Iraqi News Highlights Tuesday Evening 3-28-23
Tlm724 Administrator Bondlady’s Corner
Crippling Dollar Shortage Underscores Vulnerability Of Iraq’s Oil-Based Economy
March 28, 20230 Attempts to control a monetary crisis have had unintended consequences for a country struggling to get back on its feet
By Raya Jalabi in Sulaimaniya, Iraq Iraq is struggling to control a crippling currency crisis that has roiled the country for months, underlining the fragility of its oil-dependent economy 20 years on from the US-led invasion.
Ali Mohsen al-Allaq, the new central bank governor, defended measures introduced to stabilise the monetary crisis that has led to an acute shortage of US dollars and a sharp fall in the dinar.
“We’ve focused on resolving the root of the problem and we’re seeing some positive indicators,” Allaq said in an interview, referring to central bank and government efforts to calm the panic that has taken hold since the crisis erupted in November.
This was when Iraqi’s authorities, with the US, implemented tough rules for banks as part of efforts to stamp out money laundering and surreptitious cash flows abroad.
But the package of measures had unintended consequences, including drastically cutting the dollar supply in an economy where the US currency is heavily favoured, pushing up inflation and creating hardships for Iraqis who trust neither their institutions nor their own currency.
Hamoody Ismail, 27, a personal trainer in Baghdad, said he was struggling to find the $4,300 he was due to pay in rent and business payments.
“My landlord refuses to take dinars and I’ve spent several days this week trying to find dollars.”
The Parallel Dollar Market.. Negative Effects That Limit Purchasing Power
Economical 2023/03/28 Baghdad: Haider Fleeh Al-Rubaie And the mainstay of the emirate Specialists in economic affairs have warned of the dangers of continuing speculation taking place in the “parallel market” at the level of individuals’ income, calling for monitoring phenomena harmful to the Iraqi economy.
Despite the successive “packages and measures” of the Central Bank, aimed at controlling the dollar’s reins, and at the same time seeking to bridge the gap between the official dollar price and what is being sold in the parallel market,
this currency is still witnessing successive rises that have remarkably affected the level of per capita income, and led to clear increases in inflation rates, as a result of relying almost entirely on financing commodity imports in dollars.
The noticeable increase in the volume of the Central Bank’s sales of dollars did not constitute a factor that could affect the dollar prices in the parallel market, in which the exchange rate reached 156 thousand dinars for every 100 dollars.
Economist Dr. Sattar Al-Bayati believes, during his interview with Al-Sabah, that
“the exchange rate remains subject to speculation, which is normal according to economic theories and the opinions of financial scholars who assert that money in any country is requested for three reasons.
The first is in transactions, and the second is for reserve or hedging, and the third is for speculation.”
According to the expert al-Bayati, “the times of crises and difficult circumstances that countries are going through show the so-called war dealers, meaning that in such difficult circumstances there are personalities and institutions that work and exploit these conditions to work in the market of speculation and money laundering, as well as smuggling hard currency, which is what happens.” speaker saying.
Al-Bayati also stressed the need for the successive packages and procedures of the Central Bank to accompany the security services, with the support of the judiciary, to monitor these phenomena harmful to the Iraqi economy and hold them accountable by all legal means,
warning of the dangers of the parallel market for the currency and its negative repercussions on the life of the citizen, especially since Iraq is an importer of most consumer goods and foodstuffs.
This has a negative impact on the purchasing power of low-income citizens.
In turn, the researcher in economic affairs, Dr. Ali Dadoush, indicated during his interview with “Al-Sabah” that
“the Central Bank’s measures to control the crisis of the dollar’s rise did not have an effect on the parallel market, as the successive rises in the exchange rate of the dollar in the parallel market,”
warning that this will lead to a rise in inflation rates, especially with the existence of a wide difference between the official price set by the Central Bank and the price in the parallel market, which directly affected the rise in the prices of goods and commodities in the markets, as most, if not all, are imported in dollars.
Dadoush believes that these conditions and the resulting continuous price hikes have negatively affected the salaries of employees, which, in my opinion, decreased by about 12%,
stressing the need to stimulate private banks to enter the window and buy remittance dollars according to the terms and conditions of the new electronic platform and to deal more realistically.
In import operations in terms of amount, quantity and quality, down to the main source of the goods or commodity. https://alsabaah.iq/74120-.html
The Vinicial Times: The Dollar Crisis Revealed The Fragility Of The Iraqi Economy
Information/ translation .. A report by the British Finchial Times confirmed on Monday that Iraq is fighting to control the financial crisis that has been ravaged by the country for months, which confirms the fragility of the Iraqi-based Iraqi economy after twenty years of the US invasion of the country.
The report, translated by the information agency, stated that “the governor of the Central Bank on Mohsen Al-Alaq defended the measures taken to achieve stability in the monetary currency and led to a severe shortage of the dollar and a decrease in the value of the Iraqi currency.”
Al -Alaq said that we “focused on solving the root of the problem and see some positive indicators,” referring to the efforts of the Iraqi government and the central bank to calm the panic that prevailed since the outbreak of the crisis last November.”
The report added that “the package of procedures has resulted from unintended repercussions,
including an unintended decrease in the supply of the dollar in an economy in which the American currency prefers strongly,
which led to high inflation and the creation of difficulties for Iraqis who do not trust their institutions or their currency.”
He continued, “The weak Iraq economy is almost completely dependent on the transformations in global oil prices, and
the standard oil revenues have led to the inflation of the second largest producer in the Organization of Petroleum Exporting Countries (OPEC) to more than 100 billion dollars,
although Baghdad cannot Access to funds except through the American Federal Reserve that has retained Iraq’s foreign exchange reserves since the invasion. He explained that
“according to this arrangement, the Central Bank of Iraq requests its dollars from the federal reserve and sells it to two commercial lenders and exchange companies for a dinar, a process known as the daily dollar auction.
But US and Iraqi officials have long complained that widespread fraud allowed large sums to withdraw large sums From the country. And that “some banks and merchants are unwilling to reveal the details of the final recipients, while others were slow to adapt to the bases.
With many requests for transferring from Iraq’s accounts in the Federal Reserve, it reduced the supply of dollars in the market.
The size of these decreased. Transfers from the average daily value of $180 million in 2022 to between 65 million dollars to $75 million this year, according to the central bank data.
For his part, Al -Alaq said that “there are signs of progress.
“We are witnessing a steady rise in the number of transactions on the digital platform and we see more Iraqi merchants registering officially to participate.
“However, the experts warned that the matter may take several months before Iraqi banks fully adapt
And years until the economy completely moved away from the informal nature and the domination of criticism.” https://almaalomah.me/news/translated/الفاينيشيال-تايمز:-ازمة-الدولار-كشفت-هشاشة-الاقتصاد-العراقي
Al-Jawahiri: One Billion And 500 Million Dollars Is The Value Of Iraqi Profits After International Arbitration Against Turkey
Information / Baghdad ..The oil expert, Hamza Al-Jawahiri, affirmed, on Monday, that the decision of the Arbitration Authority of the International Chamber of Commerce in Paris contributes to supporting Iraq politically and economically, indicating that the decision will give Iraq an increase in its oil imports by about one and a half billion according to the currently circulating prices.
Al-Jawahiri said in a statement to / the information, that
“the international court’s decision regarding the lawsuit submitted by Iraq against the Turkish side forced the latter to abide by it and immediately for fear that if it violated this, it will lose the confidence of the countries that extend their oil and gas pipelines through its territory, as well as its violation For the international agreement related to the extension of oil pipelines. He added that
“the arbitration decision has positive effects that will return to Iraq, including increasing its production from 3 and a half million by/ m to four million by/ m from the financial side,
it will achieve additional resources for Iraq within one and a half and a half according to the current prices, as well The region will not be able to export one drop of oil except through the Iraqi Marketing Company Sumo
A member of the Parliamentary Oil and Energy Committee, Intisar Hassan, had returned yesterday, Sunday, the International Court’s decision to end the smuggling of Iraqi oil from Kurdistan to Turkey, with the tremendous step of the Ministry of Oil.
“The decision is an achievement calculated to the Ministry of Oil at the present time after the long period that continued in the region to smuggle oil to Turkey and Israel,” Hassan said in an interview with the information agency. From the region’s government, except with the approval of the central government through the Jihan port. End / 25 m
Planning: Iraq Maintains The Pace Of Population Increase
Economical 2023/03/26 Baghdad: Ali Muwaffaq The Ministry of Planning announced new indicators that showed maintaining the pace of population increase in the country at a rate of one million people annually.
Meanwhile, the International Labor Organization confirmed that Iraq has not yet benefited from the demographic gift in employing youth and the labor force due to the weak ability to generate increasing jobs.
According to the indicators published by the Ministry of Planning yesterday, population estimates during the year 2022 reached 42,248,883 people, while population growth rates during the past year reached 2.5%.
The official spokesman for the ministry, Abdul Zahra Al-Hindawi, had previously stated that the country’s population is 41 million and 190 thousand people, according to the 2021 census, indicating that this increase is normal, and if it continues, we may reach 80 million people by 2050.
Economists believe that it is necessary to urgently conduct a general population census, in order to find out the real indicators and know the exact percentages of the economically active population, as well as identify indicators of poverty, unemployment, disability, education, health and population status indicators.
For his part, the Social Security official at the International Labor Organization, Dr. Amjad Rabi, said during a dialogue forum organized by the Ministry of Planning on the Iraqi labor market, security and social protection: that Iraq is now in the first phase of the “window of economic opportunities”, but it did not enjoy the growing number of young people and forces. employed, and was unable to transform this demographic gift due to the poor ability to generate sufficient jobs to meet the increasing demand for work.
He added that the younger generation joining the labor force faces “deprivation of education”, as only 51% of males and only 45% of girls are enrolled in secondary education, indicating that this educational gap leads to many costs, on the individuals themselves, society and the economy. As a whole.
For her part, the ILO Country Coordinator, Dr. Maha Kattaa, said: This forum is about education, the labor market and innovation, which is one of the priorities of the Iraqi government, especially the new government program.
She added that the choice of this topic was due to the fact that the development process today has an urgent need to look at the education process during the past years in Iraq, stressing that the link between education and the labor market is very important, because the outputs of education will enter this market.
The Ministry of Planning recently discussed the overall (final) framework of the National Development Plan (2023-2027) with the participation of a group of experts, specialists and representatives of the concerned departments, and presented a definition of the plan’s priorities, which came at the forefront of its objectives, benefiting from human capital as a basic pillar. https://alsabaah.iq/73963-.html
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