WOTS WED JAN 20 21
These are the articles I discussed in the podcast at https://anchor.fm/dashboard/episode/ep8hqu
The US insurance agency AM Best has ranked Iraq among the most dangerous countries in the political, economic and financial fields.
The agency's special report on Iraq was part of "risk reports" of 138 countries around the world, setting risk levels for each country, serving international insurance companies to meet their financial obligations, based on the study and evaluation of all factors that directly or indirectly affect the insurance sector.
According to the report, obtained by The Twilight News agency, Iraq falls within the highest level of the most dangerous countries, based on measures of economics, politics and the financial system.
While GDP growth in 2019 was 4.4 percent, it is expected to be a 12 percent decline in 2020, an economic downturn due to measures taken to curb the corona epidemic and the collapse of oil prices.
Among the high-risk countries, a map published by the AGENCY shows countries such as Iraq, Egypt, Libya, Algeria, Lebanon, Ethiopia, Kenya and Nigeria.
The global collapse in oil prices in 2020 was a "major shock" to the region, as many of its economies depend edited on oil and gas exports, the agency's report said.
Social and political unrest in the region could escalate, particularly in countries with limited resources that could not provide incentives, the agency said. "The united nations is ready to take the measures that will help the iraqi people to do their part," he said. The situation in Lebanon is particularly unstable.
She noted that many currencies in the region are pegged to the US dollar, limiting the ability of fiscal policies to deal with the crisis.
"The Iraqi economy lacks diversity and is heavily dependent on the oil sector," the report said, adding that the Corona epidemic has exacerbated the country's economic vulnerability. The drop in oil prices and incomes has put more pressure on the country's financial situation, exacerbating the deficit to 20 percent and 16 percent of GDP.
Because of Iraq's strained relations with key Western countries, it is likely that it will not receive a large amount of foreign aid. The Central Bank has set up a fund to raise funds from financial institutions and raised the equivalent of $37 million to tackle the Corona epidemic.
He said inflation could worsen over the medium term, although domestic demand and devaluation of the national currency kept inflation at 1 percent in 2020.
According to the INTERNATIONAL Monetary Fund, tackling government weakness and reducing corruption will be vital for the future of economic development.
As for political risks, the report said that government stability is under great pressure under the epidemic, noting that waves of demonstrators protesting, while the risks, including those related to non-payment of salaries, have increased because the government of Mustafa Al-Kadhimi has not been able to raise enough revenue.
Widespread corruption remains an important element, and Iraq ranks 162nd out of 198 countries on transparency international.
As for the risk of rocket attacks on US military and diplomatic bases by "militias" linked to the popular mobilization, they have increased. In addition, ISIS is likely to take advantage of the partial withdrawal of US forces and step up its attacks against iraqi security forces and energy sites.
The agency also classified iraq's financial system as high-risk. The central bank has helped stabilize the economy by financing and supporting SMEs, she said.
According to the INTERNATIONAL Monetary Fund, a crucial strategy to reform large state-owned banks and resolve issues in the financial sector will boost private sector development and provide financial stability.
AM Best was founded in 1899 in New York City and has branches around the world including London, Dubai, Amsterdam, Hong Kong, Singapore and Mexico City. In addition to its core work in the insurance sector, the agency publishes news reports and analysis of information related to the insurance sector.
Saleh congratulates Biden and invites him to take important steps
President Barham Salih congratulated, today, Wednesday, US President Joe Biden on the occasion of his swearing in and assuming his official duties.
Saleh expressed his “aspiration to strengthen relations between the two countries in various fields, to face common challenges, foremost among which is combating terrorism and extremism, and to work to reduce tensions in the Middle East region, and to chart a path towards a more prosperous Iraq and Middle East based on mutual respect and the values of freedom and democracy.”
In the text of the congratulations, he said, “Dear President Joseph Biden, I extend my sincere congratulations on your inauguration as President of the United States of America, and I wish you and Vice President Harris all success in your future endeavors as you work to achieve the hopes and aspirations of the American people.”
He added, “We look forward to building on the deep relations that bind our two countries, expanding the range of strategic cooperation that we already enjoy, and together we face many challenges, especially those represented by terrorism and extremism, as it is in our common interest to confront them, and we also welcome the opportunity to work closely with the states.” United to ease regional tensions and promote peace and stability in the Middle East. ”
“We hope that the relations between our two countries will become stronger in the coming months and years, and that we will be able to chart a common path towards a more prosperous Iraq and Middle East based on mutual respect and our common values of freedom and democracy,” Saleh added.
Al-Maliki warns of "luring voters with money, gifts and gifts.
Al-Maliki said in a speech delivered this evening amid a large gathering of the masses of the State of Law coalition on the Rusafa side in Baghdad, "We feel great pain for the loss of the state's prestige and the state of weakness and weakness that afflicted the state."
"We do not want chaos in Iraq and we want a strong country with the ability to extend security and enforce law," he added.
The head of the State of Law coalition explained that "the elections are a great responsibility and an important milestone because they enable us to correct the course of governmental and parliamentary work," calling for "a readiness to participate widely in the elections and scrutinize the candidates who have applied to run in the elections and choose who is the fittest," warning of "attempts by some to influence" The voters must choose by luring them with money, gifts and gifts, considering this matter as an attempt to insult the voter and take away his will. "
Al-Maliki stressed "the importance of the upcoming elections being fair, transparent, and far from the tampering of the absurd, and that the scenario of the 2018 elections and the manipulations and excesses that took place at the time should not be repeated, recalling the successful electoral practices that the government administered during the period from 2006 to 2014" during his tenure as president the government.
Regarding the regional situation and the international changes taking place, he said, "What happened in the United States recently from the attack on the Congress building and President Trump's objection to the election results represents a fatal blow to the body of democracy, expressing his hope that the new administration will be able to address the problems and crises inherited to change America's image. And developing relations with friendly countries and the world.
Rouhani urges Biden to return to the nuclear agreement and lift the sanctions
Iranian President Hassan Rouhani urged US President-elect Joe Biden today, Wednesday, to return to the two thousand and fifteen nuclear agreement, as well as to lift the severe sanctions imposed on his country.
Rouhani said in a cabinet meeting broadcast on state television that the ball is in the court of the United States now, adding: If Washington returns to the agreement, Iran will also respect its obligations under the signed agreement.
Rouhani described the Trump administration’s policy of maximum pressure on Iran as “a failure,” as he put it.
This is that Economic Report I talked about
What is money and why do we need it?
In this article, we review a topic that was most important, but it did not receive the attention it deserves because people take it as if it were an obvious thing. We will talk about the meaning of money, its role in the economy, and what are its uses, among other topics.
Can the economy run without money?
There are historical examples of economies in which people exchanged goods and commodities in exchange for goods and other goods. In Iraq, for example, when the Bedouins came to the cities, they would exchange their products of carpets, wool and other products in exchange for urban products such as tobacco, sugar, rice and others. But modern economies use cash to carry out trade. Money is defined as any asset that people own and accept by others in exchange for the goods and commodities that they sell or use for financial exchanges. An asset here is everything of value owned by a person or company.
Barter system and the invention of money:
For a better understanding of the importance of money, let us look at the case of an economy that does not use money. The economies in which goods and commodities are exchanged for goods and other commodities are called barter economies. These economies have major fundamental shortcomings. The exchange of goods and commodities in these economies needs to have a bilateral reciprocal desire. That is, meaning that you need what the other person has, and at the same time the other person needs what you have. It may take a long time and a lot of effort on the part of people for this mutual desire to materialize. This renders the barter system an inefficient system and limits commercial exchanges and thus reduces the size of the economy significantly. Therefore, it is not surprising that the peoples who use this system live in deplorable economic situation.
In order to get rid of the problems associated with the barter system, societies have incentives to create a commodity that most people will accept in exchange for the goods and goods they exchange. For example, Iraqis used gold and silver as a means of exchanging goods and commodities before the concept of modern money developed. Historically, when a certain commodity began to be widely accepted as money, people would start accepting it even if they had no other use for it.
Selling and buying goods and commodities becomes much easier when the cash is available. People only need to sell what they have for cash and use that money to buy what they want. When cash is available, families are more likely to specialize in producing specific things rather than producing everything they need.
In modern economies people are highly specialized. They only produce one thing, such as being a doctor, teacher, or accountant, and they use the money they get from their work to buy everything they need. People become more efficient in production when they specialize because they will gain comparative advantage in production.
The high incomes that people achieve in modern economies derive from the specialization in production made possible by the presence of money. Therefore, the answer to the question of why we need money, is that it makes commercial exchange easy and gives people an opportunity to specialize and become more productive and achieve higher incomes.
Functions of money:
Anything that is used as money, for example gold, salt in North Africa, cigarettes in prisons, dinars or dollars must perform four functions:
- Exchange broker:
Money serves the function of a medium of exchange when the sellers are ready to accept it in exchange for the goods and commodities they sell. When a food store accepts a banknote in exchange for some bread and milk, that paper acts as an exchange. Through the medium of exchange, people can sell goods and commodities for cash and use the cash to buy what they want. The economy becomes more efficient when people accept a single commodity as the medium of exchange for goods and commodities.
- measuring unit:
In a barter system, each commodity has a very large number of prices. Maybe the price of a cow is fifty chickens, or 200 eggs, or 2 tons of wheat or other things. When one commodity is used as money, each commodity will have one price instead of multiple prices. This function of money gives buyers and sellers a unit of measurement, that is, a means of measuring the value of a good in the economy using money. And because the Iraqi economy uses dinars as money, all goods and commodities have a fixed price in dinars.
- Stock value:
Money allows people to store the value of their money with the money itself. That is, if you did not spend all of your money to buy goods and commodities, you could keep part of the money with you for future use. It is not just money that can be a store of value. Any asset of value, such as a plot of land, a painting, or a piece of carpet, for example can be a store of value. Financial assets, such as stocks and bonds, have an important benefit compared to keeping cash as store value because they yield higher interest or may increase in value in the future. You also have other assets over money for this job because it provides some services: for example, your house provides you with housing service. So why do people keep some cash with them? The answer is simply liquidity, that is, the ease of transferring assets to an exchange broker. Because money acts as a direct medium of exchange, it is the most liquid asset. If you want to buy something and need to sell an asset you own in order to do so, it is very likely that it will cost you some costs. For example, if you want to buy a house and you want to sell gold items owned by the family, you may have to sell them at a lower price now. To avoid such costs, people are prepared to keep a portion of their wealth in the form of cash. There are at least two problems with using cash as a store of value. The first is that money loses some of its value over time due to inflation. Second, there is a physical risk like fire, theft, or maybe mice.
- Deferred Payment Standard:
Money is useful because it provides a standard for deferred payments in borrowing and lending matters. It can facilitate exchanges at a given moment in time by providing exchange broker function and unit of measure. But it can also facilitate exchanges over time by providing a valuable stockpile function and standard deferred payments. For example, you could buy a car today and pay deferred installments over a period of time with cash.
How important is it for money to act as a store of value and a reliable deferred payment standard?
People care about what their dinars can buy in terms of food, clothing, commodities, and other goods. In other words, the value of money depends on its purchasing power, that is, its ability to purchase goods and commodities. Inflation causes a decrease in the purchasing power of money because higher prices make the same amount of money able to buy fewer goods and commodities. When inflation reaches very high levels, the money becomes a store of value and an unreliable deferred payment standard.
What can be used as money?
When something can be used as a medium of exchange that makes commercial exchanges easier, the economy can operate more efficiently. So the question is, what are the assets that can be used as a medium of exchange? And as we indicated earlier that for anything to be used as money it must be, at least, generally accepted as a method of financial payments. But in practice there are other requirements.
There are five criteria for any asset to be used as a broker:
- The original has to be accepted by the majority of people.
- It should be of modular quality, that is, every two units of it are identical. Hence, the use of precious metals as money becomes a difficult process due to concerns about the different purity of different metal pieces.
- It should continue to exist for a long time so that it does not lose its value as a result of continuous use.
- It should be of comparable value to its weight so that large quantities of it can be transported easily in order to be useful for commercial use.
- It should be divisible so that people can use it to buy goods and commodities of less than its value and receive the remainder at a value less than the asset itself. (Unless you're a cowboy hero like John Wayne or Clint Eastwood who walk into the bar and shoot, drink, eat, pay and don't take the rest.)
The Iraqi Dinar has these characteristics. What makes the Iraqi dinar acceptable as a medium of exchange? Simply put, it stems from personal expectations. You regard an asset as money if you believe that others will accept it in exchange for goods and commodities they give you. Society's acceptance of the use of dinars as money is what makes it acceptable as a medium of exchange.
From here emerges the need to differentiate between the different types of money. We focus here on two types of money.
- Commodity money:
They are assets that have intrinsic value separate from their use as money. For example, gold has value in the manufacture of jewelry, dental fillings, and most importantly in the manufacture of microelectronics. But using gold as money is a big problem. The money supply will face great difficulties for the government to control because it depends on the quantities of gold present or that are being discovered.
- Paper money (including coins):
The economy would be inefficient if it relied on gold as money. Transporting quantities of gold for use as a medium of exchange for commercial transactions would be difficult, dangerous and costly. In order to avoid this, people in Britain began and by the year 1500 to store gold with goldsmiths and goldsmiths began to issue papers proving the holder's ownership of a certain amount of gold. People took to exchange these papers to meet their needs from purchases. Governments and companies in Europe took notice and began issuing documents that could be bought back for gold. As long as people had confidence that the gold backing up those securities was there and available when they asked for it, those documents remained in circulation as an exchange medium. As a matter of fact, paper money was invented.
In modern economies, paper money is issued by the central bank of the state which is one of the state institutions responsible for regulating money supply. The Central Bank of Iraq was established in 1947 by royal will and was previously called the National Bank of Iraq until 1956. At present, there is no country in the world that issues paper money covered with a gold cap. Paper money has no value except that it is used as money and therefore it is not commodity money. Paper money is a currency issued by the monetary authority with a decision to consider paper as a currency only.
If you look at the Iraqi dinar, you will see some words that say "a banknote issued by law," meaning that the Central Bank officially issued the note to be used as money. The Central Bank of Iraq is not required to exchange the dinar for gold if the holder of the dinars so desires. The banknotes issued by the central bank are a legal document in Iraq, meaning that the Iraqi government imposes its acceptance by people and companies in their dealings and the payment of government fees. Although it is a legal document, it will not be of much use to use as a medium of exchange and it will not work as money if people stop accepting it in general. The key to accepting cash is that families and companies have confidence that if they accept these papers in exchange for the goods and services they sell, they will not lose their value while they hold it before using it again. Without this trust, the banknotes will not function as an exchange.
* Professor of Economics and Political Science, Kansas State University, USA.
The exchange rates of the dollar on the main stock exchange in Baghdad and the Kurdistan region increased slightly today, Wednesday, January 20, 2021.
Shafaq News Agency correspondent said that the Al-Kifah Central Stock Exchange in Baghdad registered 145,800 Iraqi dinars today against 100 US dollars, while Al-Harithiya Stock Exchange also recorded 145,800 dinars.
While the Central Kifah Stock Exchange in Baghdad registered 145700 Iraqi dinars against 100 US dollars when it opened yesterday.
Our correspondent indicated that the selling and buying prices have stabilized in the exchange shops in the local markets in Baghdad, where the selling price reached 146,250 Iraqi dinars, while the purchase prices reached 145,000 dinars per 100 US dollars.
As for Erbil, the capital of the Kurdistan Region, the price of the dollar also witnessed a rise, as the selling price reached 146,000 dinars per hundred dollars, and the purchase was 145,500 dinars per hundred dollars.
The Markets:
Asian markets closed mixed NIK down by .38% HSI up by 1.08% SHANG up by .47%
UK markets are currently trading in the green from .08% to 1.03%
Our futures are currently trading in the green the DOW at 30897 up by .22% SNP at 3805 up by .40% NDX at 13086 up by .78%
Brent 56 WTi 53
Favorite Currencies Forex Quotes
| Symbol | Bid | Ask | High | Low | Open | Change | Time |
|---|---|---|---|---|---|---|---|
| USD/IQD |  1433.6000 |  1483.0000 | 1458.5000 | 1458.5000 | 1458.5000 | 0.1000 | 09:17 |
| USD/VND | 23072.0000 | 23074.0000 | 23059.8700 | 23056.1900 | 23056.1900 | 4.7500 | 00:33 |
| USD/CNY | 6.4646 | 6.4666 | 6.4784 | 6.4626 | 6.4784 | -0.0139 | 05:19 |
| USD/KWD | 0.3024 | 0.3034 | 0.3029 | 0.3026 | 0.3029 | -0.0003 | 05:01 |
| GBP/USD |  1.3698 | 1.3699 | 1.3717 | 1.3626 | 1.3631 | 0.0066 | 05:20 |
| USD/IRR | 42000.0000 | 42210.0000 | 42097.5000 | 42097.5000 | 42097.5000 | -914.4000 | 07:13 |
| USD/IDR | 14042.0000 | 14050.0000 | 14101.0000 | 14037.0000 | 14086.0000 | -41.0000 | 05:16 |
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Parliamentary Finance is considering adding articles in the budget law to support the private sector and stimulate the economy
"The Finance Committee continues to discuss the draft federal budget bill for the year 2021," noting that it will study adding articles in the law that support the private sector and contribute to revitalizing the Iraqi economy.
And confirmed according to the statement that "the sub-committees of the Finance Committee will host the General Secretariat of the Council of Ministers, the Ministries of Industry and Transport and the Iraqi Media Network, to discuss their financial allocations in the 2021 budget."
High oil prices and the Brent index jumps above $ 56
Oil prices recorded a noticeable rise today, Wednesday, amid expectations that the next US administration will spend huge stimulus spending that will boost demand for fuel and reduce crude stocks.
Brent crude futures rose 37 cents, or 0.66%, to $ 56.25 a barrel.
US West Texas Intermediate crude futures were up 40 cents, or 0.76 percent, to reach $ 53.38 a barrel.
President-elect Joe Biden, US Treasury Secretary-candidate Janet Yellen, urged lawmakers to act aggressively on spending on relief from the epidemic, boosting hopes for massive spending to boost growth.
Today, Wednesday, the Chinese capital, Beijing, announced tougher measures to control COVID-19, as it will shut down a subway station after the city reported its largest daily jump in new cases of COVID-19 in more than three weeks.
Traders will be watching the US crude and product inventories data, due for release from the American Petroleum Institute today and the Energy Information Administration next Friday.
Parliamentary Finance: The budget will be ready next week
The Parliamentary Finance Committee confirmed, on Wednesday, that the draft federal budget law for 2021 will be ready next week, while indicating the continuation of discussions on the budget.
A member of the Parliamentary Finance Committee, Sherwan Mirza, said in a press interview, that the Finance Committee is continuing to discuss the draft federal budget law for 2021 with the relevant ministries and government agencies.
He added that the Finance Committee holds about 10 daily meetings with government agencies, stressing that the committee has received all observations and proposals on the budget.
He explained that the Finance Committee will start amending the budget as of next week, and I think that the bill will be ready for voting during the next week.
Finance" reassures: employees' salaries will be paid at the end of the month
The parliamentary finance committee on Wednesday set the end of January as the date for the payment of salaries to employees, the Finance Ministry confirmed.
"During their hosting of the parliamentary committee, officials at the Ministry of Finance confirmed that there is liquidity available to pay employees' salaries for the month of January," committee member Jamal Cougar told Shafq News.
"There is no delay in the salary disbursement process, and it will be disbursed by the Ministry of Finance as scheduled by the end of this month," he said.
"The payment of salaries of employees and retirees has nothing to do with the delay in passing the general budget law," Cougar said.
The Iraqi government is struggling to secure employee salaries and other operating expenses due to the collapse in oil prices caused by the Corona pandemic, which has crippled large sectors of the world's economy. The country relies on raw sales revenue to finance 95 percent of state expenditures.
Iraq has been forced to devalue the local currency against hard currency, particularly the US dollar, in order to provide the salaries it paid in the fourth quarter of 2020 through the fiscal deficit law passed by parliament.
The 35th session of the Iraqi Parliament, which resumed last Saturday, ended the debate on the 2021 budget bill.
The Iraqi government approved the draft last month and sent it to parliament for discussion and approval in the coming weeks.
According to the draft, seen by Twilight News, the budget is 164 trillion dinars with a fiscal deficit of 71 trillion dinars.
The budget was based on an estimated price of $42 per barrel of oil and an export rate of 3.250 million barrels per day, including 250,000 barrels from the Kurdistan region fields.
CBI Update: Just a note:
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