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

US Audit: Administrative Costs Swallow 50 Percent of Iraq Reconstruction Funds
By VOA News
25 October 2006



A report on reconstruction in Iraq says up to half of the money paid to U.S. government contractors goes to administrative costs rather than actual building work.

An audit released by the government's special inspector general examines spending patterns on reconstruction projects. Together they account for more than $1 billion ($1.3 billion) of an $18.4 billion Iraq aid package approved by Congress.

In one case, the report says, KBR Incorporated, a subsidiary of the giant U.S. corporation Halliburton billed the federal government $163 million for its overhead costs in Iraq - more than 55 percent of the amount budgeted ($296 million) for the full rebuilding project.

A spokesman for the inspector general, Jim Mitchell, says bureaucratic flaws caused the high administrative costs. The audit notes there were long delays between contract staff being mobilized in Iraq and the start of reconstruction, with some workers staying idle for up to nine months.

The audit says the full cost of many projects may be even higher than preliminary government forecasts, because U.S. officials have not properly tracked expenses.

The report analyzed several U.S. reconstruction contracts worth one-point-three billion dollars. The money is part of an aid package of $18.4 billion approved by Congress.

U.S. Representative Henry A. Waxman, a Democrat, responded to the report by criticizing Halliburton for wasting taxpayers' money.

A Halliburton spokesman, Melissa Norcross, defended the company's administrative costs, saying they were extensively audited and deemed legitimate.

I read a post back about Article VIII. I also think that this is important. Only question I have is can it be compared with Jordan?

I read that the article VIII is on the agenda for the 31 october. After that they can go international with a new exchange rate. I think they planned this earlier because there is a lot of pressure of the world and the kurds.

This is an official step that has to be completed before a new exchange rate can be set. I think they have everything ready, complete this official step and open the banks with a RV, FIL that is enacted and HCL that is ready.

There is no better time to plan a RV right now with all the banks down untill the 1st of november.

We know the FIL must be enacted a week later. We don't hear anything about the HCL?

I think there is a hell of a lot going on behind closed doors over there.

Inflation is still high and driving the people to mass poverty as we can read.

I don't think this can hold for months anymore or they have a real serious problem.

Kurdistan Oil Troubles Begin to Surface


Wednesday, October 25, 2006

IPS - By Mohammed Salih

ARBIL - Through a steadily worsening security situation and deepening political divisions, a dispute is now erupting between Kurdish leaders and the Baghdad regime over access to oil resources.

Kurdish authorities and the federal government in Baghdad have exchanged sharply worded statements recently in their rival claims for control over northern oil fields. The row is expected to intensify after the Kurdistan regional government (KRG) in charge of the three northern provinces Arbil, Sulaimaniya, and Dohuk presents an oil bill to the regional parliament.

This would then be a basis of claims from the federal government, and an assertion of rights over oil in the north.

In an attempt to calm this growing confrontation U.S. Secretary of State Condoleezza Rice urged Kurdish leaders on her last visit to Kurdistan to make concessions to Baghdad on distribution of oil revenues.

Kurdish leaders agreed to share an unspecified portion of their revenues with Baghdad, but they say they will not hand over control of oil wells to the Iraqi oil ministry.

"We have not made any concessions, and the KRG has constitutionally the right to exploit the oil wealth in areas under its control," Dler Shaways, head of the economic and financial committee of the Kurdistan Parliament in Arbil, told IPS. "It is part of the characteristics of federal systems that regions can govern themselves and control their revenues."

Accusing federal authorities of adopting "a colonialist approach in dealing with Kurdistan," Shaways said "the regimes in Baghdad have so far used our oil wealth to buy bombs and destroy the country with it."

Disputes emerged first in December last year when the KRG officially declared the discovery of oil in the northern town Zakho by a small Norwegian firm.

Such oil explorations in the north have led Iraq's Shia Oil Minister Hussein al-Shahristani to declare that his ministry "isn't committed to oil investment contracts signed in the past … by officials of the government of the Kurdistan region."

The Kurdish government in turn held out options other than coexistence with the federal government if it refused to recognize its authority over oil wealth in the north.

Over the course of the past three years, since the U.S.-led invasion of Iraq, the Kurdish government has signed three production-sharing deals. These are with the Turkish companies Petoil in April 2003 and Genel Enerji in January 2004, and recently the Canadian company Western Oil Sands.

Much of the disagreement over oil management and revenue distribution has emanated from ambiguities in the text of the national constitution.

The constitution gives ownership of oil and gas resources to Iraqi people, but stipulates that "the federal government, with the producing governorates and regional governments, shall undertake the management of oil and gas extracted from present fields."

The phrase "present fields" has been interpreted by Kurdish officials as those that are producing oil already, not new fields.

Many see the oil dispute as a major battle of self-assertion for the Kurdish and Iraqi governments. Baghdad fears that Kurds' control of their oil wealth will give them powers challenging the central government's domain of influence.

Sunni Arabs, who constitute the core of insurgency against the U.S. and Iraqi government, are afraid that the Kurdish example would inspire Shias to follow a similar path in their southern oil-rich regions, and leave their oil-barren central region impoverished.

As squabbling over oil increases, what many Iraqis want is only an end to the fuel shortage they have been facing for years.

Abdullah Razwan, 32, a government employee from Arbil, is not interested in the dispute. Stopping every now and then to wipe the sweat off his face as he rolled an empty barrel to a kerosene tanker, he said the oil controversy is all politics.

"When I cannot get a barrel of oil easily without paying the whole of my monthly salary for it, what difference can it make in my life who controls the oil?"

Inter Press Service

IT FROZE ON MY END TOO - I think because it already has an english tab

Does anyone if the CBI was also down for 10 days last years??

Maybe it has been told over here that I don't know!

Originally Posted by zwhatimsaying

what i ment when I said this is, if you want to buy a oil field right now it is lets say 3,000,000.00 just for simplisity. at the current rate you pay 3 million and at the new rate you pay 3 million. the only difference is how many dinars it takes to make that number. the first way is close to 4 billion dinar and the new way is closer to 2 million dinar give or take. I hope you understand what I am getting at. I don't explain myself well. LOL

Hi Z,


If the currency were to increase then the commodity would also increase, it's a natural monetary process.
If it worked the way you explained it would cause an immediate deflation of the economy which would require reflation. In other words, if the oil field were 3 million before a revalue then you can expect it to increase in proportion with the revaluation.

Originally Posted by kiko

Does anyone if the CBI was also down for 10 days last years??

Maybe it has been told over here that I don't know!

No, I believe Adster told us it was open last year.

24 October 2006 (The Kurdish Globe)


The Directorate of Sulaimaniya Statistics, in coordination with Iraqi Statistics Foundation and Kurdistan Region Statistics, began an essential and expanded statistics project based on a "random sample system," local media reported last week.

The statistics project covers economy, community, and social welfare. Mahmoud Osman, Director of Sulaimaniya Statistics, told the Kurdish Sulaimaniya-based Nawa radio, "The aim of this project is to know the number of poor people in Iraq and to improve the economy and social fields."
"The project starts on November 1st and lasts for one year. The International Bank will assist with the technical parts of the project," said Osman.

"Each family will receive a form to record daily income, expenses, and other information for one year," said Osman. Three teams have been formed in Sulaimaniya Governorate, and will visit each family six times monthly. The statistics will be announced once every three months.

Cheers!
DayDream

Originally Posted by kiko

Does anyone if the CBI was also down for 10 days last years??

Maybe it has been told over here that I don't know!

Closed 11/3 - 11-6 (4) days.
First day of Eid was the 4th. This time it's different, 10 days but for other reasons.

Originally Posted by worf

I think what we need to remember is that Iraq is selling oil right now without the r/v taking place.

So if it r/v's or not the Kurds could still sell their oil. How it affects us is concerning foreign investment. If the Kurds open the doors for oil companies and foreign investment to come in now before the r/v, it would allow the large companies (and foreign govts) to come in and literally buy Iraqi companies, lease land, buy their ISX for .00068 on the usd. They could literally buy entire companies and industries for next to nothing on the usd. In theory the large multinational companies/foreign govts. could probably buy all of Iraq in mere weeks. The Iraqi/US govts. don't want this to happen.

Baghdad is playing the game of "let's drag our feet as long as we can and maybe nobody will notice". Problem with this strategy is everyone is noticing!!! Everyone is PO'd with Maliki's pace. He won't be able to keep this going forever. He will either get with the program or get run over trying to stand in the way.

Way too much money sitting on the sidelines waiting to come in IMO. American presidents, kings and other rulers have been assinated for less. If you are Maliki, you have some tough decisions to make: Drag your feet and try to appease the militias and get assinated by either the US or the foreign govts/multinational corps., or go with the US & multinational corps benchmarks and get assinated by your own countrymen/militias. He is in a no win scenario.

For our benefit and the rest of western world's, I vote for him reaching the benchmarks, including a r/v real soon!!! His people want/need it, the Kurds want/need it, the foreign govts want/need it, the US wants/needs it, the multinational businesses don't necessarily want it (except for their various executives that have bought millions of dinars), but they want to get in and start making obscene amounts of money right away so they'll put up with it.

So I don't personally think Maliki would be removed by the US govt. (at least not officially) I think he risks being taken out by assination if he doesn't get moving. He risks greater chances of being assinated by the foreign govts/multinational corps. then the miiitias imo. If he goes with the benchmarks, he at least gets protection from the US, and the praise of his people resulting in the defeat of the insurgents, stopping their impending civil war, and the peace and stability of his country. He could go down in the history books as a hero.

If he continues to try and appease the militias, he will be probably taken out by either them or someone else and be viewed as a weak leader (read loser) IMO. He needs to shiite or get off the pot!!!

worf

One thing about people and corporations coming in and buying up Iraq because their currency is undervalued is not what would happen. Thats because the currency value has more to do with Iraqi's ability to buy things especially imports. But land and buisness, etc are going to be priced for their worth. For example a company that is worth a million US dollars would still be worth that regardless of how much a dinar's exchange rate is set at. Where it could be a problem for publicly traded companys would be the stock price because of the current exchange rate, and those stocks currently being so undervalued but there are ways the company can split stocks and such to protect themselves from being bought up by others.
So in the end the currency must be revaled but for their purchasing power more than ours.
CLM