Sudanese: General Budget Law No. 13 for the years 2023-2024-2025 has become effective
Prime Minister Muhammad Shiaa Al-Sudani confirmed that the General Budget Law No. 13 for the years 2023-2024-2025, which was approved by Parliament and published in the Official Gazette last June, has become effective.
Al-Sudani pointed out in a press conference today, attended by the National Iraqi News Agency ( NINA ), that “Article 77, paragraph one, makes the provisions of the law effective for a period of 3 years, and paragraph two, obliges the Council of Ministers to send the budget tables to the House of Representatives.”
Al-Sudani continued: The government will send tables A, B, and C. D.W.
The video for this My FX Buddies blogpost is below:
Sudanese announces details of budget schedules... expenditures and deficit
Prime Minister Muhammad Shiaa Al-Sudani:
We continue to communicate with the media to inform our people of everything related to government performance
- Iraq witnessed for the first time the approval of a budget covering three years
- The Council of Ministers is in the process of sending the 2024 budget to the House of Representatives, which consists of tables
- Table (A): Revenues amounted to 144 trillion and 336 billion dinars
- Table (B): Expenditures amounted to 210 trillion and 936 billion dinars
The deficit table reached 63 trillion and 599 billion dinars
- Table (D): Governing expenditures 10 trillion and 42 billion dinars
The investment budget reaches 55 trillion dinars
- The total investment allocation to the governorates and the Regional Development Fund for the 2023 budget reached 10 trillion and 633 billion.
- The remainder of the governorates’ allocations, 7 trillion and 330 billion, are in trust accounts and at the disposal of local governments and are available to finance projects.
- In the governorates’ accounts within the emergency security allocations, 11 trillion and 264 billion dinars were disbursed, and 38%, approximately 4 trillion and 2 billion dinars, were disbursed, and the rest was 7 trillion dinars.
During the year 2024, the governorates can spend 14 trillion and 492 billion dinars, the total remaining food security funds.
- Allocating more than two trillion dinars to the governorates, guaranteed in a trust account
- The 2023 budget amounted to 199 trillion, and the 2024 budget amounted to 211 trillion.
- Employee salaries for the year 2023 were more than 59 trillion, and for the year 2024 they amounted to more than 62 trillion.
The deficit in all budgets is planned and not real
- $3 billion Iraq lost on improved gasoline
Trade announces the opening of the new Iraqi Commercial Attaché headquarters in Washington
The Ministry of Commerce opened the headquarters of its new commercial attaché in the United States of America.
A statement by the Ministry’s Media Office quoted the Director General of the Department of Foreign Economic Relations, Riyad Fakher Al-Hashimi, as saying, “The Iraqi Ambassador to Washington, Nizar Al-Khair Allah, opened the new headquarters of the Commercial Attaché in Washington, after the headquarters had been in the Iraqi embassy building since 2014.”
The statement indicated that "the opening of a new headquarters for the commercial attaché comes within a set of steps taken by the ministry to strengthen the work of the commercial attachés to be able to strengthen Iraq's economic and trade relations in their field of work, under the direct supervision and support of the Minister of Commerce, Atheer Daoud Al-Ghurairi.
Release of the full-time employee’s accumulated salary for 3 years
Today, Sunday, the Ministry of Labor and Social Affairs announced the release of the full-time employee’s accumulated salary benefits for three years .
The Ministry stated in a statement, received by Mail, that it “announces the release of the full-time employee’s accumulated salary entitlements for the various months for the years 2019-2020-2021 .”
The head of the Authority for People with Disabilities and Special Needs, Dhikra Abdel Rahim, said, “The Authority has completed the technical, financial, and administrative procedures for more than (8,894) thousand beneficiaries to release their financial dues, with a total amount of (12) billion and (712) million,” noting that “the disbursement will be electronic via Through MasterCard cards .
Abdul Rahim called on the beneficiaries, male and female, to “go to the outlets approved by the banks of (Al-Rafidain, Al-Rashid, and Assyria) to receive their dues after completing the procedures and notifying them from the banks,” according to what was stated in the statement .
Ki: Rafidain Bank played a fundamental role in achieving financial inclusion and the transition from a monetary to a cashless system
Ali Hussein Moneim, Managing Director of Qi Card International, confirmed today, Saturday, that Rafidain Bank played a fundamental role in achieving financial inclusion and the transition from a cash to a cashless society.
Moneim said at the 83rd founding ceremony of Al-Rafidain Bank, attended by (Al-Rabaa), that “Key International Company is proud to be part of the success of Al-Rafidain Bank,” pointing out that “Al-Rafidain Bank played a fundamental role in achieving financial inclusion and the transition from a cash to a cashless society.”
He added, "Ki International Company worked to provide smooth financial procedures and provide a smart application that is considered one of the largest applications in the Arab world and North Africa."...
The United Nations Development Program approves the electronic payment services system in Iraq
The United Nations Development Program (UNDP) approved, today, Saturday, the electronic payment services system in Iraq.
The United Nations Development Program (UNDP) said in a statement: “We are pleased to announce the official approval of the electronic payment services system, which was achieved through joint efforts between the Central Bank of Iraq and the Economic Reform Support Project of the United Nations Development Programme, and with generous support from the United States Agency for Development.” International".
He added, "This important achievement - which was officially approved and published in the Iraqi Gazette on April 29, 2024 - confirms the pivotal progress in the financial sector in Iraq."
He explained, “Approving the electronic payment services system is an essential step towards modernizing the country’s financial infrastructure, stimulating digital transformation and promoting economic development.
Adjourning the session to elect the Speaker of Parliament until further notice
#Urgent | After a fight inside the Council.. Al-Mandalawi adjourns the Parliament session until further notice
The Council’s Media Department stated, in a statement, a copy of which was received by {Al-Furat News}, that: “The House of Representatives adjourns the session to elect its speaker until further notice.”
It is noteworthy that a quarrel and fistfight occurred between representatives Muthanna Al-Samarrai and Haibat Al-Halbousi inside the House of Representatives hall during the third round of electing the president, creating massive chaos, which prompted the postponement of the decision-making session until further notice.
Parliamentary sources confirmed {to Al-Furat News} the House of Representatives' intention to go to a third round today to complete the vote on the Speaker of Parliament.
Salem Al-Issawi received 158 votes, while Mahmoud Al-Mashhadani received 137 votes, and Amer Abdul-Jabbar received 3 votes, according to the results of the second round election for the candidate for the presidency of Parliament, while the invalid papers amounted to 13 papers.
Iraqi Parliament adjourns amid chaos: Failure to elect Speaker leads to physical altercations
As speculated, and in a recurring scenario, the Iraqi Parliament adjourned its session on Saturday evening to an unspecified date after failing to reach a decisive third round in the election of its president.
The competition remained intense between the Siyada bloc’s Salem Al-Issawi and the Taqadum Bloc-backed Mahmoud Al-Mashhadani.
The scene did not differ much from January 3, 2024, as leaked by MPs about today's session, marked by verbal altercations, and physical scuffles, reminiscent of events witnessed and reported five months ago, orchestrated by members of the Taqadum Party under the leadership of Mohammed Al-Halbousi.
MPs' smartphones captured heated verbal exchanges and physical confrontations between members of the Taqadum Party and colleagues from other blocs over the election of the parliament's president.
Mishaan al-Jubouri, a leader in the Siyada Party, posted on the X, " When the quorum reached 190 deputies, Taqadum’s MPs set up a barrier between the seats and the presidency platform."
Al-Jubouri added that "MP Haibat Al-Halbousi from Taqadum assaulted Muthanna Al-Samarrai, the head of the Azm bloc, prompting MP Ahmed al-Jubouri to strike Haibat."
This incident highlights the tensions and physical confrontations that marred the proceedings during the parliament's session.
Prior to this, MPs from Taqadum demanded amendments to the parliament's internal regulations before proceeding with the voting round, fearing Salem Al-Issawi's potential victory in the third round, according to a parliamentary source.
While the quorum was complete, several Taqadum MPs opposed proceeding with the vote unless the internal regulations of the parliament were amended.
These demands led to chaos inside the council, escalating later into physical brawls and verbal abuse between MPs from the Taqadum Party and others from different blocs, as shown in leaked footage.
Yet again, the Iraqi Parliament failed to elect a new president in its second round of voting, which saw intense competition between Al-Issawii and Al-Mashhadani. The former garnered 158 votes while the latter received 137 votes.
Against the backdrop of this vote convergence, a state of division prevailed among political blocs. The Siyada and Al-Azm, alongside others aligned with them, as well as MPs supporting Salem Al-Issawi, insisted on continuing the session and initiating a third round to elect a new parliament president.
However, other blocs, including the State of Law, Taqadum, and Al-Sadara, supporting Mahmoud Al-Mashhadani for the parliament presidency, pushed for postponing the session to a later date, according to a parliamentary source.
Notably, on November 14, 2023, the Federal Supreme Court, the highest judicial authority in Iraq, decided to end the membership of Parliament Speaker Mohammed al-Halbousi. Then, the Iraqi Parliament officially terminated his membership on November 21, 2023.
On January 13, the Iraqi Parliament held an extraordinary session to choose the new Speaker. However, due to verbal altercations inside the council hall, the session was adjourned without completing the election process.
Nearly half a year after the dismissal of Al-Halbousi, the parliamentary council has again failed, for the fifth time, to settle the issue, thereby stalling the enactment of crucial legislation.
Iran confirms negotiations with the United States: it will not be the last
On Saturday evening (May 18, 2024), the Iranian official agency “IRNA” quoted Iran’s representative to the United Nations, Saeed Irani, as saying that Tehran held indirect negotiations with the United States in the Sultanate of Oman last week.
When asked about the existence of indirect negotiations between Iran and the United States in Oman, Irani said, "Yes, negotiations took place, and these negotiations are an ongoing process. They were not the first and will not be the last."
The American website Axios reported, citing informed sources, that two senior officials in President Joe Biden's administration held an indirect conversation with Iranian officials last week in Amman.
American media continued that earlier, in January 2024, similar negotiations took place in Amman. This round of talks was attended by Brett McGurk, Joe Biden's senior advisor in the Middle East, and Abram Paley, the acting US representative for Iran.
Axios quoted two of its sources as saying that McGurk and Bali arrived in Oman last Tuesday and met with mediators in the capital, Muscat. It is not known who participated in these negotiations on behalf of Iran.
American media, citing its sources, claimed that the talks focused on Iran's activities, resistance factions in the region, and US concerns about the Iranian nuclear program.
Floating the dinar... Will it achieve monetary stability in Iraq?
link more citizen education
The stability of the Iraqi dinar in recent years has always faced major challenges, as it witnesses price fluctuations, not to mention a gap between what the central bank determines and what is sold in the parallel market.
In order to avoid the “volatility” syndrome and the “gap” in the price of the Iraqi dinar against foreign currencies, some experts believe that the solution lies in a kind of “surgical” operation for the country’s monetary system that may be painful, but it achieves long-term monetary stability for the national currency through... "float".
The cash selling price, according to the Central Bank, is 1,305 dinars per dollar, while the price for transfers abroad is 1,310 dinars per dollar, and the price in the parallel market is about 1,450 dinars per dollar in mid-May, according to local media , while it reached levels of 1,600 dinars per dollar in previous periods.
For months, the Iraqi authorities have been imposing restrictions in their efforts to control exchange rates, restricting all commercial transactions within the country to the Iraqi dinar, and establishing a new mechanism that subjects external transfers to greater scrutiny.
Iraqi economic analysts who spoke to Al-Hurra website, some of them warned against taking a decision that would lead to floating the dinar, while some of them believe that a moderate policy could be taken that suits the Iraqi economy, based on “floating” and “stabilization” at the same time.
Is the flotation policy compatible with the Iraqi economy?
Advisor to the Prime Minister for Financial Affairs, Mazhar Salih, believes that floating the currency price does not suit the Iraqi economy, especially since it is a "rentier economy, dominated by foreign currency reserves."
He explains in statements to the “Al-Hurra” website that “the economic vision that wants to float the Iraqi dinar to end the gap between the official price and the parallel price may be possible in an economy in which the free market alone influences the movement of the balance of payments, and not in an economy in which the rentier government sector is dominant and generates reserves.” Foreign currency".
He added, "The monetary authority in Iraq alone is the main source of supply of foreign currency that meets the desired demand for foreign exchange in the local market."
Saleh believes that the demands for flotation inevitably mean “adopting the prevailing exchange rate in the parallel market, in order to achieve the goal of stability and balance in the official exchange rate itself at a new exchange point that the market will reach at the end of the assumed flotation policy and return to stability again.”
The flotation scenario also means “the withdrawal of the monetary authority as the main central offerer of foreign currency, and its replacement by new forces of free market makers, which certainly have only a weak, limited supply of foreign exchange,” according to Saleh.
He points out that these forces carry “an uncontrolled package of inflationary expectations, and are called in the economic literature (the forces generating inflationary expectations), which will give dominance to the supply forces of speculators” who own limited amounts of foreign exchange, matched by “an open demand for foreign currency from The market side" exceeds what is offered by "at least more than ten times in our estimate."
Chancellor Saleh described this policy as “unruly,” as as long as “the central government supply of foreign currency will be absent from the market, we will not obtain any equilibrium point in the exchange rate that flotation seeks except with a widespread deterioration of the exchange rate as long as it is carried out by forces generating inflationary expectations in a severe rentier economy.” "unilateralism."
He warns that if the exchange rate moves in “a market that is incomplete, in terms of productivity, in its compensation for the required supply of goods and services,” no one “will know how much the new exchange rate resulting from the flotation will be,” which will be accompanied by “a prior wave of inflationary expectations,” the trends of which are difficult to control. , which may push monetary policy makers to “intervene with excessive foreign reserves and unjustified extravagance in foreign exchange to impose a state of stability.”
According to the World Bank, Iraq has 145 billion barrels of proven oil reserves, which are among the largest crude oil reserves in the world.
But Iraq hopes that the country's oil reserves will exceed 160 billion barrels, according to what the Minister of Oil, Hayyan Abdul Ghani, recently announced.
What if the Iraqi dinar was floated?
The claims that have appeared every now and then for years calling for floating the exchange rate of the Iraqi dinar are “strange,” and most of them are made by people who are “not specialized in economics or monetary policy,” according to what Professor of International Economic Relations, Abdul Rahman al-Mashhadani, confirms to the Al-Hurra website.
He asserts in a decisive tone, "Iraq cannot proceed with floating the dinar's exchange rate. The evidence for this is all the agreements concluded with the International Monetary Fund since 2004, and the reviews praised the stabilization of the exchange rate by the Central Bank of Iraq."
Al-Mashhadani added that there was a study by experts at the World Bank during the past years that recommended “raising the exchange rate,” noting that even then, “these recommendations cannot be taken into account because the World Bank is concerned with what is related to economic development, but following up on the recommendations for monetary policies is taken into account if It was from the International Monetary Fund.
In its latest review on Thursday, the International Monetary Fund praised the efforts of the Central Bank of Iraq to tighten monetary policy and strengthen its liquidity management framework.
He explains that “the real gap is in the wheel of production in the Iraqi economy, as the majority of goods are imported from abroad, which means that the flotation will cause a spiral in price rates to become significantly high and affect the marginalized classes,” indicating that such a decision cannot be taken “as a matter of politics.” “Cash” only, as we must “consider the burdens it will impose on citizens.”
Al-Mashhadani confirms that what has been applied in other Arab countries does not “mean that it can be applied to the Iraqi economy,” suggesting that “the exchange rate will become at the levels of 5,000 dinars to the dollar,” as “the Central Bank has lost control of exchange rates, leaving them to float.”
There is a fear that “floating” will cause “social” problems, as “salaries will erode significantly,” which may threaten “new classes to slide into poverty,” while “a class of merchants, politicians, and businessmen will benefit, who will benefit from the state of instability that will result from... This matter".
Al-Mashhadani agrees that floating in the end means “that the parallel market will control exchange rates,” but it will not achieve “the desired monetary stability,” as the central bank will then need to “print more local currency to keep up with demand in the markets,” and the government will need to increase salaries and allocations for aid packages. Social.
The economic expert, Manar Al-Obaidi, recommends following a “currency float” policy, but with controls such that “a managed float policy is used to gradually liberalize the currency until a complete liberalization of the exchange rate is reached.”
He said in a post on his Facebook account, "Such a policy could be a successful alternative in Iraq by following a managed float policy where the central bank controls the range of volatility and works to gradually increase it until the currency is completely liberalized."
Al-Obaidi gave the example of “the managed flotation policy followed by Morocco in 2018,” noting that it was accompanied by the abolition of customs tariffs on basic materials and “supporting funds for vulnerable classes,” stressing that this experience can be used to influence “inflation.”
Reasons for the exchange rate “gap”.
The Iraqi government advisor, Saleh, attributes the reason and existence of a “gap” in the dinar’s exchange rates against the dollar between the official and parallel markets to “external factors imposed by the compliance platform and auditing administrative restrictions on external transfer movements, which is not related to the deficit in the authority’s monetary reserves,” noting that the reserve Iraq's foreign currency is considered the highest in the country's history, as it touches the levels of import coverage for 16 months, compared to the global standard, which does not exceed three months of import coverage.
Financial transfers in dollars through official channels have increased significantly in Iraq, while Iraq continues its reforms of the financial sector in line with international standards, according to a previous report by Agence France-Presse.
In late 2022, the Iraqi banking sector adopted the SWIFT electronic transfer system with the aim of providing better control over the use of the dollar, ensuring compliance with US sanctions on Tehran, and also in order to limit the prosperity of the informal economy.
The financial standards that were adopted encouraged the emergence of a parallel market for currencies, attracting those seeking to obtain dollars outside official channels.
Saleh pointed out that there is a distortion in support for the prices of some commodities “on the part of financial policy, which is support in which the rich and poor mostly enjoy it equally without discrimination, and it represents an added, imperceptible real income, and it is the product of a financial policy inherited from the consumer welfare state for the rentier resource.”
He continued, "It is inconceivable until this moment that 90 percent of Iraq's population is receiving support for food supplies provided by the state as an extension of the economic blockade phase of the 1990s in light of the changing standards of living and lifestyle, the increasing number of affluent people, and the growth of the middle class."
In mid-May, the Iraqi authorities announced the purchase of 1.5 million tons of wheat since the beginning of the year.
According to the Ministry of Agriculture, Iraq, with a population exceeding 43 million people, needs between 4.5 million and five million tons of wheat annually.
The International Monetary Fund said Thursday that Iraq's internal imbalances have been exacerbated by significant fiscal expansion and low oil prices.
The Fund added that Iraq needs to gradually correct public financial conditions in Iraq to achieve debt stability in the medium term and rebuild financial reserves.
To ensure compliance with US standards regarding money laundering and sanctions on Iran, about 20 Iraqi banks were prevented from making dollar transfers.
Last September, the Iraqi government decided that merchants who deal with Iran are forced to turn to the parallel market to obtain currency, given that Tehran is subject to sanctions and “is not allowed to conduct financial transfers,” according to Agence France-Presse.
A positive step for the "economy" but!!
The Iraqi economic academic, Nabil Al-Marsoumi, believes that the solution to addressing the discrepancy in the currency exchange rate through “free floating of the Iraqi dinar” may have “some economic positives.”
He added in an interview with Al-Hurra website that "the economy should not be taken in its abstract aspect, but rather insofar as it relates to people, especially the poor among them."
Al-Marsoumi warns that "the Iraqi dinar may witness a violent collapse and rampant inflation that will cause prices in the Iraqi market to rise to record levels that will harm citizens, especially the low-income classes."
He explains that Iraq lacks "a national private sector that could contribute to increasing the supply of dollars in the local market, and because of the large volume of imports, which reach 67 billion dollars annually, the government is the only party that owns the dollar."
He notes that "if the government decides not to intervene in the exchange market, we are expected to witness consequences that will cause severe damage to citizens' living standards, making the poor even more miserable, and may lead to social tensions and a major rift in the social peace."
For his part, the economic expert Al-Obaidi defined the primary goal of liberalizing the currency as “creating an economy capable of withstanding various economic shocks, and reducing reliance on reserves that are greatly depleted in order to maintain a fixed exchange rate, which could stop once the reserves run out.” .
He added that this also "contributes to supporting the domestic product and changing the consumption pattern, and thus reducing the import bill for Iraq, which rises annually as an indirect reason as a result of the attempt to maintain a fixed exchange rate."
Not to mention, “continuing to try to maintain a fixed exchange rate depletes reserves,” which will lead at a certain stage, “accompanied by a decrease in reserves, followed by either a complete liberalization of the currency or a significant reduction in the price rate, which will have major repercussions on the citizen, and will cause great confusion in "A market that already suffers from a lack of economic stability."
What is the alternative to floating the currency?
The Iraqi economic expert, Mahmoud Dagher, confirms to Al-Hurra website that the solution for Iraq may be a system “between floating and stabilization” to help stabilize currency exchange rates.
Expert Dagher, a former official at the Central Bank of Iraq, explains that "the origin of the exchange system is floating, which is what free countries adopt."
He explains that "the continuity of the gap requires reaching a middle system that solves the problem between free floating and stabilization. This is a system that many developing countries follow, and it helps solve the problems of currency fluctuation."
Financial expert Saleh proposes alternatives to floating, in a way that serves the objectives of monetary policy and limits inflationary risks, through the use of financial tools such as “taxes and customs duties that act as an intermediary to influence the exchange rate to achieve balance and price stability.”
He added, "Instead of resorting to lowering the exchange rate to harmonize the market through flotation, it would be through amending customs tariff schedules and imposing careful, thoughtful controls to protect the national economy."
Saleh called for correcting the defect in the structure of the Iraqi economy as a whole, as it is not possible to continue with “high operating spending in annual public budgets, which has always generated cash income from rentier sources that are matched only by very limited productivity of commodity and service flows, which has made the country It relies mainly on large-scale imported consumer goods.”
Counselor Saleh revealed, on Thursday, that the loans provided by the International Monetary Fund to Iraq since 2003 totaled no more than $8 billion, confirming that they had been paid in full, according to a report published by the “ INA ” agency.
Last March, the International Monetary Fund stressed “the Iraqi economy’s need for broad structural measures to enhance private sector development and economic diversification, and to raise growth rates in the non-oil sector in a sustainable manner to accommodate the rapidly increasing workforce, and to increase non-oil exports and government revenues, in addition to Reducing the economy's exposure to oil price shocks.
He called for "accelerating the pace of reforms in the financial sector to improve access to financing, by modernizing the banking sector and supporting the ability of banks to establish banking relationships with other banks, and taking steps aimed at merging small-sized private banks," not to mention the need "to restructure the two largest government banks." ".
The Governor of the Central Bank, Ali Al-Alaq, announced in statements in early May that “the banking sector is witnessing major qualitative developments, while calling for cooperation and coordination between Arab central banks, banks and non-banking financial institutions to achieve stability and economic growth,” according to the “ Inaa ” agency.
He continued, "Central banks face new challenges in the interaction between financial and monetary stability, in light of the dominance of general financial policy and the necessity of central banks to facilitate excessive government debts, according to financial control, which requires reducing spending or increasing domestic revenues, or both."
Iraq has begun to recover relatively after years of wars, occupation, and sectarian violence that followed the US-led invasion in 2003, according to an Agence France-Presse report.
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Al-Sudani will visit Doha tomorrow to participate in the World Security Forum
A political source reported today, Sunday (May 19, 2024), the visit of Prime Minister Muhammad Shiaa Al-Sudani to the Qatari capital, Doha.
The source told "Baghdad Al-Youm", "Prime Minister Muhammad Shiaa Al-Sudani will head tomorrow, Monday, to the Qatari capital, Doha."
He added, "The reason for the visit is to participate in the 2024 World Security Forum."
The activities of the Global Security Forum will begin tomorrow in Doha, and will continue until the 22nd of this month with broad participation from officials, decision makers and policy makers.
The forum witnesses in-depth discussions on many sensitive issues related to global security, with the aim of addressing and discussing the challenges and opportunities posed by the interconnected world.
Next month... a major conference to announce 8 cities as investment opportunities
Director of the Authority, Hamed Abdel Hamad, said in a press statement that “the procedures have been completed to reveal 8 new cities as investment opportunities within the second group of residential cities in the government program for housing, in addition to working to complete the procedures to announce three other cities soon,” pointing out that “The cities will be available for investment to Arab and international companies, and local investors wishing to invest in this vital sector.”
Hamad explained that: “The beginning of next month will witness the holding of a large conference to announce investment opportunities, in the presence of international, Arab and Gulf companies,” noting that “the Authority’s headquarters witnessed the visit of dozens of companies to review investment opportunities in these cities, and we sensed a real desire to invest in this sector.”
The Director of the Authority added . He said, "Five new cities had previously been assigned, including {Ali al-Wardi} with the signing of the initial contract, while work began after the issuance of the investment permit in the cities of {Al-Jawahiri} in Baghdad and {Al-Ghazlani} in Nineveh," pointing out that "the Chinese and Iraqi implementing companies have begun erecting the monument." Concrete factory units, administrative buildings, and soil leveling works in Al-Ghazlani, with the actual commencement of them within the next three months.”
He stated, “The other city is {the banks of Karbala}, which is distributed among three investors with experience and previous similar work, including a Malaysian company, and it is in the process of issuing Investment license and starting work next month after handing over the site. As for {the gardens} in Babylon, it is in the process of preparing plans, handing over the land, and issuing the license.
Regarding construction operations, he explained that “it has been directed that all cities be at the level of smart and sustainable cities with all their details of transactions.” Electronic and the use of technology in the daily movement of residents.
Regarding the marketing of residential units in new cities, he said: “Directives will be issued to investing companies to announce unit prices through their websites, so that citizens can enter and register directly,” calling on citizens to “stay away from fictitious entities that claim to be connected to new cities and promote unrealistic matters regarding prices.” Or marketing residential units, and citizens can view the Authority’s website to answer all their inquiries and questions, or go to the company directly instead of taking other methods that may not lead to the same purpose.”
KRG expands 'MyAccount' salary disbursement project
According to the MyAccount Project team, over 400,000 employees from various Kurdistan Regional Government (KRG) institutions have participated in the project, with 200,000 of them having received their bank cards.
On Monday, over 5,000 employees in the Kurdistan Region are scheduled to receive their April salaries through the "MyAccount" project, marking a significant expansion on the number of employees who previously received their payments via the same method.
Aziz Ahmed, Deputy Chief of Staff to the Kurdistan Region's Prime Minister, confirmed that 500 employees received their April salaries on Sunday through the "MyAccount" initiative.
Currently, there are 231 automated teller machines (ATMs) available across the Kurdistan Region.
The regional government aims to increase this number to approximately 1,000 by the end of 2024.
Project Milestones and Statistics
According to the MyAccount Project team, over 400,000 employees from various Kurdistan Regional Government (KRG) institutions have participated in the project, with 200,000 of them having received their bank cards.
The Ministry of Finance and Economy of the Kurdistan Regional Government reports that the total number of employees in the region is 1,114,194, with a combined monthly salary estimated at approximately 913 billion dinars.
The 'MyAccount' Initiative
Launched by Prime Minister Masrour Barzani on February 28, 2023, the "MyAccount" initiative is a key component of the ninth ministerial formation’s strategy for the electronic transformation of public services. The project aims to enhance citizen prosperity and facilitate business operations through several key benefits:
For Citizens:
- Ensures timely and secure salary disbursements.
- Reduces the risk of theft and long queues for salary collection.
For Financial Products:
- Allows earning additional income by investing idle money into savings or financing personal expenses through soft loans.
- Enhances financial literacy among citizens.
For Digital Payments:
- Facilitates online purchases and money transfers via bank cards and mobile applications.
- Enables receiving international transfers without the need for banking and transfer offices.
For the Kurdistan Region’s Economy:
- Increases local production through greater citizen participation in the banking sector.
- Raises consumer spending due to higher individual loan rates.
- Creates job opportunities in the banking sector.
- Reduces dependence on cash transactions and improves government performance and transparency.
Future Projections
During a special meeting at the Fourth Middle East Peace and Security Forum, hosted by the American University of Duhok on November 19, 2023, Prime Minister Masrour Barzani predicted that over one million government employees would register for the "MyAccount" project by the end of 2024.
Participating Banks
So far, seven banks are participating in the "MyAccount" project:
- Bank of Beirut and Arab Countries (BBAC)
- Cihan Bank
- RT Bank
- National Bank of Iraq (NBI)
- Bank of Baghdad
- Iraqi Islamic Bank
- Trade Bank of Iraq (TBI)
The continued rollout of the "MyAccount" initiative represents a significant step towards modernizing financial transactions and enhancing economic stability within the Kurdistan Region.
The Central Bank of Iraq strengthens the banking sector with specialized courses
The Center for Banking Studies at the Central Bank of Iraq, in cooperation with the German Organization for International Cooperation (GIZ) and the project to strengthen public financial management and financial markets in Iraq (FFM), held a celebration on the occasion of the launch of the specialized certificate program accredited by the University of Frankfurt and funded by the European Union and the German government.
The program, which targets banking sector employees to develop their practical capabilities, includes several certificates, including a certified credit analyst and a risk management expert.
The Director of the Center for Banking Studies at the Central Bank of Iraq, Dr. Haider Hussein Ahmed, on the sidelines of the celebration, said that the bank, in partnership with the relevant authorities, seeks to provide the best training programs for banking sector employees to raise and develop their practical capabilities and keep pace with technological and cognitive progress.
It is noteworthy that the training program for specialized certificates will begin in June 2024 and end in October of the same year.Central Bank of Iraq
Information Office
May 19, 2024
Paying off external debt is a step to promote stability and recovery
Experts in the field of economics expressed their confidence in the economic and financial reform steps undertaken by the current government under the direct supervision and guidance of Prime Minister Muhammad Shiaa Al-Sudani, and while they pointed out that Iraq’s payment of its foreign debts is a supportive step for financial and economic stability and moving towards recovery, they called for Accelerating the steps to move away from the framework of the “mono-rentier economy” towards a multi-resource economy.
The head of the “Osoul” Foundation for Economic and Sustainable Development, Khaled Al-Jabri, said in an interview with “Al-Sabah”: “Iraq’s payment of all its debts to the International Monetary Fund is a positive step towards enhancing economic stability and improving the country’s financial situation,” indicating that “this achievement has implications.” “There are multiple impacts on the Iraqi economy, in terms of improving the credit rating, as repaying debt enhances Iraq’s credit rating, which may reduce borrowing costs in the future, and it also reflects the country’s ability to fulfill its financial obligations, which increases the confidence of international lenders and investors.”
He added, “Enhancing international confidence confirms Iraq’s commitment to financial and economic reforms and can attract more foreign investments, as investors see that the financial environment has become more stable, and that the financial resources (money) that were used to repay debts can now be allocated to development projects.” And infrastructure, and can contribute to improving public services and increasing spending on health and education.”
Today, Thursday, the Advisor to the Prime Minister for Financial Affairs, Mazhar Muhammad Salih, announced that Iraq has fully repaid all loans provided by the International Monetary Fund since 2003, noting that their total did not exceed 8 billion dollars.
The head of the Al-Sharq Center for Strategic Studies and Information, Ali Mahdi Al-Araji, explained in an interview with “Al-Sabah” that “Iraq’s total debt amounts to about 70 billion dollars, divided into an internal debt worth 50 billion dollars scheduled between the Iraqi banking system and the three government banks (Al-Rasheed, Al-Rafidain, and Al-Basra). Iraqi Trade), and the other part is an external debt amounting to 20 billion dollars, meaning that in total it constitutes only 35 percent of the country’s gross domestic product.
He explained, “Iraq - as it is known - is a rentier country that depends on oil, and this is offset by a significant real exhaustion of the state budget estimated at $42 billion that goes annually between job salaries, retirement, and social care. Perhaps we will face in the future what is called (the Dutch disease), where reliance on... Natural resources and the collapse or decline of the industrial side.
Al-Araji expressed his confidence in “the great efforts of Prime Minister Muhammad Shiaa Al-Sudani to resolve the financial crises in Iraq,” stressing that “we find them to be good steps. There must be a wise administration that controls the country’s cash reserves and seeks to achieve harmony and balance between operational and investment expenses and... Its imports, and repairing the deficit in the trade balance, budget, and payments, to avoid any financial crisis that may afflict the country.”
The Council of Ministers votes on the 2024 budget schedules and refers them to Parliament for approval
The Council of Ministers votes on the schedules of the federal general budget for the year 2024, and refers them to the House of Representatives for approval.
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Media Office of the Prime Minister
19-May-2024
more details will come out later but now they go to the House of Representatives/Parliament
The Council of Ministers votes on the budget schedules for 2024
The Council of Ministers voted, on Sunday, on the schedules of the federal general budget for the year 2024.
The Prime Minister's Media Office said, in a statement, seen by Al-Iqtisad News, that "the Council of Ministers voted on the federal general budget schedules for the year 2024, and referred them to the House of Representatives for approval."
Today, Sunday, the Council of Ministers held an extraordinary session headed by Prime Minister Muhammad Shiaa Al-Sudani.
The Prime Minister's Media Office said in a statement received by the Iraqi News Agency (INA): "The Council of Ministers held an extraordinary session today, headed by Prime Minister Muhammad Shiaa Al-Sudani."
He added, "The session aims to discuss the federal general budget schedules for the year 2024."
some details:
Details of the extraordinary session of the Council of Ministers headed by Al-Sudani, which witnessed the approval of the federal general budget schedules for the year 2024
🔹 The session witnessed the approval of schedules (A, B, C, D, E, and F) and the planned deficit schedule for the year 2024, based on Article (77/Second) of the Federal General Budget Law No. (13) of 2023, for the years (2023-2024). 2025), and refer it to the House of Representatives
The session also included approval to re-announce the investment opportunity to implement the Baghdad Metro project, and the Holy Najaf-Karbala train, for an additional month, to ensure obtaining offers from other companies and entering the competition with the only offer.
🔹The Council agreed to exclude the company executing the project to design and implement the Tajiyat Stadium (60,000 spectators), and the project to construct the fence and gates of the Tajiyat Sports City, from submitting a letter of guarantee for good implementation of the project, according to what was stated in the letter of the Ministry of Youth and Sports, dated May 19, 2024.
Central Bank Governor: Licenses for digital banks and renewable energy initiatives
During the meeting, the strengthening of bilateral relations between the Central Bank of Iraq and the World Bank was discussed, especially the restructuring of government banks and the launch of the Riyada Bank project and its economic and social importance. The two parties also discussed the experiences of neighboring countries in confronting climate change and its impact on the national and regional economy.
The meeting discussed small and medium enterprises and their support by the Central Bank, the development of the financial and banking sector, non-banking financial institutions, financial markets and the insurance sector, as well as benefiting from the World Bank’s experiences in digital transformation, financial inclusion, and digital banks.
During the meeting, His Excellency the Governor reviewed the plan of the Central Bank of Iraq in structuring the banking sector, indicating that this bank has completed the first phase of the plan and has begun the second phase.
His Excellency stated that the Board of Directors of the Central Bank licensed the green bank, which will be the nucleus of renewable energy and sustainable financing initiatives.
Revealing the intention of the Central Bank of Iraq to license a number of digital banks.
Media Office
May 19, 2024
The Governor of the Central Bank announces the start of the second phase of the banking sector restructuring plan
Central Bank Governor, Ali Mohsen Al-Alaq, announced today, Sunday, the start of the second phase of the banking sector restructuring plan.
The media office of the Central Bank of Iraq said in a statement received by the Iraqi News Agency (INA): “Al-Alaq received a delegation from the World Bank headed by the Regional Director for Equitable Growth, Finance and Institutions for the Middle East and North Africa region, Nader Muhammad,” noting that “during the meeting, strengthening relations was discussed.” The bilateral relationship between the Central Bank of Iraq and the World Bank, especially the restructuring of government banks, the launch of the Riyada Bank project and its economic and social importance, and the two parties also discussed the experiences of neighboring countries in confronting climate change and its impact on the national and regional economy.”
He added, "The meeting discussed small and medium enterprises and their support by the Central Bank, and the development of the financial and banking sector, non-banking financial institutions, financial markets and the insurance sector, as well as benefiting from the World Bank's experiences in digital transformation, financial inclusion, and digital banks," noting that "the governor reviewed during the meeting , The Central Bank of Iraq’s plan to restructure the banking sector,” noting that “this bank has completed the first phase of the plan, and has begun the second phase.”
Al-Alaq stated - according to the statement - that “the Board of Directors of the Central Bank licensed the Green Bank, which will be the nucleus of renewable energy and sustainable financing initiatives,” revealing “the Central Bank of Iraq’s intention to license a number of digital banks.”
Details of the extraordinary session of the Council of Ministers and the budget schedules sent to Parliament
The media office of Prime Minister Muhammad Shiaa Al-Sudani revealed, on Sunday, the details of the extraordinary session of the Council of Ministers and the budget schedules sent to Parliament.
The office stated in a statement received by Shafaq News Agency, “Al-Sudani chaired an extraordinary session of the Council of Ministers devoted to discussing the federal general budget schedules for the state ministries and institutions, for the year 2024, within the requirements of the Federal General Budget Law No. 13 of 2023, for the years 2023, 2024, and 2025.”
The session witnessed the approval of schedules (A, B, C, D, E, and F) and the planned deficit schedule for the year 2024, based on Article (77/Second) of the Federal General Budget Law No. (13) of 2023, for the years (2023 - 2024 - 2025). ), and refer it to the House of Representatives.
The session also included approval to re-announce the investment opportunity to implement the Baghdad Metro project, and the Holy Najaf-Karbala train, for an additional month, to ensure obtaining offers from other companies and entering the competition with the only offer.
The Council agreed to exclude the company executing the project to design and implement Al-Tajiyat Stadium (60,000 spectators), and the project to construct the fence and gates of Al-Tajiyat Sports City, from submitting a letter of guarantee for good implementation of the project, according to what was stated in the letter of the Ministry of Youth and Sports, dated May 19, 2024
Official working hours in Iraq will be suspended for 9 days next month - urgent
Baghdad Today publishes a schedule of official holidays for next June, where a holiday is expected to be announced for 9 consecutive days.
As shown below:
Friday, June 14: Weekly holiday.
Saturday, June 15: Weekly holiday.
Sunday, June 16: Day of Arafat.
Monday, June 17: Eid al-Adha.
Tuesday, June 18: Eid al-Adha.
Wednesday, June 19: Eid al-Adha.
Thursday, June 20: Eid al-Adha.
Friday, June 21: Weekly holiday.
Saturday, June 22: Weekly holiday.
US State Department: We are closely monitoring reports of the difficult landing of the Iranian President's helicopter
The US State Department announced on Sunday that it was monitoring reports of a difficult landing for the helicopter carrying Iranian President Ebrahim Raisi and his Foreign Minister Hossein Amir Abdollahian.
Reuters quoted the US State Department as saying: “We are closely monitoring reports of a difficult emergency landing of the helicopter carrying the Iranian president and his foreign minister.”
Iranian media reported that Iranian Supreme Leader Ali Khamenei chaired an emergency meeting of the Iranian Supreme National Security Council, after the accident of Iranian President Ibrahim Raisi’s helicopter.
The Iranian Tasnim International News Agency reported on Sunday that some reports indicated that the helicopter carrying Iranian President Ebrahim Raisi was involved in an accident in East Azerbaijan Province.
Some of the Iranian president’s companions in this helicopter were able to contact the center, and thus hopes are increasing that this incident will end without loss of life, according to Tasnim.
This convoy included 3 helicopters, and two helicopters carrying some ministers and officials arrived safely at their destination.
Information indicates that the Tabriz Friday Imam and Foreign Minister Hossein Amir Abdullahian were on board the helicopter carrying the Iranian president.
Red Crescent rescue teams, military forces, and auxiliary police forces began a large-scale operation to find this helicopter.
Local residents say that the condition of the helicopter is still unknown due to the foggy conditions in the area.
Western sources: The Iranian president and his foreign minister did not survive the helicopter crash (photos + video)
Israeli Channel 12 reported today, Sunday (May 19, 2024), that Western intelligence assessments indicate that the Iranian president did not survive his helicopter crash.
It also quoted Western diplomatic sources as saying: Their estimates indicate that the Iranian president and his foreign minister did not survive the helicopter crash.
The Iranian media published the last picture of President Ebrahim Raisi’s plane before communication with it was cut off, and expected it to crash in the mountains on the border between Iran and Azerbaijan.
While the Syrian journalist Qutaiba Yassin published the last photo of my president, accompanied by Muhammad Ali Al-Hashem (the Friday imam of Tabriz), Hossein Amir Abdollahian (Foreign Minister), Malek Rahmati, the governor of East Azerbaijan, a pilot, a co-pilot, Krochev (the cabin crew assistant), the head of security, and one of them. Of the bodyguards.
This is the last photo taken of the Iranian president’s plane, which was carrying on board the president, his foreign minister, the governor of East Azerbaijan, and the leader of the escort team.
- Qutaiba Yassin (@k7ybnd99) May 19, 2024
The media close to the government were preparing the air to broadcast shocking news that began with a statement to Reuters that their condition was dangerous according to the region in which it occurred. The
Israeli media reported information... pic.twitter. com/JQGKBSRuBC
These are pictures of search and rescue operations, showing how bad the weather conditions are and the onset of night, which makes the task of finding the wreckage of the plane difficult.
Source: X website + Iranian media
Electronic payment: technical solutions to ancient financial problems in Iraq
Electronic payment: a lever to combat corruption and enhance transparency in Iraq
Independent Economic researchers stressed the importance of expanding the culture of electronic payment in Iraq, in order to combat corruption and enhance transparency in various financial transactions.
Advantages of electronic payment:
- Combating corruption: Electronic payment contributes to reducing the use of cash blocks, which reduces opportunities for corruption and bribery.
- Enhancing transparency: Electronic payment processes allow easy tracking of the movement of funds, which enhances transparency in various financial transactions.
- Speed of performance: Electronic payment is much faster than cash transactions, which saves time and effort.
- Ease of use: Electronic payment cards are easy to use and can be easily carried.
- Security: Electronic payment systems provide a high level of security to protect customer information and accounts.
- Reducing costs: Electronic payment contributes to reducing financial transaction costs, such as the costs of printing money, transporting and holding operations.
Challenges:
- Lack of awareness: There are still segments of society that prefer to deal in cash, and face difficulty in using electronic payment systems.
- Weak infrastructure: Some areas in Iraq lack the necessary infrastructure to expand the use of electronic payment systems.
- Lack of trust: Some people suffer from a lack of trust in electronic payment systems, for fear that their data will be stolen or hacked.
Solutions:
- Spreading awareness: The government, financial institutions and the private sector must cooperate to spread awareness about the advantages and benefits of electronic payment.
- Improving infrastructure: The government must work to improve digital infrastructure throughout Iraq, to ensure easy access to electronic payment systems.
- Enhancing trust: Entities responsible for electronic payment systems must enhance trust in them by following the best security and data protection standards.
Government initiatives:
- Agreement between the government electronic communication team and the Pharmacists Syndicate: It was agreed to activate electronic payment in pharmacies, drug stores, and laboratories.
- Deploying point-of-sale (POS) devices: Banks and relevant authorities are working to deploy point-of-sale (POS) devices in many sales centers, to limit the handling of large amounts of cash.
Director of Rafidain Bank: We have great support from the Prime Minister
The Director of the Rafidain Bank, Ali Karim, confirmed today, Sunday, that the bank enjoys great support from the Prime Minister, and we are determined to provide more.
The bank stated in a statement: “The Director General of Al-Rafidain Bank, in his speech during the celebration of the eighty-third anniversary of the founding of Al-Rafidain Bank, said, ‘We feel proud of the achievements that have been achieved, and we are all passionate and determined in our new year to provide more.’”
He added, "We thank our strategic partners in developing the bank's work, Guardia Company in the comprehensive banking system, Crystal Company in the data center, the International Smart Card Company in electronic payment, and Captel Company in the search and investigation system and combating money laundering and terrorist financing for helping them in this success."
He stressed, “We have great support from the Prime Minister, the Governor of the Central Bank, and the Ministry of Finance,” pointing out that “Rafidain Bank faces many challenges, but we are working to turn every challenge into an opportunity for success.
Adviser to the Prime Minister: Iraq's pivotal role provides a supportive climate for Arab economic action
Advisor to the Prime Minister for Financial Affairs, Mazhar Muhammad Saleh, confirmed today, Sunday, that Iraq’s pivotal role provides a supportive climate for joint Arab economic action and the development path project will create true integration between Iraq and the Arab countries.
Saleh told the Iraqi News Agency (INA):
“Iraq today represents a point of balance and stability that is accelerating in its contribution to the development of Arab-Arab relations, and the positive push in Arab relations with the regional neighborhood, which is the philosophy adopted by the Iraqi state in building close and stable relations with all brotherly and friendly countries.”
He added, "Baghdad's embrace of the upcoming Arab summit confirms that Iraq remains the main incubator for joint Arab action and building its strategic depth in strengthening and sustaining ties within the single Arab family."
He continued, "Therefore, the pivotal role in which Iraq plays its positive role in the Arab vital political field today is one of the important ways leading to providing a supportive climate for joint Arab economic action in a way that parallels the successes of joint political action, which allows Iraq to launch polarized sustainable development activities." "For Arab investments through the enormous opportunities available in our country, so that Iraq will be a developmental radiation point within the Arab group, by virtue of the geo-economic location of our country within the Arab political geography itself."
Saleh pointed out, “Iraq began its effective development start with a major national strategy, which is (the development path), which is one of the most important strong foundations leading to real integration within the Arab and Gulf Arab group and Iraq on the one hand, and providing ways of natural expansion that link the economies of the global south to its European north.”
On the other hand".
He concluded his speech by saying: “Based on the above, Iraq will form, with this strategy, the launch of one of the most important axes of joint Arab action in the economic field by virtue of the balance and stability of its foreign policies and their positive openness at all Arab, regional and international levels.”
Release of the full-time employee’s accumulated salary for 3 years
Today, Sunday, the Ministry of Labor and Social Affairs announced the release of the full-time employee’s accumulated salary benefits for three years .
The Ministry stated in a statement, received by Mail, that it “announces the release of the full-time employee’s accumulated salary entitlements for the various months for the years 2019-2020-2021 .”
The head of the Authority for People with Disabilities and Special Needs, Dhikra Abdel Rahim, said, “The Authority has completed the technical, financial, and administrative procedures for more than (8,894) thousand beneficiaries to release their financial dues, with a total amount of (12) billion and (712) million,” noting that “the disbursement will be electronic via Through MasterCard cards .
Abdul Rahim called on the beneficiaries, male and female, to “go to the outlets approved by the banks of (Al-Rafidain, Al-Rashid, and Assyria) to receive their dues after completing the procedures and notifying them from the banks,” according to what was stated in the statement .
Al-Sudani and Al-Mandalawi stress the need for Parliament to approve the budget schedules
The Prime Minister, Mr. Muhammad Shiaa Al-Sudani, received, this Sunday evening, the Acting Speaker of the House of Representatives, Mr. Mohsen Ali Al-Mandalawi.
During the meeting, the integration of work between all authorities in the country was emphasized, and the importance of the House of Representatives supporting the executive work and government programs and priorities, in a way that achieves the general benefit of citizens.
The meeting also discussed the Cabinet’s approval, during its extraordinary session, of the federal general budget schedules for the year 2024, and the need for them to be approved in the House of Representatives. In support of the development approach and infrastructure projects approved by the government program.
this is mostly the same as yesterday's article but this one has pictures hahaha and a few details the other one didn't
An unruly policy or a necessary need? .. Floating the currency between economic benefit and disadvantages
another article about floating the currency? hmmm
The stability of the Iraqi dinar has always faced major challenges in recent years, as it has witnessed price fluctuations, not to mention a gap between what the central bank determines and what is sold in the parallel market.
In order to avoid the “volatility” syndrome and the “gap” in the price of the Iraqi dinar against foreign currencies, some experts believe that the solution lies in a kind of “surgical” operation for the country’s monetary system that may be painful, but it achieves long-term monetary stability for the national currency through... "float".
The cash selling price, according to the Central Bank, is 1,305 dinars per dollar, while the price for transfers abroad is 1,310 dinars per dollar, and the price in the parallel market is about 1,450 dinars per dollar in mid-May, according to local media, while it reached levels of 1,600 dinars per dollar in previous periods.
For months, the Iraqi authorities have been imposing restrictions in their efforts to control exchange rates, restricting all commercial transactions within the country to the Iraqi dinar, and establishing a new mechanism that subjects external transfers to greater scrutiny.
Iraqi economic analysts who spoke to Al-Hurra website, some of them warned against taking a decision that would lead to floating the dinar, while some of them believe that a moderate policy could be taken that suits the Iraqi economy, based on “floating” and “stabilization” at the same time.
Is the flotation policy compatible with the Iraqi economy?
Advisor to the Prime Minister for Financial Affairs, Mazhar Salih, believes that floating the currency price does not suit the Iraqi economy, especially since it is a "rentier economy, dominated by foreign currency reserves."
He explains in statements to the “Al-Hurra” website that “the economic vision that wants to float the Iraqi dinar to end the gap between the official price and the parallel price may be possible in an economy in which the free market alone influences the movement of the balance of payments, and not in an economy in which the rentier government sector is dominant and generates reserves.” Foreign currency".
He added, "The monetary authority in Iraq alone is the main source of supply of foreign currency that meets the desired demand for foreign exchange in the local market."
Saleh believes that the demands for flotation inevitably mean “adopting the prevailing exchange rate in the parallel market, in order to achieve the goal of stability and balance in the official exchange rate itself at a new exchange point that the market will reach at the end of the assumed flotation policy and return to stability again.”
The flotation scenario also means “the withdrawal of the monetary authority as the main central offerer of foreign currency, and its replacement by new forces of free market makers, which certainly have only a weak, limited supply of foreign exchange,” according to Saleh.
He points out that these forces carry “an uncontrolled package of inflationary expectations, and are called in the economic literature (the forces generating inflationary expectations), which will give dominance to the supply forces of speculators” who own limited amounts of foreign exchange, matched by “an open demand for foreign currency from The market side" exceeds what is offered by "at least more than ten times in our estimate."
Chancellor Saleh described this policy as “unruly,” as as long as “the central government supply of foreign currency will be absent from the market, we will not obtain any equilibrium point in the exchange rate that flotation seeks except with a widespread deterioration of the exchange rate as long as it is carried out by forces generating inflationary expectations in a severe rentier economy.” "unilateralism."
He warns that if the exchange rate moves in “a market that is incomplete, in terms of productivity, in its compensation for the required supply of goods and services,” no one “will know how much the new exchange rate resulting from the flotation will be,” which will be accompanied by “a prior wave of inflationary expectations,” the trends of which are difficult to control. , which may push monetary policy makers to “intervene with excessive foreign reserves and unjustified extravagance in foreign exchange to impose a state of stability.”
According to the World Bank, Iraq has 145 billion barrels of proven oil reserves, which are among the largest crude oil reserves in the world.
But Iraq hopes that the country's oil reserves will exceed 160 billion barrels, according to what the Minister of Oil, Hayyan Abdul Ghani, recently announced.
What if the Iraqi dinar was floated?
The claims that have appeared every now and then for years calling for floating the exchange rate of the Iraqi dinar are “strange,” and most of them are made by people who are “not specialized in economics or monetary policy,” according to what Professor of International Economic Relations, Abdul Rahman al-Mashhadani, confirms to the Al-Hurra website.
He asserts in a decisive tone, "Iraq cannot proceed with floating the dinar's exchange rate. The evidence for this is all the agreements concluded with the International Monetary Fund since 2004, and the reviews praised the stabilization of the exchange rate by the Central Bank of Iraq."
Al-Mashhadani added that there was a study by experts at the World Bank during the past years that recommended “raising the exchange rate,” noting that even then, “these recommendations cannot be taken into account because the World Bank is concerned with what is related to economic development, but following up on the recommendations for monetary policies is taken into account if It was from the International Monetary Fund.
In its latest review on Thursday, the International Monetary Fund praised the efforts of the Central Bank of Iraq to tighten monetary policy and strengthen its liquidity management framework.
He explains that “the real gap is in the wheel of production in the Iraqi economy, as the majority of goods are imported from abroad, which means that the flotation will cause a spiral in price rates to become significantly high and affect the marginalized classes,” indicating that such a decision cannot be taken “as a matter of politics.” “Cash” only, as we must “consider the burdens it will impose on citizens.”
Al-Mashhadani confirms that what has been applied in other Arab countries does not “mean that it can be applied to the Iraqi economy,” suggesting that “the exchange rate will become at the levels of 5,000 dinars to the dollar,” as “the Central Bank has lost control of exchange rates, leaving them to float.”
There is a fear that “floating” will cause “social” problems, as “salaries will erode significantly,” which may threaten “new classes to slide into poverty,” while “a class of merchants, politicians, and businessmen will benefit, who will benefit from the state of instability that will result from... This matter".
Al-Mashhadani agrees that floating in the end means “that the parallel market will control exchange rates,” but it will not achieve “the desired monetary stability,” as the central bank will then need to “print more local currency to keep up with demand in the markets,” and the government will need to increase salaries and allocations for aid packages. Social.
"Controlled float" for full "editing".
The Iraqi dinar exchange rate crisis against the dollar continues. Archive
The economic expert, Manar Al-Obaidi, recommends following a “currency float” policy, but with controls such that a “managed float policy is used to gradually liberalize the currency until complete liberalization of the exchange rate is reached.”
He said in a post on his Facebook account, "Such a policy could be a successful alternative in Iraq by following a managed float policy where the central bank controls the range of volatility and works to gradually increase it until the currency is completely liberalized."
Al-Obaidi gave the example of “the managed flotation policy followed by Morocco in 2018,” noting that it was accompanied by the abolition of customs tariffs on basic materials and “supporting funds for vulnerable classes,” stressing that this experience can be used to influence “inflation.”
Reasons for the exchange rate “gap”.
The Iraqi government advisor, Saleh, attributes the reason and existence of a “gap” in the dinar’s exchange rates against the dollar between the official and parallel markets to “external factors imposed by the compliance platform and auditing administrative restrictions on external transfer movements, which is not related to the deficit in the authority’s monetary reserves,” noting that the reserve Iraq's foreign currency is considered the highest in the country's history, as it touches the levels of import coverage for 16 months, compared to the global standard, which does not exceed three months of import coverage.
Financial transfers in dollars through official channels have increased significantly in Iraq, while Iraq continues its reforms of the financial sector in line with international standards, according to a previous report by Agence France-Presse.
In late 2022, the Iraqi banking sector adopted the SWIFT electronic transfer system with the aim of providing better control over the use of the dollar, ensuring compliance with US sanctions on Tehran, and also in order to limit the prosperity of the informal economy.
The financial standards that were adopted encouraged the emergence of a parallel market for currencies, attracting those seeking to obtain dollars outside official channels.
Saleh pointed out that there is a distortion in support for the prices of some commodities “on the part of financial policy, which is support in which the rich and poor mostly enjoy it equally without discrimination, and it represents an added, imperceptible real income, and it is the product of a financial policy inherited from the consumer welfare state for the rentier resource.”
He continued, "It is inconceivable until this moment that 90 percent of Iraq's population is receiving support for food supplies provided by the state as an extension of the economic blockade phase of the 1990s in light of the changing standards of living and lifestyle, the increasing number of affluent people, and the growth of the middle class."
In mid-May, the Iraqi authorities announced the purchase of 1.5 million tons of wheat since the beginning of the year.
According to the Ministry of Agriculture, Iraq, with a population exceeding 43 million people, needs between 4.5 million and five million tons of wheat annually.
The International Monetary Fund said Thursday that Iraq's internal imbalances have been exacerbated by significant fiscal expansion and low oil prices.
The Fund added that Iraq needs to gradually correct public financial conditions in Iraq to achieve debt stability in the medium term and rebuild financial reserves.
To ensure compliance with US standards regarding money laundering and sanctions on Iran, about 20 Iraqi banks were prevented from making dollar transfers.
Last September, the Iraqi government decided that merchants who deal with Iran are forced to turn to the parallel market to obtain currency, given that Tehran is subject to sanctions and “is not allowed to conduct financial transfers,” according to Agence France-Presse.
A positive step for the "economy" but!!
The Iraqi economic academic, Nabil Al-Marsoumi, believes that the solution to addressing the discrepancy in the currency exchange rate through “free floating of the Iraqi dinar” may have “some economic positives.”
He added in an interview with Al-Hurra website that "the economy should not be taken in its abstract aspect, but rather in terms of its relationship to people, especially the poor among them."
Al-Marsoumi warns that "the Iraqi dinar may witness a violent collapse and rampant inflation that will cause prices in the Iraqi market to rise to record levels that will harm citizens, especially the low-income classes."
He explains that Iraq lacks "a national private sector that could contribute to increasing the supply of dollars in the local market, and because of the large volume of imports, which reach 67 billion dollars annually, the government is the only party that owns the dollar."
He notes that "if the government decides not to intervene in the exchange market, we are expected to witness consequences that will cause severe damage to citizens' living standards, making the poor even more miserable, and may lead to social tensions and a major rift in the social peace."
For his part, the economic expert Al-Obaidi defined the primary goal of liberalizing the currency as “creating an economy capable of withstanding various economic shocks, and reducing reliance on reserves that are greatly depleted in order to maintain a fixed exchange rate, which could stop once the reserves run out.” .
He added that this also "contributes to supporting the domestic product and changing the consumption pattern, and thus reducing the import bill for Iraq, which rises annually as an indirect reason as a result of the attempt to maintain a fixed exchange rate."
Not to mention, “continuing to try to maintain a fixed exchange rate depletes reserves,” which will lead at a certain stage, “accompanied by a decrease in reserves, followed by either a complete liberalization of the currency or a significant reduction in the price rate, which will have major repercussions on the citizen, and will cause great confusion in "A market that already suffers from a lack of economic stability."
What is the alternative to floating the currency?
The Iraqi economic expert, Mahmoud Dagher, confirms to Al-Hurra website that the solution for Iraq may be a system “between floating and stabilization” to help stabilize currency exchange rates.
The expert, Dagher, a former official at the Central Bank of Iraq, explains that “the origin of the exchange system is floating, which is what free countries adopt.”
He explains that "the continuity of the gap requires reaching a middle system that solves the problem between free floating and stabilization. This is a system that many developing countries follow, and it helps solve the problems of currency fluctuation."
Financial expert Saleh proposes alternatives to floating, in a way that serves the objectives of monetary policy and limits inflationary risks, through the use of financial tools such as “taxes and customs duties that act as an intermediary to influence the exchange rate to achieve balance and price stability.”
He added, "Instead of resorting to lowering the exchange rate to harmonize the market through flotation, it would be through amending customs tariff schedules and imposing careful, thoughtful controls to protect the national economy."
Saleh called for correcting the defect in the structure of the Iraqi economy as a whole, as it is not possible to continue with “high operating spending in annual public budgets, which has always generated cash income from rentier sources that are matched only by very limited productivity of commodity and service flows, which has made the country It relies mainly on large-scale imported consumer goods.”
Counselor Saleh revealed, on Thursday, that the loans provided by the International Monetary Fund to Iraq since 2003 totaled no more than $8 billion, confirming that they were fully repaid, according to a report published by the “INA” agency.
Last March, the International Monetary Fund stressed “the Iraqi economy’s need for broad structural measures to enhance private sector development and economic diversification, and to raise growth rates in the non-oil sector in a sustainable manner to accommodate the rapidly increasing workforce, and to increase non-oil exports and government revenues, in addition to Reducing the economy's exposure to oil price shocks.
He called for "accelerating the pace of reforms in the financial sector to improve access to financing, by modernizing the banking sector and supporting the ability of banks to establish banking relationships with other banks, and taking steps aimed at merging small-sized private banks," not to mention the need "to restructure the two largest government banks." ".
The Governor of the Central Bank, Ali Al-Alaq, announced in statements in early May that “the banking sector is witnessing major qualitative developments, while calling for cooperation and coordination between Arab central banks, banks and non-banking financial institutions to achieve stability and economic growth,” according to the “ Inaa ” agency.
He continued, "Central banks face new challenges in the interaction between financial and monetary stability, in light of the dominance of general financial policy and the necessity of central banks to facilitate excessive government debts, according to financial control, which requires reducing spending or increasing domestic revenues, or both."
Iraq has begun to recover relatively after years of wars, occupation, and sectarian violence that followed the US-led invasion in 2003, according to an Agence France-Presse report.
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