Thread: Archive Latest News - Think Tank - 15/04/08 - 26/08/08

FACTBOX-Breakdown of Iraq's Foreign Debt

U.N. Secretary-General Ban Ki-moon and Iraqi Prime Minister Nuri al-Maliki will chair a debt-relief conference on Iraq on Thursday.

The meeting aims to assess the progress of a plan adopted last year to help the shattered country rebuild after five years of war.

The United States has been pressing Sunni Arab governments to shore up the government of Nuri al-Maliki by forgiving debts and opening diplomatic missions.

Here are some details on Iraqi debt:

* Over the past three years, about $66.5 billion of Iraq's overall $120.2 billion foreign debt has been forgiven. With the participation of all members, the Paris Club cancelled $42.3 billion, including Russia's $12 billion.

The Paris Club is an informal group of official creditors whose role is to help debtor nations manage their debts.

* A number of non-Paris Club members have cancelled a total of $8.2 billion, on Paris Club terms. A total of $16 billion has been cancelled by commercial creditors, also on Paris Club terms.

* Other Paris Club members agreed to cancel 80 percent of Iraq's debt.

* ESTIMATED DEBT REMAINING:

$56.6 billion to $79.9 billion including:
-- Paris Club: $7.6 billion.

-- Gulf Cooperation Council, which comprises Saudi Arabia, Kuwait, Bahrain, Oman, Qatar and the United Arab Emirates: $32.4 billion to $55.4 billion.

-- Non-Paris Club with signed bilateral agreements:
$646 million.

-- Other non-Paris Club: $15.9 billion to $16.2 billion.

* DEBT WRITTEN OFF BY SOME COUNTRIES:

United States: $4.1 billion
Japan: $6.8 billion
Germany: $5.6 billion
France: $5.1 billion
Russia: $12 billion
Italy $2.4 billion
Bulgaria $3.1 billion
Serbia, Slovenia and Bosnia: $2.2 billion
Romania: $2 billion

* SAUDI ARABIA/KUWAIT:

-- Last year, Saudi Arabia's Foreign Minister Prince Saud al-Faisal said his country would write off 80 percent of the more than $15 billion it is owed by Iraq.

-- Last September, the chairman of the Paris Club, Xavier Musca, said Saudi Arabia and Kuwait still had not offered to Iraq a debt treatment comparable to the one provided by the Paris Club in 2004.

-- Kuwait is owed about $15 billion.

http://pukmedia.com/english/index.ph...=4491&Itemid=1

President Talabani review with EU ambassadors Iraq’s developments

Iraqi President Jalal Talabani received on Monday the EU ambassadors and the Turkish ambassador in Baghdad, during which he reviewed with them the latest developments in the country.

“President Talabani received at his office in Baghdad this afternoon EU ambassadors as well as he Turkish Ambassador in Baghdad,” according to a presidential statement received by Aswat al-Iraq – voices of Iraq (VOI).

“The meeting came within a series of periodic meetings between the president and the EU ambassadors,” the statement explained, noting that the meeting dwelt on the recent conditions and the latest positive developments in various fields in Iraq.

“Talabani reiterated his assertion that Iraqis are living a great political atmosphere after the recent security achievements since the beginning of Basra and Sadr City until Um al-Rabeieen operation in Mosul, where security forces proved their abilities and took control after tracking down gunmen,” the statement added.

“He also hailed the significant role played by Prime Minister Nouri al-Maliki and his courage in implementing law-imposing plans and tracking down outlaws,” read the statement.

“The president highlighted during the meeting with the ambassadors the importance of developing the political process and finalizing the new government and approving the laws, which of high importance Iraqis,” it said.

He asserted that the EU's support is useful for the ‘new Iraq’ in the political, economic, and developmental fields.

“Talabani agreed with the diplomats on holding such meetings regularly,” the statement underlined.

“For their parts, the ambassadors reiterated their countries’ support of Iraq, asserting their continued support to the ongoing political process and the democratic experience in the country,” it noted.

The meeting was attended by the ambassadors of UK, France, Germany, Italy Spain, Czech, Slovakia, Romania, Netherlands, Poland, and the Turkish ambassador.

From the Iraqi side, it was attended by Deputy Foreign Minister Abdul Karim Mustafa Hashem.

Aswat Aliraq

Parliament discusses its estimated 2008 Budget Law

The Iraqi Parliament on Monday convened a session to vote on the amended Parliament’s budget law for the calender year of 2008, the legislative council's Web site reported.

“Parliament held a session to vote on the estimated budget law for the calender year of 2008, and the premier’s decision to allocate a pensioners salary to the family of Yarub al-Anbaki.”

Yarub al-Anbaki was the chieftain of the Anbakiya tribe in Diala province, and was assassinated by al-Qaeda network operative on the main road of al-Salam district, 15 km north of Baaquba, two years ago and was the first chieftain to stand against gunmen.

The statement also noted that “a first reading on the draft supreme judicial council law” took place.

The announcement added that Parliament included “a first reading on the draft law proposing the merging of al-Ishtraqi bank with al-Rafidain bank.”

Al-Rafidain bank is the main government bank in Iraq and has several branches across Iraq’s cities and areas, while al-Ishtraqi (Social) bank is a defunct bank established under Saddam’s regime to grant loans for short-term projects.

Aswat Aliraq

Tüzmen to visit Baghdad with Business delegation

Foreign Trade Minister Kür؛ad Tüzmen has plans to visit Iraq's capital city with a delegation of businessmen to boost trade relations between the two countries.

Tüzmen told the Anatolia news agency that he had met with Iraq Trade Minister Abd al-Falah al-Sudani, Minister of Water Resources Abdul Latif Jamal Rashid and Minister of Construction and Housing Byan Dizayee at the third International Iraq Fair launched on Thursday in Gaziantep. He said they discussed how they would develop a strategy for a potential regional development program covering Iraq, Iran, Syria and Turkey.

Tüzmen noted that the Foreign Trade Undersecretariat has new projects lined up. "We will hit the road again," he said, adding that they are planning to make a business trip to Baghdad and that the talks between the foreign affairs ministries were on track.

The trade minister said his Iraqi counterparts had concerns about security and thus had requested that he limit the size of the delegation. "We are ready to go there at any time, but the visit was delayed until now for security reasons," he noted.

Tüzmen stated that the bilateral trade volume is at $3 billion, which, he said, is fairly low, but that the two countries aim to increase this figure to at least $5 billion.

In response to a question about the Iraqi government allocating $17-20 billion to construction projects, Tüzmen said the projects undertaken by Turkish firms in Iraq and their investments had reached $7 billion.

http://www.iraqdirectory.com/DisplayNews.aspx?id=6174

Provincial elections draft law passed to head of parliamentarian blocs

Provincial elections draft law was passed to head of parliamentarian blocs and discussed in a meeting in this regard. The issues of women representation and minorities as well as electoral districts system were the main disputed points.

http://www.alsumaria.tv/en/Iraq-News...ian-blocs.html

Swedish police prepare for high-ranking Iraq gathering

Swedish police said Monday they were preparing for an international gathering on Iraq that will be addressed by US Secretary of State Condoleezza Rice, Iraqi Prime Minister Nuri al- Maliki and UN Secretary General Ban Ki-moon. The United Nations and Iraq asked Sweden to host the one-day conference Thursday to follow-up progress since the International Compact for Iraq (ICI) was launched at a summit in Egypt a year ago.

Swedish State Secretary Frank Belfrage said hosting the conference was "a step in showing support for Iraq." Iraq and the UN were to co- chair the meeting.

The conference organizer, Ambassador Krister Kumlin, said 97 delegations were slated to attend, totalling some 500 to 600 participants.

The number showed how "committed" the international community was to Iraq, Belfrage said.

The final delegation tally was likely to be clarified just before the conference opens Thursday, Belfrage and Kumlin said.

Security police spokesmen said high-ranking officials like Rice and the Iraqi government delegation were often targets of threats. Press reports suggested 1,700 police officers were to be on duty.

Demonstrations against the US and events in Iraq were also expected, which would likely strain police resources.

The conference venue was located not far from Stockholm's Arlanda Airport, allowing delegates to arrive and leave the same day.

However, Swedish Prime Minister Fredrik Reinfeldt and Foreign Minister Carl Bildt were due Friday to hold bilateral meetings with al-Maliki and other members of the Iraqi delegation.

Police have advised the general public that the arrival of the delegations and security cordons around hotels and other venues in downtown Stockholm will likely cause traffic jams Thursday and Friday.

http://www.earthtimes.org/articles/s...gathering.html

Shell soon to join Samsun-Ceyhan pipeline: sources

Royal Dutch Shell Plc is near signing a deal with Turkish Calik Energy and Italian to join work on a oil pipeline between the Black and Mediterranean seas, sources close to the deal said on Monday.

The deal would ease financing concerns but more importantly assure supplies for the pipeline, probably from Kazakhstan's Kashagan field. Construction was started last year without securing the necessary throughput.

"Talks over feasibility are at the final phase. I think an agreement will be signed by the end of June," said one source.

Indian Oil announced it had bought a 12.5 percent stake in the pipeline in December 2006, but sources now say the state-run Indian oil company will not be taking part in the project.

The 550-km long (340 miles) pipeline is expected to cost $1.5 billion and will ship an initial 1 million barrels per day to the Turkish port of Ceyhan on the Mediterranean, with plans to raise the capacity to 1.5 million bpd.

The project, which will be carried out by the Trans Anatolian Pipeline Company (Tapco), was envisioned to reduce increasing traffic on the Bosphorus Straits in Istanbul.

Calik and Eni each has 50 percent in Tapco and under the new deal Shell will get "a considerable stake" from them, the source said.

Shell and Eni will also be able to use their shares in Kazakhstan's Kashagan fields, considered to be the biggest oil find since the 1960s, to fill up a portion of the Samsun-Ceyhan, said a second source.

"The Kashagan project, in which Shell and Eni have a stake, will be able to provide enough oil for the pipeline," another source said.

Other sources of oil are expected to come from other fields in central Asia and the Caspian region.

Under the latest agreement between the Kazakh government and the consortium of companies working at the Kashagan fields, exports will begin in 2011. But some producers say they may want to delay the schedule, which could incur sanctions form the central Asian country.

A pipeline between Kazakhstan and the Russian Black Sea port of Novorossisk carries 750,000 barrels per day, a part of which Shell may be able to divert to the Turkish project.

http://uk.reuters.com/article/allBre...*****Channel=0

Update.......

Airline deal with Boeing Boosts Iraq; Officials hail purchase as sign of Economic Rebirth

Iraqi Airways, nearly grounded by decades of mismanagement and economic sanctions under the regime of Saddam Hussein, is back on the runway with a multibillion-dollar order for a fleet of new Boeing passenger planes to service domestic routes and reclaim a share of the increasingly lucrative Middle East market.

Iraqi officials hail the deal as a symbol of the country's slow but steady economic rebirth, and also as a sign that they are finally translating the country's vast oil wealth into tangible gains for ordinary Iraqis.

Iraqi Minister of Finance Bager Jabor Al Zubaidy called the deal a "new beginning for Iraq," and Iraq's U.S. ambassador, Samir Sumaida'ie, said the Boeing order was a clear sign that his country was taking on the expense of funding its own reconstruction.

"We are willing to pay more and more and, ultimately, all of our reconstruction costs," Mr. Sumaida'ie told The Washington Times in an interview earlier this month, acknowledging criticism from U.S. lawmakers that Iraq should shoulder more of its reconstruction bill.

One sign of the deal's importance in Baghdad was the presence of Prime Minister Nouri al-Maliki and senior U.S. diplomats along with Boeing officials at the May 5 contract signing.

The $5.5 billion Boeing deal, with commitments and options for up to 55 new passenger planes, marked one of the largest purchase orders by the Iraqi government since Saddam's ouster in 2003.

Airbus SAS, the European manufacturer that surpassed Boeing as the world's largest aircraft manufacturer in 2003, was not invited to bid for the contract. Some in the industry say the omission was not surprising.

"Not to be too cynical about it, but I do expect there was a connection between the war and the Boeing deal," said Scott Hamilton, an aviation industry consultant in Issaquah, Wash.

"From a practical standpoint, given France's stand on the war, there was just no way this order was going to go to Airbus," he said.

Under terms of the contract, Iraq will buy 30 Boeing 737 commercial airplanes and 10 of the Chicago-based manufacturer's new 787 "Dreamliners," with options to purchase at least 15 more planes. The Dreamliner, which can seat up to 330 passengers, is the first new Boeing passenger model since the 777 was introduced in 1990.

That was just one year before state-owned Iraqi Airways - the oldest carrier in the Middle East - plunged into a near-death spiral in the wake of harsh U.N. economic sanctions that followed Iraq's invasion of Kuwait. Most of the airline's 17 planes were flown to neighboring countries, never to return.

A U.N. "no-fly" order, enforced by U.S. and British warplanes, further restricted the airline's operations. By the time the Maliki government came into office, Iraqi Airlines' fleet consisted of two planes that it owned and a small handful of leased planes.

But operations re-started with a direct flight from Baghdad to Amman, Jordan, beginning in October 2004, and the first domestic scheduled service began two years later with flights between Baghdad and the southern city of Basra.

Although air traffic in the Middle East grew 18 percent last year, Iraq's carrier could have difficulty re-entering a market with a number of established, well-funded regional competitors. The carrier's aging fleet and reputation for poor service, coupled with Iraq's security woes, have earned Iraqi Airways the nickname "Inshallah Airlines," for the fatalist Arabic expression meaning, "God willing."

Brian Walker, a spokesman for Boeing's Middle East and Africa operations, said the company has forged a much broader relationship with Iraq than simply building its planes.

As the company has done with many African customers, Boeing has advised Iraqi transportation officials on improving the country's aviation infrastructure, training airline staff and technicians and obtaining leased planes before the first of the new 737s and 787s are delivered.

"They're trying to build a national airline, and that's one reason we've been able to get these kinds of deals," he said. "We can bring a lot of resources to the table."

The first new 737s are not scheduled to be delivered until 2013, Iraqi officials said, and the last of the planes will not arrive until 2019.

While not a huge part of Boeing's order list, the Iraq deal was well-timed. The company has been under fire for repeated delays in the new 787 Dreamliner.

Boeing's stock fell $3.95, or 4.6 percent, on Wednesday - the biggest drop in four months - after American Airlines announced sharp cutbacks in its fleet. Boeing shares gained 7 cents on Friday to close at $81.48 on the New York Stock Exchange.

Boeing ****utives say overseas deals like the one with Iraqi Airways are key to its battle to overtake Airbus in the global market.

With world oil prices surging, Iraqi officials are also talking more hopefully of the future, and of rising foreign investment interest.

"Iraq is the largest ever emerging market that you can think of," Deputy Prime Minister Barham Salih told reporters at last week's World Economic Forum on the Middle East, held at the Egyptian resort city of Sharm el-Sheik.

"There is nothing in Iraq that doesn't require investment, but the state cannot solve it and so we look seriously to the private sector," he said.

Iraqi Ambassador to the U.S. Samir Sumaida'ie says Iraqi Airways' $5.5 billion order for Boeing airplanes is a clear sign that Iraq is taking on some of the costs of its reconstruction.

Iraqi Airways, long derided as "Inshallah (God willing) Airlines" because of its aging fleet and poor service, is taking wing with a multibillion-dollar order for new Boeing passenger planes.

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Iraq and oil...The real story; an interview with Ben Lando - United Press International and Iraq Oil Report editor Ben Lando

The facts about Iraqi oil

As gas prices continue to rise throughout the world, many analysts are asking who is benefiting. Many eyes, of course, turn to the Persian Gulf, which produces at least 25% of the world's oil. No country's oil is more controversial than Iraq's. The GPB asked Ben Lando, Energy Editor for United Press International and Editor of the The Iraq Oil Report to give us the facts about Iraqi Oil.

GPB: A lot of statistics are loosely thrown around regarding Iraqi oil. To your knowledge, how much Iraqi oil exists? Where is it drilled? How and where is it shipped? Who is currently profiting from it? To what degree is the Iraqi government dependent on Iraqi oil revenues?

Ben Lando: Yes, too often politicians and pundits are quick for sound bites saying that this or that should be done with Iraq oil and its revenue, and it's unfortunate for the Iraqi people, for decision makers and policy makers. It's generally accepted that Iraq's proven reserves are around 115 billion barrels, the third largest in the world behind Saudi Arabia and Iran. What's actually recoverable is another question, largely but not only because of the overworking of the oil fields by the current government and in the past by Saddam Hussein's regime in order to increase exports and production levels, thus threatening the overall life of the oil fields. On the other hand, Iraq is mostly under- and unexplored, with an unknown but likely large quantity remaining to be found. Oil fields are scattered across the country but mostly in the south and north. About 80 percent of the reserves are in the south and 90 percent of the exports are sent to market from the export terminals in the Persian Gulf and then purchased by a couple dozen international companies via tanker. Nearly all of the rest of the exports head to the Turkish port of Ceyhan from two pipelines that begin at the Kirkuk field in the north. This pipeline is starting to remain open consistently and the Iraqi Oil Ministry said it averaged nearly 450,000 barrels per day in April -- only a third of capacity -- but from 2003 until mid last year it was attacked so often it was offline more than it was on. About 500,000 barrels per day are refined for domestic consumption in Iraq, and about 1.9 million exported. As the price of oil increases so do profits, and through last month Iraq earned already this year half of its total 2007 oil income of $41 billion. Predicting what this year's total oil sales will be is used often and remains unhelpful, considering the price of oil is on a roller coaster and exports from Iraq could be a victim of the war zone again. Iraq is an oil economy and without it the state would collapse. All revenue is collected at the Development Fund for Iraq, kept in an account at the Federal Reserve Bank of New York, per a U.N. mandate to ensure transparency and protect from Saddam creditors claiming the "new" Iraq's funds.

GPB: The Iraq Oil Law has received increased attention in the press recently. What is the purpose of this law and who are the key players in its creation? To what degree does the US government and/or military play a role in its legislation and implementation? Is the US government seeking to pay for the Iraq War with Iraqi oil revenues? What impact will oil revenues concretely have on the redevelopment of Iraq? And what of the Kurd independent development contracts?

Ben Lando: The Iraq Oil Law is far from being approved and is a lightning rod in Iraqi politics. Its goal is to create a governing structure for developing the oil and gas reserves, but there is widespread disagreement on four key issues:

• to privatize or denationalize and if so to what extent;
• whether the oil strategy is controlled by the central government or the local governments and to what extent;
• whether a country enduring war and occupation should sign long term deals; and
• to what extent and pace to rebuild the state-run industry.

The oil law should NOT be confused with a revenue sharing law, but often Congress and the Bush administration do so. The occupation of Iraq is both military and economic. U.S. prerogative from the outset was to take Iraq into the free market, although there was resistance in the oil sector. Nevertheless, the U.S. maintains "advisors" at each of the ministries, lobbies the government extremely hard to pass the oil law and was promoting an early version of an oil law in 2003. To what extent the Iraqi government's share of oil profits are compared to any international oil companies depends on how well the Iraqi government negotiates contracts. But the international oil companies are keen on exports while Iraqis lack adequate electricity, heating and transportation fuels. This obviously isn't a mutually sustainable relationship right now. Iraq's government has a dismal track record for spending, especially on capital projects, and the funds then just sit in the bank. Politicians in the United States -- which has spent tens of billions of dollars on reconstruction even though a frightening percentage went missing, was misspent or was spent on projects unsuitable for Iraq -- are complaining about Iraq's lack of spending and are now threatening legislation that to some extent would require any U.S. funding to be repaid by Iraq. Some, even, are going as far as to say the total cost of the war should be repaid by the Iraqi government. Oil revenue, spent and spent correctly, including on reinvestment in the energy sector and other industries, are vital to a truly self-sufficient and autonomous Iraq. The deals signed by the Kurdistan Regional Government are definitely a hang up for Baghdad and the relationship between the two sides has continued to sour.

GPB: What does the legacy of the Saddam era have on the present oil laws? And what of the deals contracted before the Iraqi war? What is the legacy, damage and implications of the botched Iraqi Oil for Food Program?

Ben Lando: Saddam in the 1980s decided he wanted to control more of the oil sector. What remains is a strong Oil Ministry and a requirement for certain types of oil deals to be approved by Parliament. Oil deals with Vietnam, China, India and Indonesia, signed by Saddam, are considered valid by the ministry but are being renegotiated. The Oil for Food Program hurt Iraq in many ways: it restricted necessary training, technology and equipment to maintain the state-of-the-art oil sector, led Saddam to unhealthy practices in producing oil, and facilitated an institutionalization of oil smuggling.

GPB: To what degree do countries like Iran, China and Russia have a stake in Iraqi oil fields and exploration? What about other nations and other non-American companies such Russia's Lukoil? Do these nations and companies have influence over Iraq's Oil Law?

Ben Lando: Aside from a deal with China, none of the above have contracts recognized by the Iraqi government, though some, such as Lukoil, claim it should. All major companies have influence on Iraq's oil law the same way major companies affect global politics and business. They may be leaning on Iraq to pass a law, or a certain type of law, but there is an extent of opposition to the current law and process it has taken that domestic politics is winning out over international leverage.

GPB: Is the political volatility in Iraq (and the Middle East and other oil producing nations) the real reason for the high price of oil today? Or is it from speculation in financial markets? Or something else entirely?

Ben Lando: There is not one reason for high oil prices. But reasons include growing consumption; the usage of a finite resource; speculators; the U.S. economy; and geopolitics.

2007 PostGlobal Global Power Barometer (washingtonpost.com)

ISX index up by 0.419 %

Iraq's Stock Exchange (ISX) index rose by 0.419 percent to settle at 38.260 points at the closing of Tuesday's session, the 10th this month.

Traded shares in Tuesday's session exceeded 717 million at a total value of over 868 million Iraqi dinars (1 U.S. dollar= 1,221 Iraqi dinars) by implementing 203 contracts. Non-Iraqi investors participated by implementing 35 contracts.

According to the daily analysis of the capital market, 31companies were traded in Tuesday's session out of 94 companies registered in Iraq's stock exchange, of which eight indexes went up, eight dropped, and 16 maintained their previous price.

The Iraqi Stock Exchange, established under Law No. 74 of the year 2004, held its first session on June 24, 2004. The stock market holds three sessions a week: Sunday, Tuesday, and Thursday.

Aswat Aliraq