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

anything new on the Iraqi front mike or adster??...things seem to b crawling along now....lol....Pat

Greetings,

The only news is that they have finally chosen their leaders having finally gotten past the al Jaafari situation. It will be 30 days before the elected are confirmed, but this is formality. I like what I hear with replacement for prime minister position, so lets see what happens as the dust settles.

Good luck to all, Mike

good deal mike...thanks for the feed back...hopefully when the dust is settled and clear,we will b some happy campers.....have a good day...Pat

Here we go...maybe....

April 24, 2006
js-4205

Deputy Secretary Kimmitt to Hold Press Briefing Following Roundtable with Iraqi Finance Officials
Deputy Secretary Robert M. Kimmitt will hold a press briefing tomorrow at 1:30 p.m. (EDT) following a roundtable discussion with senior U.S. and Iraqi financial officials including Iraqi Finance Minister Allawi and Central Bank Governor Shabibi.
Discussion topics for the roundtable will include Iraq's IMF program, monetary policy, banking sector reform and efforts to strengthen anti money-laundering and counter terrorist financing efforts. In addition to U.S. Treasury officials, representatives from the Federal Reserve, State Department, USAID and the NSC will participate. Joining Minister Allawi and Governor Shabibi will be representatives from Iraq's Finance Ministry and Central Bank.
Who Deputy Secretary Robert M. Kimmitt
Treasury's Outgoing Financial Attaché in Iraq Kevin Taecker
Treasury's Incoming Financial Attaché in Iraq Jeremiah Pam
What Press Briefing

http://www.ustreas.gov/press/releases/js4205.htm

Interesting,

The insiders are saying May or June still, so who knows, but it sounds good to me. Judging from all the activity, and the fact the central bank has mentioned increased cost of dinar is coming in this same time frame to the larger buyers of dinar, and relayed to me by my suppliers, I would say the last pieces of the puzzle are falling into place finally.

Certainly, with Free-Dinar prices going up 40% to 50% soon, never mind dozens of dealers who do not even have any inventory left, it sure is going to be interesting to watch this invetment increase as it already has over the past 18 months, but now, not just a few percent, but 50% and then 4000% and then, who knows. (g)

Good luck to all, Mike

thanks for the info mike....always good to hear from u and adster concerning Iraqi news on the dinar....i had said the end of may as my guess on when it might peg....might still have a chance on being right maybe....hope the value soars......like an eagle....lol....have a good day and keep us posted please...Pat

Mike:

Does the 4000% represent a peg of approximately .04 cents?

Strat

Yes, technically it would work out about that at current actual rates, so this was the low side estimate by some in beginning, but I feel it will be higher, so if we already know it will jump shortly by 40% to 50%, then 4000% over that would be fine with me, in fact, as I am holding, it really doesn't matter much, I am in it for long term, but even at .04 that is a far better ROI than on anything else out there. (g)

Good luck to all, Mike

Priming the Iraqi economy

The new Iraqi government needs to commit to free markets and neoliberal economic thinking, or else. 21/04/2006 Source: The Minnesota Daily

Now that Iraq’s squabbling political parties finally put together a government — Iraqi leaders will need to make up for lost time. Security situations and problems with corruption have spiraled out of control, sectarian powers need to be checked and big constitutional changes need to be made. The other hot topic will be oil, or more broadly, economic reform.
It will be up to Iraq’s new leaders to keep Baghdad pointed in the right direction. Arab governments — even the good ones — have a nasty tendency to turn into corrupted socialist pork barrels. If Iraq’s leaders want to avoid that, they will need to work around nationalistic sentiments and commit to truly free markets.

So far, Iraqis have depended on large public-works projects to repair old infrastructure and bring basic amenities back online. Banking reforms have been a success, and, among other projects, massive grants and loans have been provided to revitalize the country’s agribusiness.

The result of early efforts has been a three-fold rise in the average Iraqi income from time of the invasion to today. Internet cafés have sprung up around Baghdad and cellular phone use is at an all-time time. Some 30,000 new businesses have registered with the U.S. Agency for International Development since fall 2005, in spite of the ongoing violence and the government’s sporadic curfews.

If and when the violence subsides, small businesses will be most responsible for shrinking Iraq’s stubbornly high unemployment rate, which means nurturing them today is a big priority. Thus far, USAID has taken the lead by helping nongovernmental organizations establish microcredit finance programs through Iraqi banks and lenders. USAID also worked with the Iraqi government to create the Iraqi Trade Information Center, which provides private firms with information on investing in the country, and the Iraq Investment Promotion Agency, which looks to draw more foreign direct investment for Iraq’s provinces.

It’s baby-step progress, but it shows Iraq’s central government is on the right track. The cornerstone of Iraqi trade policy should be to encourage foreign direct investment, even in large and “sensitive” sectors of the economy. The central government sticks to that open borders policy pretty well — its meager 5 percent national tariff is lower than the average tariff rates of most developed nations. And unless Baghdad decides otherwise in the next few months, even that nominal imports tax will expire come September.

Baghdad’s stock market is another story. The Iraq Stock Exchange — not to be mistaken for Saddam’s corrupted Baghdad Stock Exchange — was opened in 2004 and since has doubled in value, despite being closed to foreign investors. Bank stocks are hot, especially now that the Iraqi dinar is stable and Saddam’s cronies no longer corrupt the system. Investors say they wish the market were open to foreign traders who would add more capital to the exchange. “I like the rush, the frantic pace on the floor,” one female Iraqi investor says, “I wish we had more money and tradings every day.”

Encouraging foreign direct investment also means loosening restrictions on Iraq’s oil reserves. Per day, 2.1 million barrels of oil are drawn out of Iraq — about the same amount as before the war. Attacks on oil pipelines in the north have limited supplies, but another problem is self-inflicted. Saddam let Iraq’s oil infrastructure and technology slip far behind international standards. Iraq really needs Western energy companies to modernize the industry and search out Iraq’s undiscovered oil reserves. Yet thanks to the paranoia of being seen as stealing Iraq’s oil wealth, American officials have avoided pressuring Iraqis on opening their oil industry to those all-important foreign investors.

For Iraq’s politicians, then, real economic development depends on having the political courage to avoid spurning foreign investors or nationalizing the oil industry, much as the Saudis have done and so many Iraqis want to do. Development also depends on the will of Iraqi leaders to eliminate lavish subsidies and Saddam-era social welfare programs. The socialist models of impoverished Arab countries have proved they don’t work, and in a democratic society like Iraq, they don’t have to. Only by curtailing government intervention can Iraqi leaders fix market distortions and make the populace more self-sufficient.

Iraqis only need to take to the basic ideas; the International Monetary Fund, the Paris Club, and American, European and Iraqi officials will sort out the rest. The silent majority of Iraqis are invested in their country’s future, even without political certainty. Going forward, Iraqi leaders can save themselves a lot of trouble by resisting their populist tendencies and promoting grassroots entrepreneurship, free trade and foreign direct investment. It might be decades off, but imagine the phrase, “Arab tiger.”

Iraq ready for oilfield contracts negotiations

Iraq ready for oilfield contracts negotiations 22/04/2006 Source: Gulf Daily

Iraq is ready to move swiftly in negotiating multi-billion-dollar oilfield contracts with international majors and can sign deals before an investment law is passed by the government, a top oil official said yesterday.

The Iraqi oil sector has been crippled by attacks on energy installations, political wrangling, lack of funds and mismanagement since the US-led invasion in 2003. To reverse output declines, it needs to ensure the flow of funds and restore security to allow for maintenance and development.

"The investment law could take some time and we are not prepared to wait for that long," Shamkhi Faraj, director general of marketing and economics at the ministry of oil, said.

"I think (negotiations) can happen very fast. I am confident that we can do our own legislation within the contract itself to assure the investors that if any new regulation comes through it will not affect them," he added.

Only small oil firms, such as Norway's DNO, have ventured into Iraq, home to the world's third largest oil reserves.

The majors are eager to take a stake in the industry but are waiting for security and the political process to stabilise as well as an investment law.

"I think we could talk more on the procedures and possibilities and when they are ready to come in. We are ready to make all the things required for making investment... but they are hesitant because of the security situation," Faraj said.

"But that doesn't really exclude that we start talking," he said.

"What we have on offer are the oilfields in the south, the big ones that will add some three million barrels per day to our production and that's what the big companies are looking for."

Iraq's oil minister was set to meet with officials from oil companies gathered in Doha for the International Energy Forum, a round table for producers and consumers, Faraj said. Among those expected in Qatar were Exxon Mobil Chief Executive Rex Tillerson and Chevron boss David O'Reilly.

Oil services providers are also reluctant to enter Iraq with a bloody insurgency raging and growing sectarian bloodshed.

Iraq pumped some 2.5m barrels per day (bpd) and sold some 1.7m bpd before the invasion, and prior to the 1990 Gulf War, crude output levels were at around 3m bpd.

Now it is struggling to maintain output of 2m bpd.

Faraj said exports in the second half of the year were expected to rise from 1.3m bpd in the first quarter.

"So far this month we achieved 1.58 for the average of the first 18 days, and hope we can be for the rest of month we'll be close to 1.5-1.6," Faraj said.

"For the second half, we hope to do 1.6, maybe a little bit higher towards the end of the year."