across Iraq as farmers find they can no longer make a living through growing traditional crops.
Afghan with experience in planting poppies have been helping farmers switch to producing opium in fertile parts of Diyala province, once famous for its oranges and pomegranates, north- east of Baghdad.
At a heavily guarded farm near the town of Buhriz, south of the provincial capital Baquba, poppies are grown between the orange trees in order to hide them, according to a local source.
The shift by Iraqi farmers to producing opium was first revealed by The Independent last May and is a very recent development. The first poppy fields, funded by drug smugglers who previously supplied Saudi Arabia and the Gulf with heroin from Afghanistan, were close to the city of Diwaniyah in southern Iraq. The growing of poppies has now spread to Diyala, which is one of the places in Iraq where al-Qa'ida is still resisting US and Iraqi government forces. It is also deeply divided between Sunni, Shia and Kurd and the extreme violence means that local security men have little time to deal with the ***** trade. The speed with which farmers are turning to poppies is confirmed by the Iraqi news agency al-Malaf Press, which says that opium is now being produced around the towns of Khalis, Sa'adiya, Dain'ya and south of Baladruz, pointing out that these are all areas where al-Qa'ida is strong.
The agency cites a local agricultural engineer identified as M S al-Azawi as saying that local farmers got no support from the government and could not compete with cheap imports of fruit and vegetables. The price of fertiliser and fuel has also risen sharply. Mr Azawi says: "The cultivation of opium is the likely solution [to these problems]."
Al-Qa'ida is in control of many of the newly established opium farms and has sometimes taken the land of farmers it has killed, said a local source. At Buhriz, American military forces destroyed the opium farm and drove off al-Qa'ida last year but it later returned. "No one can get inside the farm because it is heavily guarded," said the source, adding that the area devoted to opium in Diyala is still smaller than that in southern Iraq around Amara and Majar al-Kabir.
After being harvested, the opium from Diyala is taken to Ramadi in western Iraq. There are still no reports of heroin laboratories being established in Iraq, unlike in Afghanistan.
Iraq has not been a major consumer of ***** but heroin from Afghanistan has been transited from Iran and then taken to Basra from where it is exported to the rich markets of Saudi Arabia, Kuwait and the Gulf. Under Saddam Hussein, state security in Basra was widely believed to control local drug smuggling through the city.
The growing and smuggling of opium will be difficult to stop in Iraq because much of the country is controlled by criminalised militias. American successes in Iraq over the past year have been largely through encouraging the development of a 70,000-strong Sunni Arab militia, many of whose members are former insurgents linked to protection rackets, kidnapping and crime. Muqtada al-Sadr, the leader of the powerful Shia militia, the Mehdi Army, says that criminals have infiltrated its ranks.
The move of local warlords, both Sunni and Shia, into opium farming is a menacing development in Iraq, where local political leaders are often allied to gangsters. The theft of fuel, smuggling and control of government facilities such as ports means that gangs are often very rich. It is they, rather than impoverished farmers, who have taken the lead in financing and organising opium production in Iraq.
Initial planting in fertile land west and south of Diwaniya around the towns of Ash Shamiyah, al-Ghammas and Shinafiyah were said to have faced problems because of the extreme heat and humidity. Al-Malaf Press says that it has learnt that the experiments with opium poppy-growing in Diyala have been successful.
Although opium has not been grown in many of these areas in Iraq in recent history, some of the earliest written references to opium come from ancient Iraq. It was known to the ancient Sumerians as early as 3400BC as the "Hul Gil" or "joy plant" and there are mentions of it on clay tablets found in excavations at the city of Nippur just east of Diwaniyah.
Opium fields spread across Iraq as farmers try to make ends meet | Iraq Updates
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