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

Originally Posted by Inscrutable

It matters, it's either $1 million USD divided by 20 gunmen or $700.00 divided by the 20 which gives them a whooping $35.00 each.

You are right, for some reason I just considered 1 mil ...thinking 1 mil of dinars will be 1 mil of dollars soon...forgot that they specified 1 million dollars...
My bad, yes, you are right.

Kirkuk budget unexpectedly shrinks

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11 December 2006 (The Kurdish Globe)
The budget for the Kirkuk city will be increased to 200 billion Iraqi dinars for the year 2007.

Kirkuk City Provisional Council held its regular meeting last week to discuss and vote on the budget earmarked for 2007. In the meeting, members of the Brotherhood List in the council boycotted the vote on the proposed budget.

"We heard from the council, following its latest meeting with Iraqi Prime Minster Al-Maliki in Baghdad, that the budget for the city will be increased to 200 billion Iraqi dinars for the year 2007. However, we have seen it surprisingly shrink to 114 billion dinars," said city council member Mohammed Kamal to Khabat.

"The population of Kirkuk is currently estimated at over one million, not counting the people who will be returning to the city," Mohammed said, adding, "Any attempt to reduce the budget is interpreted as an oppressive act against the city and its people."

Iraqi MPs: Some oil income should go to the people

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11 December 2006 (The Kurdish Globe)
The Iraqi government to allocate 30% of its oil income to the people.

Some Iraqi parliament members are proposing a project that would require the Iraqi government to allocate 30% of its oil income to the people, local media reported.

"The basics of this project will be discussed with the Minister of Planning and the chairman of parliament's Economic Committee. It is expected to be submitted before parliament prior to the end of this year," Noraddin Al Hayali from the Iraqi Accord List said.

According to economists, annual income in Iraq from oil is more than $30 billion. The project being proposed by the parliament members requests that $10 billion be distributed to the people.

Originally Posted by frathousemicrowave

I understand the target figure but the thing that gets me is that we are reading all the stories about the CBI wanting to strengthen the dinar & yet the people still want dollars over dinar. Well sure, the Iraqi people don't have a lot of money to hang on to but with the trend of the dinar in the last month I would expect the auction amount to go down & not up. With the way it's going I can't see it slowing down. 1365.....Starting to think not.

I undestand your point. It's not so much the "people" who want the dollars, its the banks, (other than the CBI) that need the dollars in order to transact day to day business. Since Iraq has a dual currency economy, and since the dinar is not a legal tender for goods and services brought in from outsde the country, the banks have to have dollars in order to pay off purchase contracts that are needed by the companies they support. The auction generally has been a little higher after their weekend because they need the extra funds to pay for goods purchased during that time period while the banks were closed. As a whole, you are right, the auction amounts have gone down from where they were when the CBI started this plan. At first the amounts were close to 100 million dollars on a daily basis. Now we see amounts typical of what we saw today. Another factor that will continue to drive the need for dollars is the ongoing creation of new businesses. Last month another 263 new businesses were filed for in the Baghdad area. Their economy is growing in spite of the violence. All of this is a good thing because as more businesses come into existance, the greater their need for capital and the more capital the CBI pulls from circulation the higher the value of the dinar will become. Once the GOI makes the move to an internationally traded currency for the dinar, then you will see the need for the US dollar fading away.

SORRY IF ALREADY POSTED


Iraqis Near Deal on Distribution of Oil Revenues

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11 December 2006 (New York Times)
Iraqi officials are near agreement on a national oil law that would give the central government the power to distribute current and future oil revenues to the provinces or regions, based on their population, Iraqi and American officials say.

If enacted, the measure, drafted by a committee of politicians and ministers, could help resolve a highly divisive issue that has consistently blocked efforts to reconcile the country’s feuding ethnic and sectarian factions. Sunni Arabs, who lead the insurgency, have opposed the idea of regional autonomy for fear that they would be deprived of a fair share of the country’s oil wealth, which is concentrated in the Shiite south and Kurdish north.

The Iraq Study Group report stressed that an oil law guaranteeing an equitable distribution of revenues was crucial to the process of national reconciliation, and thus to ending the war.

Without such a law, it would also be impossible for Iraq to attract the foreign investment it desperately needs to bolster its oil industry.

Officials cautioned that this was only a draft agreement, and that it could still be undermined by the ethnic and sectarian squabbling that has jeopardized other political talks. The Iraqi Constitution, for example, was stalled for weeks over small wording conflicts, and its measures are often meaningless in the chaos and violence in Iraq today.

But a deal on the oil law could be reached within days, according to officials involved in the drafting. It would then go to the cabinet and Parliament for approval.

The major remaining stumbling block, officials said, concerns the issuing of contracts for developing future oil fields. The Kurds are insisting that the regions reserve final approval over such contracts, fearing that if that power were given to a Shiite-dominated central government, it could ignore proposed contracts in the Kurdish north while permitting them in the Shiite south, American and Iraqi officials said.

The national oil law lies at the heart of debates about the future of Iraq, particularly the issue of a strong central government versus robust regional governments. The oil question has also inflamed ethnic and sectarian tensions. Sunni Arabs, who preside over areas of the country that apparently have little or no oil, are adamant about the equitable distribution of oil revenues by the central government.

On the drafting committee, Sunni Arabs have allied with the Shiites against the Kurds, who have sought to maintain as much regional control as possible over the oil industry in their autonomous northern enclave. Iraqi Kurdistan has enjoyed de facto independence since 1991, when the American military established a no-flight zone above the mountainous region to prevent raids by Saddam Hussein.

Gen. George W. Casey Jr., the senior American commander here, and Zalmay Khalilzad, the American ambassador, have urged Iraqi politicians to put the oil law at the top of their agendas, saying it must be passed before the year’s end.

The drafting committee is made up of ministers and politicians from the main Shiite, Sunni Arab and Kurdish blocs in government. They began talks months ago, but the pace picked up recently, said an American official tracking the negotiations, who spoke on condition of anonymity because he did not want to give the appearance of Western interference in sovereign Iraqi matters.

At the start of the talks, the Kurds fought to ensure that regional governments have the power to collect and distribute revenues from future fields, Iraqi and American officials said. They also proposed that revenues be shared among the regions based on both population and crimes committed against the people under Mr. Hussein’s rule. That would have given the Kurds and Shiites a share of the oil wealth larger than the proportions of their populations.

But the Kurds dropped those demands, said Barham Salih, a deputy prime minister who is a Kurd and the chairman of the committee.

“Revenue sharing is an accepted principle by all the constituent elements of the Iraqi government, including the Kurds, and that is the unifying element that we’re all hoping for in the oil law,” Mr. Salih said in an interview.

The American official said the Kurds were willing to make concessions because a national oil law could attract more foreign oil companies to exploration and development in Kurdistan. A large foreign oil company would have more confidence in signing a contract with the Kurds if it were to operate under the law of a sovereign country rather than just the law of an autonomous region.

Some Kurdish leaders also believe that the concessions are a worthwhile price to pay for having a stake in the much larger revenue pool of the country’s oil industry, the American official said. The southern fields accounted for 85 percent of total Iraqi crude production last year, partly because northern production was hampered by insurgent sabotage. The south has an estimated 65 percent of the country’s 115 billion barrels of proven reserves.

But the Kurds are still holding out on the issue of oil contracts, arguing that the Constitution guarantees the regions absolute rights in those matters. The Kurds recently discovered two new oil fields after signing exploration contracts with a Turkish company and a Norwegian company.

“There are those among us who say we cannot go back to the former days of centralization, which were not conducive to good business practice and to the idea of federalism that is enshrined in the Constitution,” Mr. Salih said.

In its recommendations released Wednesday, the Iraq Study Group took the opposite tack, to the anger of the Kurds. The report said that “no formula that gives control over revenues from future fields to the regions or gives control of oil fields to the regions is compatible with national reconciliation.” Though the Kurds have ceded their position on the issue of future revenues, they are fighting for control over the development of future fields.

The drafting committee met Thursday night to try to resolve the contract issue, but could not reach an agreement.

Distributing revenues by population could be a difficult matter without a reliable census, which Iraq lacks. Sunni Arabs often claim they are at least 60 percent of the population, not the 20 percent that is commonly cited. The Shiites are generally estimated to be 60 percent of the population, and the Kurds 20 percent. The American official said a national census expected to be taken next year should determine the share of revenue that goes to each province or region.

If doing a census next year is too politically fraught, or if security conditions prevent it, then revenues could be distributed to provincial or regional governments according to the household counts used by Mr. Hussein’s government to distribute rations in the 1990s.

The Kurds have insisted that revenues collected by the central government should be put into an account that automatically redistributes the money into sub-accounts dedicated to the provinces or regions. This approach could be written into the national oil law or into a separate law, the American official said.

The working draft of the oil law re-establishes the state-run Iraq National Oil Company, which was founded in 1964 to oversee oil production but was shut down by Mr. Hussein in 1987. The company would operate using a business model and not through a government budget process. Iraqi and American officials say that would make management of oil production more efficient and separate it from the Oil Ministry, which has been rife with corruption.

The North and South Oil Companies, which currently manage production in their regions, would fall under the umbrella of the Iraq National Oil Company. Any exports would still be sold through a state marketing company.

The law also sets production thresholds for creating new regional companies. A province or region, for example, might have to show it can produce 100,000 barrels a day before a company can be created there. Officials in Maysan Province in the south have already said they want to start a company.

Just my take on this article....

Originally Posted by Jola

"They're basically meeting their targets," said the official, who requested anonymity. "I think this is actually a good thing for Iraqi consumers."

Most Iraqis receive oil and food subsidies but struggle to pay for cars, computers and other items, said Laith al Abadi, 30, a computer engineer who was exchanging dollars for dinars at the Beirut Exchange Co. last week. Abadi said he imports PCs on the black market to avoid taxes and keep his prices low — $300 to $1,400 for a basic model.

"If something changes, if the market is OK, then I pay taxes," he said.

Investors were more upbeat last week at the stock exchange, where 93 stocks appeared on whiteboards. In a stucco building behind an armed checkpoint and concrete barriers, men fingered prayer beads as they waited for the exchange to open. Some said they are more confident that the central bank can curb inflation as the dinar's value rises.

"It's a sign of stability because you are going to have capital that has fled the country coming back," said Saad Lutfi, 64, a trader who mostly invests in the banking sector, which he said is picking up. "But it's a long-term thing."

Alhajji, the Ohio economist, said Iraqis were following the bank's lead, exchanging dollars for dinars.

"People historically, since the days of Saddam Hussein, saved their money in non-Iraqi currency. Since the U.S. came, it was the U.S. dollar, especially since the military was paying in dollars," he said. Now people believe the economy is improving and will keep buying dinars, he added.

Even with prices rising, U.S. soldiers in the streets and bombs in the markets?It's been the economy causing the problem not the security situation.

"Sometimes high inflation is a sign that the economy is picking up," Alhajji said. "In Dubai, inflation is rampant, but it is one of the most prosperous places in the world."

But Iraq is no United Arab Emirates. The Dubai skyline is dotted with construction cranes, while Baghdad's high-rises are pocked by mortar rounds. Iraq emerged from Hussein's rule with $125 billion in international debt, pared down to $76 billion, and trade ties weighted heavily in favor of foreign countries, chiefly the U.S.

Add to that the complications of post-colonial currency shifts. Get out of the past! The world is witnessing a NEW country forming on the horizon, unprecedented in history...there is NO comparison here!

After World War I, when Iraq fell under British rule, the official currency was the Indian rupee, with rates set by the empire. Once Iraq gained independence in 1932, leaders created a national currency board to set exchange rates for the dinar but not shape monetary policy.

Under Hussein, the exchange rate fell from $3.30 per dinar to a low of 3,000 dinars per dollar in 1995 as the government, bedeviled by international embargoes, massively printed old dinar notes, including those emblazoned with the dictator's likeness.

The new central bank was created with U.S. and British oversight in part to help stabilize the dinar. Some say the currency's rise amid the sectarian war is the result of the bank's dysfunctional money management.

"Given their history with money in Iraq, they should never have had a central bank," said professor Steve H. Hanke, co-director of the Institute for Applied Economics and the Study of Business Enterprise at Johns Hopkins University in Baltimore.

He said Iraq should replace the central bank with the currency board it had before or adopt a foreign currency. Ecuador, El Salvador and East Timor have adopted the dollar, he noted, while Montenegro and Kosovo use the euro.

Hanke called the dinar's rise "both very dangerous and the worst of all possible worlds" because it is not curbing inflation.

"This is a major train wreck waiting to happen," he said. This guy has been spouting switching to a currency board for a LONG time and has been comparing Iraq with Nigeria. I think he is just bitter because no one has listened to him. Quote: Regrettably, sticking to our policy conclusions seems to suggest that we would derive some perverse satisfaction from policy failures in Iraq, as our advice has been not so politely ignored.

The head of the Iraq Stock Exchange, Taha A. Salam, said the dinar will inevitably decline in value. When it does, he said, "you will have more problems in the streets" as Iraqis' buying power wanes. Hmmm...The dinar will be the currency of choice.... But it won't last? The dinar will rise on par with that of surrounding nations... But it won't last? The dinar will rise significantly in 2006....But it won't last?

Shemry, the exchange dealer, advises clients like Mudhaffar Jenari, an employee at the Ministry of Oil, to keep their dollars as insurance against further unrest. Just a few months ago, a car bomb exploded up the street, wounding the owner of another foreign exchange shop and killing an employee. After the blast, thieves stole $40,000. So because of this the government should put all their plans on hold or refrain from doing ANYTHING to improve their economy? I think NOT!

"Everything depends on the security situation," Shemry said. WRONG....The most important of these catalysts stable economic policy, because foreign investors will not risk investing in Iraq if there is no stability in the Iraqi economy). http://www.rolclub.com/iraqi-dinar-d...tml#post144196

This is true for the dinar as with everything else. "One thing goes badly, and we lose everything."

Cheers!
DayDream

11 December 2006 (The Kurdish Globe)

The constitution recognizes Islam as a source of legislation sparking some angry reactions by civil society organizations.
Kurdistan Parliament has extended the time to review the draft copy of the region's constitution. Extra time has been called for to allow more opinions from experts and the public on the content of the charter.
The original date was set for the beginning of December but for now has been pushed back to April 1st, next year.
Kurdistan lawmakers say that since this is the first draft of the constitution for the Kurdistan Region, they want to give an extended opportunity to a wider number of people and different factions to have their say on the constitution's development.
"This is the first draft constitution for Kurdistan Region, so we would like to value the views of all segments and factions concerning the amendments in the constitution," Tariq Jambaz a member of the constitutional panel, told the Globe.
Jambaz added that they have consulted 50 constitutions of various countries from around the world with a view to further enrich the constitution.
"We are asking media outlets and experts to participate in this process and suggest their proposals to enrich the draft." He said.
The constitution recognizes Islam as a source of legislation sparking some angry reactions by civil society organizations, especially NGOs acting on behalf of women, who believe it will restrict civil liberties.
The charter has also been criticized by some minority groups in the Region who are demanding more rights. A prominent Christian leader, Sarkis Agha Jan, has asked the Kurdistan constitution to recognize self-rule for Christians in areas where they constitute the majority.

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DayDream

Manama, 11 December 2006 (Gulf News)

Iraq's national security adviser Muwaffaq Al Rubaie yesterday said that there would be no red lines in the reconciliation process launched by the Iraqi government.
"The central theme of the Iraqi government is national reconciliation. We will accept any organisation or individual as long as they are not Al Qaida. We will talk to former regime figures as well as religious leaders and others, and everything could be on the table," Al Rubaie said in Manama.
"We will negotiate all their demands but right now we cannot disclose whom we are talking to," Al Rubaie told the Manama Conference 2006.
"At the national level, we have already had three important conferences with political religious leaders. We will also have an important conference this month with political leaders who include people who refused earlier developments," he said.
At the regional level, there is a need to have a security pact against terrorism.
"At the international level, we should not make this a US project, it should be an international community project," Al Rubaie said.
He said the nature of the conflict in Iraq was in fact a competition between groups competing for political power and financial gains. "It is ... a fight between moderates and extremists," he said, adding that violence was "very localised, mainly in two areas".
"If we do not help Iraq control the sectarian violence, it will land on the doorsteps of Saudi Arabia, Bahrain, other GCC countries and even further up in Pakistan and India," he said.

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DayDream

Kurdistan parliament held a special meeting to discuss the Baker-Hamilton
Arbil - (Voices of Iraq)

The Chairman of the National Council for Iraqi Kurdistan today, Monday, to hold a special meeting of the Council to discuss the report of the Baker-Hamilton sector developments in the situation in Iraq.

A statement issued by the National Council of Iraqi Kurdistan, issued today, and received news agency (Voices of Iraq) independent copy, Mr. Adnan Mufti, President of the Council called for an extraordinary session of the Council on the 17th of this month to discuss the report of the Baker-Hamilton, to determine the position of the Parliament of Kurdistan.

A team from the Republican and Democratic parties, headed by former Foreign Minister George Baker submitted a report last Wednesday (79) contains a recommendation on rescue the situation in Iraq and review in the American strategy in Iraq and to ensure the threat of cutting off (support) from the Iraqi government in the absence of its rapid action to improve the situation in Iraq.

The President Masoud Barzani of the Kurdistan of Iraq has announced that he would not abide by the report of the Commission (Baker-Hamilton) on Iraq, because it contains proposals inappropriate and unrealistic.

He referred in this regard to the report's call to review the constitution Iraqi participation of experts from the United Nations and the development of oil revenues under the control of the central government and the distribution of proceeds on the basis of the population in the regions of Iraq, considering that the control of the regions oil wells run with the new process of national reconciliation.
The report also called for the postponement of the application of Article (140) of the Constitution and the special situation in Kirkuk.

ßÑÏÓÊÇä - ÌáÓÉ ÇÓÊËäÇÆíÉ :: Aswat al Iraq :: Aswat al Iraq

Irbil, Iraq, 10 December 2006 (VOA)

The report published this week by a bipartisan U.S. panel urging policy changes in Iraq has not been warmly received in northern Iraq's semi-autonomous Kurdistan region, particularly its recommendation on how Iraq's oil wealth should be distributed. VOA's Margaret Besheer sat down with the regional prime minister, who says the report does not reflect realities on the ground.
Iraq's Kurdistan region is often overlooked by outside observers because it suffers none of the sectarian violence plaguing Baghdad and other parts of the country.
But the prime minister of the semi-autonomous region, Nechirvan Barzani, tells VOA that is no reason for the U.S. commission reviewing U.S. policy in Iraq to have neglected visiting the area when they were preparing their 79 recommendations for President Bush.
"They stayed just inside [the] Green Zone, and [for] just a few days inside the Green Zone," he said. "They did not come to Kurdistan, or to anywhere, to see the real situation on the ground."The Green Zone is a secure area in Baghdad where U.S. troops and government officials are housed.
Mr. Barzani is particularly upset about the Iraq Study Group's recommendations for dividing the country's oil wealth, particularly as there are sensitive internal negotiations going on now in Baghdad to draft a new national oil law.
Iraq possesses more than 100 billion barrels of proven oil reserves, so the stakes are high.
The Iraq Study Group's report urges equitable distribution of oil revenues, saying it is necessary to the process of national reconciliation. This option is attractive to Iraq's minority Sunni Arabs.
But Iraq's Kurds, including Mr. Barzani, and also its majority Shi'ites - who sit on much of the country's oil reserves - oppose this, preferring instead to follow the Iraqi constitution, which allocates all regions of Iraq a proportion of oil profits relative to their population.
The Kurds are generally considered to be 17 percent of the population. However, if an expected census is conducted next year, Mr. Barzani says their share is more likely to increase than decrease.
"Our point is, because we do not have any census in Iraq, we told Baghdad, you should keep 17 percent for the Kurds, until you finish that census, and then, according to the constitution, it will be adjusted, and we will accept that," he added.
He says Iraqi oil revenues should also go to a special account outside the country, which would automatically transfer their share from that account directly to the regional government's account.
In Baghdad, as the new oil law is hashed out, the version the Kurds would like to see approved would allow them to retain the right to sign oil deals with foreign countries and keep the proceeds for themselves, which they contend is their right under the Iraqi constitution.
Negotiations on the draft oil law will resume this week, and Mr. Barzani will go to Baghdad to take part.
Also on his agenda there is the annual budget. Right now, he says, the Kurdistan region does not receive any of the money allocated for national security, something he would like to see changed.
"Our point is, we are part of the security in Iraq, and they should allocate some budget for security in this region," he said. "You should give us our share. If the situation here is good, it is because we try hard to be like that. We need more help, more assistance."
Mr. Barzani said he was disappointed that the last round of Baghdad talks did not yield any significant results, but he tells VOA, he is hopeful that this trip will see some of these issues resolved.

Iraqi Kurdish PM Discusses ISG Report, Iraqi Oil Law | Iraq Updates

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DayDream