‘Nothing achieved’ in Baghdad meeting over Kurdistan oil exports: Source
The meeting in Baghdad between Iraqi and Kurdish officials as well as international oil companies has concluded without reaching any deals despite US pressure, a meeting participant told Rudaw English.
The video for this My FX Buddies Blogpost is below here:
“Nothing [was] achieved and there was no breakthrough,” the source told Rudaw English on the condition of anonymity, adding that, however, they agreed to form two committees between Erbil and Baghdad to address pressing issues, including debts, assurances of payment, and how the scope of the third party consultant.
A top American diplomat also attended the meeting as Washington is increasingly pressuring Baghdad to resume Kurdish oil exports swiftly, the well-placed source said.
The Iraqi oil ministry had invited the Association of the Petroleum Industry of Kurdistan (APIKUR), which consists of eight oil companies operating in the Kurdistan Region, and the Kurdistan Regional Government’s (KRG) natural resources ministry for a meeting in Baghdad on Tuesday. However, the meeting did not take place as scheduled, and an unannounced meeting was held on Saturday instead.
The companies also want assurances that payments under Iraq’s budget amendment - requiring Baghdad to pay $16 per barrel in production costs to the KRG - will be reliably distributed to the producers.
Oil exports from the Kurdistan Region through the Iraq-Turkey pipeline were halted in March 2023 after a Paris-based arbitration court ruled in favor of Baghdad against Ankara, saying the latter had violated a 1973 pipeline agreement by allowing Erbil to begin independent oil exports in 2014.
Confirming to Shafaq News.. The Iraqi Parliament sets Saturday as the date to resume its sessions
link nothing we are interested is on the agenda but at least they are saying they are going to work but we shall see
The Iraqi Parliament has set next Saturday, March 8, as the date to resume its sessions, according to what the media department of the parliament reported.
According to the session agenda issued by the media department, and received by Shafaq News Agency, the session will witness voting on the draft law amending the fourth law of industrial investment for the private and mixed sectors, in addition to voting on a decision to recommend the Ministry of Education to reinstate the trial system. The interim parliamentary committee will also discuss its report on preserving state property.
The first reading of the draft law to cancel the ratification of the agreement exempting holders of diplomatic and service passports from entry visas between the governments of Iraq and Cyprus will also be presented during the session, in addition to the first reading of the proposed law to amend the second law of the Mukhtars, and the report and discussion of the proposed fourth amendment to the law of medical and health professionals.
Earlier, a parliamentary source reported that the parliament presidency decided to suspend the sessions and resume them next Saturday.
The source told Shafaq News Agency that the Council Presidency informed the representatives that there would be no session this week, and that the session would be held on Saturday evening after breakfast.
For his part, member of the Parliamentary Legal Committee, Mohammed Anouz, revealed to Shafaq News Agency that Parliament sessions during the month of Ramadan will be in the evening after breakfast, to ensure the continuation of legislative work before the end of the current session.
It is noteworthy that the current session of the Iraqi Council of Representatives began on January 9, 2022, and is scheduled to last for four years, ending on January 8, 2026.
No: Voting on the draft law amending the fourth amendment to the Industrial Investment Law for the private and mixed sectors No. (20) of 1998. (Economy, Industry and Trade Committee, Investment and Development Committee), (9) articles).
Anya: Voting on a decision to recommend to the Ministry of Education to reinstate the trial system.
Third: Report of the interim parliamentary committee to follow up on the preservation of state property.
Fourth: The first reading of the draft law to cancel the law ratifying the agreement exempting holders of diplomatic and service passports from entry visas between the Government of the Republic of Iraq and the Government of the Republic of Cyprus No. 26 of 2023. Foreign Relations Committee, (2) Articles.
Parliament
Fifth: The first reading of the proposed law amending the second law of the Mukhtars Law No. 13 of 2011. The Committee of Regions and Governorates Not Organized in a Region, the Security and Defense Committee, the Finance Committee, the Legal Committee, (8) articles. Rajuma Ni Nowina
Sixth: Report and discussion of the second reading of the proposed law amending the fourth amendment to the Law on the Progression of Medical and Health Professionals No. (1) of 2000. (Health and Environment Committee), (13) articles.
The session begins at one o'clock in the afternoon
Parliamentary Finance: The government is responsible for the delay in sending the 2025 budget tables
Member of the Parliamentary Finance Committee, Moeen Al-Kazemi, said, “The Ministry of Finance sending the 2025 budget tables to the Council of Ministers means that its mission has ended, and we are waiting for the Council of Ministers to vote on these tables and send them to the House of Representatives.”
Al-Kadhimi called on the Ministry of Finance to expedite sending the current year’s budget tables to Parliament for approval, in a statement seen by Al-Masry.
He stressed that "the delay in sending the schedules is the responsibility of the government and negatively affects the performance of the ministries."
He pointed out that "the 2025 budget schedules do not take a long time, as the Ministry of Planning has all the indicators and figures related to the investment aspect."
Economist: Some institutions have the ability to self-finance
Economic expert Safwan Qusay said on Thursday that “Iraq has flexibility in dealing with some files that could contribute to reducing expenditures outside the country, especially at the level of the pharmaceutical industry, as well as stopping gas burning in the medium term and rationalizing public spending at the expense of oil and relying on self-financing.”
He explained in a statement seen by Al-Masry, that “some institutions have the ability to self-finance and can cover the expenses of some ministries without relying on the federal budget.”
He added, "Operating expenses are secured, especially since oil prices are still above the $70 per barrel threshold, as Iraq needs less than this amount to secure salaries as well as the ration card."
.png)
Al-Sudani issues 8 directives to develop electronic payment and enhance digital transactions in government departments
Prime Minister Mohammed Shia Al-Sudani issued 8 directives today, Thursday, regarding the development of electronic payment systems and the enhancement of digital transactions in government departments.
According to a statement from Al-Sudani's office, the directives were as follows:
1. Assigning the Baghdad Chamber of Commerce, the Federation of Chambers of Commerce, and the Iraqi Federation of Industries to work on simplifying procedures, in cooperation with the relevant authorities, within a time frame of 6 months to implement the business automation and digital transformation project in these institutions, in a way that accelerates company registration procedures and enhances electronic payment systems.
2. Facilitating the process of authenticating company contracts, especially simple and medium-sized ones, by issuing a confirmation letter from a notary public, and authenticating those contracts without delay.
3. Study the possibility of allocating a notary public office within the Baghdad Chamber of Commerce to ensure the approval of company incorporation contracts and facilitate the necessary procedures.
4. Obligating the company owner to open a bank account in one of the authorized Iraqi banks, based on official approval from the Baghdad Chamber of Commerce, as this is a basic condition for completing the registration procedures and obtaining the company’s identity and certificate of incorporation.
5. Enhancing the use of electronic transactions and digital payment systems within the new business environment, through coordination with the Central Bank of Iraq, and issuing a circular to all banks to facilitate account opening procedures for small and medium-sized companies.
6. Coordinating with the Central Bank of Iraq to issue a circular to banks to provide banking facilities and financial incentives to companies, including loans, banking facilities, and electronic transfers, enhancing the use of digital payments, and adopting technological financial solutions.
7. Preparing a media campaign to raise awareness of the new procedures, by producing content that explains to citizens and investors the company registration process, the advantages of digital transformation, and the banking opportunities available.
8. Forming a specialized committee from the relevant authorities to follow up on the implementation of these procedures and prepare periodic reports on the progress made in implementing the recommendations.
Central Bank Policies Result in Lower Annual and Core Inflation in 2024
Samir Al-Nusairi
The Central Bank announced, within the monetary policy indicators for the fourth quarter of 2024, a decrease in the annual inflation rate to 2.8% and the core inflation rate to 2.5%, compared to 4% and 4.5%, respectively, for the same quarter of 2023.
It is one of the objectives of monetary policy that the Central Bank is working on according to the policies and procedures adopted since 2023. This means controlling the general level of prices, which is a basic objective of monetary policy that confirms the soundness of the steps and the fixed approach of the Central Bank in achieving all the objectives contained in its applicable law. The objectives of the Central Bank's monetary policy are to achieve economic growth and stability. In the extremely complex economic, security and political conditions in 2024 that the world is going through and that our country is affected by. Especially the countries of the geographical region in which our country is affected negatively and positively.
Our economy has suffered from these conditions for decades, due to the rentier nature of the economy and the dependence of 93% of the general budget allocations on oil revenues, which constitutes about 60% of the gross domestic product. While the effective productive economic sectors, namely agriculture, contribute 3% to the gross domestic product and industry does not exceed 2%, as indicated by official data from the Ministry of Planning. Despite the development in the contribution of the two sectors in 2024, these are indicators that confirm the necessity of supporting, activating and revolutionizing the real sector to contribute to sustainable development and address the shortcomings in the local product and its failure to cover the consumption needs of citizens in food and other basic materials. Therefore, there was almost complete reliance on imports for the private commercial sector, and internal trade was not controlled and foreign trade was not regulated. There was also weak control over illegal trade and unofficial border crossings.
This affected the monetary and commercial market, and exchange rates and prices of imported and necessary goods and materials rose at high rates during 2021 and 2022. Therefore, the inflation index was the most prominent challenge facing monetary policy and directly affected the stability of the exchange rate. This led the Central Bank to take many measures in cooperation with the government in 2023 and 2024 to regulate foreign trade financing, control foreign transfers, regulate the global financial and banking system, comply with international standards, and leave the electronic platform. And begin implementing its third strategy for banking reform and classification in all its basic links at the level of internal and external banking transactions.
The most prominent of which is securing foreign transfers through direct dealings of our banks with international correspondent banks, which have reached 20 Iraqi banks so far, using 8 foreign currencies, namely the US dollar, the European euro, the Chinese yuan, the UAE dirham, the Indian rupee, the Turkish lira, the Jordanian dinar, and the Saudi riyal. Through analyzing the indicators of the general and basic inflation rate conducted by the Central Bank and in comparison with the rates of inflation rates achieved in Arab and regional countries.
Official data shows that inflation rates in most countries with unstable economies have reached very high levels. In Turkey, it reached 80.2%, in Sudan, it reached 11.4%, and in Iran, it reached 40%. In the Maghreb countries with relative economic stability, Tunisia, Algeria, and Morocco, it reached 9.3%, 9%, and 5%, respectively. In Egypt, it reached 37.4%, and in the Gulf countries with stable, oil-rich economies, it ranged between (2.4%-4.8%). This confirms beyond doubt that the strategy and measures of the Central Bank during the past and current years have achieved one of the basic objectives of monetary policy, which is to reduce the inflation rate and maintain the general level of prices of goods and services.
It is currently working to achieve other goals, which are the stability of the exchange rate and maintaining a foreign exchange reserve that covers the local currency in circulation and imports, increasing the gold reserve and reducing the percentage of local currency exported. Therefore, the economic results and outputs in 2024 confirm that the policies and procedures undertaken by the Central Bank have achieved an important goal of its goals to achieve stability in the monetary system, which is an important step in achieving other goals of monetary policy.
The value of deposits in the Iraqi banking sector decreased by 10 trillion dinars
The "Iraq Al-Mustaqbal" Foundation for Economic Studies and Consultations announced on Thursday that the Iraqi banking sector witnessed a noticeable decrease in the total value of deposits by 9% during the year 2024.
The institution indicated in a report today that the value of deposits "decreased from 133.5 trillion Iraqi dinars at the end of 2023 to 123.5 trillion Iraqi dinars, which means a loss of deposits worth 10 trillion dinars.
The institution explained the details of the decline, including those related to the government sector. Government sector deposits witnessed a significant decline of 14%, falling from 47.3 trillion Iraqi dinars to 42.8 trillion Iraqi dinars.
This decline is attributed to a decrease in government revenues or a change in liquidity management policies, according to the report.
Regarding public institutions’ deposits, public institutions’ deposits decreased by 7.4%, from 29.6 trillion Iraqi dinars to 27.4 trillion Iraqi dinars.
As for the private sector, private sector deposits recorded a decrease of 6.52%, falling from 56.5 trillion Iraqi dinars to 53.2 trillion Iraqi dinars. This decline may be a result of declining confidence in the banking sector.
As for the decline according to the nature of deposits, it includes current deposits, which decreased significantly by 11.6%, from 107.5 trillion Iraqi dinars to 97.4 trillion Iraqi dinars. This decline is considered the most influential on total deposits, especially since current deposits constitute the largest percentage of total deposits.
While fixed deposits witnessed a slight decrease from 9.67 trillion Iraqi dinars to 9.62 trillion Iraqi dinars, reflecting relative stability in this type of deposits.
As for savings deposits, contrary to the general trend, savings deposits rose by a small percentage of 0.7%, from IQD 16.3 trillion to IQD 16.43 trillion, indicating a limited shift towards saving.
Prime Minister's Advisor Explains Details of "Bridge Borrowing"
Prime Minister's Advisor Explains Details of "Bridge Borrowing"
The Prime Minister's Advisor, Mazhar Muhammad Salih, explained today, Thursday, the details of "bridge borrowing", while indicating that more than 50% of the domestic debt is concentrated in the investment portfolio of the Central Bank.
Saleh told the Iraqi News Agency (INA): "Historically, government borrowing through treasury transfers is a type of short-term borrowing from the banking market that British public finance has adopted since the reign of Queen Victoria."
He added that "this type of borrowing was done for limited periods not exceeding weeks or financial quarters, and is known as (bridge borrowing), as it aims to bridge the temporary deficit gap resulting from the slowdown in revenues compared to actual expenditures."
He pointed out that "due to monthly financial obligations, public finance may resort to issuing treasury transfers as a financing tool to bridge the temporary deficit in the budget until cash flow stabilizes in the next period of the fiscal year."
He added that "in light of the fluctuations in the oil revenue cycle on the general budget over the past ten years, the government was forced to borrow multiple and accumulated, which led to an increase in expenditures in three stages: the first during the war on ISIS terrorism, the second due to the economic closure caused by the pandemic, and finally the increase in expenditures in the areas of reconstruction and implementation of suspended projects."
He added that "these circumstances resulted in the accumulation of domestic public debt, part of which was borne by government banks, as more than half of it was deducted from the Central Bank of Iraq through open market operations."
He stressed that "this necessitated a complementary monetary issuance that led to a significant increase in the monetary mass, especially since the domestic public debt, amounting to 82 trillion dinars, is still mostly within the government financial and banking system, more than 50% of this debt is concentrated in the investment portfolio of the Central Bank."
He added, "On the positive side, this debt is covered by foreign currency by more than 100%, which reflects a high level of monetary stability, as the annual inflation growth rate did not exceed 3%."
He added that "despite these challenges, both the monetary and fiscal authorities seek continuous consultation in order to gradually extinguish the domestic debt," stressing that "the government relies on enhancing financial sustainability by reducing the public debt balance annually and reducing the annual budget deficit to a percentage not exceeding 3% of the gross domestic product." He concluded that "this approach is part of a fiscal policy aimed at providing financing and protecting economic activity, which contributes to achieving stability and sustainable economic growth through coordination between fiscal and monetary policies."
Gunther Report on the Challenges of the Iraqi Economy Released in Arabic
Failure will destabilize social and political stability.
The Iraq-British Business Council (IBBC) announced the release of the Arabic version of Professor Frank Gunter’s report, which was presented at the IBBC conference in Baghdad on February 17, 2025.
Titled “Is Iraq Ready for Business?”, the report provides a comprehensive analysis of the challenges facing the Iraqi economy, focusing on the urgent need to expand the private sector, reduce dependence on oil, and address regulatory barriers that hinder investment and business growth.
The report concluded that the rapid growth in the Iraqi workforce, coupled with expectations that oil revenues will remain flat or decline, means that the Iraqi government will not be able to continue to play the role of primary employer.”
Good policies require good data, the report noted, noting that the World Bank’s new Doing Business report provides a wealth of data on three key aspects across ten key sectors of the economy. However, this report is not a ready-made practical guide, and many of the subcategories and data may seem counterintuitive compared to the previous “Ease of Doing Business” report, which has been cancelled. Moreover, the Doing Business report does not measure or collect data on informal enterprises, which are estimated to account for about two-thirds of employment in Iraq, a significant gap.
Based on the “Business Readiness” data on Iraq, the report’s author believes that the government should focus on seven difficult tasks: (reducing corruption, simplifying regulations and increasing transparency, improving access to financial services, reducing government employment, developing a system for dealing with the liquidation of troubled companies, improving the quality of education, and adopting an appropriate exchange rate).
He stressed that these improvements in these areas require dedication and political courage because the cost of failure will be huge. Continued reliance on government jobs funded by oil revenues will become more difficult in the coming decade, leading to higher rates of unemployment and underemployment, especially among young males. This will not only lead to negative economic results, but its impact will extend to destabilizing social and political stability.
To read the full report this is 37 pages all in Arabic
Washington reviews all economic exemptions for Iran... and Iraq is at the heart of the crisis.
The US State Department announced that it is reviewing all economic exemptions that provide Iran with any degree of support, in an escalatory step that could have broad repercussions, especially on Iraq, which relies heavily on gas and electricity imports from Tehran.
State Department spokeswoman Tammy Bruce confirmed that Washington is urging Iraq to speed up its move away from Iranian energy sources. This statement reflects increasing pressure on Baghdad, which finds itself facing a dual challenge of meeting its electricity needs amid a stifling energy crisis, while at the same time avoiding any economic and political repercussions from adhering to US sanctions.
Baghdad between the hammer and the anvil
Iraq relies on Iranian gas to power the power plants that feed most of its provinces, with Baghdad importing about 40% of its energy needs from Tehran. Despite its attempts to diversify its sources, local gas investment projects are still lagging, leaving Iraq in a vulnerable position in the face of any tightening of US sanctions.
The Iraqi government, which previously received periodic waivers from Washington to import energy from Iran, may now face tighter restrictions. If those waivers are removed, it could exacerbate the electricity crisis, especially as summer approaches, when consumption rates rise and power outages are frequent.
Economic and political repercussions
The repercussions of the US decision are not limited to the energy file only, but extend to the Iraqi economy more broadly. Iraq pays part of its Iranian gas dues in Iraqi dinars through frozen bank accounts, which means that any suspension of exemptions could disrupt this mechanism and impose new financial challenges on Baghdad.
Politically, this American pressure puts the Iraqi government before a difficult test, as it must reconcile its strategic relationship with Washington and its economic partnership with Tehran. With tensions rising in the region, any new American move could affect the fragile balance in the Iraqi scene.
Reconstruction: Iraq receives international offers to invest in new residential cities
The New Cities Implementation Authority, affiliated with the Ministry of Construction and Housing, confirmed the referral of residential cities in 5 governorates with “integrated” designs, and also confirmed the arrival of international offers to invest in the new residential cities.
The head of the authority, Hamid Abdul Hamad, said in a statement followed by "Ultra Iraq", that "the first phase included the establishment of 5 new cities that were announced, referred, and started, and reached different stages. There are also other cities that were announced, which are 6 cities, and the announcement period will end during the current month, including the city of Mutanabbi in Wasit, the new city of Balad, the city of Salam in the new Najaf, Ur in Nasiriyah, Warka in Samawah, and another city in Al-Majar Al-Kabir, south of Maysan."
Hamad added, "A number of countries have come forward to invest in the new cities through joint companies, including Iraqi, foreign and Arab companies, such as Al-Jawahiri City, which is being implemented in partnership between an Iraqi and Chinese investor, and Al-Ghazlani City in Mosul, which is being implemented in partnership with an Iraqi-Chinese partnership, and on the banks of Karbala in partnership with a Malaysian entity and various Iraqi companies with Arab and foreign banks, in addition to Ali Al-Wardi City for a global investor and Aura Company."
Hamad stressed that “these cities were designed in a way that makes them integrated in all activities, whether housing or other economic activities,” indicating that “the Nahrawan residential city will be implemented on an area of 80,000 dunums, and in several models. The first is to establish different cities with different areas, and develop infrastructure through investment while guaranteeing a share for the state, and this is one of the facilities if the citizen thinks of buying land that is served in all aspects.”
US State Department: All economic waivers for Iran under review
The US State Department announced today, Thursday, March 6, 2025, that "all economic exemptions for Iran are under review."
In February, the United States imposed new sanctions on an international network accused of smuggling Iranian oil to China, the first new measures under US President Donald Trump's so-called "maximum pressure" policy against Iran.
The US Treasury Department announced that this network transported millions of barrels of Iranian crude oil, providing hundreds of millions of dollars to fund the Iranian armed forces and Tehran's allies in the region.
The US "exemption" for exporting Iranian gas to Iraq ended today, Thursday.
US Treasury Secretary: If I were Iranian, I would convert my money to a currency other than the Toman
US Treasury Secretary Scott Besant vowed on Thursday to close the international financial system to Iran, saying, "If economic security is national security, the Iranian regime will not have both."
The United States will target "regional parties" that facilitate the transfer of revenues to Iran, according to what Reuters reported from Bessent.
He added: "If I were Iranian, I would convert all my money to non-rials (Iranian tomans) by now... Sanctions will be used clearly and aggressively to achieve maximum immediate effect."
The United States will "completely" disrupt Iran's oil sector, according to Bessent, who said Washington will also halt Tehran's ability to manufacture drones, stressing that the United States will exert maximum pressure on Iran through sanctions.
Rafidain Bank invites its customers
Rafidain Bank stressed, today, Thursday, March 6, 2025, the necessity of updating its customers’ personal data and official documents immediately upon any changes, such as renewing documents or amending information registered with it, with the aim of ensuring the smooth flow of banking transactions and enhancing account protection.
The bank confirmed in a statement by its media office, received by "Baghdad Today", that "updating data is a routine procedure to keep pace with official updates and to ensure that information matches accurately when implementing banking operations."
He explained that the challenge is "when renewing the national card or passport, and in the event of changing any personal data registered with the bank."
Regarding the update mechanism, Rafidain Bank called for “visiting the nearest branch of the bank with the updated documents,” stressing that “the procedure does not affect customers’ accounts or balances, but rather comes within its commitment to developing banking services and facilitating procedures.”
The bank has allocated phone numbers to communicate with customer service via the following numbers: 5788, 07901940112, 07901911179.
With the decline in oil.. Economic warnings of financial risks in Iraq
Nouri explained to Al Furat News Agency that “the selling price of a barrel, which currently ranges between $64 and $66, is significantly lower than the conservative price set in the budget of $70, which is considered the minimum to avoid a deficit.”
He pointed out that the current deficit is covered through internal and external borrowing, asking: "What would happen if the price stabilized at $66 or fell further?"
He pointed out that the continued decline will increase pressure on public finances and exacerbate the state's need for external financing, calling for the need to enhance economic reforms and reduce dependence on oil by diversifying sources of revenue.
It is worth noting that the Ministry of Finance had prepared the current year’s budget based on conservative scenarios, but the fluctuations in the global oil market have confused the calculations, which portends greater challenges in the event of price instability.
No comments:
Post a Comment