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

Government committed to adopting free market policy
05 November 2006 (Arab News)

The economic achievement in Iraq is often ignored, overshadowed by the violence in the country, Iraqi and American officials said. “The economic team has made significant progress,”said US deputy secretary of treasury Robert Kimmit who was in Kuwait for the International Compact for Iraq meeting. “They have stable currency, they have sizable foreign currency reserves, there are almost back up to pre-war level oil production, and they are able to finance a considerable part of their own government operations,” he told reporters at a conference late Tuesday.

There remains a gap on Iraqis resources however with what the country needs, which is why the government is calling for international support in its Iraq compact. The Iraqi government outlined its economic strategy to put forward, that is hoped to primarily diversify the country’s economy and decrease its reliance on oil. “Agricultural horizons are very promising but we are encountering impediments which need huge investments to overcome. We have been facing the problem of water supplies with our neighbours,” said its Minister of Planning and Development Cooperation Ali Baban.
Iraq however stressed that it will not go back to subsidies policy and will continue to keep its economic sectors “open”. But Iraq also will not expedite privatizations of its industries despite the government’s leaning towards an open economy. “We should not rush as some negative results may accompany any unplanned privatization process,” he said. The government is studying plans to privatize state factories, but most of the factories depend on costly government assistance, and recent move of “keeping the import door open” and without regulations and restrictions has put an end to many factories, he said.

While the Iraqi government remained committed to adopting free market policy, Baban said the removal of subsidies and facilities have hurt the agricultural and industrial sectors. To strengthen the industries, the government is asking the private sector firms to merge. “Many of the private factories are still small and cannot do the required task .. . we are trying hard to urge the Iraqi businessmen to merge their companies and establish big ones,” he said.

The government also believes that merging Iraqi small banks into big banks is necessary. It currently has 25 private banks. “Our idea is to have some kind of minimum capital for banks, to at least 20 billion Iraqi dinar. Some of the very small banks that do not have the capacity will have to merge, or otherwise they would have to raise the capital alone,” he said. The country also has six state-owned banks, the biggest of which are Rafidain and al Rasheed Banks.

Iraqi central bank is also trying to get private banks to participate more in the country’s economic activities, and for Iraq to be less dependent on the Trade Bank of Iraq, which is financed by a consortium of foreign lenders such as Citigroup and JP Morgan to provide trade finance services Iraqi banks are unable to offer. “We would like government’s import activities to be more diversified. We want all banks to participate, this is our policy in the future. Trade Bank is doing fine, but we don’t to have to be completely dependent on that,” he said. Al Shabibi said the central bank is currently succeeding in its fight against inflation.

“We are using interest rate and we sell our own bills to skim liquidity. The inflation rate now is at 51 per cent, down from 70 per cent previously. Whether it will continue to go down, we will have to see,” said al Shabibi. The Iraqi government has given out six licenses to foreign banks in 2004, including to National Bank of Kuwait, Arab Banking Corp, HSBC and Standard Chartered. Only Arab Banking Corp operates a full-fledged branch in the country; the others opted to enter Iraq via a local partner.

Originally posted by Webinvestor:

Will they RV if the economy is not as strong as hope? Or is a Dinar RV a way to "kick start" the economy?

The guy in the article is saying that they need more than just monetary policy (this is what the CBI does) for the Iraqi economy to recover. In essence what he means is the other productive sectors, i.e. the agriculture, construction, general business markets etc. etc., or everything other than the oil related industries, need to be stronger to provide jobs for all of the unemployed Iraqis. So, how do you do this? Well you need money. In a capitalist society you need individuals that are willing to put their money or someone elses money (a loan they took out from a bank or venture capitalist) on the line to hire the unemployed to do a job. So, the question is were are these budding capitalists going to get the money to build their businesses and hire all of these unemployed people? There are many wealthy families in Iraq that currently run successful businesses, but as far as I can see they probably won't be hiring very much more of the population than they already do. So, that still leaves us with the question of where will they get the money?

Well, as far as I can see that leaves Iraq with two options....

1) Seek loans and investments from foreigners to help build the businesses in Iraq.

2) Revalue the currency so that the capital that exists can fund (pay for) more than it has previously.

The first option leaves Iraqis at the mercy of foreigners. It makes them dependent upon the good will of non-Iraqis who may or may not decide to help them. As the local exchange rate of the dinar would be small compared to the value of the foreigner's currency, this situation would do nothing to improve the ability of the average citizen to purchase the goods and services that the article is so desperately seeking for all Iraqi's. Even if foreign capital were to be used to shore up the industries that are hurting in Iraq the gap between the value of the foreigner's currency capital investment and the growth of the Iraqi industries net capital value would be large. The only gain for Iraq would be the growth of locally produced products, which would be a long term investment. The industries would probably not produce items of any quality in numbers large enough to make an impact very quickly. So, under option one you would get products at your local price, but most likely it would take awhile (2-5 years), and the industries would basically be backed or bank rolled by foreigners (i.e. owned indirectly).

So, lets look at option 2-Revalue the currency. Plenty of capital in circulation. Backed by oil, everyone's favorite commodity, Texas tea.

Come 'n listen to my story 'bout a man named Jed
A poor mountaineer, barely kept his family fed
And then one day, he was shootin' at some food
And up through the ground come a bubblin' crude
Oil, that is, black gold, Texas tea
Well, the first thing you know, old Jed's a millionaire

Ok, so its not Jed, its Habib now, but I digress....

So, they use this capital to invest in their own industries. Not only do they own them, but they owe no one for them. They begin to produce local products, employ their citizens and get back on their feet. Also beneficial is that they can buy products not only from their own industries, but now they can buy products from everyone else, without asking for a handout. And that can happen immediately, not while they wait for their industries to get back on their feet.

So, which one is better for Iraq.

Question is, what do the people in charge want for Iraq?

More great news!


U.S.-Iraq Business Dialogue: Membership Opportunity


Iraq Investment and Reconstruction Task Force

On October 30, the U.S. Department of Commerce published a Notice in the Federal Register announcing membership opportunities for American representatives to join the U.S. Section of the newly-established U.S.-Iraq Business Dialogue. The Business Dialogue is a bilateral forum to facilitate private sector business growth in Iraq and to strengthen trade and investment ties between the United States and Iraq. Further, the Sections will advise the U.S. Department of Commerce and Iraqi Ministry of Trade on private sector views of Iraq's business environment and make recommendations for ways to enhance Iraq’s commercial development. The application deadline is December 5, 2006. For more information, please review the Federal Register Notice

Retrieve Pages



The U.S. Department of Commerce and the Iraqi Ministry of Trade established the Dialogue as a bilateral forum to facilitate private sector business growth in Iraq and to strengthen trade and investment ties between the United States and Iraq. During Secretary of Commerce Carlos M. Gutierrez’s visit to Iraq in July 2006, he joined Iraqi Minister of Trade Dr. Abd-al-Falah al-Sudani in signing the Joint Statement on Commercial Cooperation, which formally provided for the establishment of the Dialogue.
In their next meeting in September 2006, the Secretary and the Minister approved and signed the Terms of Reference for the Dialogue. The U.S. Secretary of Commerce and the Iraqi Minister of Trade will co-chair the Dialogue. The Dialogue will consist of a U.S. Section and an Iraqi Section. Each Section will consist of approximately 10 members from the private sector, representing the views and interests of the private sector business community. Each Party will appoint the members to its respective Section. The Sections will provide advice and counsel to the U.S. Department of Commerce and the Iraqi Ministry of Trade that reflect private sector views, needs, and concerns regarding private sector business development in Iraq and enhanced bilateral commercial ties that could form the basis for expanded trade between the United States and Iraq. The Dialogue will exchange information and encourage bilateral discussions that address the following areas:


— Factors that affect the growth of private sector business in Iraq,
including disincentives to trade and investment and regulatory obstacles to
job creation and investment growth; — Initiatives that the Government of
Iraq might take, such as enacting, amending, enforcing, or repealing
laws and regulations, to promote private sector business growth in Iraq;

— Promotion of business opportunities in both Iraq and the United States,
and identification of opportunities for U.S. and Iraqi firms to work together;
and

— Attracting U.S. businesses to opportunities in Iraq and serving as a
catalyst for Iraqi private sector growth.

Baghdad airport reopens as curfew lifted

1 hour, 4 minutes ago

BAGHDAD (AFP) - Baghdad airport has reopened two days after it was closed when a round-the-clock curfew was imposed in the Iraqi capital to prevent violence during the announcement of a verdict on
Saddam Hussein.
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The curfew was also completely lifted from 6:00 am (0300 GMT) Tuesday.

The ban on pedestrian movement was lifted from 4:00 pm Monday itself, while the vehicle ban was removed from 6:00 am (0300 GMT) Tuesday.

Life had came to a virtual halt in Baghdad during the curfew with no sign of a pedestrian or a vehicle on the city's streets.

Anticipating a surge in violence during the verdict on Saddam, the Iraqi government had imposed the indefinite curfew from 6:00 am (0300 GMT) Sunday.

On Friday authorities had also cancelled all military leave and put the country's armed forces on alert.

Saddam was sentenced to death on Sunday for "willful killing", part of his indictment for crimes against humanity in ordering the deaths of 148 Shiite residents of Dujail, north of Baghdad, after a 1982 assassination attempt.

Saddam's half-brother and intelligence chief Barzan al-Tikriti was also sentenced to death, as was Awad Ahmed al-Bandar, former chairman of the so-called Revolutionary Court that ordered the Shiites executed.

Former vice president Taha Yassin Ramadan received a life sentence, while three Baath party officials from Dujail received 15 years each and a fourth, more junior, figure was cleared.

The deposed dictator is to appear in the court again Tuesday to face charges of genocide for the 1988 killings of thousands of Kurdish villagers in the country's north.

Labor ministry to distribute funds for monthly idles
04/11/200604 / 11 / 2006
Source: Al-SabahSource : Al-Sabah

Ministry of labor has referred an application for distributing funds every month instead of three months.Ministry of labor has referred an application for distributing funds every month instead of three months. A source at the ministry said that children of chronicle diseases would be included in the coming fund.The source made it clear that the ministry would raise up with about 50 per cent of current salaries, which is about 120 to 150 thousands dinars for the current time.A source at the ministry said that children of Chronicle diseases would be included in the coming fund.The source made it clear that the ministry would raise up with about 50% of current salaries, which is about 120 to 150 thousands dinars for the current time.

Originally Posted by TerryTate

Originally posted by Webinvestor:



The guy in the article is saying that they need more than just monetary policy (this is what the CBI does) for the Iraqi economy to recover. In essence what he means is the other productive sectors, i.e. the agriculture, construction, general business markets etc. etc., or everything other than the oil related industries, need to be stronger to provide jobs for all of the unemployed Iraqis. So, how do you do this? Well you need money. In a capitalist society you need individuals that are willing to put their money or someone elses money (a loan they took out from a bank or venture capitalist) on the line to hire the unemployed to do a job. So, the question is were are these budding capitalists going to get the money to build their businesses and hire all of these unemployed people? There are many wealthy families in Iraq that currently run successful businesses, but as far as I can see they probably won't be hiring very much more of the population than they already do. So, that still leaves us with the question of where will they get the money?

Well, as far as I can see that leaves Iraq with two options....

1) Seek loans and investments from foreigners to help build the businesses in Iraq.

2) Revalue the currency so that the capital that exists can fund (pay for) more than it has previously.

The first option leaves Iraqis at the mercy of foreigners. It makes them dependent upon the good will of non-Iraqis who may or may not decide to help them. As the local exchange rate of the dinar would be small compared to the value of the foreigner's currency, this situation would do nothing to improve the ability of the average citizen to purchase the goods and services that the article is so desperately seeking for all Iraqi's. Even if foreign capital were to be used to shore up the industries that are hurting in Iraq the gap between the value of the foreigner's currency capital investment and the growth of the Iraqi industries net capital value would be large. The only gain for Iraq would be the growth of locally produced products, which would be a long term investment. The industries would probably not produce items of any quality in numbers large enough to make an impact very quickly. So, under option one you would get products at your local price, but most likely it would take awhile (2-5 years), and the industries would basically be backed or bank rolled by foreigners (i.e. owned indirectly).

So, lets look at option 2-Revalue the currency. Plenty of capital in circulation. Backed by oil, everyone's favorite commodity, Texas tea.

Come 'n listen to my story 'bout a man named Jed
A poor mountaineer, barely kept his family fed
And then one day, he was shootin' at some food
And up through the ground come a bubblin' crude
Oil, that is, black gold, Texas tea
Well, the first thing you know, old Jed's a millionaire

Ok, so its not Jed, its Habib now, but I digress....

So, they use this capital to invest in their own industries. Not only do they own them, but they owe no one for them. They begin to produce local products, employ their citizens and get back on their feet. Also beneficial is that they can buy products not only from their own industries, but now they can buy products from everyone else, without asking for a handout. And that can happen immediately, not while they wait for their industries to get back on their feet.

So, which one is better for Iraq.

Question is, what do the people in charge want for Iraq?

Thanks TerryTate.

I think the question "which one is better" depends on who you're asking.

The FIL and HCL will be good for the "big guys" in Iraqs economy. Not that reval will hurt the big guys but a reval will help the common people who need it.

BAGHDAD, Iraq - Saddam Hussein returned to court Tuesday for his genocide trial, two days after another panel convicted him of crimes against humanity and sentenced him to hang.

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Saddam, wearing a black suit and white shirt, found his way quietly to his seat among the other six defendants charged in the Operation Anfal crackdown against Iraqi Kurds in the late 1980s.

The chief judge then convened the session and called the first witness, Qahar Khalil Mohammed.

On Sunday, another five-judge panel convicted Saddam in the deaths of nearly 150 Shiite Muslims following a 1982 assassination attempt against him in the town of Dujail in 1982.

He and two others were sentenced to death by hanging. Four co-defendants received lesser sentences and one was acquitted.

The Anfal trial will continue while an appeal in the Dujail case is under way.

On Monday, the chief prosecutor in the Dujail case said a nine-judge appeals panel was expected to rule on Saddam's guilty verdict and death sentence by the middle of January. That could set in motion a possible execution by mid-February.

Iraqi authorities imposed a lockdown on Baghdad and surrounding provinces in anticipation of the Sunday verdict. Those measures were lifted Monday after a feared surge in violence failed to materialize, although there were pro-Saddam rallies throughout Sunni Muslim areas of the country.

Shiites and Kurds, who suffered terribly under Saddam's rule, hailed the sentence as just.

If the appeals court upholds the sentences, all three members of the Presidential Council — President Jalal Talabani and Vice Presidents Tariq al-Hashimi and Adil Abdul-Mahdi — must sign death warrants before executions can be carried out.

Talabani said Monday that although he opposes capital punishment, his signature is not needed to carry out Saddam's death sentence. Talabani, a Kurd, has permanently authorized Abdul-Mahdi, a Shiite, to sign on his behalf. Abdul-Mahdi has said he would sign Saddam's death warrant, meaning two of three signatures were assured.

Al-Hashimi, the other vice president and a Sunni, gave his word that he also would sign a Saddam death sentence as part of the deal under which he got the job April 22, according to witnesses at the meeting, which was attended by U.S. Ambassador Zalmay Khalilzad.

"We wanted a written promise before the first meeting of the new parliament. But later and during a meeting in the presence of American and British ambassadors and other politicians, the promise became oral in which he vowed not to oppose important rules and laws — especially those related to Saddam," Deputy Parliament Speaker Khaled al-Attiyah told the AP.




I'm glad to see that the Kurds are gonna get their date in court with the bastard...

Good day you all.

Good news and statements are coming out more and more that are pointing to the RV.

Inflation was 70% that is a concern. I agree on Adster that we must place a doubt with the latest statement of Shabibi that the inflation was reduced to 50%.

I think this inflation is still so high and they have to tackle it. They must give the Iraqi people their jobs back.

The only way to do this is to open up for foreign investment, improve your oil production and create a lot of jobs in other sectors with the oil revenue.

For realising this they NEED an International Currency with a realistic exchange rate.

They know what to do and they will do it. We don't hear anything to prevent further speculation, but I believe that we will be surprised this week.

The best moment to do it in my eyes it to do it today after being closed from last friday and the start of the 10,000 handout.

Good luck to us all!

Originally Posted by www.xealthy.com

Aswat al Iraq :: Aswat al Iraq

The OPEC ministers are talking about reducing production by one million barrels per day, which seemed to be consensus before the Doha meeting and the difficulties arose only in a resolution into effect.

واوضح بيان اوبك ان قرار الخفض يشكل "اجراء مؤقتا سوف يعاد درسه" في الاجتماع المقبل لمنظمة اوبك المقرر عقده في 14 كانون الاول/ديسمبر في ابوجا بنيجيريا.

The statement by OPEC's decision to cut was "temporarily will be studied" in the next meeting of OPEC scheduled for December 14 in Abuja, Nigeria.

ولم تشر اوبك الى سقف انتاجها الرسمي ما يعني انه بقي دون تغيير عند 28 مليون برميل يوميا وهو السقف المعتمد منذ تموز/يوليو 2005.

OPEC did not refer to the official production ceiling, which means that there remained unchanged at 28 million barrels per day ceiling, which adopted since July 2005.

و للمنظمة اي خفض منذ نيسان/ابريل 2004.

There has been no official production ceiling of the Organization of any reduction since April 2004.

وكانت بعض الدول الاعضاء وبينها ايران، اعربت عن الرغبة في ان يتم تطبيق الخفض على سقف الانتاج الرسمي.

And some Member States, including Iran, She expressed the desire to apply the reduction to the official production ceiling.

واوضح وزير النفط الاماراتي محمد بن ضاعن الهاملي خلال مؤتمر صحافي ان "جميع الدول ستخفض انتاجها"، موضحا انه يشير الى الدول العشر الاعضاء في منظمة اوبك بدون العراق، مضيفا ان "التخفيض احتسب انطلاقا من الانتاج الفعلي في ايلول/سبتمبر".

The UAE Oil Minister Mohammed bin Dhaen Al-Hameli during a press conference that "all States would reduce its" he was referring to the ten-member countries in OPEC without Iraq. He added that "the reduction calculated from actual production in September."

وعلاوة على ارتفاع الاسعار الذي يؤثر على عائدات الدول الاعضاء، فان اوبك تراقب بقلق تعويم المخزون النفطي في الولايات المتحدة اكبر مستهلك عالمي للنفط الذي يتزامن مع تباطؤ النمو الاقتصادي العالمي.

In addition to the rise in prices, which affect the revenues of Member States, the OPEC monitors with floating oil reserves in the United States, the biggest oil consumer in the world, which coincides with a slowdown in global economic growth.

وتعتبر المنظمة ان العرض اكبر بكثير "من الطلب الحقيقي على النفط كما يظهره المستوى الاعلى من المتوسط للتخزين" في بعض الدول.

The organization considers that the offer much greater "than the actual demand for oil as shown by the higher level of average storage" in some States.

وستتحمل المملكة العربية السعودية القسم الاكبر من التخفيض بـ 380 الف برميل يوميا ثم ايران بـ 176 الف برميل يوميا.

The Kingdom of Saudi Arabia would bear the bulk of the reduction by 380 thousand barrels a day and then Iran of 176 thousand barrels per day.

ورغم الزيادة الفورية في الاسعار اليوم في التبادلات الاسيوية، فانه لا يزال من المبكر الحكم عما اذا اتاح قرار اوبك قلب توجه الاسعار من الانخفاض الى الارتفاع ووضع حد لتشاؤم المتعاملين في الاسواق.

Despite the immediate increase in prices today in the Asian exchanges, it is still too early to judge whether OPEC's decision allowed the heart of the guide price decline to the rise and put an end to the pessimism dealers in the market.

وقال محللون ان المنظمة تعاني منهجيا من صعوبات في الانضباط حين تقرر تخفيض الانتاج بسبب تراجع العائدات الذي ينجم عن مثل هذا القرار.

And analysts said that the organization suffers from methodological difficulties in the discipline while it was decided to reduce production due to the drop in revenues resulting from such a decision.

واضافوا انهم يتوقعون ان تعمد العديد من الدول الى الغش وتخفيض كمية تقل عن حصتها المعلنة من الخفض.

They added that they expect many countries deliberately to fraud and reducing the amount less than its share of the announced reduction.

وفي حال لم يأت قرار الخفض بالاثر المطلوب، فقد تقرر اوبك القيام بعمليات خفض اخرى.

In the event of reduction decision did not come as desired effect, OPEC has decided to carry out another reduction.

واشار وزير البترول والثروة المعدنية السعودي علي النعيمي الى امكانية تقرير اوبك تخفيضا اضافيا في اجتماعها المقبل في كانون الاول/ديسمبر.

The Minister of Petroleum and Mineral Resources Ali Naimi, the Saudi report to the possibility of a further reduction of OPEC at its next meeting in December.

واكد وزير الطاقة الفنزويلي رفاييل راميريز قبل اجتماع الدوحة ان الوزراء سينكبون من الان على بحث خفض الانتاج بـ 500 الف برميل يوميا في اجتماع ابوجا.

The Venezuelan Energy Minister Rafael Ramirez before the Doha meeting that the ministers Sinkpon from now on the discussion of the reduction in production of 500 thousand barrels a day in the Abuja meeting.

Another reason why it is so important to Europe and North America that Iraq get back to a high oil production level. They are NOT a member of OPEC and are not bound by OPEC's decisions. And as long as they continue towards a full democracy they are not likely to become members. Getting their oil production levels up will make it more difficult for OPEC to manipulate oil prices.

New audit hunts Iraq's lost millions | Iraq Updates

07 November 2006 (Aljazeera)

A new audit examining 15 contracts signed in Iraq has found new evidence of massive corruption and mismanagement by the US government.

The audit of 15 noncompetitive contracts paid for by US government agencies with Iraqi oil money was unable to account for $22.4 million in funds, a UN-led watchdog said on Monday.

The audit by KPMG, ordered by the International Advisory and Monitoring Board (IAMB), said that in some cases Iraq did not receive goods and there were "unreconciled payments".

The report also said there was no evidence that steps were taken to fix previously reported problems with corruption.

The contracts varied from paying for guards for oil pipelines to training Iraqi police and military to the purchase of vehicles and food.

"In view of these findings, the IAMB recommends that the Iraqi government seek resolution with the US government concerning the use of resources of the [Development Fund for Iraq], which might be in contradiction with the UN Security Council Resolution 1483," the board said in a statement posted on its website.

The IAMB, which also includes officials from the World Bank and International Monetary Fund, was created by the UN Security Council in 2003 to oversee the use of Iraqi oil money while the country was under an interim US administration.

The watchdog's mandate expires at the end of December.

Missing millions

In 2004 an audit, ordered by the Coalition Provisional Authority (CPA) which governed Iraq after the US-led invasion, found that more than $8.8bn of Iraqi money was missing.

The CPA found that the money had been paid for goods and services that were never provided.


The US hoped Iraq would become a model for the Arab world


In other cases, millions of dollars were paid by the CPA in salaries for thousands of security guards who did not exist.

In other cases the money simply vanished.

Since the CPA handed over the power to Iraqis, corruption has become even worse.

A new survey released yesterday by Transparency International, an anti-corruption watchdog, ranked Iraq as the second most corrupt country in the world.

The 2006, Corruption Perception Index placed Iraq in joint 162nd place - tied with Myanmar and Guinea - but marginally ahead of Haiti, the world's most corrupt nation.


Corruption is a big problem over there. It is now choosing for your own people and tackling the corruption as soon as possible after the RV and opening the doors with assistance.