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

Originally Posted by neno

Iraqi Dinars - Special Report

Chris Papatheofanous is PortAl Iraq's exclusive dinar trading associate.

http://www.portaliraq.com/iraq-dinar-report.php

Neno,

Many thanks for finding this one. Chris is the dealer that I have always used and this is a great read for me.

To Much to list so bookmark the page or remember the Post# This is the Iraqi Foundation. And I see this is where my dealer safedinar gets there articles from:

http://www.iraqfoundation.org/news.html

Originally Posted by clueless

Neno,

Many thanks for finding this one. Chris is the dealer that I have always used and this is a great read for me.

Yes clueless, with my family jumping on board now it makes me have to do more and more for them as far as places for them to see and read to. I stumbled on this guy and thought it was a good read for the thread too..

Have the prices changed recently on PortalIraq?...They just seem rather pricey compared to others...

D. Bata became Khalifa Hilal
Monetary policy is one of the most prominent economic policies aimed at achieving economic stability and the stabilization of exchange rates, which increase the strength of the national economy and effectiveness to meet the economic challenges, The Iraqi Central Bank has succeeded in achieving the large reserve of foreign exchange. The stabilization of the exchange rate of the Iraqi dinar against the major currency transaction (the dollar)




Is necessary and appropriate, The Lamzadat foreign currency held by the Central Bank of Iraq played an important role in maintaining an appropriate level of the exchange rate and stabilization, When no pressure on exchange rates, the central bank is tightening monetary policy and narrowed, including lifting Mdlat interest on deposits in Iraqi dinars, and to allow greater flexibility in the management of monetary policy. The Bank has taken several steps to expand the list of tools available to the monetary policy, Coverage of reserve required to cover government deposits, and the granting of facilities on deposits that mature in a short period of time in order to allow banks to manage liquidity in a more effective manner. and reducing the risks of liquidity to the Central Bank.
The monetary sector in the economy of the Central Bank, commercial banks and other financial institutions. It is the only sector among the four main sectors covered by the national accounting, which consists of the real sector. and the central government and the monetary sector, the external sector. The objectives of monetary policy to achieve economic growth and reduced unemployment rates, the stability of prices of goods and services, and the stability of exchange rates in the case of a floating exchange rate, and improve the balance of payments.
These objectives are achieved through the tools of monetary policy direct and indirect, to the last control in the budgets of public CBE tools while targeting direct control of the balance sheets of commercial banks such as a credit ceilings and determine interest. The instruments of direct allocation to the efficient use of resources, reducing the effectiveness of investment and the multiplicity of exchange rates.
The structural stability of the current rates of exchange have been granted an opportunity for rebuilding the Iraqi economy and its growth, Although prices have not fully stabilized, This is due in part to instability and the nature of security and political conditions throughout Iraq. Within this context, the Central Bank of Iraq has succeeded in collecting the reserve at a high level of foreign exchange. requires the stabilization of the exchange rate of the Iraqi dinar against the dollar is appropriate and required at the current stage. In support of this structure, the Central Bank of Iraq is ready to provide the required amounts of foreign currency on the basis of the maximum rate of daily auctions.
To allow greater flexibility in the management of monetary policy, Central Bank of Iraq has taken a number of steps to expand the list of tools available to the monetary policy, and the granting of the Reserve Bank is required to meet the government deposits, a critique of the years 2005 and 2006 set the perceptions about the growth in the demand for the currency and the currency in circulation and expectations about economic growth and inflation.
In order to improve the governance and transparency of the Central Bank of Iraq. The Iraqi government commissioned a company (Ernst and Young) global review of operations and the financial statements of the Central Bank to monitor the economic performance and analysis of the essence of the monetary policy pursued by the Central Bank of Iraq in this area with a view to achieving the targets and goals of the monetary policy in Iraq ...
An expert in the Ministry of Planning and Development Cooperation

Does this mean they are considering letting the dinar float on the open market?

http://translate.google.com/translat...3Doff%26sa%3DG

I know this is old, But when I read it, it showed what the Paris Club was up against to make all the things that have happened to now a must to of happened. I find it as a great "READ". Please injoy if you never seen it.

7/12/04 The IMF and the Future of Iraq by Zaid Al-Ali

(Zaid Al-Ali practices international commercial arbitration law in Paris and works with Jubilee Iraq, an organization advocating debt relief for Iraq. He is also the editor of www.iraqieconomy.org.)

On November 21, 2004, the 19 industrialized nations that make up the so-called Paris Club issued a decision that, in effect, traces the outline of Iraq’s economic future. The decision concerns a portion of Iraq’s $120 billion sovereign debt — a staggering amount that all concerned parties recognize is unsustainable. In their proposal to write off some of the debt, the Paris Club members took advantage of the opportunity to impose conditions that could bind the successor government in Baghdad to policies of free-market fundamentalism.

Iraqis, in general, are contemptuous of the idea that loans made to Saddam Hussein’s government should be repaid. Much of that debt was contracted for purposes such as purchasing military equipment that was used to invade neighboring countries, which is not a spending priority that the Iraqi people voted to pursue. Iraqis and international campaigners argue that much of Iraq’s debt is in fact “odious” — a category of debt that should not be repaid because the loan proceeds were used against the interests of the indebted country’s population. “Odious debt” need not be written off or forgiven; it is simply not owed at all because it is illicit in nature. A number of legal precedents on odious debt exist, but from a strictly legal point of view, authorities such as the Paris Club are under no obligation to apply the precedents or even to take them into account.

The Paris Club probably calculated that Iraq will not invoke the odious debt doctrine to refuse any repayment whatsoever. Such action would invite a boycott on the part of public and private lending institutions, leading to a severe shortage of capital and guaranteed economic meltdown. Iraq will likely stop repaying only if repayments were exerting such budgetary strain that it would be better off not paying back its debt, regardless of whether or not capital flows dried up. As the creditor nations are perfectly aware, compelling Iraq to repay its debt completely would push the country into an economic crisis so severe that debt servicing would halt.

It was therefore decided long ago that a portion of the debt would have to be written off. Although this reduction is often couched in humanitarian terms, the reality is that creditors are simply vying to bleed Iraq as much as possible without actually killing it.

STRINGS ATTACHED

The Paris Club agreed to write off a portion of Iraq’s debt in three stages. The first 30 percent, amounting to $11.6 billion, is to be written off unconditionally. A second 30 percent reduction will be delivered “as soon as a standard International Monetary Fund program is approved.” A final 20 percent reduction will be granted “upon completion of the last IMF board review of three years of implementation of standard IMF programs.” In other words, 30 percent of Iraqi debt will be excused only if the IMF and Iraqi authorities agree on an economic “reform” package, and another 20 percent will be written off only if the Fund is satisfied that Iraq has implemented the terms of that package.

Since 1947, the IMF has extended loans to debt-ridden, developing countries in return for those countries’ adherence to “conditionalities,” typically including privatization of state enterprises and other major restructuring of the economy. In the case of Iraq, 50 percent of the debt piled up by the country’s former dictator — amounting to $19.38 billion — is tied to as yet unspecified conditionalities. As Paris Club members claim around $40 billion, Iraq will still owe $7.78 billion to the Paris Club even if the IMF certifies its adherence to the conditionalities. If Iraq does not satisfy the Fund, it will owe $27.16 billion to the society of 19 industrialized nations.

As soon as the substance of the Paris Club’s decision was made public, the Iraqi National Assembly, the closest thing Iraq has to a representative institution, issued a statement declaring that “[Iraq’s] debts are odious and this is a new crime committed by the creditors who financed Saddam’s oppression.” Sheikh Muayyad of Baghdad’s Abu Hanifa mosque, the one raided by US troops in mid-November, added: “In the Paris Club process, the enemy is the judge, and this cannot be fair.” Although Iraqis rightly object to the deal’s failure to acknowledge the odious nature of much of the debt, their incentive to meet the terms of the Fund’s program will be very strong. What type of future can Iraq expect under the guidance of the IMF? Two cases from recent history offer some clues.

POISON PILL

The Southeast Asian crisis of 1997 is a commonly cited illustration of IMF ideology in practice. Reacting to rumors that Thailand would devalue its currency, the baht, speculators confirmed the prophecy by moving capital out of the country and converting it into dollars, thereby weakening the baht. A number of other factors converged to send the entire region into a brutal recession, as foreign investors withdrew money into dollar accounts in “safer” places. The mass flight of foreign capital from Southeast Asia was possible mainly because many of these countries had undertaken capital market liberalization reforms prior to 1997 — upon the advice of the IMF.

As the crisis spread, the IMF offered approximately $95 billion in loans to the afflicted countries, but not without stipulating conditionalities. Most importantly, the Fund required governments to balance their budgets, inducing governments to slash important social programs and abandon their goal of full employment. These “reforms” came at great social cost. In Indonesia, for example, riots broke out the day after the government cut food subsidies. In addition, the IMF insisted that Southeast Asian countries boost interest rates to attract foreign capital back to their banks. The ironic result was that a number of domestic firms were forced into bankruptcy, widening the recession and diminishing the region’s allure for investors.

The countries that swallowed the IMF’s poison pill — including Thailand — were still in recession in 2000. Malaysia, on the other hand, famously rejected the Fund’s advice and followed its own path. Pegging its currency, the ringgit, to the dollar and cutting interest rates, Kuala Lumpur ordered that all ringgit invested offshore be repatriated within one month, imposed tight limitations on transfers of capital abroad and froze the repatriation of foreign capital for 12 months. In the meantime, the country took the time to restructure its corporate and banking laws. As a result, Malaysia emerged from recession much sooner and with a smaller debt than its neighbors.

ARGENTINA’S EXAMPLE

Throughout the 1990s, the IMF held up Argentina as a shining example for others to follow, but there, too, its recommendations are now closely associated with economic disaster. Before Argentina entered a recession in 1998, the IMF enjoyed control over the country’s economic policies through past loans and the conditioning of other financial packages upon a “standard IMF program.” Argentine authorities happily carried out all the demanded reforms, including selling off huge amounts of state property and opening up just about every industry in the country to 100 percent foreign ownership. Before Argentina’s eventual economic collapse in 2002, for instance, foreign institutions dominated the banking industry. While these banks readily provided funds to multinational corporations, and even to large domestic firms, small and medium-size firms complained of a lack of access to capital. The resulting lack of growth was pivotal. Many argue that the main culprit in Argentina’s dramatic crash was not the IMF but the government, which never saw anything wrong with selling off the country wholesale. Even if so, the IMF certainly did not help.

By the time the crisis started in 1998, the Argentine government had already incurred a large amount of foreign debt. The recession caused tax revenues to plummet, therefore aggravating its balance of payments problem. Buenos Aires made up the difference by increasing borrowing from international lenders such as the IMF. The Fund provided $3 billion in 1998, $13.7 billion in 2000 and a pledge for a further $8 billion in 2001. In addition, it arranged for an additional $26 billion to be granted by other sources at the end of 2000. The bailout came with strings attached: the IMF decreed that Argentina should, among other things, balance its budget by drastically cutting public spending and by raising taxes. The Fund aimed thereby to make the country more attractive to foreign capital, but the downside was that unemployment worsened and vital social programs were canceled. Despite the astronomical sums made available to Argentina, and despite the government’s budget cuts, the recession’s effect could not be overcome, and the gap in the budget continued to grow until the government could no longer sustain debt repayments.

Argentina officially defaulted on its debt of $141 billion on January 3, 2002, and devalued its currency over IMF objections shortly thereafter. Investors lost confidence in the Argentine economy and began pulling their money out of the country. The government foresaw that the outflow of capital might cause a banking failure and so imposed a limit of $1,000 per month on withdrawals by ordinary Argentinians. In addition, officials converted bank deposits that were originally made in dollars into local currency, thereby increasing the liabilities of the population, as debts that were incurred in dollars remained in dollars. Following the devaluation, the debts of ordinary Argentinians increased in value by over 300 percent.

In the six months following the devaluation, Argentina’s gross domestic product dropped by 16.3 percent. As of June 2002, 19 million people out of a total population of 35 million were earning less than $190 per month. Amidst riots, looting, increased crime and police brutality, 8.4 million Argentinians were destitute, with monthly incomes of less than $83 per month. Reports surfaced of malnutrition and children missing school in order to beg.

MORE, NOT LESS

In a July 2004 report from its Independent Evaluation Office, the IMF conceded that it should not have continued urging Argentina down the budget-cutting road after “the growing vulnerabilities in the authorities’ choice of policies” became apparent. Instead, the report concluded, the Fund should have diverted its loan funds to help Argentina cover “the inevitable costs of exit” from its chosen policies. But this internal audit of the IMF’s role in the crisis makes clear that the Fund has not altered its basic views about what indebted countries should do to reduce their burdens. “During the pre-crisis period,” reads a July 29 press release on the audit, “the IMF correctly recognized fiscal discipline and structural reform, labor market reform in particular, as essential to the viability of the convertibility regime.” Further, the IMF believes that Argentina should have done more, not less to adhere to its program before the crisis: “Conditionality was weak, and Argentina’s failure to comply with it was repeatedly accommodated.”

To date, the approach of the Bush administration in Iraq strongly suggests that the same “more, not less” mentality will govern their recommendations for Iraq’s economic future. Most infamously, the Coalition Provisional Authority (CPA), which ruled Iraq from May 2003 to June 2004, legislated that “[a] foreign investor shall be entitled to make foreign investments in Iraq on terms no less favorable than those applicable to an Iraqi investor, unless otherwise provided herein.” This Order 39 also provides that “[f]oreign investment may take place with respect to all economic sectors in Iraq, except that foreign direct and indirect ownership of the natural resources sector involving primary extraction and initial processing remains prohibited.” Order 39 also substituted a flat tax of 15 percent for Iraq’s system of progressive taxation, wherein the top rate was 45 percent.

Assuming that the successor government in Baghdad does not overturn Order 39, the long-standing ban on foreign investment in Iraq has been abolished, allowing foreigners to own up to 100 percent of any enterprise except those controlling oil and other natural resources. Although foreign ownership of land remains illegal, companies or individuals will be allowed to lease properties for up to 40 years. Another CPA decree, Order 81, sets out the circumstances under which the reuse of seeds by farmers constitutes patent infringement. For the US-British occupation authority, such neoliberal policies were an article of faith. Speaking to journalists aboard a US military transport plane in June 2003, ex-CPA head Paul Bremer emphasized the need to privatize government-run factories with such enthusiasm that his voice could be heard over the din of the cargo hold. “We have to move forward quickly with this effort,” he said. “Getting inefficient state enterprises into private hands is essential for Iraq’s economic recovery.”

It is uncontroversial to argue that US policies and interests are widely reflected in the decisions taken and the statements made by the Iraqi interim authorities. In relation to debt and IMF programs, however, the government of Iyad Allawi seems to have surpassed all expectations.

On September 24, three Iraqi interim ministers sent a “letter of intent” to the managing director of the Fund. Such letters — a standard requirement in IMF procedure — are officially the work of national authorities, though IMF officials typically dictate their content themselves. A quick examination of the Iraqis’ letter of intent, as well as the documents on Iraq already published by the IMF, reveals multiple references to “restoring Iraq’s external debt sustainability,” “tax reform,” “financial sector reform,” “restructuring state-owned enterprises” and “macroeconomic stability.” The tenor of these documents bears a remarkable resemblance to the Fund’s prescriptions for Argentina and Southeast Asia during the 1990s. Absent from the letter, moreover, is any statement about the priority that Iraqi authorities or the IMF will place upon reduction of unemployment. A statement on Iraq issued by the IMF’s deputy managing director on September 29, meanwhile, makes not a single reference to unemployment or to poverty. On October 14, the Iraqi interim government took still another step in the direction of free-market fundamentalism when it applied for membership in the World Trade Organization.

INTRANSIGENT ARAB CREDITORS

To make matters worse, and despite all the attention garnered by the Paris Club negotiations, most of the debt incurred by the deposed regime is not actually owed to Paris Club members. Iraq’s main creditors are Arab states. Saudi Arabia claims $30 billion, while Kuwait demands repayment of a further $16 billion in debt as well as more than $30 billion in reparations from Iraq’s invasion and occupation of the country from 1990-1991. Billions of dollars are also claimed by the United Arab Emirates, Qatar and other Arab countries. Finally, on October 25, Iran was reported to have claimed $97 billion in reparations from Iraq for damage caused during the Iran-Iraq war of 1980-1988.

At first, Arab creditors were loath even to consider writing off any of the Iraqi debt. Kuwait was particularly intransigent, eliciting a rather confused reaction from senior US officials. “I have to say that it is curious to me,” Bremer said, “to have a country whose per capita income, GDP, is about $800…that a county that poor should be required to pay reparations to countries whose per capita GDP is a factor of ten times that for a war which all of the Iraqis who are now in government opposed.” Bremer was referring to monies transferred to Iraq during the 1980s, which were most probably intended to assist Iraq in its war against Iran.

Iraq, under Saddam Hussein and subsequently, has long argued that these funds were grants and not loans. Kuwait obviously disagrees. Kuwaiti Foreign Minister Muhammad Sabah Al Salim Al Sabah affirmed on December 1 that Kuwait has in its possession official documents demonstrating the transfer of monies to Iraq. “Any single dinar that Kuwait paid to Iraq without a legal and official proof will be worthless,” he said. But, from a legal point of view, the fact that transfers were made does not suffice to prove that Iraq is under any obligation to pay back any money unless the terms of the transfer are specified. If creditor nations insist on being rigid in their interpretation of the law, and argue that they have no obligation to apply the doctrine of odious debt to Iraq, then Iraq should not hesitate to argue that a loan is not a loan without a written contract to prove it. It is unclear whether such contracts exist. What is true of Kuwaiti “debt” is also true of Saudi Arabian claims.

There is a solid legal basis, by contrast, for enforcing the war reparations claimed by Kuwait, as they are based on UN Security Council resolutions. Iraq will have difficulty avoiding payment of any amounts claimed by the Kuwaitis and granted by the UN Compensation Committee, unless Iraq decides unilaterally to refuse payment, which may or may not work out in its favor.

LESSONS FOR REFORMERS

Post-Saddam Iraq offers a perfect illustration of how the industrialized world has used debt as a tool to force developing nations to surrender sovereignty over their economies. Iraq had no bargaining chip — save its economic weakness — with which it could have forced Paris Club members to write off a greater portion of debt. Indeed, had Iraq’s economy been in better shape, less of its debt would have been written off. The odious debt doctrine has considerable moral force, but it is not binding, and it comes as no surprise that Iraq’s creditors do not think in altruistic terms. Nor does the Iraqi case even constitute a precedent that other highly indebted countries could use in their favor; the Paris Club was careful to note that Iraq’s is an “exceptional situation.” What implications does the November 21 Paris Club deal have for activists seeking to ameliorate the financial burdens thrust upon poor countries by corrupt regimes?

When arguing with government officials in relation to existing debt, campaigners face two obstacles. First, the legal context in which existing debt was contracted cannot be modified retroactively, and there is therefore no legal obligation on the creditor’s part to determine whether or not the subject matter of a financial agreement is illicit. Second, there is a clear financial disincentive for creditor nations and financial institutions to forgive outstanding loans. Neither of these obstacles applies to future debt. Any reform that is put in place today will necessarily apply to loans made in years to come. In addition, the legal status of future debt has no real impact on a lender’s balance sheet.

Campaigners should move to establish the equivalent of odious debt doctrine for loans yet to be lent. The legal framework relating to international loans can be reformed through a number of different mechanisms, including, but not limited to, a new international convention, or a Security Council resolution. The European Union could even begin drafting an international convention, while leaving open the possibility for other states to ratify the agreement in the future.

Many argue that if repayment of loans were subject to scrutiny of how the borrower spent the money, loan funds would dry up. So the international convention or Security Council resolution should provide for a mechanism for dispute resolution or to refer all disputes to an already existing dispute resolution mechanism. One possibility would be for the International Center for the Settlement of Investment Disputes, a tribunal organized under the auspices of the World Bank, to deal with international lending disputes. Whatever the case may be, the advantage that opting for a particular dispute resolution mechanism would present in practice is that it would allow for the creation of a significant body of law that would serve to clarify rules relating to the illicit purpose exception.

Any such reforms will come too late for Iraq, however. As creditor nations are unlikely to have a change of heart and forgive a greater portion of Saddam’s odious debt, the new Iraqi government will need to determine whether there are ways to force debt renegotiation and to resist pressure to adopt IMF prescriptions. The first priority should not be to please outside creditors. It should be to reduce unemployment and to redistribute wealth in such a way as to reduce social divisions, something that is particularly important in Iraq. The struggle over Iraq’s economic future has moved from Paris to Iraq.

http://www.williambowles.info/iraq/imf_iraq.html

Originally Posted by tiffany

Have the prices changed recently on PortalIraq?...They just seem rather pricey compared to others...

I had never actually seen the PortalIraq site before, so cannot say about price change. I had done all of my purchase thruogh

http://www.newiraqcurrency.com/

and Chris was the individual with whom I have always cooresponded about my purchases. The prices on newiraqcurrency have not changed since I first ordered from them in sept. of 2005. They are still higher than some have discussed but are lower than I see now on PortalIraq.

Originally Posted by tiffany

Have the prices changed recently on PortalIraq?...They just seem rather pricey compared to others...

I posted it for the readings tiff, I didn't even look at that. Maybe clueless can answer that.

Hi all!
Found this at: http://www.iraqupdates.com/p_articles.php/article/9290
Sorry if this was already posted. I definitely want this to peg so I am
Not sure if this is good or bad......
Also has anyone heard of, or recognise this Iraqi economic expert 'Mr. Ali Mahmoud al-Fakiki'? Hope this is just his opinion here.
<><><><><><><><><><><><><><>
Repercussions of the Iraqi Dinar/US Dollar Parity
By Ali Mahmoud al-Fakiki
11 July 2006 (Al-Hayat)

Today, the US dollar corresponds to 5.7 Egyptian pounds and 116 Japanese yen. Can we say that the Egyptian pound is stronger than the Japanese yen, and that the Egyptian economy is stronger than the Japanese economy since the number of Egyptian monetary units required for purchasing one dollar is less than the required number of Japanese units?

Successive Iraqi governments have adopted the slogan of 'Improving the Iraqi dinar exchange rate', as if they were promising Iraqis the key to 'Ali Baba's Cave'. This slogan was the 'promise' given by the governments of Dr. Iyad Allawi and Ibrahim Jaafari, among the priorities of their economic agendas. Today, Nouri al-Malki's government is doing the same thing. Saddam Hussein and his son, Odai, had also previously made such promises.

According to the statements of Bayan Jabr Al-Zubeidi, the Iraqi Minister of Finance on June 26, 2006, to 'Al-Sabah' newspaper, published in Baghdad, the government intends to remove three zeroes of the dinar to make it equivalent to the dollar. Thus, we may conclude that the planned process will be nothing but currency exchange, which neither revaluates nor devaluates the dinar.

It is estimated that the ratio of replacement will be 1500 of the current dinar for one new dinar. Accordingly, if an employee currently earns 150 thousand dinars, he will be paid 100 new dinars (unless the salary brackets are changed). This will be equivalent to 100 dollars. Thus, the exchange rate of one dinar is equal to one dollar. For example, the current price of one kilo of mutton, which is 8000 dinars, will accordingly be around 5.33 new dinars.

The monthly salary of 150 thousand dinars currently buys 18.75 kilograms of mutton in Baghdad. When the dollar exchange rate is equal to the dinar, according to the new process, the monthly salary of 100 new dinars (equivalent to 150 thousand of the current dinar) will also buy 18.75 kilograms of mutton. This means that the salary will have the same purchasing power of the current salary of 150 thousand dinars.
Hence, the proposed or planned process is simply an illusion, just like changing daylight saving time. It is all the same, whether the clock was moved an hour ahead or the formal working hours were increased. Thus, the proposed process of equating the US and Iraqi exchange rate should not be celebrated. Many third world countries, like Turkey in the 1980s, applied this policy.

It is well known that the Iraqi dinar is a local, not a global, currency. It will remain the same both in the foreseeable and distant future. The country's import capacity, the consumption levels, and the welfare of the Iraqi individual, all depend on the circumstances of oil exports and the policies and methods of handling them. It is also known that about 99% of foreign exchange revenues in Iraq are petro-dollar revenues, since oil prices are paid in dollars and have nothing to do with dinars.

If the Iraqi economy and currency were like the Japanese economy and currency, for example, the foreign exchange rate would have a significance that would render it a source of a serious commercial intensification. This happened between the US and Japan, and later between the US and Germany, throughout the 1970s and the first half of the 1980s. The Japanese yen went down against the US dollar, becoming a protective measure for the Japanese industry. The move hindered the flow of American products to the Japanese market, weakening their competitiveness. It facilitated the flow of Japanese products to the American market and strengthened the competitiveness of Japanese companies in that market.

The exchange rate against the dollar in the 1970s and the first half of the 1980s was 230-250 yen. However, the continued pressures of US President Ronald Reagan on Japan and Germany in the annual conferences of the Big Seven (it did not yet include Russia), and in other conferences, led Japan to almost double the value of the yen through monitory procedures. The value of the yen was raised from the level of 230-250 yen against the dollar to the level of 120-110 yen from the second half of the 1990s.

In brief, the value of the dinar against the dollar differs in several aspects from its value against global currencies. This is just a formal issue of no use, and that is not to be celebrated.

Today Iraqis are looking forward to more important issues, including the following:

First: Macroeconomics

1 - Lowering the unemployment rate to 2-3% along with an effective system of unemployment compensation and insurance. The unemployment rate today is 18%, while pseudo-labor is about 31%, according to the Ministry of Planning.
2 - Lowering the inflation rate to 2-3%, compared to the current 20-30%, most of which is due to inflation resulting from high prices.
3 - Continuous improvement on the standard of living by 20-30% annually, with a significant rise in the living standards of the marginalized populations.
4 - A spending policy which compensates for poor territories and geographical areas that have been suffering inequity and deprivation during 80 years of feudal, nationalist and Baathist rules.

Second: Microeconomics

1 - Handling the accumulated deficit in the housing sector. There is a need to build 300-320 thousand housing units per year over the next ten years. The annual rate of achievement for the year 2004 and 2005 was around 15% of this figure. It is not expected that the rate of achievement for this year will exceed the rates of both years. There is an economic slogan that goes: 'Success of construction guarantees overall success'.
2 - Handling the accumulated deficit in the road sector. The density of roads in Iraq is expressed by the total length of the roads, divided by the area of the country. It is among the lowest densities in the world (only 0.09). The rate in Thailand is 0.14, in Brazil 0.24, in Korea 0.85, and in Japan 2.04 or approximately 34 times the rate of Iraq. There is a need to establish main and secondary roads amounting to 8-10 thousand kilometers per year, over ten years. Moreover, there is a need to repair and rehabilitate the current debilitating road network. The current rate of achievement is about 10% of the required rate.

If the state meets these important demands among others, we should not be concerned about the rise of the exchange rate of the dinar to be the equivalent of the dollar or leaving it at its current state.

*Mr. Ali Mahmoud al-Fakiki is an Iraqi economic expert

Healing Iraq
"It is useless to attempt to reason a man out of what he was never reasoned into." Jonathan Swift


Daily news and comments on the situation in post Saddam Iraq by an Iraqi dentist



Monday, July 10, 2006
The Iraqi Invasion
You can notice it everywhere you go in Amman. At shopping malls and supermarkets; at restaurants and coffee shops; at hotels and net cafés; at discos and nightclubs; at bus stops and fruit stands: the signs and symptoms of an Iraqi invasion.

An unofficial estimation by Jordanian authorities, based on residency records, recently put the number of Iraqis inside Jordan at half a million, which in a country of 6 million is, understandably, an alarming trend. All other evidence, however, indicates that actual numbers are much higher. The majority of Iraqis here work around the restrictions of Jordanian immigration laws by paying fines or by staying illegally.

When an Iraqi normally enters Jordan, for whatever reasons, they are usually granted 2 weeks stay. When it’s over, they file an application at the Jordanian Interior Ministry and get another month of temporary residency from the Directorate of Residency and Borders. Temporary residency can then be extended to a maximum of 2 months for a 20 Dinar fee and a medical check requirement. It would be extremely rare to get another extension unless one has a status of investor or businessman, and a minimum of 50,000 Dinars ($70,000) in a Jordanian bank.

Very lately, Jordanian authorities, fearing a mass exodus of Iraqi refugees into Jordan, have imposed even stricter measures against the entry and residency of Iraqis. A regulation was introduced a few days ago banning young Iraqi males, born between 1970 and 1978, from entering Jordan. Exceptions are very rare.

I mentioned that my family was expected to arrive here a few days ago. They made it safely, but they experienced a 12-hour ordeal at the Karama border center on the Iraqi-Jordanian border. My brother, Nabil, was not allowed to pass. According to my mother, he was literally devastated to hear that. Hours later, following lengthy negotiations with Jordanian security and customs officers, several phone calls to relatives and officials at Amman, and a display of some old medical reports, he was finally permitted to go through. Other Iraqi youngsters were not so lucky. Sometimes female and elderly members of a family would be granted entry, but not the young men. Such scenes of families breaking apart, with some allowed to tread safe land and the rest forced to go back to hell, are not pretty to watch.

There was an unreported explosion at the Traibeel border center on the Iraqi side, just moments after my family crossed into Jordan. Hundreds of Iraqi travelers on the other side, where a mere few meters separate them from sheer danger, watched the plumes of smoke arising while they waited in their vehicles. American soldiers were giving toys and candy to Iraqi children leaving the border with their wary parents.

It took my family exactly 24 hours to get here through the land route from Baghdad. They literally collapsed on the floor from stress and exhaustion when they got to my apartment. The ride cost them $700. Now, it’s $800 and rising.

My family said that about 120 transport SUVs from Iraq, each carrying 7 passengers, were waiting in queue to enter Jordan that day. That’s close to a thousand people. Flights from Baghdad to Amman are all booked until early August. A good deal of those passengers will try not to return, and even if they do, it will be just to get their residencies renewed.

It’s a very distressing experience to hear the stories of Iraqis living in Amman. Concern for relatives back home, residency problems, and the quest for employment or a third country offering sanctuary to fleeing Iraqis, are principal conversation topics. Jordanians bitterly complain of inflation and an increase in real estate values as a result of the mass migration of Iraqi families, while Iraqis, on the other hand, never fail to point out, often with distaste, that Jordan is getting back much more in profit from the flow of hard currency out of Iraq. There’s an old and very common belief among many Iraqis that Jordan is always in the position to gain from Iraq’s problems, starting from the Iraq-Iran war to the gulf war, the sanction years, and the last war. Jordan was, and continues to be, Iraq’s main outlet to the rest of the world. It’s only normal that Jordan’s economy would prosper as a result, but not without its own problems.

Jordan has struggled with the issue of Palestinian refugees for several decades. There was a time when there were more Palestinians here than native Jordanians, especially before the Israeli occupation of the West Bank, which was part of the Jordanian kingdom, until the late King Hussein relinquished Jordan’s claim over the West Bank to the PLO. A large part of Jordan’s population today can be traced to Palestinian territories, west of the Jordan River. Most were eventually absorbed and granted Jordanian citizenship, unlike Lebanon, Syria and other Arab countries, were they are still restricted to their original refugee camps and do not enjoy civil rights.

Jordan, evidently, has no intention to go through the same dilemma with Iraqi refugees. It does not grant asylum or permanent residency to Iraqis. There is also evidence, Iraqis here say, that Jordanian authorities are being selective in their admission of Iraqis. All Iraqi visitors are screened at ports of entry and questioned meticulously about their tribal, regional, and sometimes sectarian, background back in Iraq. When tribe names are obscure, customs officers try to investigate deeper. I suspect, but I may be wrong, that Sunni Iraqis are given preference in their entry to Jordan. Some explain this in the light of Jordan’s fears of a growing Shi’ite community in their midst, given King Abdullah’s warning of a Shi’ite crescent from Iran to Lebanon in the region. Iraqis also claim that King Abdullah recently turned down a request by Iraqi Shi’ites in Jordan to build a husseiniya, and that Muqtada Al-Sadr’s visit to Jordan was mainly to convince the king to reconsider.

Still, Iraqis living in Jordan come from all backgrounds. Most are upper and middle class Baghdadis, both Sunni and Shia, and there is a considerable Iraqi Christian community as well. Most Iraqi politicians and MPs either own apartments or spend a good deal of their time here in Amman. There is a whole district in Amman called Dhahiet Al-Rashid in which Iraqis own more property than Jordanians. I’ve changed apartments three times over the last month, and my neighbours at each were Iraqis. It’s no wonder that real estate prices have soured. A 3-bedroom apartment can cost up to 1500 Dinars ($2,150) in rent per month, while a simple hotel suite for 2 people can cost between 500 to 900 Dinars. Rentals are usually lower at suburbs, but transportation is quite expensive.

You can find more people speaking the Iraqi dialect on the streets than Jordanians, followed by Saudi tourists. The number of relatives and old friends and acquaintances I have run into everywhere I go is just amazing.

Iraqi businesses have also started moving to Amman. Well-known Iraqi restaurants such as the Qasim shawarma restaurant and Al-Qaraghuli have opened branches in Amman. Other new restaurants catering for Iraqis have spawned, such as the Al-Mahhar, Qasr Al-Ballour, Al-Mileh Wa Al-Zad, and Sumer restaurants. The Al-Hamadani brand for Iraqi sweets, famous for its crusty filled rolls, called Znoud Al-Sitt, is open with a sign reading ‘from Baghdad to Amman.’ Even Jordanian restaurants now have notices announcing ‘Iraqi bread available,’ or ‘we offer Masgouf fish made the Baghdadi way.’

All signs here give the impression that Iraqis are not going away any time soon, as long as the situation in Iraq continues to deteriorate rapidly.

There are less foreign tourists on the streets in Amman than the last time I visited, and security measures are tighter around hotels and public places including malls and cafés where tourists might be present, obviously as a result of the Amman hotel bombings. At the US embassy, security measures were almost at Baghdad’s standards but minus the concrete barriers. I was at the Four Seasons hotel last week to meet Le Figaro’s Baghdad correspondent, Delphine Minoui, and her husband, Borzou Daragahi, the LA Times Baghdad bureau chief (this was my first face-to-face interview with a foreign reporter), and I could see that no vehicles were allowed to go near the hotel without passing through a security checkpoint. Security guards also search visitors and their belongings before they enter the hotel’s main lobby. Undercover Mukhabarat agents often patrol Abdoun and other districts where embassies and international missions are located. I know this because they followed me last year when I was lost, trying to find my aunt’s apartment, and asked if I had any business loitering around the street.

Photos of Amman will follow soon.



# posted by Zeyad : 7/10/2006 11:18:00 PM


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