The Central Bank of Iraq announces the results of its visit to New York

 The Central Bank of Iraq announces the results of its visit to New York: A high-level delegation negotiated with the US Treasury

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The Central Bank of Iraq announced the results of the visit of the delegation headed by the Governor of the Central Bank, Ali Mohsen Al-Alaq, to ​​the United States of America, which lasted from August 26 to 29, 2024. 

The video for this blog post is below here:

The Central Bank of Iraq confirmed in a statement received by Shafaq News Agency that a high-level negotiating delegation headed by Governor Ali Mohsen Al-Alaq held a series of intensive meetings in New York City, USA, which included discussions with the US Treasury Department and the Federal Reserve Bank, in addition to meetings with a group of companies (Visa, Mastercard and MoneyGram) as well as banks (Citi Bank and JP Morgan) as well as international auditing firms (KPMG, E&Y, K2i and Oliver Wyman).

He added that the participants in the meetings praised the major transformations accomplished by the Central Bank of Iraq, which represent an unprecedented achievement at the country level, as the bank has achieved remarkable progress in the procedures for monitoring foreign transfers and cash sales of the US dollar, which has led to improving systems, policies and procedures in accordance with international and local standards, enhancing transparency in covering foreign trade and providing protection for the banking and financial sector from the risks of money laundering, terrorist financing and financial crimes.

He announced that a meeting will be held between the officials of the Central Bank of Iraq and its international partners by the end of this year regarding the major transformation in ending the work of the electronic platform for foreign transfers and replacing it with direct banking relations between Iraqi banks and the network of international correspondent banks, according to the plan set by this bank, and implemented internationally, which will allow the Central Bank of Iraq and the Federal Reserve Bank to exercise their supervisory roles away from executive procedures, as this transformation will have important repercussions on the stability, fluidity and transparency of the country's foreign trade financing operations, indicating that it aims to achieve the required stability in exchange rates, which in turn will lead to enhancing the efficiency of the financial system in Iraq.

He pointed out that the meetings in New York City also addressed mechanisms for expanding the network of international correspondent banks and qualifying Iraqi banks to meet the necessary requirements to open their accounts with international correspondent banks, with the aim of enabling them to complete their financial transactions, whether through external transfers in US dollars or other foreign currencies.

The Central Bank announces the participation of 13 Iraqi banks in the external transfer

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The delegation of the Central Bank of Iraq in New York announced today, Friday, the participation of 13 Iraqi banks in foreign transfer operations, while indicating the currencies used.

The Central Bank's media stated, in a statement received by "Al-Eqtisad News", that "this announcement came after reaching an agreement on the mechanisms for regulating these operations, as it will include dealing in the euro, Chinese yuan, Indian rupee, and Emirati dirham."

He stressed, "Determining the scope of work of the international auditing company E&Y, which will review the transfer operations to ensure their safety and compliance with international standards. This step is a reflection of the Central Bank of Iraq's commitment to achieving the highest levels of transparency and security in all foreign transfer operations, and enhancing confidence in the Iraqi financial system."

The statement indicated that "this initiative came within the framework of the ongoing efforts of the Central Bank of Iraq to support economic growth and expand the horizons of international cooperation with global markets."

 

Parliamentary Finance Committee reveals the truth about government spending exceeding the "red lines"

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What about cash?

The Parliamentary Finance Committee revealed, today, Wednesday, August 28, 2024, the truth about government spending from the financial budget exceeding the red lines by spending more money than its allocated amount.

Committee member Jamal Kojer told Baghdad Today, "Government spending did not cross the red lines, because basically there is no government spending so far and no money has been spent according to what was stated in the budget law for this year."

He explained that "the delay in government spending as planned in the budget law is perhaps due to a lack of liquidity or a delay in approving the budget and the problems that occurred in its schedules."

Koger said, "There are a number of issues that led to stopping government spending and keeping only salaries."

It is noteworthy that the Ministry of Finance has denied on more than one occasion the existence of a liquidity problem to secure employees’ salaries and other operating expenses.

Why doesn't Iraq rely on the World Bank to overcome the "dollar crisis"? An expert answers

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Today, Friday (August 30, 2024), the expert in economic and financial affairs, Nabil Jabbar Al-Tamimi, commented on the possibility of the World Bank helping Iraq develop its economic and financial situation and solve the remittance crisis.

Al-Tamimi said in an interview with Baghdad Today, "The World Bank is an international banking financial institution affiliated with the United Nations, but it is subject to special management related to the influence of some countries according to their banking contributions, as its tasks are limited to investment financing for countries, providing international loans, and managing projects according to its international banking conditions."

He pointed out that "Iraq is currently working extensively with one of the World Bank institutions with the International Finance Corporation (IFC) to develop a group of sectors, including the transportation and airports sectors," explaining that "the World Bank, as an important international and financial institution and a UN institution at the same time, works with Iraq and other countries in the fields of lending and providing technical consultations, as well as providing Iraq with economic data and analyses within the limits of its work."

The expert in economic and financial affairs stressed that "it is not within the World Bank's jurisdiction to intervene in the issues facing Iraq, especially with regard to the remittance crisis, local banking failures, or weak procedures to protect funds from suspicions of money laundering and financing terrorism."

According to specialists, Iraq has more than (70) banks, approximately five of which are governmental and the remaining number are private banks, but Iraq relies heavily on financial transfers, especially with regard to the dollar, to various foreign banks, due to the failure of Iraqi private banks to arrange their legal and technical situations in the issue of financial correspondence.

Earlier, Alia Nassif, a member of the Parliamentary Integrity Committee, revealed that the Iraqi-Jordanian National Bank had obtained $3.6 billion from the currency auction during the first three months of the current year, which enabled it to obtain a profit of about 40 billion dinars.

Famous "pessimistic" economist: Iraq is suffering from financial difficulties and the government resorts to borrowing from banks

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Economic expert Nabil Al-Marsoumi revealed, today, Friday (August 30, 2024), that Iraq is suffering from financial difficulties due to the significant growth in public expenditures, which reached 41% during the first half of 2024.

Al-Marsoumi wrote in a post on his personal account on the Facebook platform, which was followed by Baghdad Today, that "the recent government decisions regarding attempts to seize the financial resources of oil companies and maximize non-oil revenues by raising customs duties on the import of some goods and trying to raise tax revenues indicate that the government is actually suffering from financial difficulties due to the significant growth in public expenditures, which amounted to 41% during the first half of 2024 compared to the same period in 2023, while the growth in government revenues did not exceed 20%."

He added, "The government resorted to borrowing 7 trillion dinars from government and commercial banks and issuing bonds worth 3 trillion dinars to cover the actual budget deficit, which rose to 8 trillion dinars in the first half of 2024, which raised the size of the domestic debt to 86 trillion dinars."

Al-Marsoumi pointed out that "the situation will become more difficult and government revenues will decrease in light of the noticeable decline in oil prices and Iraq's commitments to OPEC Plus restrictions, which if Iraq actually adheres to them, will reduce the production level to 4 million barrels per day and to 3.850 million barrels per day starting next September to compensate for Iraq's production in excess of its production quota, which will reduce its oil exports to 3.3 million barrels, while the planned number in the budget is 3.5 million barrels per day, while Iraq will increase its imports of petroleum derivatives as a result of Iraq's agreement to reduce its domestic consumption of crude oil from 570 thousand barrels per day to 500 thousand barrels per day."

Methodology for evaluating investment activity and the attractiveness of agricultural investment in Iraq 

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Dr. Aqil Al-Mohammadawi 

The process of economic regulation of the state for investment activity is of strategic importance and priority, and it is necessary to develop measures to improve it according to the targeted economic priority for sustainable economic growth in the agricultural sector in market conditions based on the use of targeted approaches in integrated programs that are consistent with the economic renaissance orientations of the government’s executive economic and service programs and improving infrastructure.

Often, the scientific literature provides many interpretations of the concept of methodology, and methodology is interpreted in two senses: as a system of methods and as a theory of the method of study or a method of working methods. 

 

But this previously widely held point of view is beginning to be challenged. For example, V. Kutsenko disagrees with the interpretation of methodology as a doctrine of methods and a system of methods and defines it as a system of principles for the formation and practical application of methods of knowledge and transformation of reality. If the methodological approach determines the strategic guidelines of future research, then methodological generalization involves either enriching the theoretical base of science in a particular branch of knowledge, or concentrated material for decision-making in the practice of production or management and is already the result of the completed study. 

 

In our opinion, the methodological approach is to determine the principles of selection of relevant investment instruments, as well as to consider the proposed sectoral product sub-complexes of the agro-industrial complex as an effective and sustainable investment model as more viable or more attractive projects for effective and sustainable investment.

 

It is advisable to present the assessment of investment attractiveness of the food sub-complex of the agro-industrial complex in groups of indicators characterizing the most important components of the investment mechanism. These blocks are:

- Evaluation of the production potential of the food sub-complex of the agro-industrial complex;

- Status of the sub-complex of the industry product;

- Developing the marketing capabilities of the products of the industrial complex of the agricultural industrial complex.

Improving investment activities in agriculture should meet the following requirements:

- Ensuring sustainable development, increasing the efficiency of agricultural production, and achieving food security for the country;

- Increase the attractiveness of investment in the industry for external investors;

- Strengthening government intervention in regulating agriculture.

Improving investment activities in agriculture should meet the following requirements:

- Ensuring sustainable development, increasing the efficiency of agricultural production, and achieving food security for the country;

- Increase the attractiveness of investment in the industry for external investors;

 

- Strengthening government intervention in regulating agriculture and the food industry and organizing effective partnership by targeting the growth of foreign production when achieving the optimal degree of interaction in this process with the free market;

- Creating incentives for introducing scientific and technological progress, and reducing production costs;

- Ensure relatively equal starting opportunities for expanding production for all agricultural producers;

- Forming a marketing strategy for agricultural production based on a mixed economy;

- Stimulating rational allocation and specialization in agricultural production;

- Strengthening environmental protection and environmental protection in the field of agriculture;

- Creating stable conditions between industries in the agricultural sector by overcoming the disparity in prices of industrial and agricultural products.

One specific form of implementation of these requirements is the improvement of the economic mechanism in agriculture, which should be implemented on the basis of the following principles:

- construction of individual elements of the economic mechanism on a unified methodological (cost) basis;

- Using a programmatic approach aimed at improving the economic mechanism in order to ensure its sustainable operation and the performance of its inherent functions through each economic lever;

- Adopting an integrated approach when implementing measures to improve the economic mechanism in order to ensure its close interaction in the process of economic regulation of investment activities in agriculture.

 

At the same time, the implementation of the targeted approach of the program assumes the need to use a system of forecasting and planning of agricultural production in market conditions, the use of an integrated approach - the optimal interaction of prices, taxes, credit and other factors of the reproductive process in the agricultural sector.

Objectivity and reliability in evaluating the effectiveness of investment projects

In the agricultural sector it is presented on the basis of: determining the costs and benefits of the project; measuring the costs and benefits; determining the duration of the project life cycle; choosing the discount rate; determining the price level; justifying the criteria for evaluating the effectiveness of the project.

Investments in their economic movement pass through three stages of circulation and take the appropriate functional forms. At each stage, production and circulation processes occur simultaneously, the value of capital increases, forms of ownership change, and so on. 

In the first stage of circulation, the monetary form of capital value turns into work on creating or rebuilding the organization, and in the form of capital value - into the main means of production. 

At the second stage of turnover, the production consumption of created (modern) production facilities (fixed assets) and the formation of finished products is carried out, which accumulate a value that is already greater than the cost of consumed fixed and working assets (at the same time, the process of repayment of investments in capital costs is carried out). 

 

At the third stage of the turnover, products are sold, and investment investments are returned from the commodity form to their original monetary form. At the same time, the value continues to increase, because the work of workers in selling products creates new value. Hence, at all stages of investment turnover, a change in the forms of value and the creation of new value occurs.

 

It seems important to use the investment turnover index in economic research and practice and practical applicability. The methodology is important to develop and implement an indicator that expresses the full investment turnover rate in the long term. This indicator is the investment turnover index, which is calculated by the ratio of the operating volume of fixed production assets and the corresponding investments.

 

As a general rule, investment abroad is evaluated in relation to the macroeconomic sphere. 

 

In some countries, such as Japan, descriptive investment methods prevail.

 

Attractiveness without any quantitative assessment. However, the most common studies are those in which economic indicators are expressed in numerical values. In the United States, a method is used that takes into account various factors of investment attractiveness, on the basis of which the "Annual Statistical Map" is published for all states. It includes four general indicators of the investment climate: economic efficiency of investments, business feasibility, development potential of the territory, and components of tax policy.

 

I can't find this anywhere else   though so maybe it's old???  

Iraqi faction bombs US base with drone, Pentagon says we will respond

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 Arab media reported on Thursday evening that an Iraqi faction attacked a US military base in the Syrian province of Deir Ezzor.

Al Jazeera reported in a breaking news report, citing sources affiliated with an Iraqi faction, that it carried out an attack with a “drone on an American base in Deir ez-Zor, Syria.”

For its part, the US Department of Defense (Neptune) confirmed that it reserves the right to respond at the time and place of its choosing if its forces are subjected to any attack, whether in Iraq or Syria.

Iraq called off one million barrel shipment in a bid to match OPEC regulations: Reuters

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Iraq plans to lower its oil output to in between 3.85 million and 3.9 million barrels each day in September as part of a strategy to make up for producing over its quota concurred with OPEC and allies, Reuters quoted a source on Thursday.

The plan comes just as Libyan oil production drops due to a. political conflict in between various factions.

The declines will tighten the oil market ahead of a prepared. output boost by OPEC and its allies - called OPEC+ - from. October to begin loosening up some production cuts.

Iraq produced about 4.25 million barrels each day (bpd) in. July, according to the Company of the Petroleum Exporting. Countries, mentioning secondary sources. That is above its quota of. 4 million bpd.

The oil ministry had actually sent a strategy to OPEC to compensate. for the overproduction between this month and September next. year. Iraq's cumulative overproduction between January and July. was 1.4 million bpd, OPEC said recently.

Iraq cancelled a spot cargo of 1 million barrels in August. to reduce its exports throughout the month, the source said.

There were quotes for the freight however it was removed the. market, the source said, adding two more freights of the exact same. size will be deferred from August to September.

Baghdad plans to reduce its output from September onwards by. cutting exports to 3.3 million bpd or lower, from 3.43 million. bpd, in addition to cutting local consumption to 500,000 bpd from. 570,000 bpd and asking the Kurdistan Regional Federal government to cut. its output to 50,000 bpd from 150,000 bpd, the source stated. 

OPEC Secretary General Haitham Al Ghais was in Baghdad on. Wednesday and consulted with Iraqi Oil Minister Hayan Abdel-Ghani.

OPEC stated on X that Abdel-Ghani restated Iraq's. dedication to the complete and timely implementation of production. level changes, including payment plan as agreed under. the Statement of Cooperation

 

Baghdad wants money from the government and has its eye on “stalled projects”: We will launch new ones - Urgent

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Baghdad Provincial Council confirmed, today, Friday (August 30, 2024), the development of important and strategic plans to develop the capital's service reality during the next phase, indicating that it is awaiting financial allocations to complete the stalled projects .

Council member Nora Al-Jahishi told Baghdad Today, “Despite its short life, the Baghdad Council has worked during the past period to activate the oversight aspect and follow up on the work of service departments in Baghdad, and there is a noticeable development in service work due to continuous and strict oversight and follow-up  .”

Al-Jahishi added, "The Baghdad Council has developed an important and strategic work plan to launch projects and complete others that have been stalled for a long time, but we are waiting for the financial allocations, as they have not been released to us yet by the central government  ."

The Iraqi capital, Baghdad, is witnessing a remarkable urban development on the level of main roads and vertical buildings after the relative security in the country was restored and the country opened up to investments and partnerships with Arab and Western countries .

Last year, the Ministry of Planning revealed a decrease in the number of stalled projects in Iraq, while indicating that there are more than 7,000 projects under construction .

The spokesman for the Ministry of Planning, Abdul Zahra Al-Hindawi, told Baghdad Today, "There are more than 7,000 projects in Iraq with different rates of completion, and great efforts are being made to complete them within two years," noting that "the government has raised the slogan of services and interest in service projects such as school projects, hospitals, roads, and sewage networks ."

He added that "the number of stalled projects has decreased to 1,000 projects distributed across various sectors and governorates," noting that "the Prime Minister has directed that these projects be resolved during the coming and upcoming year ."

He added, "We have 73 hospitals that are lagging behind and with different rates of completion that were addressed through the Amiri order 45, and some of the suspended hospitals were completed, and about 90 percent will be completed within two years," indicating that "there are 16 new hospitals that have been included in the 2024 budget ."  

Regarding the schools sector, Al-Hindawi explained that “there is a great deal of work being done to complete this sector, as the project of the thousand Chinese schools has begun, and the construction of a number of schools will be financed within the Iraq Development Fund,” noting that “nearly 40 percent of the delayed or suspended schools have been completed .”  

The spokesman for the Ministry of Planning, Abdul Zahra Al-Hindawi, had previously explained to Baghdad Today the reason for the halt of most projects in Iraq, indicating that “the main reason for the halt of these projects is due to Resolution 347 issued in 2015, during the financial crisis, which led to the halt of many projects, and these projects are distributed across various sectors of transportation, communications, buildings, services, industry and agriculture, and they are at different rates of completion .”

 He added, "The priority now within the current government's program is to complete service projects, most notably hospital projects, school projects, sewage projects, and water projects. By the end of next year 2024, more than 90% of these projects will be completed, especially after the approval of the budget law, and with the existence of financial allocations for the investment program ."

Has the Iraqi government controlled money laundering?

 interview I stumbled upon:

 

Money laundering is being carried out at full speed

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by some influential political parties which

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have become

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have shops in ministries and destinations

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banks like banks and they have the upper hand in

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all state institutions, so there is an activity that limits

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money laundering will definitely serve the Iraqi economy

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in general and the issue of the exchange rate in particular

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The Iraqi government is the decision-maker and the bank

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the central bank is the decision-maker, but the fluctuation of

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prices is not

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due to the weakness of the central bank

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but rather the government as a whole, meaning its borders are loose

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the parties control it, the ministries are divided into

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political blocs and the obstacles that are placed

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in front of the banking system and the application of the system SWIFT

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It means by many figures and parties

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The influential politicians are the ones who affect the

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exchange rate and not closing the accounts of some banks that

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I mean have suspicious dealings. These sanctions

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I mean they led to the rest of the banks

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reviewing all their suspicious accounts and all their

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suspicious clients. Therefore, these sanctions led to

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I mean formulating

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and fixing many of the defects that were

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present in the Iraqi banking system and we in

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the Iraqi state have a large cash and financial drain

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that is in dire need of maintenance

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and reformulating it again

Al-Sudani's advisor rules out removing 3 zeros from the currency

"Two conditions to achieve it" .. Al-Sudani's advisor rules out removing 3 zeros from the currency

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The Prime Minister's financial advisor, Mazhar Mohammed Salih, ruled out the government removing three zeros from the Iraqi currency at present, noting that achieving this requires two basic conditions.

Saleh said in a statement reported by the Rudaw media network, and seen by Al-Eqtisad News, that he rules out the possibility of the government removing zeros at present, indicating that “removing three zeros from the currency has nothing to do with the value of the currency, but rather with improving cash payment systems.”

The video for this blogpost is below here:

He explained that "the three zeros added price and monetary inflation to the currency, starting with the Iran-Iraq war and passing through the time of the economic blockade (the nineties of the last century), and the conflicts generated inflation in the value of the currency."

He pointed out that "when prices rise, we need larger denominations of money to maintain the equivalence between price and money. For example, due to price inflation, 25 Iraqi dinars have become 25,000 dinars."

Saleh pointed out the importance of "reducing the calculations that have reached trillions in recent years, and this has become a tiring matter," adding that "the process of raising three zeros does not only mean the value of the currency, but also the calculations and statistics, and in order for the method of managing it to be easy."

The Prime Minister's financial advisor also said that "the process of issuing large denominations reduces the currency in terms of quantities, and is a process of reforming the cash payments system, especially since this modern and advanced time requires smaller numbers."

He believed that removing three zeros from the currency, globally, requires two conditions: "political stability and economic stability. When these two factors are available, countries resort to removing zeros from their currency," adding that "the value is fixed and not affected. Rather, it is a relative change."

He stated that the project to remove three zeros “we worked on between 2011 and 2012, but there was a delay in the matter, because it requires a change in the accounts of the Republic of Iraq and statistics, and requires cooperation between monetary policy and all government policies.”

It is noteworthy that a number of economists and experts recently called for deleting three zeros from the Iraqi currency, considering that this would reduce monetary inflation in Iraq and strengthen the dinar currency.

Rafidain announces the implementation of the comprehensive banking system in three new branches

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Rafidain Bank announced, today, Thursday, the implementation of the comprehensive banking system in the branches of Al-Amel neighborhood in Baghdad, Al-Farouq in Diyala, and Al-Khalidiya in Anbar.

The media office of Rafidain Bank said in a statement received by "Al-Eqtisad News", "In implementation of the government program to move from paper transactions to electronic transactions to provide the best services to citizens, Rafidain Bank announces the implementation of the comprehensive banking system in the branches of Al-Amel neighborhood in Baghdad, Al-Farouq in Diyala, and Al-Khalidiya in Anbar to join the branches that have activated the comprehensive system in Baghdad and the governorates in addition to the branches of the border crossings (Zurbatiya - Safwan - Arar - Trebil) so that the number of branches that have implemented and completed the system becomes (40) branches," indicating that "this came in an important step to strengthen the banking system and achieve its requirements and leave paper work and move completely to electronic systems." 

The two banks confirmed that "the digital transformation plan and the adoption of the comprehensive banking system are proceeding according to the set timetables to include all bank branches in the implementation of the system, especially since the priorities and adoptions of the government program include electronic transformation in financial transactions, reducing the circles of routine for citizens, shortening time, simplifying procedures, overcoming obstacles, and intensifying efforts to improve the level of services provided to customers and completing their transactions."

 

Industrial Bank warns citizens against carrying amounts exceeding the permitted limit

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The Industrial Bank warned citizens, today, Thursday, against carrying amounts exceeding the permitted limit.

The bank's media office said in a statement received by the Iraqi News Agency (INA): "Citizens should be careful not to carry amounts exceeding the permitted limit," indicating that "they can use official methods to transfer large sums of money."

He added, "Citizens should avoid carrying cash to avoid legal accountability in the event that the permitted limits for bringing in and taking out money to and from Iraq are exceeded."

Taif Sami and the World Bank discuss supporting the economic and financial reform program

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On Thursday, Minister of Finance, Ms. Taif Sami, received the World Bank’s Regional Director for the Middle East, Jean-Christophe Carret, and the Bank’s Special Representative in Iraq, Richard Abdelnour.

During the meeting, the World Bank's loans and grants, development project priorities, and ways of supporting the World Bank to enhance the financial and business sectors and improve the investment environment were followed up. The meeting emphasized the continuation of bilateral coordination to enhance sustainable development, in addition to discussing the bank's support for the government program regarding economic reform in Iraq.

Minister Sami pointed out the government's interest in strengthening partnership with international financial institutions, within the framework of accelerating the pace of financial and banking reforms in line with the Iraqi government's vision aimed at consolidating the foundations of the national economy, achieving economic balance, and correcting the course of financial policy in Iraq.

Central Bank of Iraq on 'unannounced' visit to America

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An informed source revealed, on Thursday, that the Central Bank of Iraq is currently making an unannounced visit to the United States of America, to discuss developments in the Iraqi banking sector. 

The source told Shafaq News Agency that a delegation from the Central Bank of Iraq, headed by the Governor of the Central Bank, Ali Al-Alaq, and a number of general managers, have been visiting the United States of America since the 26th of this month, to discuss developments in the banking sector and the restrictions on the use of the dollar imposed on a large number of private banks. 

He pointed out that the Central Bank delegation discussed cancelling the platform at the beginning of next year, and relying on correspondent banks, which will increase the imposition of restrictions on Iraqi private banks, and completely eliminate competition in favor of Jordanian banks that have American correspondent banks. 

The source noted that the Central Bank is close to signing a contract with Oliver Wyman, the consulting firm for the Iraqi Development Road, to conduct a study on reforming the Iraqi banking sector, in order for it to be approved by the Central Bank in the coming period, and to be considered a roadmap for reforming the private banking sector. 

On the other hand, a number of economists were surprised by the lack of announcement of the visit of the Central Bank of Iraq to America, especially since it comes at a very important time.

Parliamentary Committee: We intend to amend 10 economic laws to facilitate trade and customs procedures

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The Parliamentary Economic Committee announced today, Thursday, the existence of a project to amend about 10 economic laws, explaining that the goal is to enhance trade, facilitate customs and tax procedures, support the public and private sectors, and develop a real map for economic reform.  

Committee member Yasser Al-Hussaini said, “There is a new project that includes amendments to approximately 10 economic laws,” indicating that “the proposed amendments came after holding intensive workshops with the Businessmen’s Union and the Iraqi Businessmen’s Council, in addition to representatives from various economic sectors.” 

He explained that "these workshops aimed to absorb all visions and requirements from various economic sectors, including commercial and industrial sectors, in order to develop a comprehensive vision that achieves the required reform." 

Al-Hussaini pointed out that "the proposed project includes amendments to 10 laws aimed at enhancing trade, facilitating customs and tax procedures, and supporting the public and private sectors." 

The MP stressed that "the proposed percentage of amendments is still less than the desired level of comprehensive economic reform." 

He explained that "the committee hopes to expand the scope of the amendments to include more economic laws, reflecting the true vision of economic reform, which is not limited to meeting the requirements of the government or the private sector, but aims to develop a comprehensive vision that achieves the interests of all." 

He explained that "the law was read for the first time, and the second reading is scheduled to take place after the final vision matures through the ongoing workshops, after which the committee's report will be submitted and the law will be voted on." 

He pointed out that "this approach aims to draw a real roadmap for the long-awaited economic reform, and to ensure its compatibility with all the aspirations of the concerned parties, whether at the government or private sector level." 

Common phenomena in developing economies

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In order to understand the reality of our Iraqi economy, we must look at the experiences of success and failure in economies close to or similar to the circumstances and challenges facing the Iraqi economy in order to benefit and overcome the challenges and causes.
There are commonalities in the causes of structural imbalance in the economies of developing countries in particular, including Iraq, of course, and the reason is that they are recipients of financial and economic crises exported by major countries that dominate the capabilities of the global economy, and exporting crises is either intentional or a result of conflicting interests between the major countries.
Perhaps the most beautiful description of the global economic situation I have read was in what an Arab international economist said, which he summarized in three words or synonyms: (confusing, thorny and pressing), which is a realistic and accurate description indeed.
He attributed the reason to the multiple errors in setting public policies and implementing the procedures required to implement these policies, or rather the important ones.

It is clearly evident in the results achieved as a result of the errors, with the emergence of large deviations between what was drawn up in public policies and what was implemented, and this gap is the criterion for evaluating the economic reality of any country.

The aforementioned economic expert believed that one of the most important reasons for this deviation is the issue of choosing the right man in the right place. At the same time, he acknowledged the great difficulties facing the economic planner, especially in finding an accurate mechanism for the optimal choice of economic work paths, as they conflict or intersect with the desire of those in charge of political decision-making for this choice. Herein lies the difficulty of finding solutions! This is the reality of the situation in developing countries.

This phenomenon, or the vision and analysis regarding it, is one of the common issues among countries that suffer from difficulty in finding solutions to economic problems due to the many structural distortions in their economies, according to the opinion of that international expert. There is much evidence that proves the validity of what that thinker and economic expert went to, specifically: (the difference between policy-making and implementation) in the experiences of several developing countries. What concerns us in this analysis is the need to pay attention to the importance of overcoming such challenges by all available means, as it is noted that there are persistent government efforts and serious practical steps in formulating economic policies that include realistic solutions, and this is what is included in the government program, and what is required is to address some cases represented by the weakness of implementing the policies drawn up in the best possible way by some, which may be the reason for the weakness of executive experience. What is required now is to work on finding a solution to the problem of appropriate selection in executive positions, while acknowledging the difficulty of having a ready mechanism for the solution. Despite this, the government realizes the importance of this option and must continue its well-known attempts to investigate administrative and technical competencies continuously.

The great interest that the government has provided in the services sector indicates the extent of its accuracy in formulating sound policies to address traffic congestion, for example, as well as in the field of addressing the housing crisis, and what is required is continuous follow-up of implementation in order to avoid falling into the mistakes noted according to the vision of the international expert, which he summarized as the problems of the separation between planning and implementation.

 

Billion Dollar Ambition.. Iraq Provides Facilities to Egyptian Companies and a Delegation from Them to Visit Baghdad Next Month

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Egypt aims to increase the volume of trade exchange with Iraq by about 41% to one billion dollars during the coming year, compared to 707 million dollars annually, according to an Egyptian government official, at a time when major Egyptian companies expressed interest in investing in several sectors there in a meeting with Prime Minister Mohammed Shia al-Sudani.

The official's statements came hours after Prime Minister Mohammed Shia'a's visit to Egypt, where he met with a group of businessmen representing major Egyptian companies, who expressed their readiness to work in Iraq in various fields, especially the development road project, pharmaceutical industries, hospitals, infrastructure, and construction industries, according to a statement issued by the Prime Minister's Office.

Al-Sudani pointed out during the meeting that “the doors are open to Egyptian businessmen and companies, whose presence in Iraq is important to us, due to their successful experiences, and within a political direction to lead the two countries towards more cooperation and integration,” according to the statement.

The government official added that according to the latest statistics, the value of Egyptian exports to Iraq amounts to about $700 million annually, while the value of imports from Iraq does not exceed $7 million.

In contrast, an Egyptian delegation headed by Deputy Prime Minister and Minister of Industry and Transport Kamel El-Wazir intends to visit Iraq on September 9, with the aim of completing procedures for strategic partnerships between Egyptian and Iraqi companies, and with the Iraqi government, according to what was revealed by Alaa Ezz, Secretary-General of the Federation of Egyptian Chambers of Commerce.

Ezz added that the meeting with Al-Sudani, which included representatives of several companies including Hisham Talaat Moustafa, Hassan Allam, Orascom and El-Sewedy, witnessed the presentation of “the contribution of Egyptian companies to the infrastructure in the field of housing and construction in Iraq,” adding: “We asked the Prime Minister to deal with Iraq as a partnership and not as a labor market, meaning that Egyptian factories will manufacture production requirements in Iraq, either by acquiring their troubled factories or partnering with them to operate them.”

Pharmaceutical Partnership

Ezz explained that they also asked the Iraqi Council of Ministers to establish a partnership between the two countries in the field of medicines in stages, by establishing Egyptian factories to produce medicines, adding that Iraq imports 90% of its medicine needs, worth 3 billion dollars, revealing that the Iraqi side promised to issue government guarantees to Egyptian companies that will operate in Iraq.

This is not the first time that Egyptian companies have expressed a desire to work in Iraq. Last June, two Egyptian sources said that the Iraqi Ministry of Health was holding talks with Egyptian contracting companies to participate in the implementation and rehabilitation of 12 hospitals in the country with a total investment of $480 million.

Role of contracting companies

In addition to the pharmaceutical sector, Egyptian contracting companies are moving towards expanding their business abroad and seizing business in countries that are allocating billions in investments for reconstruction and development, especially Iraq and Libya.

Iraq needs $88.2 billion to implement reconstruction projects inside the country, which witnessed great destruction during the war against ISIS, according to previous statements by the Iraqi Ministry of Planning.

Tarek Shukry, head of the Real Estate Development Chamber at the Federation of Egyptian Industries, said that the Iraqi Prime Minister addressed his country’s need to build 2.5 million housing units, and implement other projects in the fields of infrastructure, water, roads and utilities.

Shoukry added that the Egyptian Minister of Investment and Industry will be a link between Iraq and Egyptian businessmen, especially with regard to the details of the required investment projects, land locations, offering systems, methods of granting them, financial transfers, granting visas, and other important matters for investors.

Shoukry said that the Iraqi Prime Minister promised to send all the details of the projects within two weeks.

Iraq spends half of its budget on imports, and these countries are at the forefront of suppliers

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The Ministry of Planning revealed "the volume of Iraq's annual imports."

The Ministry's spokesman, Abdul Zahra Al-Hindawi, said in a statement to the official media, that: “Iraq imports many goods and merchandise from various countries of the world, including foodstuffs of various kinds and shapes, including electrical, construction, engineering, chemical, agricultural, medical, health supplies, and cars.”

He added, "The volume of annual imports reaches no less than 50 billion dollars."

He continued, “Iraq imports from the countries: Jordan, Turkey, Iran, Saudi Arabia, the Emirates, China, India, Japan, Brazil, the United States, and a number of European countries.

Ports and Financial Control discuss ending the file of final accounts for previous years

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Today, Wednesday, the General Company for Ports of Iraq discussed with the Financial Supervision Bureau the completion of the file of the final accounts for previous years.

The Director General of Iraqi Ports, Farhan Mohsen Al-Fartousi, said in a statement received by (Al-Rabia): “According to the directives of the Minister of Transport, Razzaq Muhaibis Al-Saadawi, to provide transparent answers to the Audit Bureau, the ports discussed the draft report containing the Bureau’s observations on the 2021 accounts, and all difficulties were overcome and all inquiries were answered.”

For his part, the Assistant Director General for Administrative and Financial Affairs, Ahmed Khalaf Thajil, who attended the meeting with the Federal Financial Supervision Bureau team/Second Region Audit Department, Basra, stated that “Iraqi ports seek to complete the file of the final accounts for previous years and provide accurate answers to these observations.”

Parliamentary Finance: The path of development will achieve a shift in the course of trade exchange between Iraq and the world

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The Parliamentary Finance Committee confirmed, on Wednesday, that the development path will achieve a qualitative shift in the course of trade exchange between Iraq and the world. 

The media office of the head of the parliamentary finance committee stated in a statement, which was reviewed by "Al-Eqtisad News", that "the head of the parliamentary finance committee, Atwan Al-Atwani, received the Chargé d'Affaires of the German Embassy, Roland Vestbe, and his accompanying delegation; to discuss ways to enhance bilateral cooperation between the two friendly countries."

He added, "The meeting discussed political and security developments in the region and their impact on the Iraqi economy," indicating that "the two sides stressed the need to enhance bilateral cooperation between Baghdad and Berlin at all levels and in various fields, especially in developing the energy sector and financial and banking systems, in a way that achieves sustainable development." 

Al-Atwani said - according to the statement: "Iraq looks forward to strengthening its relations with everyone on the basis of mutual respect, common interests, and non-interference in its internal affairs," adding that "the political and security stability that Iraq is currently witnessing has made it an attractive environment for investment." 

He continued, "The entry of major international companies into Iraq is a clear indicator of stability and security, and we look forward to the participation of German companies in developing the energy sector and helping Iraq invest its wealth," noting that "the development path will achieve a qualitative shift in the course of trade exchange between Iraq and the world as it shortens time and provides security." 

Al-Atwani pointed out that "many European countries have expressed their desire to join the development path, and Germany must have a presence in this strategic project, and the industrial and commercial projects scheduled to be established along the development path will drive the economy and provide thousands of job opportunities."

What are the challenges of selling Iraqi oil in “petro dinars” and will the dollar falter?

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After 2003, Iraq was able to significantly increase its oil production level thanks to its openness to international companies specializing in energy, through the new contracting system called licensing rounds. Production increased from three million barrels per day in 2003 to more than 4.22 million barrels in the last quarter of 2023.

Iraq's oil and gas sector is the country's lifeblood, contributing more than 95% of GDP.

Caution Caution

In addition, warnings are escalating about the impact of the decline in oil on the general budget in Iraq and the extent of its impact on increasing the budget deficit, which is estimated at the time of approving the budget at about (47) billion dollars, especially since the budget depends primarily on oil prices, at a rate exceeding (95%) as its source.

And to Basra, where its crude oil is witnessing weekly losses of $5, or 2%, as a result of the global decline in oil prices, while observers see: “The interesting thing about the latest confusing matter is the acceleration of oil prices, which have witnessed some declines, but as long as oil prices are above (70) dollars, Iraq is safe and the planned deficit is (47) billion dollars, but they confirmed that if it falls below (70) dollars, even by one dollar, this will increase the deficit by a large percentage of up to $1.2 billion if the decline continues for one year, and this will put great pressure on the budget.

The data also indicates that prices will remain at $70 and will rise again to around $80 based on the OPEC and OPEC Plus action plan, and Iraq will benefit. As for Iraq’s current weekly losses, they are due to fluctuations or declines in Asian demand, especially in India and China.

Strategic expert Alaa Al-Azzawi said: “This measure will enhance the value of the local currency, which is suffering from confusion due to the fluctuation of the dollar exchange rate in the Iraqi markets.

Al-Azzawi told the “Iraq Observer” agency that the most important thing in this procedure is selling oil in dinars. “The petro-dinar will enable the Iraqi currency to enter the global markets, as Russia did before and sold its oil in local currency.”

The strategic expert pointed out that the most important thing is that the Iraqi dinar will enter a new phase in global trade relations, and the position of the dollar may weaken within Iraq.

Where is the series of losses going?

Basra Heavy and Medium crude recorded weekly losses, with global oil prices recording losses of more than 2%. Basra Heavy crude closed in its last session up $1.8 to reach $72.47.

It recorded weekly losses of $3.25, while Basra Medium crude closed in its last session with an increase of $1.8 to reach $75.47, and it also recorded weekly losses of $3.39, or the equivalent of 3.92%, while Brent crude recorded weekly losses of 1.2%, and West Texas Intermediate crude recorded weekly losses of 2.1%.

Both crudes hit their lowest levels since early January this week, after the U.S. government sharply cut its estimate of jobs added by employers in the country this year through next March.

For his part, Al-Sudani’s financial advisor, Mazhar Muhammad Salih, said: “Any deviation between oil prices (petrodollars) and the exchange rate (petrodinars) according to international market data will be considered a cost that requires compensation by paying fewer dinars or collecting a higher dinar in the opposite case,” indicating that “international reserve currencies are foreign currencies held by central banks and global financial institutions as part of their monetary reserves.”

These currencies are used in international transactions and debt settlement between countries, and are a standard for international payments and facilitating global trade.”

“Russia suffered a lot when it priced its exported oil in rubles (petrorubles), and the ruble is a non-reserve currency, and committed to a value for the ruble that was initially denominated in gold to ensure the stability of oil revenues. Here, the petroruble underwent two asset cycles at the same time (which complicated the scene of selling oil in local currency and stabilizing the value of the petroruble),” Saleh said.

According to Saleh, international market data indicate that “the first cycle: is the result of the impact of what is called the gold asset cycle and its impact on the value of the (petroruble) or the local currency denominated in exported oil.

The second, and the talk is in favor of: it is the oil assets cycle, and its effect on the value of a barrel of oil outside the global price and the reflection of that on oil revenues priced in that currency, and that “the two cycles are asset cycles that are linked and contradict each other at the same time on the value (of the currency priced in the exported oil, such as the petroruble), which made pricing Russian oil in rubles as a local currency and according to the data of the global oil market a very complex issue.”

He pointed out that “the principle of using the dinar as a local currency in international oil exchanges (petrodinar) is not without many challenges, which is why those potential challenges must be carefully considered, especially the issue of the flexibility or stability of the value of the (petrodinar) itself to change and fluctuation, especially since we in the oil market are not price makers in it, but rather price takers.”

He noted that “the global oil market will control the fluctuation of the local currency (petrodinar), in addition to the importance of international recognition of it, and the financial infrastructure necessary to support such operations from (petrodinar).

“In other words, the strategy of basing the value of the currency on oil exports directly may make the value of the local currency vulnerable to fluctuations in the global market,” he continued. “The proposal to sell oil in dinars as a local currency must take into account an important theory in global trade called the Law of One Price, which is an economic concept that assumes that the same commodity should be sold at the same prices in all markets when the price is expressed in the same currency.”

Explaining: “This is on condition that there are no transportation costs or trade barriers such as customs tariffs and others, as the single price theory here is the basis for many economic and commercial models and the theory is based on the assumption that markets operate efficiently, according to the official agency.”

A new collapse
and oil prices fell by about 2 percent today, due to fears of the impact of the slowdown in economic growth in the United States and China on energy demand, especially after prices rose by more than 7 percent during the previous three days.

Brent crude futures fell 1.6 percent, or $1.31, to $80.12 a barrel, while U.S. West Texas Intermediate crude fell 1.7 percent, or $1.30, to $76.12.

Prices have risen sharply in the past few days as analysts point to a potential shutdown of Libya's Nagat fields, which could limit the OPEC member's output of around 1.2 million barrels per day.

Analysts pointed to tensions in the Middle East following a large-scale exchange of fire between Israel and Iran-allied Hezbollah in Lebanon in recent days, according to Reuters.

Crude oil prices have recently been affected by growing expectations that the Federal Reserve will cut interest rates next month, which could boost economic growth and thus demand for oil.

U.S. data is expected to show that energy companies last week pulled crude oil from inventories for the eighth week out of nine.

Analysts expected US energy companies to withdraw about three million barrels of crude from inventories during the week ending August 23.

The American Petroleum Institute is scheduled to release weekly U.S. oil inventory data today, as is the U.S. Energy Information Administration.

Iranian Ambassador: President Masoud Pezeshkian's visit to Baghdad will take place between September 10-20

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Iranian Ambassador to Iraq Mohammad Kazem Al-Sadiq announced that the visit of Iranian President Masoud Pezeshkian to Baghdad will take place between September 10-20.

He said in a press statement that a high-level delegation will accompany President Pezeshkian in response to the invitation of the Sudanese Prime Minister, and a number of memoranda of understanding that were scheduled to be signed by the presidents of the two countries during the visit of the late President Ibrahim Raisi will be signed.

He explained that some memoranda need to be referred by the relevant ministers in the government and will be signed by the ministers of the two countries at a later time due to the start of the formation of the new Iranian government.