Thread: Iraq/Dinar News. 09/05 to 01/14/07

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Economic : Iraqi economy and the strategies and methods of privatization-2 -

D. Falah behind spring *
* Faculty of Economics / University of Omar Mukhtar
E-system instruments or coupons : - and this figure appeared in Eastern Europe, particularly Czechoslovakia and based on the fact that everyone from the people the right to a percentage of capital in projects which would turn to the private sector because the government is not the owner, but is run only on behalf of the people. Therefore coupons will be distributed to citizens give them ownership of a number of shares or enter into public auctions for a number of shares.
Two-contract or privatize management : - remains in this form of ownership capital of the companies in the hands of the state, while competing units and the private sector to obtain contracts entitling it to the Department on behalf of the state in return for certain advantages in the profit share or production. This method is less controversial than the previous method is through public tenders through management contracts or equipment leasing contracts for production lines for a fixed amount received by the State, China has applied this method.
Three - to allow the private sector to work in activities monopolize the public sector : -
This method aims to expand the extent of competition and improve performance is through the issuance of laws and the removal of restrictions that prevent entry of the private sector for some activities - such as the arms industry - and this leads with the passage of time to expand the participation of the private sector and privatization in the long run, without the need to change the ownership of public enterprises; He therefore called spontaneous privatization.
4-style build-operate-transfer : - This method allows the private sector to set a specific project personnel and exploited for a certain period to be subsequently extradited to the government, and might not interested investor in this type of project to train personnel, as has the negligent maintenance operations at the approaching delivery, But this method ensures that control permanent strategic projects as it relieves the State of spending on new projects. For example, projects highways in Malaysia.
5-Build-Operate - BOO : - different from the previous method that allows the investor to own the project and not hand it over to the state after a period.
6-Build-Operate - BOO-conversion : -
Different from the two combatants in that the investor own project for a certain period after having built and then turn to the state.
And as far as the Iraqi economy, it can be said that the success of the strategy or method to be adopted by the government, depend on the extent taken into account the negative effects that accompany that process as follows : -
1-weak mechanisms and economic and social standards governing the operations base and the transfer of ownership and foremost Effective financial markets, and investment banks and consulting firms.
Two - lack of the necessary technical studies to assess the assets and setting prices, this exposes the ownership transfer procedures for direct sales and cheap prices.
3-weak local private sector and a lack of national savings, which will open the door for foreign companies. that might not comply with the implementation of the plans of reconstruction and development programs.
4 - The application of the privatization program inevitably be accompanied by the sacrifice of social considerations. and in the forefront of the demobilization of thousands of workers and increased unemployment rates.
5 - The direct sale of public institutions in light of the weakness of the financial market will lead to the sale of profit-making institutions, and successful, It is now making institutions, and therefore the state would lose revenue, which was obtained from the successful institutions, and will continue to incur losses increased from defaulting institutions, which increases the burdens of the public treasury.
To avoid these negative aspects and ensure the success of the privatization process must be to create a set of controls that can protect private property be confiscated, and the development of economic laws, and the clear and appropriate for the economic and political realities, The laws governing the relationship between the producers and workers, It stresses the importance of providing good management of the size of the high level of competence and integrity, in addition to providing a network of sophisticated infrastructure, and secure information system, ports and the structure of financial and accounting well, There is no doubt that all of this requires economic policies clear and specific believe in the principle of progressivity in the sale of units and structures reform the faltering them, The strict control on the evaluation and pricing, as well as transparency at all stages and in all times and the presence of financial market strong and active. Finally, we have to say, to reap the benefits of privatization in Iraq. and to achieve the goal of increasing economic efficiency and expand the participation of citizens in the ownership of public assets, requires avoid a shock and made gradual manner, and promote economic culture in favor of a free economy; To make the process of privatization of the feasibility of the economy and society, and not the way to achieve profits greedy based on the exploitation of others.

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Economic : Efforts to link the Iraqi electricity grid Iranian oath

Baghdad-Sabah
An official source in the Ministry of Electricity is expected to be Iraq, Iran is to supply about 1000 megawatts of electricity, project D Kabul under the Shatt al-Arab waterway separating the two countries border in the south.
The source revealed that the official and Defense Ministries of Electricity Coalition, Stbachran implementation plan for this vital project. The cleaning of the Shatt al-Arab naval mines dating back to the Iran-Iraq war in 1980 - 1988, in preparation for linking the electric grid Iraqi Iran.
The source pointed out that the Minister of Electricity Karim Wahid, signed during his recent visit to Iran, a contract for the implementation of this project, , which links the city of Basra city of Abadan.
The source said the Iranian side currently supplying Iraq
B 150 megawatts by linking the electricity grid between the Iranian Sir Sarbil Zahab
The city of Khanaqin, east of Baghdad.

Link: http://www.middleeastforex.com/index.php?section=230

Dinar's revaluation impacts expatriates

It is an older article but the facts stays the same!!

Last week, Kuwait revaluated its currency for the first time since January 2005. This move has sparked market speculation that other GCC countries will follow the lead and revalue their currencies.

However, Saudi Arabia - the world's top oil exporter - has denied taking any steps for revaluation. In Kuwait, the dollar fell from $0.2920 versus the dinar before the revaluation to $0.2891 to allow a 1 per cent appreciation.

As Kuwait has a large expat community, this move will definitely affect those who keep their savings in other currencies or transfer part of their salaries to their country of origin. People repatriating their salaries into dollars, rupees, euros, pesos and Egyptian pounds will see a rise in their earnings. They will get more of their home currency in exchange for the dinar. In other words, expats working in the Gulf and sending their money home will get a sudden and unexpected raise the next time they change dinars.

Shailesh Dash, senior vice president, Global Investment House said this step was expected. "If you look at the revenues and exports inflows in recent months, it was expected that the dinar was to be revalued," he said. "The dollar has been depreciating all along, so it was time for the dinar to be revalued," he added. During the first five months of this year, the euro gained more than 7 per cent against the dollar. On Thursday, the dollar declined to $1.2792 per euro from $1.2759 late on Wednesday.

Dash also believes that most of the GCC countries that depend on oil exports will need to revalue their currencies. "The revaluation is connected to oil prices; your currency has to be linked to oil if your major export is oil," he said. "Other GCC states will have to do it, maybe not in the short term, but if oil prices keep rising, they will have to do it," he said.

The revaluation has had a positive impact on individuals as well. "Your purchasing power increases," Dash agreed. "Having said that, usually when you revalue your currency, exports go down. But this is not the case in Kuwait because more than 90 per cent of our exports are oil and that doesn't go down." Revaluation of the currency is tied to rising oil prices that climbed above $73 a barrel on Thursday. Many observers have commented that the revaluation will boost the economy and maintain stability in the country. "This is true," Dash agreed. "People will have a higher purchasing power. You will have less inflation when your currency is revalued. You as an individual can buy more things and import more goods that will be cheaper for you. The living standard will also improve in this case." According to Dash, this will also have a positive impact on the companies with their capital in US dollars.

"Because [The companies] can buy more in dollar terms," he said.

Gamal Zayed, general manager of Al-Muzaini Exchange Co, pointed out that this move also affected other currencies such as the euro, pound sterling and even the Egyptian pound. "The value of other currencies dropped because they are tied to the dinar," he said. "On the international level, there has been no change in other currencies but here in Kuwait, the value of the other currencies has been reduced as well to the value of 1 per cent," he said.

This means that expats can transfer more money than before. "Now under this decision, the customer takes more dollars for his dinars," Zayed said. He explained that before the CBK's decision on Thursday, KD 300 used to get $1024, but now after increasing the value of the dinar, the same amount will get $1034. However, there has been no noticeable change in the currency exchange markets. "Expats usually transfer their money [to their home countries] at the beginning of the month," Zayed pointed out. On the effect of the revaluation on the business of exchange companies, Zayed advised that it can have a negative impact. "The companies usually have deposits outside Kuwait in other banks. Those deposits must be in either US dollars or the local currency of the country, so the value of [the deposits] has been decreased by 1 per cent," he said.

Global's Dash agrees that the revaluation can have a different impact on banks and exchange companies because the value of their capital - usually kept in dollars - will go down a little bit. "But going forward, you will be spending less dinars and getting more dollars," he said. "In general, I think that this is a good decision by the central bank. We had been expecting it and I hope all the other Gulf countries will follow suit."

The Kuwaiti dinar is pegged to the dollar like other currencies of the six-member Gulf Cooperation Council (GCC). After the revaluation of the dinar, speculations sparked in the country that it would be possible for Gulf banks to ditch the dollar in favour of the euro. Dash dismissed this view. "In Kuwait, there has been talk about moving 10 or 5 per cent of the reserves to the euro, because the euro is a major currency. But no decision has been taken in this matter so far," he said.- Kuwaiti Times

A revalue is good by countries that are almost only depending on their oil like Iraq, puchasing power increase, inflation is tackled and the economy will be boosting and Iraq is a Gulf Country.

This article tells it all!!!!
Come on Reval, wooooooooooooooooooooooohhhhhhhhhhhhhhhh!!

SGS If by chance it rv's today where would you could sell it fast. and could it be sold today if so at the new rate

Originally Posted by CORY

SGS If by chance it rv's today where would you could sell it fast. and could it be sold today if so at the new rate

considering the foreign investment law isnt enacted until monday i would say youre not going to internationally trade with iraq until then.

now if youre that impatient you might consider kurdistan??

Originally Posted by CORY

SGS If by chance it rv's today where would you could sell it fast. and could it be sold today if so at the new rate

This is such new territory I do not think anyone can really answer your question here. It will be a day by day learning experenance.

so chase or BoA eather exchange the cash till monday

Originally Posted by shotgunsusie

considering the foreign investment law isnt enacted until monday i would say youre not going to internationally trade with iraq until then.

now if youre that impatient you might consider kurdistan??

It will be interesting to see how soon the banks here in the US will be set up and exchanging Dinar!!

Originally Posted by Justpraying

It will be interesting to see how soon the banks here in the US will be set up and exchanging Dinar!!

You can bet it's already a done deal, that's why their selling now, because their already ready

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Economic : High inflation in the prices of consumer goods to Iraq by 15.1%
Baghdad-Sabah
The report issued by the Central Agency for Statistics from the Ministry of Planning rise in the indicators of inflation at the consumer goods and foodstuffs for the month of last August in Iraq rose by 15.1%.
A report of inflation for the month of the same field on the prices of goods and services components of the basket of consumer prices, retail markets selected in Baghdad and other governorates. " He stated that this increase was the outcome of the high index of foodstuffs increased by 6.1% and beverages and tobacco 0.1%, fabrics, clothing and footwear, 1.5% and furniture 0.8%, fuel and lighting 57.8%, transport and communication 20.8%, and medical services and medicines 7%, and miscellaneous goods and services by 3.3% and 0.7% lease rate.
The report also noted that the annual inflation index rose during the period from August 2005 until August 2006 by 76.6%.