WOTS NOV 24 21A financial official talks about the expected exchange rate in the 2022 budget
These are the articles I discussed on the My FX Buddies Podcast:
Finance issues an “important” clarification regarding the possibility of adjusting the dollar exchange rate
On Wednesday, the Ministry of Finance issued an important statement regarding the possibility of adjusting the dollar exchange rate and patching the value of the Iraqi dinar, stressing that the 2022 budget will provide opportunities for social protection in Iraq.
The Ministry of Finance said in a statement received by Shafak News Agency, "In the past few weeks, there have been statements among senior political figures regarding the appropriate exchange rate," adding, "The Ministry of Finance has addressed this issue several times and in a number of detailed presentations regarding the strategy and policy behind exchange rate adjustment.
She explained, "We would like to reiterate our position and hope that by presenting our policy in a clear and convincing manner, the next government will have the correct basic information to interact with this matter, knowing that the international community has supported the exchange rate adjustment, as the International Monetary Fund, the World Bank and all industrialized countries supported the step." publicly and in documents and reports published by them.
And the ministry continued, "When oil revenues collapsed last year, the Iraqi government was facing enormous funding pressures while it was struggling to meet its basic internal and external obligations."
She said, “The central bank’s foreign exchange reserves were on a rapid decline path, and in December 2020, they were expected to run out within a year. Iraq’s teetering on the brink of a full-blown crisis was a symptom of the prolonged weakness in the face of low oil prices. The government should postpone all non-priority spending and focus on paying salaries in a timely manner, and pensions and social benefits are sufficient."
She explained that "bridging the very large fiscal deficit without devaluation would have required deep and painful cuts in social expenditures and layoffs of thousands of employees."
And she indicated, "The devaluation was necessary to allow for more gradual fiscal adjustment and thus avoid major disruptions in key public services, by encouraging domestic consumption to move away from imports, the devaluation of the dinar also helped protect the Central Bank of Iraq's foreign exchange reserves and gave Iraqi producers an opportunity To create job opportunities and income through better competition in the local market.
On the possibility of revaluing the dinar with the rise in oil prices now, the Ministry of Finance said, "Although the devaluation of the currency last year and the restoration of oil prices have helped improve Iraq's financial situation, it is important to bear in mind that the country is still very weak." .
She added, "The current surpluses could turn into deficits with the return of oil prices to normal in the medium term, and another contraction in the oil market could easily bring the country back to the brink of crisis, for the Iraqi economy to regain its full strength and be sustainable, economic policies must be geared toward improving resilience to oil price fluctuations by building fiscal buffers and diversifying the economy."
And she noted that "the revaluation of the dinar will have the opposite effect," noting that "there are good reasons for the scarcity of revaluation of fixed exchange rates, for example, in 2005, China revalued its currency in response to intense pressure from the United States, which threatened to impose customs duties on imports.
And on the main consequences of revaluation, and will it help the poor?, Finance explained, “The revaluation will lead to a devaluation of the dinar for oil revenues and thus eliminate a potentially large part of the budget resources, which are employed in reconstruction, health, education, social transfers and other priority areas. ".
And she added, "The government's ability to face current and future challenges will be severely weakened, and the increase in demand for foreign currencies could destabilize the currency market and lead to widening margins."
And she indicated, "Experiences from other countries indicate that after reassessment, only a small part of their expanded profit margins is passed on to consumers and they acquire the bulk of it themselves, because the commercial objective of lowering prices is not to benefit consumers but rather to drive out competition, especially local producers. .If domestic producers are already under financial pressure, even a small price cut will be enough to put them out of business."
She continued, "So the benefits to consumers are likely to be minimal, and the main victims of the reassessment will be local entrepreneurs, farmers and private sector workers. It will become more difficult to drive private sector development and build a local production base when imports become cheaper. For the same reason, groups will not feel the poor and the weak, but with a small amount of benefit, if any at all.”
"Most countries have long recognized that the most effective tool for helping the poor is direct cash assistance to the pockets of those who need it most," she said.
She pointed out that "the 2022 budget will provide an opportunity to strengthen the social protection network in Iraq, now that the government has the means to do so. Trying to help the poor by raising the value of the dinar will be like throwing cash bills from a helicopter in the hope that it will land on the doorstep of the intended beneficiaries." While the exchange rate has been adjusted for nearly a year, many irresponsible commentators have linked it to the increasing levels of prices over the past year. This is not true. As with the rest of the world, Iraq is affected by the collapse of global supply chains due to the COVID-19 pandemic. Shipping costs have increased. and transportation significantly, foodstuffs and edible oils increased significantly, as did the costs of building materials and many manufactured goods, including cars and trucks.”
She noted that "the agreed view among economic experts is that supply chains will be re-established in the near future and that this will have a dampening effect on prices. The Ministry of Finance believes that the positive effects of the currency adjustment are beginning to appear. This is reflected in the increasing demands for industrial licenses in Iraq." , to take advantage of a more competitive exchange rate. Many importers and former traders look at the local market differently now, aiming to increase the level of their productive investment. This will translate into bigger and better job opportunities for our people.”
Results will only be final after ratification by the Federal Supreme Court, which takes place once the Electoral Judicial Panel has adjudicated on those appeals brought before it.
Today I can only say that further patience will have to be exercised. The Electoral Judicial Panel is finalizing its work, and IHEC is conducting a further examination of over 800 polling stations based on the decisions issued by the Electoral Judicial Panel. Once this has been completed, IHEC is expected to send the final results to the Federal Supreme Court.
Iraq and Britain discuss national economic reform plans and support investment and the private sector
The President of the Republic, Barham Salih, received, on Wednesday, the President of the Iraqi-British Business Council, Baroness Emma Nicholson, at the Peace Palace in the capital, Baghdad.
A statement by the Presidency of the Republic, a copy of which was received by Mawazine News, stated that, during the meeting, they discussed the joint Iraqi-British relations and their strengthening in various fields, especially in the economic and commercial fields and encouraging investment opportunities in Iraq, and referring to the importance of the "Together We Build Iraq" conference, which It was organized by the Iraqi-British Business Council yesterday with governmental participation in addition to companies and businessmen from both sides.
According to the statement, President Barham Salih stressed that Iraq looks forward to the support of friends in the international community and cooperation in order to strengthen its economy, carry out the necessary reforms in the financial and economic fields, support investment and the private sector through existing national reform plans, economic interdependence in the region, and ease political tensions
A financial official talks about the expected exchange rate in the 2022 budget
The former Director of the Financial Supervision Bureau, Salah Nouri, confirmed, on Wednesday, that any new change in the dollar exchange rate will shock the markets again.
Nouri told Mawazine News: "We rule out dealing with the dollar's exchange rates within the 2022 budget," noting that "the budget prepared by the current government was adopted at the same current exchange rate."
He pointed out that "if the new government wanted to change the exchange rate of the dollar , it would not remain the same, but would return gradually so that there would not be a new shock in the markets," noting that "the project prepared by the government according to the current exchange rate."
And he indicated that "the impact of the dollar's exchange rate is still very strong on citizens, and that most of the countries that change exchange rates are among the producing countries that export their products, as their economy and Iraq thrive, unlike those countries."
And he concluded, "Iraq has experienced a counterproductive result by raising the exchange rate because it does not have the production that enters hard currency through it."
The Minister of Finance reveals the position of the international community on changing the price of the dollar and promises about the 2022 budget
Allawi said in a press statement that "the change in the exchange rate prevented the layoffs of thousands of employees," noting that "the change in the exchange rate helped protect the reserves of the Central Bank and provided job opportunities in the market."
Allawi warned that "the reassessment of the value of the dinar will have the opposite effect."
He revealed that "the 2022 budget will provide an opportunity to strengthen the social protection network," noting that "the positive effects of the currency adjustment are beginning to appear.
The Pentagon Blows It Up: US Forces Will Remain In Iraq After 12/31
The Pentagon confirmed, on Wednesday, that the American forces will remain in Iraq after the end of combat operations on December 31, despite the warnings of the Iraqi resistance factions.
"Newsweek" magazine quoted Jessica McNulty, a Pentagon spokeswoman and Commander in the US Navy, as saying that "the position of the United States has not changed, and that there is no fully organized exit."
And she added, "The United States will fulfill the commitments it made during the strategic dialogue between the United States and Iraq in July 2021, including the absence of American forces with a combat role by the end of the year," noting that "American forces will remain in Iraq, at the invitation of the Government of Iraq." , to provide advice, assistance and exchange of intelligence information to support the Iraqi security forces in the campaign against ISIS,” according to her claim.
And the report indicated that “Secretary of Defense Lloyd Austin expressed similar feelings over the weekend during a meeting in the Bahraini capital, Manama, with Iraqi Defense Minister Juma’a Inad Saadoun al-Jubouri, where the Pentagon commander confirmed that “there will be no American forces with a combat role before the end of the year,” according to the report. Ministry of Defense.
The report stated that, “With less than a month and a half remaining in the year, a group of Iraqi factions known as the Iraqi Resistance Coordination Committee published a letter expressing its disappointment at the lack of the American military withdrawal, as the letter expressed doubts about the original commitment, noting that after four Almost months, “The Coordination has not yet witnessed any manifestations of withdrawal, although only 42 days separate us from 12/31/2021.”
The Governor of the Central Bank of Iraq receives Baroness Emma Nicholson
His Excellency the Governor of the Central Bank of Iraq, Professor (Mustafa Ghali Makheeb), received His Excellency Baroness (Emma Nicholson) and the
meeting discussed ways to support the Iraqi banking sector, where Baroness Nicholson invited His Excellency and the banks to participate in a specialized conference in Britain.
Her Excellency also praised the new building of the Central Bank and the aesthetic and architectural value that it will add to Baghdad.
For his part, the Governor reviewed part of the Central Bank's efforts to reform the banking sector and the bank's roles in launching a number of initiatives to support the Iraqi economy, stimulate the real sector and employ the unemployed.
It is noteworthy that Baroness Nicholson has been interested in the Iraqi issue since the nineties of the last century. She founded a charitable organization called (Ammar) to help children affected by the wars in Iraq.
In 2008, she founded a group called the
Iraqi British Business Council
It aims to bring together institutions, businessmen and investors for the benefit of Iraq.
The center includes a large number of international commercial institutions.
Iranian forces in Iraq threaten to assassinate Blackshart and demand the annulment of the election results
The transfer of a leader in one of the armed factions attended the meeting of the forces opposing the elections with the representative of the United Nations in Baghdad aspects of that hot meeting.
The source said that Jenin Plasschaert, the United Nations representative in Iraq, attended a meeting of Shiite forces to review the evidence Collected by those forces about electoral fraud.
According to the source, the leader of one of the armed factions, Abu Hussein al-Hamidawi, whose real name is Ahmed Mohsen Faraj, has been killed During the meeting, he threatened the international envoy, Plasschaert, in direct and face-to-face speech, telling her with the letter (that if It was proven in their investigations that it is closely or remotely related to the outcome of the Iraqi elections He will respond appropriately to it.
The word (appropriate response) has a well-known connotation in the dictionary of armed factions, which usually refers to targeting the party that He is under threat, which the attendees interpreted as an explicit threat to Blackshart to bomb its headquarters or assassinate it.
Al-Hamidawi addressed the attendees by saying: If you want a civil war, no one will blame it, even you, and if you want something Else we are able to make you live safely!!
The former Iraqi Prime Minister, Nuri al-Maliki, and the head of the Wisdom Movement, Ammar al-Hakim, had attended part of the meeting Forces objecting to the elections.
Observers in Baghdad say that Blackschaert accepted the challenge and submitted its report to the Security Council in which it confirmed that the elections Al-Iraqiya took place with high professionalism and they did not look like any fraud.
During her briefing to the Security Council on the Iraq elections, Blackshart said: There is no evidence of fraud Or systematic fraud in the Iraqi elections, and any illegal attempt to change the election results will backfire on their owners .
For his part, a spokesman for the Al-Fateh coalition, which includes forces loyal to Iran in Iraq, said that his coalition Filed a lawsuit to the Federal Court to annul the election results.
Mahmoud Al-Rubaie said that the Al-Fateh coalition submitted a lawsuit to the Federal Court demanding not to ratify the results Elections and issuing a state order to annul the results and hold other elections at a later time.
Al-Kazemi's advisor talks about development plans for the next ten years that have not yet been implemented
The financial advisor to the Prime Minister, Mazhar Muhammad Salih, confirmed, on Wednesday, that there are development plans for the next ten years that have not yet been implemented, and they need concerted efforts from everyone and an end to conflicts and rivalries.
Saleh said in an interview with the official "Al-Sabah" newspaper, followed by "Al-Iqtisad News", that "Iraq has development plans for the next ten years, the state is supposed to start implementing them to the letter, and that everyone's efforts should be combined in order to save the country developmentally, because we are facing a major confrontation regarding the country's future unless We are preparing for this."
And the financial advisor stated, "This plan exists, but it requires a commitment from everyone, that Parliament is present, the legislative authority and its institutions are stable, and the country is free from conflicts and rivalries, because they are all influential in the situation."
He added that "the entry of the world into the fourth wave of (Corona) will not cause a closure, and even if it does happen, it will be lighter than previous closures, because experiences have taught countries the dangers of long closure, and taught them to organize life better, so its effects will be partial and not total
Full text of the Briefing on Iraq to the Security Council by SRSG Hennis-Plasschaert
The United Nations (UN) Security Council held an open video-teleconference briefing on the situation in Iraq earlier today, Tuesday.
"The elections were assessed as generally peaceful, well run, featuring significant technical and procedural improvements. All in all, a substantial achievement - which Iraq’s authorities and parties would do well to publicly acknowledge," the Special Representative of the Secretary-General for the United Nations Assistance Mission for Iraq, Jeanine Hennis-Plasschaert, said in her briefing.
"Under no circumstances must terrorism, violence and/or any other unlawful acts be allowed to derail Iraq's democratic process. To ease tensions, calm, restraint and dialogue are the only way forward."
"Women candidates seem to have operated very successfully – thereby taking advantage of, and likely exceeding, the 25% women quota, which is a floor and not a ceiling."
"So far, and as stated by the Iraqi judiciary, there is no evidence of systemic fraud … any outstanding electoral concerns must only be dealt with through established legal channels, in accordance with the law."
"Results will only be final after ratification by the Federal Supreme Court, which takes place once the Electoral Judicial Panel has adjudicated on those appeals brought before it. Today I can only say that further patience will have to be exercised."
"Any unlawful attempts to prolong or discredit the electoral results process, or worse, to alter the electoral results through (for instance) intimidation and pressure, can only backfire. And I call on all stakeholders not to go down that path."
"While the risk of continued political deadlock is real, Iraq desperately needs a government that is able to -swiftly and effectively- tackle the long list of unfinished domestic business: this is the primary responsibility of all political stakeholders."
"Elections were hard earned, and importantly: technically well-managed. A process for which the Independent High Electoral Commission (IHEC) and others deserve credit. Indeed, the recent parliamentary elections can serve as an important steppingstone on a longer path towards regaining public trust."
Shafaq News Agency shares below the full text of Mrs. Hennis-Plasschaert's Briefing before the Security Council:
Mr. President,
Distinguished members of the Security Council
As much as I would have liked to be with you in the chamber today, with the 10 October elections just behind us, we judged it more efficient to address you from Baghdad. It goes without saying that I very much look forward to seeing you in person early next year.
Given the importance of the recent parliamentary elections, as well as the political and security developments since, today’s briefing will principally focus on the electoral and post-electoral environment.
Given the importance of the recent parliamentary elections, as well as the political and security developments since, today’s briefing will principally focus on the electoral and post-electoral environment.
At the outset, I do wish to make a resolutely positive observation: these were the fifth national elections held under Iraq’s 2005 constitution. And there is much for Iraqis to be proud of in this election.
As we have noted before: the elections were assessed as generally peaceful, well run, featuring significant technical and procedural improvements. All in all, a substantial achievement - which Iraq’s authorities and parties would do well to publicly acknowledge.
Also, and I cannot overstate, these elections were hard-earned. Let us not forget, the October-elections emerged from an unprecedented wave of country-wide demonstrations in 2019. Demonstrations that were marked by violence, excessive use of force, abductions and targeted killings. Demonstrations that resulted in hundreds of deaths and thousands of injuries.
Mr. President, there is no denying it: elections and their outcomes can provoke strong feelings. That goes for any democracy across the globe. And Iraq is no different. Depending on where one stands, emotions can run high.
Most of the time, these strong feelings will spark intense debate on, for instance, the direction the country should go in. And there is absolutely nothing wrong with that. Such debates are the bedrock of pluralism and demonstrate political engagement.
However, if such feelings and debates give way to undemocratic impulses - such as disinformation, baseless accusations, intimidation, threats of violence or worse - then sooner or later, the door is opened to acts that are simply intolerable.
Mr. President, on 17 October, parties rejecting the electoral results began demonstrations and sit-ins, which escalated on November 5, with casualties reported in Baghdad.
In the early hours of November 7, an assassination attempt on the Prime Minister took place. A direct attack on the State. A heinous act, and one which can only be condemned in the strongest of terms. Let me be clear: under no circumstances must terrorism, violence and/or any other unlawful acts be allowed to derail Iraq’s democratic process. To ease tensions, calm, restraint and dialogue are the only way forward.
The fact is that citizens in democracies often must recognize that, even if the results are not what she or he hoped for, the process as such might have been sound. In fact, one of the clearest signs of a strengthening democracy is the ability for parties and electors to recognize outcomes - no matter their individual preferences when it comes to results.
In the case of Iraq, the aggregated votes at the national level do not necessarily translate in the number of seats some parties might have expected. How so? Well, for instance, too many candidates in one constituency could have led to a fragmentation of votes.
Interesting in Iraq’s case is that women candidates seem to have operated very successfully – thereby taking advantage of, and likely exceeding, the 25% women quota, which is a floor and not a ceiling.
What I am saying is: while losing seats can be difficult to digest, it is important - for any party in any democracy - to examine the reasons and to learn for future elections.
For any other issues, including accusations of manipulation, the established legal channels are open. And in the case of Iraq: widely used. But so far, and as stated by the Iraqi judiciary, there is no evidence of systemic fraud.
Mr. President, in recent weeks, we have observed a severe lack of trust. A lack of trust between parties, between parties and institutions, between parties and authorities. And that’s not even mentioning the longstanding lack of public trust in both politicians and institutions.
Now, that is not without risk, as mistrust often leads to escalation.
Hence, our consistent calls for political dialogue to prevail. And again, any outstanding electoral concerns must only be dealt with through established legal channels, in accordance with the law. There is no point in using others as a scapegoat for electoral grievances.
Now, where do things stand as we speak?
Results will only be final after ratification by the Federal Supreme Court, which takes place once the Electoral Judicial Panel has adjudicated on those appeals brought before it.
Today I can only say that further patience will have to be exercised. The Electoral Judicial Panel is finalizing its work, and IHEC is conducting a further examination of over 800 polling stations based on the decisions issued by the Electoral Judicial Panel. Once this has been completed, IHEC is expected to send the final results to the Federal Supreme Court.
While it would be preferable to have the final results ratified sooner rather than later, it should be noted that there are no constitutional time limits for ratification by the Federal Supreme Court.
Having said this, let me emphasize: any unlawful attempts to prolong or discredit the electoral results process, or worse: to alter the electoral results through (for instance) intimidation and pressure, can only backfire. And I call on all stakeholders not to go down that path.
Mr. President, in the midst of this post-electoral turmoil, it is clear that Iraq cannot afford its national interest to be neglected. As I have noted before: elections are never an end, but rather a means. And while the risk of continued political deadlock is real, Iraq desperately needs a government that is able to - swiftly and effectively - tackle the long list of unfinished domestic business: this is the primary responsibility of all political stakeholders.
In other words: it is important for the current situation not to drag on. Statesmanship, leadership and sound judgement are needed, and it is all needed, and so is a broad commitment to political dialogue, with factual information as a basis for deliberations and decision-making.
Clearly, time is of the essence. As I stated in August, it is high time for Iraq to emerge from prolonged political standstill, and to establish dynamic, responsive governance mechanisms.
In fact, the current post-electoral phase is the moment for all political actors to demonstrate their determination in service of all Iraqis.
Yet again, I can only refer to the events that led to the October elections in the first place. A lack of political, economic and social prospects made many, many Iraqis take to the streets. Their demands and grievances remain as relevant as ever. And as we all know, simmering anger easily swells.
Plainly speaking, Iraq’s current outlook is precarious - to say the least. And in the absence of genuine reforms, the situation will not get any better. On the contrary.
Mr. President, some final notes on the issue of missing Kuwaiti, third-country nationals and missing Kuwaiti property, including the national archives:
On 18 November, Kuwait announced the identification of another 19 Kuwaiti Prisoners of War and missing persons, bringing the total number of Kuwaiti Missing persons and third country nationals identified to date to 59: 57 Kuwaitis and 2 Saudis.
This breakthrough was possible with concerted, persistent efforts in the past couple of years, combining two elements: witness information and satellite imagery.
Here I would like to emphasize the importance for the Government of Iraq not to lose this momentum, and to use these elements to locate the remaining 300 plus missing Kuwaitis and third country nationals. I am confident that the strong commitment of all actors could expedite the resolution of this humanitarian file.
I am also pleased to report that after considerable delays due to the covid 19 pandemic, on 18 November, UNAMI successfully completed the training of 20 Iraqi staff from the Ministry of Defence on the use of Ground Penetrating Radar, which could further contribute to locating human remains, in addition to witness information and satellite imagery.
Mr. President,
In closing, allow me to reiterate: the October elections were hard earned, and importantly: technically well-managed. A process for which IHEC and others deserve credit.
Indeed, the recent parliamentary elections can serve as an important steppingstone on a longer path towards regaining public trust.
And as we await the ratification of results by the Federal Supreme Court, I can only underline that what happens in the coming days and weeks will prove to be even more significant for Iraq’s immediate future.
The importance of a sound and inclusive government formation process cannot be overstated.
Thank you.
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