Thread: Archive News - Iraqi Dinar Think Tank - 08/09/09 - 09/01/10

Is Iraq’s looming oil boom a blessing or curse?

Iraq hopes a petrodollar gush it will uncork by tripling oil output will drag it out of chaos into prosperity, but there is just as much chance the new wealth will fuel fresh conflict.

Home to the world’s third-largest oil reserves, Iraq also plans to leap to third place among oil producers — spurring hope among war-weary Iraqis of a windfall to drive development and job creation after decades of economic decline.

But rampant corruption, political inertia and ethnic feuding over oil-producing regions like Kirkuk mean that years of sectarian bloodshed could just as easily be followed by years of fighting for control of oil, experts and Western officials say.

‘The jury is out on whether the Iraqi political class will figure out how to use oil revenues to strengthen national unity or whether they will engage in mutually destructive feuds over how to divide up the pie,’ said David Mack, a former US envoy who worked in Baghdad in the mid-1960s and late 1970s.

There is scepticism over whether Iraq, burdened with poor infrastructure, can actually hike output to 7 million barrels of oil per day in six years from 2.5 million bpd now. There is a good chance it will face resumed quotas from its OPEC partners.

But even a more modest rise to 4 million bpd could bring $45 billion extra to state coffers annually, at today’s prices.

For nations like Iraq — languishing at second last in per capita income terms among lower middle income countries in the Middle East and North Africa — the potential for more damage than good from a sudden cash influx is huge, analysts say.

One risk is that inflation couldsoar and the central bank lose control over the exchange rate.

The inevitable discontent over the distribution of oil proceeds could also flare long-simmering tensions between Sunnis, Shia s and Kurds in a nation still recovering from sectarian war after the 2003 U.S.-led invasion.

The northern oil city of Kirkuk has become a symbol of the challenges ahead, as the Arab-led government in Baghdad and Kurdish authorities battle over who has the right to control it and to ink deals on oilfields around it.

With majority Shia s controlling southern output in Basra and Kurds overseeing abundant northern fields, minority Sunnis could end up feeling left out of the oil bonanza, said one Western official, who declined to be named.

‘The Iraqis have got to be very careful about how they manage their oil money,’ the official said.

JEALOUS OF OIL MONEY

Liza Barzan of Mercy Corps, which trains Iraqi leaders in conflict resolution and mediation, said it was not certain that Iraqis will settle future disputes with guns rather than words.

‘If you put aside politics and the influence of special interest groups that encourage violence, the average Iraqi is quite willing to negotiate,’ said Barzan. ‘There has been violence for decades, but if you look at history, that’s not the case. Violence is not part of the culture.’

Even so, Iraq will have to plough most of its initial oil wealth into infrastructure to benefit industry, which could anger Iraqis waiting for better power and water supply.

‘People will see the oil money coming into the country, but it won’t be keeping pace with what they want to see,’ another Western official said.
Longer term, Iraq risks becoming a state-dominated economy reliant entirely on oil, with a neglected private sector.

Already, oil accounts for 95 percent of government revenues.

Then there is corruption, which has ensured that only a small elite has benefitted from oil wealth in producers like Nigeria and Angola. Iraq ranks fifth from the bottom in Transparency International’s corruption ranking of 180 nations.

‘Given the size of Iraq’s oil reserves, I’d think that some of the wealth has to trickle down,’ said Daniel Drezner, a Tufts University professor. ‘That said, given the corruption in Iraq’s government, I would be very surprised if the people received more than a trickle of this income.’

http://www.khaleejtimes.com/Displaya...November46.xml

Leader of the Accordance Front Hashemi criticizes veto of the electoral law and emphasizes that it harmed the mass of the front

British leader of the Accordance Front and the Chairman of the Committee of the Regions and provinces in the House of Hashim al-Tai, on Sunday, a criticism of Vice President Tareq al-Hashemi for breach of the first item of the election law, saying it has harmed the audience in the Accordance Front inside Iraq and the loss in the number of parliamentary seats they will get it.

He said al-Tai told the Kurdistan News (AKnews) announced today that "the Accordance Front, the public at home affected by the election law and veto this attempt by some to implement plans to increase the number of seats displaced outside Iraq."

The Tai "if the decision was made by applying the ratio of population growth rate of 3% of all Iraqi provinces of Nineveh province would lose three or four seats in Parliament are due the Federal Electoral Tribunal decided to add it to the share of seats in Nineveh province ahead of provincial elections that took place earlier this year".

Tai stressed, saying "do not make use of the Accordance Front's decision to veto would be affected by home-Hashimi and the Iraqi public consensus also this attempt by the amendment intended to implement some things are outside the subject of a presidential veto."

He cautioned that "Nineveh province would lose seats in parliament if the adoption rate of 3% as population growth in the provinces of Iraq and this would deprive the preservation of the additional seats obtained by the Federal Court in the provincial election years.

MP Mahmoud Othman, a member of the Kurdistan Alliance would prefer that the Kurdistan Alliance and the abolition of compensatory seats to return to the current number of seats in parliament's 275 seats, the best solution to the problem of disagreement over the number of compensatory seats."

Othman said, "It can solve the problem of population growth, which was objected to by the Kurds, which did not make any growth rate in some provinces of the region through the adoption of voter registration in the provinces for 2005 with the adoption of a growth rate estimated at 3%."

The Accordance Front, called on Saturday the political blocs in the Iraqi Council of Representatives to the treatment of displaced Iraqis outside Iraq, like other Iraqi voters at home and not be marginalized, a waste of real representation in the next parliament.

He said Dhafir al-Ani, head of the Accordance Front, the Kurdistan News Agency (AKnews) said on Saturday that "members of the Front members of parliament and calling for political blocs fairly displaced Iraqis and to treat them will end up like the rest of the Iraqis inside Iraq."

Ani and stressed "that the Accordance Front will not compromise on guaranteeing the rights Almahjreynalaracien in the election law, which set aside the Vice-President Tariq al-Hashimi."

Al-Ani added that "members of the Front confirm the amendment to the first item in the electoral law on compensatory seats for the Displaced," urging "the House of Representatives to increase the number of seats from 5% to 10%" to be a genuine representation for them."

The Iraqi parliament may vote on the adjournment of the decision to veto the Vice-President Tareq al-Hashemi for the first item of the election law to this day (Sunday) because of the lack of agreement among the members of Parliament and political blocs on the proportion of seats allocated to displaced Iraqis.

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CBI’s dollar sales nosedive to 54m

The Central Bank of Iraq’s (CBI) dollar sales significantly fell to $54.057 million in its daily auction on Sunday, compared to $128.09 million during the previous session.

“The demand hit $1.240 million in cash, covered at an exchange rate of 1,183 Iraqi dinars per dollar, and $52.817 million in foreign transfers outside the country, covered at an exchange rate of 1,173 Iraqi dinars per dollar,” according to a CBI news bulletin received by Aswat al-Iraq news agency.

None of the 12 banks that participated in today’s session offered to sell dollars.

http://en.aswataliraq.info/?p=122358

Deputy PM, Google chief ponder investment opportunities

Iraqi Deputy Prime Minister Rafie al-Issawi discussed with the chief of Google company on Sunday investment opportunities available in Iraq’s communications sector, according to a release by Issawi’s office.

“Issawi and Eric Schmidt took up ways to launch investments in the communications field with the objective of providing better services for Iraqi citizens,” read the release as received by Aswat al-Iraq news agency.

Eric Emerson Schmidt (born April 27, 1955) is an engineer, Chairman/CEO of Google Inc. and a former member of the Board of Directors of A.pple Inc. He also sits on the board of trustees for Carnegie Mellon University and Princeton University.

Google Inc. is an American public corporation, earning revenue from advertising related to its Internet search, e-mail, online mapping, office productivity, social networking and video sharing services as well as selling advertising-free versions of the same technologies.

http://en.aswataliraq.info/?p=122403

Iraq could join WTO by end of 2011 - U.S. official

Iraq could get membership in the World Trade Organization by end-2011 if it actively pursues accession, which could help the country's rebuilding efforts by boosting trade and investment, a U.S. official said.

Iraq began the accession process in 2004 but has taken only the initial steps needed for membership. Iraq's benefits might also be limited since Iran, one of its main trading partners, is not a member.

But some Iraqi ministries, like the finance ministry, are keen on accession because it would boost trade, and revenues from tariffs, said Larry Morgan, director of international trade at the U.S. Agency for International Development's Tijara project, which advises Iraq's trade ministry on WTO issues.

"As it stands, it's been a very slow process, but they are not that far off from the trajectory," said Morgan. "I'd say if they apply reasonable due diligence, then they could join by the end of 2011. That would be the earliest they could do it."

WTO accession stands to increase Iraq's access to imported goods, introduce standardisation and quality control of goods and pave the way for less chaotic and bureaucratic customs practices, Morgan said.

"It would allow Iraqi customs to join the modern world," he said. "For Iraqi businessmen or women, this country has one of the worst records of time required to import or export goods."

Foreign businesses would have a greater sense of protection before venturing into the Iraqi market, aiding Iraq's efforts to develop tourism and financial services industries, Morgan said.

Analysts however caution that Iraq is unlikely to diversify its economy beyond oil -- which already accounts for 95 percent of government revenues -- and that red tape and political bickering have thrown many project timetables off track.

http://pukmedia.com/english/index.ph...14683&Itemid=1

Vice President Tariq Hashimi rejects to abandon his veto on election bill

MP Abdulhadi al-Hassani, a member of the Iraqi parliament's oil & gas committee, in an exclusive statement told PUKmedia, “Vice President Tariq Hashimi has rejected an appeal by a delegation of the Iraqi Council of Representatives that visited Hashimi yesterday to abandon his veto on the election bill.”

http://pukmedia.com/english/index.ph...14688&Itemid=1

MP: Iraqi parliament again fails to vote on election law veto

Ahmed Anwar, an Iraqi MP on the Kurdistan Alliance list, in an exclusive statement to PUKmedia said, “Iraq's parliament failed again on Sunday to find a consensus solution regarding Vice President Tariq Hashimi’s veto on the election bill.”

"The vote was delayed until tomorrow (Monday)," Ahmed Anwar told PUKmedia Sunday.

http://pukmedia.com/english/index.ph...14689&Itemid=1

Establish a symposium on the reality of economy, industry, oil & gas contracts in Iraq

Newspaper hosts the truth in Iraq and the room sound platform on the Iraqi Albaltolk World Dr. Salah Al-Ahmad Baqer Musawi.

Symposium on the reality of the economy, industry and contract oil and gas sectors in Iraq, with our guest expert in the international economy and technological development of oil and gas fields and refineries, Dr. Salah Al-Ahmad Baqer Musawi.

Eight o'clock pm All times are London on Monday, 23.11.2009 brief summary are invited to attend for all.

Note that the dialogue will be directly from London, Vale that draw attention and attendance to enrich the dialogue and stand on the reality of the oil industry and gas in Iraq.

http://translate.googleusercontent.c...oTKU4a6CuJZ9Vw

Back to Iraq
Largely undisturbed by the ongoing war in Iraq, Kurdistan is emerging as an attractive prospect for foreign hotel investors, owners and operators alike, but what potential does the rest of the war-torn country have for hospitality development?

A number of tourism developments in the Kurdistan region of Iraq, which has escaped most of the repercussions of the war, have put the ‘safe haven' on the agenda of hotel owners and operators expanding in the Middle East.

The region's population of five million, a thriving business environment, two new international airports and a liberal investment law that facilitates foreign investment has made Kurdistan an attractive destination for tourism in Iraq, according to Euromonitor International.

All eyes on Kurdistan

Just last month, Millennium & Copthorne Middle East signed a management agreement with investor Faruk Group Holding for three hotels in Kurdistan comprising a four-star Tara Hotel with 100 rooms, a four-star, 140-room Copthorne Hotel and a luxury Grand Millennium hotel offering 254 keys.

"It's part of our expansion strategy to be in every single country in MENA. We found the right investor in Iraq and went for it," says partner and president of Millennium & Copthorne Middle East Ali Lakhraim.

"Kurdistan is the present and the future and it's as safe as it can get. The area has been isolated since 1991, so it feels like you're in a different country. You're in Iraq, but you could be sitting in Jordan."

Rotana also recognised the region's potential when in 2007 the Abu Dhabi-based hotel company signed a management contract with Lebanese holding group Malia Group for a five-star property in Erbil, Kurdistan. The 205-room hotel occupies 20,000m² of land located in front of the Sami Rahman Park and between the city's convention centre and the Erbil Exhibition Fair, and is due to open in the first quarter of 2010.

"Guests will be 97% corporate business travellers and their average stay will be between three and six days. In addition, our five-star properties will also be hosting long-term guests that are in Iraq on one-month, three-month and six-month assignments. With the number of contractors, engineers, architects and so on, Rotana is certainly well positioned to cater to these requirements," says Selim El Zyr, co-founder, president and CEO of Rotana Hotel Management Corporation.

"Iraq is a rich country that I believe will re-bounce into the international business front line much faster than any of us expect," he adds.

Tourism developments

Speeding up recovery, Kurdistan's relative stability has led it to establish a State Board of Tourism in Erbil to operate as a tourism development and promotion agency. Campaigns include international tourism seminars focusing on destination development and marketing.

Trade shows are also currently taking place in Erbil, reports Euromonitor, such as the annual DBX Kurdistan Trade Show, which attracts several thousand industry experts and officials each year helping to raise reconstruction funds.

Furthermore, while El Zyr acknowledges leisure tourism will take longer to build as it is more sensitive than business travel, he says this market will not be neglected.

Kurdistan already offers a variety of tourist attractions, including ancient sites that are rich in history, mountains and attractive landscapes, and proposed projects by the tourism board include an amusement park in Erbil.

In summary, Kurdistan could well be Iraq's "secret weapon" in driving tourism to the country. Euromonitor predicts tourist arrivals to the region will grow on average 22% a year, compensating for drops in other areas and helping convey a positive image of Iraq.

Braving Baghdad

But hotel operators have not written off the rest of the country for development, as Lakhraim says Millennium's expansion in Iraq "will not stop at Kurdistan". Rotana has already ventured out of Kurdistan having signed a second agreement in Iraq with Summit Hotels to manage the five-star Rotana Baghdad.

The 250-room hotel will be located in Baghdad's International Green Zone; a heavily-guarded, diplomatic area in central Baghdad and is expected to open in 2012.

http://www.arabianbusiness.com/573662-back-to-iraq

MP Ahmed Abda Radio Tigris expresses optimism in the ratification of the election

Showed Iraqi Alliance MP Abida Ahmed optimism to ratify the election law after the veto Hashemi first paragraph on Baracie abroad.

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