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

Iraq Parliament to vote on Provincial Law

Iraqi Parliament is expected to vote on provincial elections law due in October. The media office of Speaker Mahmoud Al Mashhadani affirmed in a statement that the latter headed a meeting including heads and representatives of parliamentarian blocs to discuss the provincial law clarifying that the issue of elections in the city took the upper hand in the meeting mainly after Kurdistan Alliance called to delay elections in Kikruk. Some members of the party called to set a paragraph in the election law about Kirkuk while others called to solve the issue in concord.

http://www.alsumaria.tv/en/Iraq-News...ncial-law.html

Invitation to effectuate public sector

Ministry of Industry and Minerals has indicated that support processes for general companies working in different sectors

will be continued in order to return for production and improve circumstances of workers. Ministry's reports which as-Sabah obtained copies of them, clarified that production data are bring good news to of successful return of these companies, realizing food financial revenues as well as modernizing production lines, getting use from manufacturing manner of others, a matter the encourages it to continue production and avoid any losses

http://www.alsabaah.com/paper.php?so...page&sid=63633

Finance spends 90% of 2007 investments

Finance Ministry spent 90% of investment's allocations of 2007 for all provinces, a statement of the ministry said

Meanwhile, the Finance Minister, Baqer Jabr, confirmed at his meet with Czech Republic's ambassador in Baghdad, Peter Netsa, that Iraqi market has capacity for many foreign companies at infrastructure and building strategic projects, as he praised the Czech's efforts at support Govt., particularly at carry out projects in Irbil, Basra, Ramadi and Baghdad and opening offices in Iraq to increase economic cooperation

http://www.alsabaah.com/paper.php?so...page&sid=63639

More police and security personnel sacked

The Ministry of Interior has sacked thousands of its employees, mainly from the police corps, the ministry’s undersecretary said.

“More than 7500 members and officers were given the boots for a variety of reasons,” said Adnan al-Assadi.

Assadi cited corruption, negligence of duty and absenteeism for the large-scale dismissals.

However, he said the sackings will not hamper the ministry’s daily operations.

“We have brought into the service more than 6,000 police officers from the country’s former police force,” Assadi said.

The integration of former police and army officers has expedited recently. Their integration into the newly formed security forces is bound to have a positive impact on political reconciliation and reinstatement of security.

But the move is target of criticism from some political factions which are part of Prime Minister Nouri al-Maliki’s coalition government.

Critics charge that the dismissals were politically motivated.

More 36,000 police members have been sacked since 2003 when the new Interior Minister came into being.

http://www.azzaman.com/english/index.asp?fname=news\2008-06-07\kurd.htm

Oil Minister briefs lawmakers on Strategic plans

Iraq's Minister of Oil, Hussein al-Shahrestani, on Saturday briefed the Iraqi parliament's 25th session over his ministry's strategic plans, admitting disputes with neighbor Iran concerning border oil wells.

The session, which was headed by the parliament's speaker – Mahmoud al-Mashahadani, was started with a number of questions about the ministry's performance, directed by lawmaker Hassan al-Sineed of the Unified Iraqi Coalition (UIC – Shiite parliamentary bloc), as he previously submitted a request to summon al-Shahrestani to a parliamentary session.

Al-Sineed called on al-Shahrestani to "give a vision as to the ministry's strategy to develop oil wells and increase production rates, to encounter corruption and oil smuggling, to identify the difficulties that face the ministry, and to avoid any crisis in supplying oil products."

As other lawmakers made questions, al-Shahrestani demonstrated "the importance of the oil sector for the time-being and future in Iraq."

He referred to oil production rates during the last four years, explaining that those rates "were increased during the last four months of 2008, reaching 28.5 billion U.S. dollar."

He expected revenues from oil sale "to increase along with the increase in oil production in Iraq, and the increase in oil prices in the international markets."

He announced that negotiations "are underway with big international companies to sign contracts with a total value of more than three billion U.S. dollar, to collect, liquidize, and sell the natural gas that results from the oil excavation process."

"Iraq will be provided with liquid gas (LBG), and the extra amounts will be exported, according to the international prices," he said.

"The ministry took measures to provide the requirements for oil gauging, to prepare a gauging system devoted for oil purposes, and to form central management at the ministry to apply the system," he added.

Concerning the border wells shared with some neighboring countries, al-Shahrestani stressed "There are negotiations with these states, to form agreements to administrate those wells."

"There are multiple disputes with Iran over those wells, related to border line, and delays in technical issues," he added.

Aswat Aliraq

Nice little article in the British 'Sunday Times' today.

Bjorn Englund aiming to cash in on Iraq's peace dividend
Bjorn Englund has a vested interest in the war-torn country’s recovery

WITH his blond hair and blue eyes, Bjorn Englund struggles to blend in as he walks the streets of Baghdad.

Genetics, however, have not stopped the Swede from making half a dozen trips to the war-torn city in the past three years.

Unlike most westerners who spill out of Baghdad international airport, Englund’s business is not oil or construction. He is an investor, and through his Babylon fund has almost $10m (£5m) riding on Iraqi-quoted companies.

The other half of the $20m fund is invested in Iraqi treasury bonds and companies that are listed elsewhere but do the bulk of their business, whether oil exploration or construction, in the country.

The fund’s aim is to profit from the rehabilitation of Iraq; and despite the continuing violence Englund is confident that the commercial landscape is improving.

“Shops are open eight hours a day compared with an average of two hours one year ago, and more international companies are setting up ventures in the region,” he said.

When Englund makes his visits to Baghdad he stays in the Ashour, a five-star hotel in the north of the city. As he doesn’t speak Arabic, he relies on his Iraqi analyst, Mohammed Mohammed, to act as a guide as well as business partner.

Babylon’s Baghdad office (only investors with a physical presence in the country are permitted to invest in the exchange) is a low-key affair — anything flashy attracts the wrong sort of attention. It is located outside the Green Zone, the heavily fortified American citadel in the heart of the city, and is only a 10-minute walk from the Iraqi stock exchange.

The fund’s first base had to be evacuated a year ago because of the violence. But as a former UN soldier who served in Iraq after the 1991 Gulf war, Englund was not deterred.

Launched in 2006, the Babylon fund is the only western open-ended fund invested in the Iraqi stock exchange, which has a market cap of $2 billion — half the size of Jordan’s.

Englund calls the market “pre-frontier”, and said it could be years before the country makes it onto a “normal” hedge fund’s emerging-markets portfolio.

After hearing Englund’s tale of how his Iraqi analyst was falsely imprisoned last autumn, the cautious investor might hold off a little longer.

“Mohammed was caught in Bagdhad airport because he had the same name, age and moustache as an Al-Qaeda member who had fled from prison.

“He was stuck in the Interior Ministry prison in Baghdad for 10 days. It took the help of some powerful friends to get him out.”

The volatile security situation is not the only argument against this investment case. The Iraqi stock exchange, formed in June 2004 from the ashes of the Baghdad stock exchange, is not yet electronic.

Traders write prices on white boards using marker pens, while their colleagues peer at the board through binoculars.

Trading is limited to two-and-a-half hours, three days a week, and although liquidity has increased by more than 250% in recent years, fewer than a third of the 100 companies quoted are actively traded.

Despite this, 95% of Babylon’s investment comes from institutions — with Scandinavia’s largest pension fund being the flagship investor.

This is largely down to Englund’s performance in other pre-frontier markets. His investment vehicle, Godvig Capital Management, successfully went into the Russian stock market in the early 1990s — a good decade before most. It also moved early into the Baltic states, Romania and Azerbaijan.

“We have credibility within every strange country,” Englund said.

Going where no investor has gone before paints Englund as something of a maverick, but he is far from reckless. The fund is mainly invested in Iraqi banks, including Bank of Baghdad and Commercial Bank of Iraq, as they are majority- owned by larger foreign banks. This ownership structure helps Englund to feel “comfortable”.

Another comforting factor is that this sector adheres to more transparent reporting standards than others, which report news “late and not fully correct”.

In the next year Englund plans to double the fund’s exposure to Iraqi equities. His bullishness is down to a number of factors: imminent electronification of the bourse, a healthy stream of public flotations, (including a number of m.o.b.i.l.e. phone and media companies) and increasing liquidity.

The rising price of oil is another factor because even though the sector is nationalised, the heightened price drives secondary industries and is positive for the economy as a whole.

In the past two years the Babylon fund has produced returns of about 20% and Englund is optimistic.

“I would be disappointed if I didn’t get a 30% return per year over a five- to seven-year cycle,” he said.

http://business.timesonline.co.uk/to...null&offset=12

Iraqi Premier al-Maliki starts talks in Tehran

Iraqi Prime Minister Nuri al-Maliki on Sunday started talks in Tehran with high-ranking Iranian officials on the latest developments in Iraq, including an agreement between Iraq and the United States to be finalized next month. The Iraqi premier already held talks with Iranian Foreign Minister Manouchehr Mottaki and Vice-President Parviz Davoudi and was later Sunday to meet with President Mahmoud Ahmadinejad.

Under the not yet concluded agreement, the US is seeking not only approval to maintain military bases in Iraq but also the right to conduct military operations from those bases against other countries without consultation with the Baghdad government.

Maliki has reportedly reassured Iran that Iraq will not be used for launching attacks against the Islamic state but Tehran would prefer that Baghdad not sign the agreement at all.

Iraqi Premier al-Maliki starts talks in Tehran - Update : Middle East World

ANALYSIS-Gulf inflation threat mounts as oil hurdles to $150

Oil's rapid acceleration toward $150 a barrel threatens to spur Gulf Arab inflation to new records as currency pegs to the ailing U.S. dollar prevent the oil producers from mopping up excess liquidity.

As Gulf central bankers prepare for a key meeting in Doha on Monday, the oil price surge places more pressure on Gulf states preparing for monetary union to follow Kuwait's lead and revalue their currencies to fight inflation.

Oil jumped nearly 9 percent to a record $139 a barrel on Friday -- and could top $150 in less than a month as strong demand in Asia triggers a slowdown in shipments of crude to the United States, investment bank Morgan Stanley said last week.

For Saudi Arabia and the five other states that form the world's biggest-oil exporting region, rocketing oil revenues could drive public spending, fuelling money supply and stoking inflation in economies that doubled in size from 2002 to 2006.

But Gulf states -- bar Kuwait -- are constrained in their fight against inflation by dollar pegs which have forced them to track seven U.S. interest rate cuts totalling 325 basis points since September.

"All of the shocks of high oil prices are being absorbed by the real economy rather than the exchange rate or interest rates," said Marios Maratheftis, regional head of research at Standard Chartered Bank. "Prices show no signs of slowing down."

Inflation in the kingdom, the world's biggest oil-exporter, hit an at least 30-year peak of 10.5 percent annually in April, while in Qatar, the world's largest exporter of liquefied natural gas, prices soared at an annual rate of 14.75 percent in the first quarter.

Prices will rise by an average of 9 percent in most Gulf states this year as rents and global commodity prices surge, a Reuters poll showed last month.

But high oil prices cannot alone be blamed for inflation, analysts said.

Other global oil producers, including Canada and Norway, have low inflation rates largely because their currencies have strengthened against the dollar, which is down almost 20 percent against the euro since the beginning of 2007.

"Increasing oil prices encourage governments to spend more money given the capacity constraints in the region," said Paul Gamble, head of research at Saudi-based investment firm Jadwa Investment.

"That should push the exchange rate up and dampen the impact of inflation."

CURBING SPENDING

While rental and food prices -- the main drivers of inflation -- should begin to taper off, money supply growth will continue to drive inflation for at least three to four years in the Gulf, Gamble said.

"Inflation is spreading to other parts of the economy through liquidity created through high oil prices and negative real interest rates," he said.

Gulf policymakers have repeatedly said they would not follow the lead of Kuwait, which severed its link to the dollar more than a year ago partly to slow down imported inflation.

The states preparing for monetary union had agreed to keep their dollar pegs until the region created a single currency as early as 2010.

Gulf states would not act alone in currency reform, UAE Central Bank Governor Sultan Nasser al-Suweidi said on Sunday.

Regional central bank governors will meet on Monday in Doha to discuss ways to get the beleaguered currency project on track, possibly paving the way for multilateral currency reform.

In the meantime, the impact of oil at $150 a barrel on regional inflation may not be immediate if governments follow through with plans to curb spending, said John Sfakianakis, chief economist at SABB bank, HSBC's Saudi affiliate.

Saudi Arabia said in May it was having some success with efforts to curb public spending -- a strategy other Gulf states have also pointed to in slowing down inflation.

Acquisitions outside of the region by Gulf Arab buyers more than tripled to $89.1 billion in 2007, London-based research firm Dealogic said in April.

"They could very well keep that new money outside of the region," Sfakianakis said. "Indications are that governments are trying to balance the growth they need to have with a more measured approach to spending."

ANALYSIS-Gulf inflation threat mounts as oil hurdles to $150 | Markets | Reuters

Lower demand for the dollar at daily auction

Demand for the dollar was down in the Iraqi Central Bank's auction on Sunday, reaching $60.170 million compared to $89.220 million on Thursday.

"The demand hit $25.160 million in cash and $35.010 million in foreign transfers outside the country, all covered by the bank at an exchange rate of 1,197 Iraqi dinars per dollar, unchanged for the fourth session in a row" according to the central bank's daily bulletin which was received by Aswat al-Iraq - Voices of Iraq - (VOI).

The 16 banks that participated in the auction offered to sell $ 4 million, which the bank bought all at an exchange rate of 1,195 dinars per dollar.

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

Aswat Aliraq

Iraq Talks with Kuwait, Iran on Shared Oil-Report

Iraq, home to the world's third largest proven oil reserves, is in talks with neighbouring Iran and Kuwait to reach a deal to pool shared oilfields, the London-based Asharq al-Awsat reported on Sunday.

"Iraq has entered negotiations with Kuwait and Iran," it quoted Iraqi Oil Minister Hussein al-Shahristani as saying.

"We have informed them of the necessity of signing an agreement to unify the oil fields and to move away from a situation where each side has control from its side as that will bleed these fields in an uneconomical way."

Iraq is hoping for a further output boost after oil production and exports reached a post-war high in May.

The country, whose main source of revenue is oil, needs huge investment after decades of sanctions and war, but sabotage and oil smuggling have robbed it of billions of dollars and hampered reconstruction.

Delays in approving a long-awaited oil law to govern the industry have also held back investment in the sector.

Asharq al-Awsat did not say which oil fields Iraq was hoping to pool with its neighbours.

PUKmedia :: English - Iraq Talks with Kuwait, Iran on Shared Oil-Report