The disappearance of 1.2 trillion dinars.. The Iraqi printed currency declined as the third largest decline recorded in 20 years
Data from the Central Bank of Iraq shows a decrease in the amount of printed currency by 1.2 trillion dinars between the months of November and December 2023, while Al-Sumaria News concluded, through a historical review of the printed currency, that this decrease in the amount of currency is the third largest decrease recorded in 20 years.
This means that the amount of printed currency decreased by 1.2 trillion dinars, which is supposed to have “disappeared,” and the only way to do this is usually for the Central Bank of Iraq to destroy this currency, and it usually compensates for it by printing another currency.
Al-Sumaria News reviewed historical data for currency printing in Iraq, and it was found that the printing and quantity of currency takes an upward trend every month, and the quantity of currency rarely decreases, as printing continues, which increases the quantity of currency, but destruction is the least common act.
The data shows that the largest recorded decrease in the amount of the Iraqi currency since 2004 until now was between June and July 2014, when the decrease reached 2 trillion dinars, and then between November and December 2015, with a decrease of 1.4 trillion dinars, and also between May and June 2021, with a decrease of 1.4 trillion dinars. .
The latest decline between December and November 2023 comes as the third largest decline in the amount of currency printed within one month, amounting to 1.2 trillion dinars, since 2004 until now, that is, 20 years ago. It also comes within only 6 similar declines, amounting to more than one trillion dinars within a month, for twenty years.
The Ministry of Planning continues to review and discuss the sectoral papers of the National Development Plan (2024-2028), in preparation for its launch.
The Ministry of Planning continues to review and discuss the sectoral papers of the National Development Plan (2024-2028), in preparation for its launch.
A statement from the media office in the Ministry of Planning said today, Saturday, that “in-depth discussions and dialogues continue under the chairmanship of the Undersecretary, Dr. Maher Hammad Johan, regarding reviewing the sectoral papers of the National Development Plan 2024-2028, in morning and evening sessions, for the third day in a row.”
The statement added, "The dialogues are being held with the participation of Iraqi and international experts, as well as a representative from the Reform Administration Cell in the Prime Minister's Office, general directors, and an elite group of specialists in the Ministry of Planning and university professors."
The statement added, "The third day witnessed the presentation and discussion of the axis of human capital and poverty alleviation, in addition to the discussion of sectoral papers, related to the sectors of electricity, oil, manufacturing and extractive industries, agriculture, and water resources, in addition to the sectors of transportation, storage, communications, and building and construction."
Economist: Dollar exchange rates may witness a slight rise
Economist Nasser Al-Kanani said that the exchange rates of the parallel dollar are stable in local markets.
Al-Kanani said in a press interview, “The price of the parallel dollar will remain as it is and may reach 155 thousand dinars for every 100 dollars.”
He added, "There is difficulty in reducing the price of the parallel dollar to the official exchange rate," adding that "the measures taken by the Central Bank and the Iraqi government from the compliance platform and others contributed to the stability of food prices."
The day before yesterday, the Prime Minister’s Advisor for Financial Affairs, Mazhar Muhammad Salih, confirmed in a press interview that the exchange rates of the parallel dollar do not affect the living life of the Iraqi individual after the general level of prices fell to 3.7% by the end of 2023.
The exchange rates of the dollar against the dinar recorded stability in the banking shops in the capital, Baghdad, where the selling price reached 152,500 dinars, while the purchasing price reached 151,000 dinars for every 100 dollars.
Disagreements disrupt a law related to Iraq’s wealth in Parliament, and there is no date for its approval - urgent
Today, Saturday (February 24, 2024), the Parliamentary Oil and Gas Committee confirmed the continued disagreements over the oil and gas law between Baghdad and Erbil.
Committee member Ali Saadoun told “Baghdad Today” that “disagreements between the federal government and the region are still continuing regarding the oil and gas law, despite all the dialogues and negotiations between the two parties over the past months and the joint technical and legal committees holding several meetings.”
He stated, “The most prominent points of disagreement center around the marketing mechanism and financial returns, and for this reason there is no specific or scheduled date for the enactment of this law by the House of Representatives, as the law is still under discussion and negotiation between Baghdad and Erbil, although this law is very important for resolving all disputes.” The financial and oil relationship.”
Kurdistan Democratic Party member Pierre Taher confirmed on Tuesday (February 6, 2024) that the oil and gas law guarantees joint management of the oil fields between Baghdad and Erbil, which makes it capable of resolving most of the disputes between the federal and regional governments.
Taher told "Baghdad Today" that "most of the differences between Baghdad and Erbil focus on the financial aspects, the issue of exporting oil and gas, and the export mechanism."
He added, "Approving the oil and gas law is the key to resolving disputes and ending most of the problems between Baghdad and Erbil, and will end the crises that have been going on for 10 years."
He stated that "the problem of employee salaries in the region, the ongoing financial crisis, and the dispute over oil exports will continue, and most of the solutions are temporary, and the solution is by approving the oil and gas law within Parliament."
He pointed out that "the law means joint management of the oil and gas present in the region and thus solves the financial crisis and the issue of Kurdistan's share in the budget, which is repeated annually, and the dispute postpones voting on the budget for long periods."
He explained, "Approving the law resolves the financial dispute because it will clarify, according to the law, who is authorized to export oil and how the financial revenues will be shared."
The controversial problem between Baghdad and Erbil is summarized in a sentence contained in the constitution issued in 2025, which includes an article that says that “the current fields will be managed jointly,” which is the article that Erbil considers to apply to the fields discovered and operating in 2005, as for the fields that are discovered. Activating it after this date, its management will be the right of the region only.
A delegation from the Iraqi Financial Supervision Authority arrives in the Kurdistan region
This evening, Saturday (February 24, 2024), a delegation from the Iraqi Financial Supervision Authority arrived in the Kurdistan region.
The spokesman for the Ministry of Finance and Economy in the Kurdistan Region, Honor Jamal, said in press statements, followed by “Baghdad Today,” that “a delegation from the Iraqi Financial Supervision Authority has arrived in the Kurdistan region and will discuss expenses and revenues tomorrow with the region’s Financial Supervision Authority.”
He added, "The delegation will look at the expenditures and revenues of the last six months of last year, as a technical measure for the Iraqi budget law, to look at revenues every three or six months."
Earlier, the Ministry of Finance and Economy of the Kurdistan Regional Government denied providing incorrect figures about its local revenues during its delegation’s visit to Baghdad.
The ministry said in a statement: “For two years, there has been continuous communication between the financial oversight offices in Baghdad and Erbil, and from 2022 until July 2023, the two offices approved all reports related to oil, expenditures, and local revenues.”
The Ministry stressed in its statement that "the Financial Oversight Office of the two governments (the federal and the regional) are jointly responsible for auditing and approving the monthly budget reports, and the responsibility does not lie solely with the regional Ministry of Finance."
Closing and liquidating the work of a prominent international team in Iraq
The Iraqi Ministry of Foreign Affairs revealed the closing date of the work of the United Nations investigation team to enhance accountability for crimes committed by ISIS (UNITAD) in Iraq.
A Foreign Ministry statement, a copy of which {Al-Furat News} received, said, “The interim Chargé d’Affaires of the Permanent Representative of the Republic of Iraq to the United Nations in New York, Abbas Kadhim Obaid, met with Miguel de Serpa Soares, Under-Secretary-General of the United Nations for Legal Affairs, and during the meeting, Iraq’s relations with The United Nations, its organs and programs, the legal mechanisms used in the United Nations, the contents of international resolutions, and aspects of their implementation and follow-up.
The statement added, "The arrangements related to the UNITAD work team and the mechanism for implementing Security Council Resolution No. 2679 of 2023 and meeting Iraq's requirements regarding the implementation of the team's mandate were also discussed, including making arrangements regarding the completion of the stages and procedures for the liquidation and closure of the team's work in the month of September of this year 2024."
Some Headlines
- Al-Bayati: America practices a policy of double standards to control Iraqi funds
State of law: America transfers to Iraq its money mortgaged in the Federal Bank
Member of the State of Law Coalition, Rasoul Radi, Al-Bahed, accused the United States of America of working to harm the Iraqi economy.
Radi told Al-Maalouma, “The American administration is working to harm the economic interests of Iraq, by placing the revenues from Iraqi oil sales in the US Federal Bank.”
He added, "Iraq gets its money from the Americans using the (distillation) method when needed."
He promised, "The Iraqi economy is hostage to the US Federal Reserve, which controls the most important revenues that the Iraqi government relies on to finance the budget."
The value of electronic payment exceeded 9 trillion dinars during 2023
There is a consensus from the public and private sectors on the necessity of regulating the reality of electronic collection in Iraq after the local market witnessed great interaction using electronic payment and the value of use increased remarkably in 2023 to exceed 9 trillion and 661 billion dinars through financial movements exceeding 15 million transactions.
Participants in the workshop on enhancing electronic government collection, organized by the Iraqi Private Banks Association with the support of the Prime Minister’s Office and sponsored by the Central Bank of Iraq, described electronic payment as an important new stage that guarantees the paths of funds and makes them more transparent, but it is not without challenges that can be overcome in cooperation with the Central Bank and specialized companies.
Governor of the Central Bank of Iraq Dr. Ali Al-Alaq said: The successes achieved in the field of electronic payment stem from the great support given by Prime Minister Muhammad Shiaa Al-Sudani to this important project. We also value the efforts of the ministries that interacted with this project and gave it priority, pointing out that the launch of electronic collection comes as a translation of the Central Bank’s objectives in Adopting advanced technologies in electronic payment.
Al-Alaq stressed that electronic collection contributes to strengthening government financial resources and operates in a transparent environment in light of the components provided by the Central Bank. The project targets ministries and non-governmental institutions at the same time, and the citizen can now pay from anywhere and this is for the optimal use of cash.
Director General of Payments at the Central Bank, Adnan Asaad, indicated that the decisions of the Council of Ministers had a positive impact on activating electronic collection, especially in the second half of 2023, pointing out that the total collection from gas stations exceeded 10 billion dinars, and the number is expanding, as is the number of employee cards. In localization services as of June 2023, it amounted to 8,653,310, and the total electronic collection through electronic payment gateways in the year 2023 exceeded 108 trillion through financial transactions exceeding one million transactions.
Asaad pointed out that the commissions charged to citizens in electronic payments are “zero” and in the public and private sectors, and this issue requires expanding the citizen’s culture, and here is the responsibility of all concerned institutions.
Executive Director of the Association of Private Banks, Ali Tariq, said: The workshop brought together most of the state institutions and the private sector with a large and qualitative presence that witnessed identifying all the problems facing the ministries in this important project, and working to solve them through coordination with the companies and institutions concerned.
Tariq stressed that the great cooperation shown by the team of the Central Bank of Iraq and specialized companies with the presence of the Association of Banks achieves smooth work and contains all the problems or challenges facing some institutions, pointing out the presence of financial expertise capable of mastering advanced technology and employing it in the correct manner, and that the training carried out in We have begun to see positive results in this aspect, and we now have a developed work team in Iraq, where the Association has prepared continuous training programs for several years that enable human resources to use advanced technology.
As for the representative of the International Smart Card Company, Ghazi Al-Kanani, he pointed out that the reality of electronic payment has begun to expand significantly, and the citizen has begun to interact greatly with the electronic services that are provided, and this came after the citizen felt the positives provided by this project, pointing out that electronic payment was established with the aim of providing The best services and mechanisms that facilitated his daily life.
He stated that electronic collection will follow the collected funds to their legal destination without tampering, and will enhance the federal budget with large revenues, pointing out that Iraq is facing a new phase that preserves the funds’ paths and takes their destination to the appropriate place.
As for Traffic Major General Adel Al-Araji, he said: Electronic collection is a new experience and has faced several challenges due to the ramifications of revenues and the lack of educational campaigns. He pointed out that there are committees in the General Traffic Directorate that supervise electronic payment operations, noting that collection in the Karbala Traffic Directorate reached 100% and in Basra 60%.
He emphasized the work to allocate one day each week for electronic payment, as we have platforms that work exclusively on electronic payment.
As for the representative of the Ministry of Oil, Yasser Ammar, he confirmed that the Ministry had circulated the electronic collection experience from the first quarter of 2023. There were challenges to completing the work, but we worked to overcome them, pointing out that all 350 government stations operate with electronic payment.
As for the representative of the Minister of the Interior, he confirmed that the Minister of the Interior directed the adoption of electronic payment and that collection and collection be electronic from May 1, 2024, pointing out that there are challenges that are being addressed in cooperation with the concerned authorities, and that the Ministry believes in developing the performance of electronic payment and what rises to global performance.
What is the impact of the use of electronic payment on the Iraqi economy?
Today, Sunday, the economic expert, Abdul Rahman Al-Mashhadani, explained the impact of electronic payment on the Iraqi economy, while confirming the existence of accelerated government steps in this regard. He referred to the anti-corruption file.
Al-Mashhadani said, in a televised interview followed by Al-Iqtisad News, that “there are accelerated government steps regarding electronic payment and digital transformation, especially when state institutions were forced to pay dues through electronic payment methods,” indicating “the necessity of disseminating this culture among the public.” .
He added, "The government steps during the previous six months were good, and may accelerate in the coming days," noting that "this issue has two sides, one of which depends on the government and the other on individuals."
The economic expert explained, "This process will help individuals simplify payment methods, and the gain could be through the discount points that he can achieve."
As for the government, Al-Mashhadani stated that “the electronic payment process will contribute to the government in withdrawing the cash mass available to the public, at a time when there are more than 90 trillion dinars outside the banking system,” stressing that “if half of these amounts were deposited in banks, there would be no problem with financing.” Budget deficit, or borrowing from abroad.
He stressed that "anti-corruption operations through digital transformation are considered a secondary priority in the electronic application, because the corruption process exists," pointing out that "an employee who accepts bribes through manual payment will naturally accept bribes through electronic payment."
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- Parliament completes the first reading of the draft law on the Center for Banking Studies
On Sunday, the House of Representatives completed the first reading of the draft law on the Center for Banking Studies.
The Acting Speaker of the Council, Mohsen Al-Mandalawi, opened the work of Session No. (10), of the fifth electoral cycle, third legislative year, first legislative term.
The session was held in the presence of 169 representatives.
An advisor to the Association of Banks warns of harm to the private banking sector due to US sanctions and restrictions
Advisor to the Iraqi Private Banks Association, Samir Al-Nusairi, warned of the great harm that will befall private banks that have been deprived of dealing in the US dollar.
Al-Nusairi said, in a comprehensive televised interview, that “the Iraqi economy faced many crises and challenges, extending to the years before 2023, but the government, the Central Bank of Iraq, and the banking sector faced a new, complex crisis at the end of 2022, which was represented by the sudden fluctuation in the prices of the Iraqi dinar.” against the US dollar.
He added, "The government and the Central Bank began in a harmonious manner, and with high coordination, in order to know and determine the causes of this crisis, and what are the solutions and treatments for the purpose of quickly overcoming it," pointing out that "the Central Bank began at the beginning of 2023, using many measures, Such as using the electronic platform application for foreign transfers in accordance with new standards and controls, which is regulating foreign trade financing in directions that make the Iraqi banking sector regulated by international banking standards.
He stressed, "These measures were fruitful during the year 2023, and the Central Bank's policy succeeded in opening solid foreign correspondent banks for banks that lacked these banks."
Regarding the sanctions on Iraqi banks, Al-Nusairi confirmed, “There are 28 banks whose dealings in the US dollar have been stopped at the level of international foreign transactions and transfers, for reasons that were not mentioned,” pointing out that “these banks are currently outside the electronic platform and the currency window in Iraq.”
He stated, “The deprivation of these banks is due to transactions in previous years, which began in 2018 and ended in 2022, for reasons that were not mentioned, but rather merely due to doubts and audit, administrative, and regulatory procedures.”
He added: “These banks constitute 50% of the Iraqi private banking sector, which has a total of 60 commercial and Islamic banks, which cause great harm to the banking sector, because the total assets of the above banks that were punished and prohibited from dealing in US dollars constitute approximately 47%. The total deposits constitute 36%, and the same applies to capital, 37%, in addition to the presence of more than 245 branches in Iraq, which constitute 51%, while the number of employees working in the branches of these banks constitutes approximately 40%.
Regarding the impact of border crossings on exchange rates, Al-Nusairi said, “One of the reasons for the fluctuation of the exchange rate in Iraq is due to the lack of previous control over unofficial border crossings and illegal imports.”
He continues, "These matters push speculators to turn to the cash dollar, which is allocated for travelers and treatments outside Iraq and the wages of students studying abroad, and try to obtain it through unlicensed money exchanges and outlets for disbursing pensioners' salaries."
This makes controlling the market very difficult,” noting that “the Iraqi government, in cooperation with the Central Bank, has taken several steps in this direction, the most important of which is the automation of the tax system and the customs system.”
Regarding the possibility of imposing new sanctions on the banking sector, he stated that they are “just rumors and have absolutely no basis in truth.”
Regarding the “Riyadah” initiative, Al-Nusairi pointed out that “Riyadah represents one of the important initiatives taken jointly by the Central Bank and the government, as it began with the Prime Minister, which begins by assigning government banks to lend to young people and graduates after they enter special training courses in universities to learn how to They choose their projects in terms of economic feasibility and their impact on economic development.”
He stated, “In implementation of this measure, the Central Bank, which has the idea of preparing and launching within the next few weeks, the national lending strategy, which adopts the establishment of Riyada Bank, in which private banks contribute, has reached important stages in its establishment.”
He noted, “The capital of this bank amounts to 100 billion dinars, and it will be a digital bank, in cooperation with international organizations to complete this important project,” pointing out that “the new mechanism concerns small projects and is considered a new model for the initiative to finance small and medium enterprises, which was launched in 2015.”
Masrour Barzani arrives in Washington
The Prime Minister of the Kurdistan Regional Government, Masrour Barzani, arrived in Washington, DC, in response to an official invitation. During his visit, he is scheduled to hold a series of meetings with senior American officials in the White House, the State Department, and Congress.
On the evening of Saturday, February 24, 2024, the Prime Minister of the Kurdistan Regional Government, Masrour Barzani, arrived in Washington, DC, in response to an official invitation.
The Prime Minister is accompanied by a government delegation, and during his visit, he is scheduled to hold a series of meetings with senior American officials in the White House, the Ministry of Foreign Affairs, and Congress.
The meetings will focus on ways to strengthen relations between the Kurdistan Region and the United States, in addition to discussing the latest developments in Iraq and the region.
The delegation accompanying the Prime Minister consists of the Minister of Peshmerga, the official of the Foreign Relations Department, and a number of officials.
Media and Communications announces the cessation of cash transactions in early March
The Communications and Media Commission announced today, Sunday (February 25, 2024), that it will stop cash financial transactions at the beginning of next March, provided that they are carried out by electronic payment or bank transfers.
The authority said in a statement, received by “Baghdad Today”, that “starting from next March 1, all cash financial transactions will be stopped.”
She added, "Payment of the amounts due to beneficiaries of the authority's services will be made via POS electronic payment devices or bank transfers only."
Iraqi Prime Minister: We seek to attract partnership and economic integration
Iraqi Prime Minister Muhammad Shia al-Sudani confirmed on Sunday that ISIS today represents a defeated organization, indicating that major strategic projects will work to attract partnership and economic integration.
The Iraqi News Agency (INA) reported that this came during the participation of the Iraqi Prime Minister in a dialogue symposium held by the Baghdad Institute for Dialogue, under the slogan (Regional Communication... The Centrality of Iraq), to discuss current topics and the course of Iraqi relations with neighboring countries and the world, and the most prominent positions in this regard. .
Al-Sudani pointed out the importance of these research institutions in decision-making, and their focus on facts away from confusion and prejudices, explaining that the Iraqi government has set a primary goal for its work, which is to build trust with the Iraqi street, which is itself a criterion for determining priorities in work.
Regarding foreign relations, Al-Sudani stressed that Iraq follows a balanced approach, staying away from alliances and axes, and is open to developing relations with everyone, and has the ability to communicate with them, and also has distinguished relations with the United States and Iran.
Al-Sudani reviewed the “aggression in Gaza,” recalling that “the events did not begin last October 7, as much as they are the result of accumulations and years of occupation, oppression, and displacement to which the Palestinian people were subjected, and that the root of the problem today lies in stopping the killing and ending this aggression, as a way to contain it.” The conflict and preventing it from expanding, reiterating Iraq’s position that rejects its lands being an arena for others’ conflict,” pointing out the importance of the intertwining of interests in the region, and the shift from political focus to economic focus.
Does deleting the currency’s zeros affect its value? An economist explains
Economic expert, Durgham Muhammad, said on Sunday that deleting the currency’s zeros does not conflict with its value, explaining what needs to be taken before resorting to this step.
Muhammad told “Deleting the currency’s zeros is a regulatory process that does not conflict with its value, but this step needs educational campaigns to precede it, and a transitional period for trading the currency with its zeros and the new currency to know that the two currencies are equal in value.”
He stressed, “Printing new denominations must be proportional to the market’s need to cover daily trading, provided that there is no significant increase in the monetary supply in the market so that inflation does not occur.”
Deleting zeros from the currency.. Is the Iraqi economy prepared for this process?
Former MP, Ahmed Hama Rashid, confirmed on Sunday that deleting the zeros or printing a new currency costs the Iraqi treasury huge amounts of money, and this process is not appropriate at the present time, as the Iraqi economy is in a stage of contraction, and the Iraqi dinar is shaky against the US dollar and other currencies. Any increase in this amount will lead to monetary inflation that will reflect negatively on the purchasing value of the Iraqi dinar.
Rashid told “Jarida”, “Deleting the zeros or printing a new currency costs the Iraqi treasury very large sums of money, considering that each new denomination of paper costs the state treasury about 6 cents, and currently more than 95 trillion dinars are printed, and this is the total size of the monetary mass, As for the trading volume - that is, what is in the banks and in the hands of citizens - the news indicates that there are more than 50 trillion dinars.”
He added, “Changing this currency or deleting zeros from it is not possible at the present time, given that the Iraqi economy is not in a stage of recovery or growth, and that countries that resort to deleting zeros are usually in a stage of recovery or in a stage of economic growth, as for the Iraqi economy.” It is currently in a stage of contraction and not in a stage of growth, and it needs time to change this currency.”
He continued, “Also, the Iraqi economy is not currently available to print a new currency or delete zeros from it, because the Iraqi dinar is already shaky against the US dollar and other currencies, and any increase in this amount will lead to monetary inflation that will reflect negatively on the purchasing value of the Iraqi dinar, meaning that An increase in the total amount or monetary mass leads to economic and monetary fluctuations and declines against all currencies in the region, especially the US dollar.”
He explained, “The printing of the Iraqi currency with these zeros in the days of Bremer was intended to make the Iraqi citizen aware that he had huge sums of money so that he would be a consuming citizen and would not prefer saving and investing, so that he would benefit from spending this money on extravagance, luxury, and the like, and this is called in economics as (( The monetary illusion (that is, a person thinks that he has a lot of money, and therefore he spends a lot, and this is what countries that are under siege for a sufficient period of time resort to until they recover from the issue of the complex in front of money).
He concluded by saying, “Deleting the zeros and printing a new currency may sometimes be authorized by the Central Bank, its members, representatives, or advisors, but there is no seriousness to changing the currency and deleting the zeros from it.”
For the first time in 20 years.. Iraq participates in the Ministerial Conference of the World Trade Organization
On Sunday, the Ministry of Commerce participated for the first time since 2004 in the Ministerial Conference of the World Trade Organization, which is being held in the capital, Abu Dhabi.
Minister Atheer Al-Ghurairi said in a speech during his participation in the preparatory meeting of Arab trade and economic ministers within the Arab group for the thirteenth Ministerial Conference of the World Trade Organization, followed by Al-Iqtisad News, that “Iraq is participating for the first time since 2004 in the Ministerial Conference of the World Trade Organization, which is held in... The capital, Abu Dhabi,” pointing to “the completion of the requirements for Iraq’s accession to the organization, which is the completion of the files of trade in goods and trade in services within the timetable for joining the global multilateral trading system.”
The minister pointed to "the desire and seriousness of the Iraqi government to establish balanced economic relations with all countries of the world at various levels and fields by improving the business and investment environment and making real reforms in laws and legislation."
He thanked "the Kingdom of Saudi Arabia for supporting the process of Iraq's accession to the international organization through the visit of its permanent ambassador to the organization, Saqr Al-Muqbel, and his chairmanship of the working group for Iraq's accession."
Regarding intra-trade and increasing trade exchange between Arab countries, Minister Al-Ghurairi noted “Iraq’s keenness on the importance of the presence of Arab countries in Iraq to restore its effective role in economic organizations.”
The Minister offered congratulations to "the State of the Comoros and East Timor on obtaining membership in the World Trade Organization."
WTO Links I showed
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His advisor: Al-Sudani will go to Washington to enhance strategic cooperation
The political advisor to the Prime Minister, Fadi Al-Shammari, confirmed that preparations have begun for the visit of the Prime Minister, Muhammad Shia Al-Sudani, to Washington.
Al-Shammari said in a televised interview followed by Mawazine News, “Iraqi diplomatic teams are working to organize the Prime Minister’s visit to Washington and its agendas.”
He added, "The political file and the nature of the partnership will be the priority in the discussion between Iraq and America," noting that "the Iraqi embassy in Washington is active and is constantly provided with files.
He pointed out that "Iraq has activated its relations with European countries and with China and is working to diversify its political and economic relations." Pointing out that "Iraq wants to diversify the space of external openness and establish balanced relations with everyone."
The dollar, oil, and SWIFT are cards in America's hands to stay in Iraq
Baghdad and Washington concluded two rounds of dialogue led by military representatives and advisors from both countries in Baghdad , during the past weeks, focusing on formulating a final assessment demanded by the government of Prime Minister Muhammad Shia al-Sudani, in order to set a timetable for the withdrawal of American forces from Iraq and end the role of the international coalition that has been in place for a year. 2014 to defeat ISIS.
The political forces and armed factions allied with Iran are putting pressure on the Sudanese government to resolve the issue and end the American presence in Iraq. On the other hand, Washington avoids in its comments talking about any immediate withdrawal of its forces from Iraq.
Officials from both countries are discussing Baghdad's ability to manage the security file and prevent the reappearance of ISIS, before talking about any timetable for withdrawal and ending the role and work of the international coalition in Iraq.
But sources close to the government said that Baghdad has fears that Washington will use the financial and economic aspect to put pressure on Iraq, to prevent any unilateral step on its part that the United States does not want and related to the American military presence in the country rich in oil resources.
Among these papers are the Iraqi funds deposited with the US Federal Bank from oil export revenues, a procedure applied within the requirements of Chapter Seven of the United Nations procedures following the Iraqi invasion of Kuwait in 1990 and which is still in effect until now, in addition to the inclusion of new Iraqi companies and banks. On the sanctions list issued by the US Treasury.
Specialists believe that the United States is using these files to confront the demands of a number of armed and political parties for the withdrawal of its military forces from Iraq.
More risky economic papers
An Iraqi Foreign Ministry official in Baghdad told Al-Araby Al-Jadeed that “Washington possesses economic pressure cards that may be more dangerous to Iraq than the security and political ones in the US withdrawal negotiations from Iraq.”
The Iraqi official added that his country "fears among these papers the issue of the dollar, which is essentially linked to the state's economy, and the United States may use it if Iraq insists on a rapid exit of American forces, which Washington may consider to be an implementation of Iranian will."
For his part, a member of the Finance Committee in the Iraqi Parliament, Jamal Kujar, confirmed that there are three economic files that the United States uses to pressure Iraq, namely the oil file, Iraqi funds in the US Treasury, and the dollar file, and that the release of Iraqi funds in the US Federal Bank has become conditional according to American controls and specifications.
Koger explained to Al-Araby Al-Jadeed that these files represent strong and influential pressure cards if used against Iraq, because the Iraqi economy is fragile and depends entirely on oil revenues at a rate of up to 94% of the gross national product.
He believes that Iraq's economic and financial disengagement from the United States constitutes a danger to the Iraqi economy, because it drew the threads of Iraqi politics according to its interests after 2003, in order for the authority in Iraq to remain hostage to its will.
He added: "Politicians in Iraq must take into account the danger of US sanctions that will be imposed on the country, because they will create serious security and political problems, and constitute a major crisis and a state of internal confusion in Iraq."
Oil export revenues in 2023, according to data issued by the Ministry of Oil last January, amounted to about 87.6 billion dollars, at a rate of about 7.3 billion dollars per month. The country sold more than 1.23 billion barrels.
Iraq is counting on exporting crude to fill the financial deficit and reduce the size of internal and external debts, in addition to resuming work on more than 5,000 projects that have been suspended for years throughout the country’s cities, in the health, education, electricity, and water sectors.
Oil Minister Hayan Abdul Ghani said, in a statement last month, that Iraq intends to raise its production capacity of crude oil to six million barrels per day during the current year 2024, compared to four million barrels currently, of which between three million and 3.4 million will be exported. barrels per day.
The Minister pointed out the work to strengthen projects to sustain and increase production, and implement the requirements of the five-year plan, to reach the target rate.
Prohibiting dealing with Iraqi companies and banks
Economist Nabil Al-Marsoumi believes that the United States has adopted a set of methods in its dealings with Iraq, including effective economic measures, some of which it has actually taken, such as the recent ban on dealing with Iraqi companies and banks through US Treasury decisions.
Al-Marsoumi warned, during his talk to Al-Araby Al-Jadeed, that Washington has effective economic cards, including imposing financial restrictions, represented by exclusion from the financial transfer system (SWIFT), which is used by a large number of financial institutions in more than 200 countries. As is the case with its use against Iran and Russia after its war against Ukraine about two years ago.
He said, "There is another measure that would deprive financing for the development of the economy. The cost of borrowing in the country may rise and the value of the national currency may decrease, if Washington bans Iraq's large financial transactions in dollars."
He added, "Washington's reduction or cessation of delivering the dollar to Iraq from its balances in the United States means a significant decline in the value of the dinar against the dollar."
Among the sanctions that could be imposed on Iraq, according to Al-Marsoumi, is refraining from dealing with the Central Bank of Iraq, which leads to the world losing confidence in it and prompts them to stop dealing with the Central Bank of Iraq for technical reasons related to monetary standards.
Or for reasons related to the fear of imposing US sanctions on the party that deals with the Central Bank of Iraq, in addition to imposing sanctions on Iraqi banks and money transfer companies that confuse the economic situation and limit the financing of foreign trade.”
Among the sanctions, he pointed out stopping the lending and reconstruction programs and technical assistance provided by the International Monetary Fund and the World Bank to Iraq, as well as stopping granting Iraq the exception to import gas and electricity from Iran, which will lead to the collapse of its electrical system.
In this context, economic affairs researcher Nabil Jabbar Al-Ali believes that imposing the application of international standards on Iraqi banks initially came to restrict the arrival of funds to Iran, and this is what officials in the United States announced, in addition to protecting the international financial system from money laundering operations and combating the financing of terrorism. .
Custodian of Iraqi funds
Al-Ali added, during his talk to Al-Arabi Al-Jadeed, that Washington sensed the weakness of Iraq’s financial management and its inability to face the challenge of commercial regulation of private banks, as the dollar issue for Iraq has become one of the most prominent internal crises, as a result of its inability to control exchange rates, which made it Washington is one of the pressure files directed against Iraq.
Al-Ali stated that the United States uses legal tools in its dealings with Iraq, because Washington is still providing the necessary protection for Iraqi funds deposited in the US Federal Bank since 2003 following its occupation of Iraq, and the protection includes not exposing Iraqi funds to Iraqi creditors or international compensation issues.
He pointed out that the US Department of the Treasury and the Federal Reserve are working with the Central Bank of Iraq to regulate the procedures for foreign transfers issued from Iraq in accordance with international regulations, and both institutions have helped private Iraqi banks to open bank accounts with large banks around the world.
He pointed out that such oversight may reflect a kind of political pressure exerted on Iraq, including the delay in auditing remittance requests supervised by the US Federal Reserve, which can be considered practices that contribute to confusing the Iraqi market and its ability to dispose of its money easily.
Iraqi-US relationship future post-coalition withdrawal amid 'dangerous indicators'
The bilateral relationship between Iraq and the United States is multifaceted, reflecting a complex history marked by significant shifts and evolving dynamics. Since the 2003 US-led invasion that resulted in the removal of Saddam Hussein's regime, the relationship has traversed various phases characterized by both cooperation and challenges.
There has been a notable transition towards cooperation in recent years, particularly in critical areas such as security, counterterrorism, and economic development.
Collaboration in combating the ISIS threat stands out as a significant milestone, with the United States providing essential support to Iraqi security forces in their efforts to defeat the terrorist organization.
Economically, the US remains an influential partner for Iraq, with trade and investment playing pivotal roles in bilateral ties. Additionally, American assistance in infrastructure development, healthcare, and education highlights the depth of engagement between the two nations.
However, challenges persist, including issues related to Iraqi sovereignty, the presence of US military forces, and divergent foreign policy agendas. Domestic political dynamics in both countries further influence the trajectory of the relationship.
Notwithstanding occasional tensions and divergences, Iraq and the United States continue to engage in diplomatic dialogue and cooperation, aiming to address shared challenges while managing differences effectively. This nuanced approach reflects the complexity of their relationship and the ongoing efforts to foster mutual understanding and collaboration.
Observers maintain that the United States stands as Iraq's foremost strategic ally. Hence, there is a national interest in solidifying ties with the US. However, this necessitates clearly defined terms to avert ambiguity that might lead to deviations from stated positions.
Presently, the Iraqi-US relation appears relatively tranquil, with a decline in assaults on bases and camps housing US forces by insurgent factions.
Nevertheless, deliberations persist concerning the termination of the Global Coalition's mission aimed at combating ISIS. This was stressed by Prime Minister Mohammed Shia Al-Sudani during his recent press briefing, where he disclosed receiving communication from the US administration regarding the matter.
A series of assaults, notably the assassination of a prominent leader within Al-Nujaba Movement in Baghdad on January 5th, prompted Al-Sudani to characterize the Coalition as a destabilizing factor in the region.
Consequently, he announced the initiation of talks aimed at terminating its presence in Iraq.
Meanwhile, the US national radio NPR posited that the recent assassination of Kata'ib Hezbollah leader Abu Baqir Al-Saadi on February 7th holds broader implications for the future of American military involvement.
Speculation abounds that the Global Coalition may dissolve within a year, with the US potentially maintaining a symbolic military presence within Iraq.
WITHDRAWAL WITHIN A YEAR
The Iraqi government has repeatedly and explicitly declared its lack of need for foreign forces on Iraqi soil, as confirmed by the member of the Parliamentary Security and Defense Committee, Allawi Nima al-Bandawi. He said, "Hence, successive governments, following this agreement, have expressed the need for training forces during the previous period, which witnessed security threats and terrorism."
"However, thanks to the efforts of all Iraqi forces, including the Popular Mobilization Forces (PMF), the Peshmerga, the Interior Ministry, the Defense Ministry, and the Counterterrorism Apparatus, all Iraqi territories have been liberated from ISIS. Therefore, the government sought another way to reduce the size of foreign presence in Iraq."
He clarified, "The government is committed to resolving this issue and has formed a high-level technical security committee to study the withdrawal of the remaining foreign forces from Iraqi territory while maintaining diplomatic and economic relations. The Security and Defense Committee also met with the Commander-in-Chief of the Armed Forces and political forces to discuss this matter."
Moreover, according to Al-Bandawi, the Parliament supports the government's direction on this issue, having emphasized on multiple occasions the necessity to end the mission of the Coalition in Iraq, advocating for a multifaceted relation encompassing economic, political, and other aspects.
Addressing concerns about the possibility of mutual targeting until withdrawal, he noted, "The political forces and armed factions, most of which are part of the government, have announced halting their attacks and allowing the government to negotiate the termination of the Coalition's presence. The latter will be more disciplined until its expected withdrawal within a year, based on criteria, foremost among them being the improvement of the security situation in Iraq."
THE FUTURE OF THE RELATIONSHIP
On the other hand, retired Brig. Gen. Dr. Emad Alou, a researcher in strategic and military affairs, pointed out the distinction between US forces and the termination of the mission of the Global Coalition, which includes more than 60 countries. This Coalition was established at the request of the Iraqi government and authorized by the United Nations.
Alou explained to Shafaq News Agency, "As for scheduling the end of the Coalition's mission, this is the concern of committees that emerged from bilateral talks between Iraq and the US military technical delegation. These committees have not reached a clear result so far, and their outcomes have not been announced. The discussions are still ongoing, but three committees emerged from this bilateral meeting."
He continued, "On the other hand, both Iraq and the US are keen to ensure that the future of their relationship is built on cooperation and mutual respect, as outlined in the previous Strategic Framework Agreement. This includes areas such as industry, agriculture, scientific cooperation, cultural exchange, and visits."
Furthermore, he elaborated, "There is also a security aspect to this agreement, and its development or transition to a new phase is necessitated by the Strategic Framework Agreement, which has been in place for about ten years. Therefore, reviewing it to determine the positive direction of the relationship between Iraq and the US has become necessary. Both parties are keen on this."
THE IMPORTANCE OF THE GLOBAL COALITION'S PRESENCE
The presence of the Global Coalition yields political, economic, and security returns. Iraq is required to engage with international politics and the international security system in the region, where the Coalition forces are stationed, especially considering Iraq's strategic location in the region.
Iraq possesses resources and capabilities that could enable the Coalition forces to transition from a security relation to an economic and investment one, according to Dr. Mu'taz Al-Najim, an international relations professor.
Al-Najm emphasized to Shafaq News Agency, "Iraq needs such economic or political relations. The Global Coalition acknowledges that the US is the guarantor of the Iraqi economy, as Iraq's economic resources and oil revenues go to the Federal Reserve."
He noted that "the US is a superpower, and there is no better strategic partner for Iraq than the US. Therefore, it is in the national interest to solidify the relation with it, but to define its nature rather than have ambiguous and unclear relations, which would lead to behaviors differing from statements."
There was a clear indication of the strategic nature of the relationship when Al-Sudani mentioned at a recent Munich conference that there is a strong, long-standing relationship and a strategic partnership with the US.
Al-Najim asserted that "this should continue to ensure political gains, especially as the country is still internally fragmented and requires an official sponsor and real support at the regional and international levels to secure Iraq's interests and its leading position."
He added, "Therefore, the US is the best ally Iraq can rely on and benefit from by defining the nature of the relation and dealing with it. Although the Coalition forces are there for security reasons, the stronger the security, the more attractive the political and economic policies become. Conversely, as security weakens, so does the economy."
Furthermore, "security is the foundation of everything and peace cannot continue without it as security is the essential element for attracting politics, economics, stability, and the process of achieving sustainable development."
However, in recent times, there have been emerging issues, such as assassinations, which Dr. Al-Najim considered as dangerous indicators. He believed that "individual assassinations are more dangerous than missiles and drones because they are ambiguous and involve internal parties. This problem could escalate, especially considering the quality of the targeted individuals, who may be affiliated with factions with armed wings and political representation."
He pointed out that "these assassinations could be a dangerous start to undermining internal security and stability. They are messages to Al-Sudani, indicating the importance of dealing with these challenges that could return the country to internal conflicts and become the first stage of internal fighting, especially since some factions and tribes possess medium and heavy weapons."
Regarding the repercussions of the withdrawal of the Global Coalition, he explained that "the problem in Iraq lies in the absence of strong intelligence. Therefore, if Iraq can benefit from the Coalition's capabilities by activating the intelligence aspect to provide Iraqi security forces with information about those who carry out attacks and assassinations, given their complete control over the airspace, Iraq lacks strong intelligence efforts, air defense forces, or sensory devices for some crimes that may occur."
He asserted that "Baghdad needs to define the nature of its relation with Washington and be a partner to the Global Coalition forces, a genuine strategic partnership based on high Iraqi national interests. Al-Sudani realizes the importance of the Coalition's presence and the United States. Still, Iraqi practices in forming committees are to alleviate the pressure exerted on Al-Sudani by some entities, emphasizing the necessity of expelling the US and the Coalition from Iraq."
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