IRAQ | Economy

[elusive]

Originally Posted by BigDreamer

is that the mansour mall that you were referring to in another thread Elusive?
I still haven't figured out where this mysterious big mall in mansour is

lol no i was referring to the mall from the Baghdad Gate complex at muthana airport, its practically in mansour...they must be talking about another one?

[sheytanElKebir]

Originally Posted by worldwar2boy

I have a few questions about Iraqs economy:

they say Iraq got worlds 3th largest oil resources and a lot of gas to. Small and big neighbour country's of iraq (and country's close to Iraq), like Sauoiedie-Arabyiea (sorry don't know how to spell it), Kuwait, Qatar and the UAE are very, very rich. Stronger then that; the UAE, Kuwait and Qatar belong to the worlds richest country's. Their economy is for the greater part based on oil and gas. But why is Iraq not rich like those country's?
On wikipedia there is a list of country by GDP and Iraq is placest 110th of 180 country's, while Qatar is in the top 3!

WHY!?
And why is the GDP just 112 billion, that is nothing for a country with 31 million people!
I think is very strange that a country with that much oil and gas like Iraq is so poor..
GDP just $2000,- thats about €1450 per year per person!
The GDP of Qatar is €5300 per MONTH per person! They make almost 4 times more money in one month, what an Iraqi is making in a whole year! Why!? Iraq got much more oil and gas then Qatar!

1-oil production per capita (iraq has a much larger population than the examples you mentioned).
2-Money velocity in the economy
3-Capital flight (money drain out of the country to neighbouring countries)
4- wars for 3 decades (that does do some small damage...)
5- dilapidated industries and infrastructure that doesn't support economic growth or employment
6-large informal economy and lack of accurate statistics in iraq which results in an underestimate of GDP.

those are the most important points. Iraq (if it stays united) will certainly never reach the kind of income per capita that Qatar with its sub 1M population has. NEVER.

Yet Iraq does have a realistic chance of getting an income per capita similar to Saudi Arabia / Turkey / Iran.

if iraq splits up, then Basra can certainly compete with Qatar for title of the richest country on earth, the rest of Iraq will be lucky to match Armenia or Georgia.

[sheytanElKebir]

Originally Posted by worldwar2boy

But why is the GDP in the north much higher then the average GDP income of Iraq?
(North $9.000 - $10.300 and average $2.000). Only my grandmothers pension is about $2.000 :S (we live in the north, dont know how the pension and other incomes outside of work is in the other parts of Iraq).

1-unequal distribution of oil wealth
2-safe area causing "capital flight" from the rest of Iraq to KRG
3-safe area causing many foreign companies to put their iraqi offices there.

all the above together increases money velocity massively which causes exponential increase in GDP. http://en.wikipedia.org/wiki/Velocity_of_money

also the difference isn't quite as high as you make it, it is perhaps double the iraqi average in KRG, which is in line with the differences in income + capital inflows vs capital flight.

The main reasons KRG achieved these are :
-efficient security services to make the area safe
-fast land allocation to foreign investors to make sure investment projects are not delayed
-disunity between arabs (sunnis/shias) making KRG kingmakers in Baghdad who can get away with "eating their pie and sharing in Iraq's" (ruling themselves, and sharing the rule over the rest of Iraq!).

Of course Iraq's convoluted political climate, fractured society is the main cause of the retardation in the rest of Iraq, because even with an extra 25% oil income coming to baghdad (if Iraq unilateraly ceded from kurdistan), it would make little improvement to the overall situation in Baghdad.

[sheytanElKebir]

Originally Posted by worldwar2boy

Oke, thnx for the information. But is it possible for Iraq to be as rich as some European country's like Spain, Italy (GDP of $30.000) within 20 years or will Iraq be allways poor?

And the KRG gets only 17% of the Iraqi money and there are 5 million people in the KRG and 25 million in whole Iraq. So 20% would have been fair...

KRG gets 17% for itself + it shares in part of the 83% from the rest of Iraq using several methods including reexport of oil meant for local consumption, employment of kurdish officials in Iraq, kurdish ministers and officers in iraq on iraqi budget, as well as using iraqi budget for kurdish projects (like kurdish "cultural offices" in iraqi embassies)... all in all KRG takes about 25% or more of the budget in spite of having about 13-17% of population.

Iraq may become as "wealthy" as spain within 20 years. but that depends on good economic management which simply does not exist in iraq. Certainly oil production will rise, and subsequently iraq will achieve a higher plateau around $10-$13k GDP p/a but in order for iraq to go higher than that they must use the oil money for energy, farming, industrial development rather than current account payments on salaries/pensions and a few "white elephant" projects like major stadiums, skyscrapers and other idiotic things..


DISCLAIMER> The above is not the truth just my personal opinion.

[sheytanElKebir]

Big Increase in Iraq’s Foreign Currency Reserves
Posted on 29 November 2010. Tags: banking, IQD, iraqi dinar

The Iraqi Central Bank announced recently an increase in its reserves of foreign currency to more than $ 50 billion, up from $ 41 billion at the end of the first half of 2010.
Mohammed Salih, an advisor to the bank, said in an interview with Radio Free Iraq that this increase is attributable to rising world oil prices during the second half of this year, and added that the rise in reserves would increase the strength of the Iraqi currency.
A number of Iraqi economists stressed that increasing the size of the Iraqi Central Bank’s reserves of hard currency will not directly affect the local economy, but will serve to strengthen the local currency.
In this regard, economic expert Dr. Abdul Rahman al-Mashhadani said the strength of the currency “will increase the trust of foreign and local investors by increasing the attraction of investment in Iraq.”


the arm twisting of the US is glaringly apparent here. Iraq is force to accumulate dollar reserves in order to keep the dinar down (just like the gulf arab states). Meanwhile, the government doesn't have a paltry $1Bn for social security and has a budget of just $250M (over 4 years!) to rehouse the poor.

[elusive]

any news about when the iraqi dinar will be revaluated?

[sheytanElKebir]

Originally Posted by elusive

any news about when the iraqi dinar will be revaluated?

in my humble opinion this whole internet rumour about "revalue the iraqi dinar" is just a scam on the internet that iraqi banks on the internet use to rip off gulible and greedy foreigners... first and foremost the bunniya owned warka bank (but others too...).

iraq has a soft peg to the USD... therefore it will continue to accumulate USD reserves. I am not an economist, but my view is that iraq should have a free floating currency, and the central bank's reserves should be filled with "bonds" issued by iraqi infrastructure and industrial firms rather than US dollars!

Imagine that $50Bn (+ the other $80Bn in the new york federal reserve bank), issued as bonds for Iraqi "joint stock" companies to modernise our industries, farms, housing and infrastructure instead of just sitting there...

[sheytanElKebir]

Posted on 22 November 2010. Tags: IMF, International Monetary Fund, IQD, iraqi dinar

The International Monetary Fund (IMF) has cited Iraq’s monetary policy as the reason for turning down an Iraqi request for a loan package to reduce its 2011 budget deficit, an advisor to the Iraqi government said on Sunday.
AKnews reports that despite the IMF’s rejection, talks between Iraq and the fund continue.
“The IMF… is not satisfied with the current Iraqi financial policy and has urged the government to make extensive changes”, said Abd Hussein al-Jaberi, a member of the board of advisors to the Council of Ministers.
The IMF has reportedly called for:
changes at the level of the spending;
reduction of inflation;
a plan to encourage the private sector; and,
a plan to address employment levels in governmental departments.
The Iraqi Finance Ministry called on the Ministry of Industry and Minerals to work on transforming its subsidiaries into self-financing companies in order to cover the expenses of its employees.
The Ministry of Planning and Development has said there is a huge workforce in governmental departments.
“Iraq has promised the IMF to address the monetary issues”, said al-Jaberi, “but talks are still underway between the two sides to come up with solutions”.
The Iraqi Finance Ministry announced last month the finalization of Iraq’s 2011 draft budget, the majority of which has been devoted to investment. The 2011 budget amounts to US$86.4 billion, up from around US$72 billion last year.

[sheytanElKebir]

Originally Posted by elusive

any news about when the iraqi dinar will be revaluated?

speak of the devil....

Bloomberg reports that Japanese consumers are being warned about an investment scam selling Iraqi dinar on predictions the currency will surge in value.
A man in western Japan spent 2 million yen ($25,000) to buy 500,000 Iraqi dinar ($428) after a caller recommended buying the currency because it was expected to gain as much as 30-fold, the National Consumer Affairs Center said on its website. The man, whose attempts to get a refund were unsuccessful, was among more than 200 people who bought the currency, the posting said.
A quick calculation shows that even a 30-fold increase would still have left the man down 50% on the deal.
“In most cases, the exchange rate is extremely bad,” Ryota Kato, a spokesman for the center, told Bloomberg by telephone. “And you wouldn’t be able to exchange the dinar back into yen because currently no Japanese The Central Bank of Iraq exchanges 1,170 dinar for 1 U.S. dollar, according to its website, a rate that has been in place since early 2009. An Iraq government spokesman said in April the country has no plans to stop linking its currency to the dollar.
Kato said the center received 368 inquires about Iraqi dinar in the nine months ended September, compared with four for all of last year. Among the 202 people who said they purchased the currency, the average investment was 3.5 million yen [$44,000].
“One person spent 20 million yen buying dinar,” said Kato, adding that the elderly have been targeted. Consumers are also advised to take precautions if asked to buy the Sudanese pound, he said.
“Our organization can’t judge whether these transactions are fraudulent, but you should be very careful when you deal with currencies that have low liquidity,” Kato said. “We’re still getting many inquiries.”

[sheytanElKebir]

Industrial offsets as the way to reconstruct both Iraq's military as well as its civilian infrastructure.

http://iraqimilitary.org/forums/view...php?f=10&t=295

[sheytanElKebir]

Oh dear.

Now we can expect some silly things to start with the donkeys in charge of the Central Bank:
chopping off three 0,
printing cash on demand (inflation)
Interest rate rises
etc....

back to the days of the unreliable dinar, with the currency out of the hands of professionals and in the hands of bead sellers (maliki) and social security claimants (the rest of the government).

Iraq cenbank slams ruling placing it under cabinet


BAGHDAD | Mon Jan 24, 2011 7:43am EST
Jan 24 (Reuters) - Iraq's central bank on Monday warned that a court ruling placing it under the supervision of the cabinet, and not of parliament, could expose its international assets to seizure by Iraq's creditors.

"(The bank's) independence, as stated in the law, was and still is the only guarantee that the Central Bank of Iraq's financial resources outside Iraq are not subject to measures of confiscation and seizure by international creditors," the bank said in a statement.

Iraq's supreme court last week issued a ruling placing a number of key independent institutions under the supervision of Prime Minister Nuri al-Maliki's cabinet, rather than parliament. The central bank was one of them.

Iraq central bank slams ruling putting it under cabinet
BAGHDAD (January 25, 2011) : Iraq's central bank warned on Monday that a court ruling placing it under the supervision of the cabinet rather than parliament could expose its international assets to seizure by Iraq's creditors.

"(The bank's) independence, as stated in the law, was and still is the only guarantee that the Central Bank of Iraq's financial resources outside Iraq are not subject to measures of confiscation and seizure by international creditors," the bank said in a statement. Iraq still faces war reparations claims from Kuwait for invading the emirate in 1990 under Saddam Hussein.

The supreme court issued a ruling last week placing a number of independent institutions under Prime Minister Nuri al-Maliki's cabinet instead of parliament. They included the electoral commission and the main anti-corruption watchdog, as well as the central bank.

Maliki requested a court ruling on the issue before he was reappointed prime minister last month. The decision in his favour alarmed critics who view it as an attempt by the Shia leader to consolidate power as US forces withdraw this year.

The government said the measure was aimed at clearing up constitutional ambiguities in parliament's oversight of the institutions which had allowed the bodies to be hijacked by partisan political interests. The central bank holds $50 billion in international reserves. Iraq could also face hundreds of millions of dollars in private lawsuits in the United States once it emerges from sanctions imposed by the United Nations.

Asked whether the government might interfere in the bank's policies, central bank senior adviser Mudher Kasim said, "This is where the danger lies."

[BigDreamer]

this is indeed a very a dangerous development..

Two vital concepts that Iraqis haven't fathomed yet, seperation of power, and goverment accountablity by having a strong political oppostion..

This is why I still think our deomocracy is still "in development".. we have a long way to go

[sheytanElKebir]

oh wow. things are getting done.

This will cause some short term inflation, but in the long term its only good for our local industries.

Iraq to raise import tariffs in March
Text size
BAGHDAD, Feb 03, 2011 (AFP) - Iraq will sharply raise tariffs in March in the first major reform of its customs regime since the US-led coalition that ousted Saddam Hussein slashed duties, documents obtained by AFP showed on Thursday.

The new tariffs were detailed in a 794-page document published by the Iraqi finance ministry's public commission of customs, and will come in to effect on March 6.

The duties, which allow Baghdad to protect local industries as its moribund economy slowly grows following decades of violence and sanctions, range from zero to 80 percent of the value of products being imported.

Tariffs for rice, sugar and antibiotics will be set at five percent, while duties for cars are 15 percent.

The detailed list also includes items such as castanets and bayonets, which carry tariffs of 20 percent and 25 percent respectively.

The law replaces a variety of past regulations, including some dating back to the time of the Coalition Provisional Authority (CPA), the occupation authority charged with administering post-invasion Iraq.

In Order 12, originally signed June 12, 2003, the CPA suspended tariffs on all products, notably leading to a massive influx of used cars, some of which are still on Iraq's streets today.

Order 38, signed in September 2003, created a "reconstruction levy" -- a single tariff of five percent on all imported goods except food, medicine, books, clothing and products related to humanitarian assistance or Iraq's reconstruction.

Receipts from the levy, which was implemented at the start of 2004, were meant to be used "only to assist the Iraqi people and support the reconstruction of Iraq."

Notable exceptions included products used by the CPA, coalition forces, their contractors and foreign governments.

[BigDreamer]

antibiotics !!!!

what about produce from Syria, turkey, Iran etc.. !! why on earth target antibiotics !

[sheytanElKebir]

Originally Posted by BigDreamer

antibiotics !!!!

what about produce from Syria, turkey, Iran etc.. !! why on earth target antibiotics !

they haven't targetted anti-biotics. the tarriffs remain at 5% (as before).

[Persi]

Iraq Expects $30bn Investment in 2011

02 February 2011. Tags: National Investment Commission, NIC
Iraq expects private investment in its economy to triple to $30 billion [36 trillion Iraqi dinars] this year, as energy, agriculture and housing projects accelerate now that the country has formed a new government, a senior government official said on Tuesday.

Investment exceeded $10 billion last year, Salar Mohammed Ameen, vice chairman of the National Investment Commission (NIC), told Reuters on the sidelines of an energy conference in Istanbul.

Some $4 billion of investment will be in Iraq’s electricity sector, Ameen said

[sheytanElKebir]

maliki's trying to save his neck with bread and circuses... but by channeling the money into the "same old" ways (ministries, state salaries, state subsidies, social security) nothing will be done and unemployment will remain high (unless he hires "everyone" who still hasn't got a state job to do nothing!! (like most of the people in state jobs already)

Iraq cabinet ramps up spending as oil prices rise
(AFP) – 1 day ago
BAGHDAD — Iraq's government submitted a revised draft budget to MPs for approval on Sunday, raising projected public spending as oil prices have increased, government spokesman Ali al-Dabbagh said.
The new spending programme estimates overall expenditure at $81.86 billion, or 96.6 trillion Iraqi dinars, while income will be $68.56 billion, leaving a shortfall of $13.3 billion-- about a 16 percent budget deficit.
Sunday's submission is based on average oil prices of $76.5 per barrel and projected exports of 2.2 million barrels of oil per day (bpd), a figure which includes 100,000 bpd of exports from the autonomous Kurdish region.
A previous draft budget, sent to parliament on December 1, estimated spending of $78.8 billion based on oil prices of $73 per barrel.
Of the overall spending in the new budget, $56.44 billion will be operating expenses -- primarily salaries and pensions for civil servants - and the remaining $25.42 billion will be dedicated to investment, Dabbagh said.
Energy sales are expected to account for 90 percent of revenues.
Dabbagh said the $13.3 billion deficit would be covered by "money accumulated from past surpluses and from internal and external loans."
He added that the cabinet also gave the green light for the finance ministry to request a $4.5 billion loan from the International Monetary Fund, and a further $2 billion from the World Bank.
While Iraq's projected oil price currently looks to be a conservative estimate -- prices currently stand at around $89 in New York -- its projected exports are more ambitious.
Iraq has not exported 2.2 million barrels per day of oil since the 2003 US-led invasion ousted dictator Saddam Hussein.
The country currently produces around 2.5 million bpd, with exports averaging around two million bpd, though the former figure is expected to rise to three million bpd by the end of the year, according to the oil ministry.

by the way the money dedicated to investments also includes the weapons they're buying for the defence and interior ministries (about $5bn or so)...

utter madness.


then you have hakim's bunch trying to curry favour with the electorate, demanding a monthly payment of 15k dinars for every citizen in addition to the ration program (and allocating 15% of the entire budget for that).

15% of Iraq budget allocated for the people

Tuesday, February 08, 2011 09:57 GMT
The amendments made on Iraq’s 2011 budget includes allocating 15% of the budget to the Iraqi people, member of the parliamentary financial committee Najiba Najib told Alsumaria News.

Al Mehrab Martyr Party threatened on Monday to refuse voting for Iraq’s budget if the ration card system which it labeled as a red line is not dealt with seriously.

Iraq’s government must deal with this issue as soon as possible, the party MP Habib Al Tarfi told Alsumaria News.
Al Tarfi believes granting 15000 Iraqi Dinar for citizens is little in comparison with the routine procedures they would have to go through in order to receive the money.

Al Fadhila (Virtue) Party for its part called to form a parliamentary committee specialized in the ration card system. The Party urged to compensate Iraqis for the lack of ration cards by an adequate amount of money.

the crass, incompetent, retardation, narrow minded, economically illiterate, cretinous donkeys! Their idea of the 21st century Iraq is:

1- sell oil
2- distribute cash to populace
3- import stuff for the populace to buy with the cash.

= happiness and prosperity (in their cretinous retarded minds). Never mind the fact that the export of oil alone with no domestic economy will mean that Iraq will ALWAYS remain POOR! as long as you keep the people quiet, there's no need to try and tick over the brain for a few minutes and see if you can actually create a domestic economy instead of doling out cash.

but then again, these retards spent the best part of three decades living on social security themselves in europe (whilst not learning anything of Europe! not even the language), so why expect anything else?

[Persi]

Iraqi Banks Urged to Merge

08 February 2011
Abdul Hussein Al-Anbuge, an Iraqi government economic adviser, has urged the country’s private lenders to merge in order to strengthen their capital and provide stronger support to the banking sector, AK News has reported.

The total capital of Iraqi private banks rose from $30m in 2004 to $1.6bn now, not including what is owned by branches of foreign banks operating in the country.

[sheytanElKebir]

some details about the new tarrifs.

They are actually quite good! Lets hope enforcement works. this is certainly one of the "cornerstones" of building Iraq's local industries and farming sector.

As other Arab states scramble to prevent Egypt- and Tunisia-style uprisings sparked in part by rising prices, Iraq is going its own way by raising tariffs on a range of goods from bottled water to bayonets.
The new law, which takes effect on March 6, replaces a variety of past regulations, including some dating back to the time of the Coalition Provisional Authority (CPA), the occupation authority charged with administering Iraq after the 2003 US invasion.
Tariffs for rice, sugar and antibiotics will remain at five percent, while duties for cars will rise to 15 percent.
The 794-page list also includes items such as castanets and bayonets, which carry tariffs of 20 percent and 25 percent respectively, while bottled water and soft drinks will incur a maximum import duty of 80 percent.
"The new scheme aims to protect the economy and the Iraqi market," Hatem Hashem, head of international trade at the commerce ministry, told AFP.
"Many (local) industries have disappeared because they were not able to compete with cheap goods that have flooded the market after 2003," he said.
"Of course prices will go up, but we think it will be acceptable," said Hatem, arguing that the scheme would prevent low-quality goods from entering Iraq.
"The market was flooded in 2003 with poor-quality products and the Iraqis are now more concerned about quality," he added.
For months, Iraq has been the scene of sometimes violent protests, fuelled by acute shortage of basic services such as electricity and clean water.
With angry protests raging around the Arab world, many governments have been quick to boost subsidies and slash tariffs on many basic goods.
Rising food prices triggered angry riots in Tunisia and Algeria that began at the end of last year, toppling Tunisian leader Zine El Abidine Ben Ali, and spread to Egypt where President Hosni Mubarak is battling to stay in power in face of mass protests.
Over the past few weeks, Jordan, Syria, Algeria and Libya have either cut food taxes or boosted subsidies as a bulwark against public anger.
Conscious of the storms blowing around the Arab world, Iraq's Prime Minister Nuri al-Maliki, who pledged recently to halve his salary, suggested in an interview with AFP on Saturday that implementing the new scheme required a "favourable environment."
Hatem said he was "100% certain" that the new rates would be in force early next month as planned, because it was passed as law and was only awaiting implementation.
He added that the scheme would especially protect local agriculture by providing seasonal adjustments, so that tariffs would be higher when Iraqi crops are in the market and lower when they are not in season.
"It's quite clear the Iraqi government wants to remove dependence on oil by supporting domestic industry," said Ali al-Saffar, a London-based Iraq analyst with the Economist Intelligence Unit.
Saffar said that while agriculture accounted for eight percent of Iraq's economy in 1975, the figure was now just three percent.
"The Iraqi government wants to stimulate industries which are going to employ people and decrease dependency on oil," he said. A UN report released to the press on Monday noted that the oil sector accounts for 65 percent of Iraq's economy but just one percent of jobs.
"Increasing tariffs may not be the best way to do so because the immediate transition period comes at a time of unprecedented unrest in the region, unrest that is fuelled by disenchantment surrounding high prices and rampant unemployment," he added.
Iraq's inflation last year was 3.3 percent, according to the ministry of planning. Saffar said that could rise to 5.6 percent -- even without accounting for the new tariffs.
"The government will have to consider how it will explain the price rise to the people," Saffar said.

[BigDreamer]

I still want tarrifs on fruits and vegatbles imported from turkey & syria in particular.


Atleast until they decide to release more water.. it's only fair.
meanwhile, we can import from other nations, Iran, Pakistan, Brazil, there are many options..