Echoes of Conflict: Rocket Attacks in Iraq and the Israeli-Palestinian Ripple Effect
In the rising chill of an October evening, two Grad missiles cut through the night sky of Iraq, hurtling towards their ominous destination – the Ayn al-Esad Air Base, a strategic outpost housing US troops. A familiar sequence of events unfolded: the deafening roar of the launch, the deadly arc of the missiles, and the anxious wait for impact. But this time, the story bears a twist. The missiles failed to claim any lives or damage, a rare stroke of luck in a region where such attacks have become chillingly routine.
The Echoes of A Distant Conflict
These attacks, far from random acts of violence, are grim echoes of a distant conflict. Following Israel’s attacks on the Gaza Strip, the Islamic resistance organization, an amalgam of Shiite armed groups, has claimed these attacks as a grim form of solidarity. The reverberations of the Israeli-Palestinian conflict, thus, ripple outwards, shaking the uneasy peace of the Iraqi plains. Yet the connection to the Gaza conflict is far from straightforward, and as United Nations Secretary-General Antonio Guterres points out, the blame does not rest solely on Hamas’s shoulders. The root of the matter, he emphasizes, lies in the long-standing occupation faced by the Palestinian people.
The Crosshairs of Tension
The recent spate of attacks leaves a question hanging heavily in the air – how safe are US troops in this tinderbox environment? With around 2,500 troops stationed in Iraq and a further 900 in neighboring Syria, the US finds itself walking a tightrope, balancing the need for regional stability against the safety of its personnel. The US military, in response, is tightening its protective measures, even contemplating the evacuation of military families if necessary. The message to Iran and its proxies is clear: any attack on US personnel will be met with swift and decisive action.
A Complex Web of Conflict
The rocket attacks have not only affected the US. They have also drawn the attention of other global players. French President Emmanuel Macron proposed broadening the international coalition fighting against the Islamic State in Iraq and Syria to include a new adversary – the Palestinian militant group, Hamas, in Gaza. Such a proposal, while showcasing France’s commitment to combating terrorism, raises complex questions about the role of international forces in conflicts beyond their immediate purview.
This tangled web of conflicts, stretching from the Gaza Strip to the plains of Iraq, serves as a stark reminder of the intricate dynamics of the Middle East. Long-standing grievances, power dynamics, and the involvement of various armed groups all contribute to a volatile cocktail of tensions. And as these recent attacks show, the repercussions of these interactions can be felt far beyond the immediate conflict zones.
Resolving these issues will not be easy. It will require a comprehensive and inclusive peace process, one that not only addresses immediate concerns but also the deep-seated issues fueling these conflicts. Only then can the region hope to break free from the cycle of violence that has held it hostage for so long.
Iraq’s Financial Revolution: A Journey Towards Digitalization and Growth
In the heart of the Middle East, far removed from the clamor of the foreign media, a quiet revolution is stirring. Iraq, a nation often portrayed as a turbulent hotbed of conflict, is now spearheading a transformative shift in its financial sector, seeking to usher in an era of digitalization and economic growth. This narrative isn’t forged in the crucible of sensational headlines, but it’s a story worth telling, for it signifies Iraq’s relentless drive towards stability and prosperity.
Steering the Winds of Change
The Prime Minister of Iraq, Muhammad Shaaa Al-Sudani, recently led a crucial meeting focusing on the unified treasury account and the electronic payment system – two pillars that could potentially redefine the nation’s financial landscape. Al-Sudani emphasized the pressing need to activate the work and responsibilities of the Payments Council at the Central Bank. This is more than a bureaucratic directive; it’s an urgent call to modernize Iraq’s banking sector, a critical step towards a broader economic transformation.
The Prime Minister also insisted on receiving a final report on the progress made, reflecting a demand for accountability and transparency. His directive to all ministries to implement the fourth paragraph of the Cabinet Resolution (3581 of 2023), and to accelerate the formation of committees, underscores the urgency of the task at hand.
Al-Sudani’s call for an analysis of the non-moving bank accounts for each ministry within a month is a testament to the government’s resolve to tackle financial stagnation and inject momentum into the economy. It forms part of the larger effort to make the financial system more responsive and agile, aligning it with the changing dynamics of the global economic order.
Building a Digital Economy
At the first banking conference of the Central Bank of Iraq held in Erbil, the shift towards a digital economy was front and center. The conference, graced by the Prime Minister of the Kurdistan Regional Government, Masrour Barzani, the Second Deputy Speaker of the House of Representatives, Shakhwan Abdullah, and various political, economic, and business figures, showcased Iraq’s commitment to banking sector growth and international collaboration.
The Governor of the Central Bank, Ali Al Alaq, highlighted the risks associated with a cash-based economy, such as financial crimes and illicit practices. He painted a vision of a digital economy, where technology serves as a catalyst for growth and transparency. Al Alaq emphasized the importance of maintaining the stability of the exchange rate and prioritizing the infrastructure of financial systems and business rules.
The Governor also underscored the importance of compliance with anti-money laundering and terrorism financing laws, demonstrating Iraq’s commitment to international norms and standards. These efforts aim to ensure the transparency and safety of financial operations and make Iraq a more attractive destination for international investments.
Moving Towards a Sustainable Future
The developments in Iraq’s banking sector are not isolated events but part of a larger narrative of progress and modernization. The country is taking significant strides towards building a stable, safe, and effective financial system, which is vital for attracting investment, promoting economic growth, and improving the overall quality of life for its citizens.
From the Prime Minister’s directives to the Central Bank’s initiatives, Iraq’s commitment to transforming its financial infrastructure is clear. Amid the challenges and complexities, the nation is charting a course towards a future defined not by conflict and crises, but by stability, growth, and digital empowerment. This is the untold story of Iraq – a story of resilience, ambition, and an unwavering resolve to secure a prosperous future for its people.
FIREFLY: My bank guys says corruption is still the major holdup right now but
even Sudani was on the news saying for parliament to stop calling out Alaq. He's saying the parliament members are the problem...
When you ask when is it going to happen... ask how is the cleaning going. How is the removal of Iran...eradicating the smuggling going. That's what we want to know. Nothing else.
Because once the atmosphere is suitable you're going to get what you want. You're never going to get rid of the cockroaches but you can definitely control them. That's what's happening right now - corruption is being controlled, it's being cleaned up.
Major powerful countries are coming into Iraq. It's going to effect their currency exchange rate. More than anything else it will rocket their float and that when you have to be very astute. Watch it...You've got to watch the rate in the float. Know when to hold'm and know when to fold'm. Know when to backoff.
This is Section 1 of: The Ultimate Guide to Every Economic and Political Reason for an Iraqi Dinar Revaluation (RV)
Amidst years of speculation, rumors, and expectations surrounding an Iraqi Dinar Revaluation (RV), there exists a base case to be made deserving serious consideration.
Coming Soon
Part 2 will identify and explain every key economic and political stability indicator that directly influences and supports a strong and stable currency exchange rate.
Part 3 will bring everything together to analyze and present a comparison between economic and political indicators for Iraq and the three strongest currencies in the world – Kuwait, Oman, and Bahrain.
However, it is crucial to ground any discussion in the real economic, financial, and political environment surrounding Iraq today.
While the speculative nature of previous claims may not align with economic reality, it is important to acknowledge the continuous improvements witnessed in Iraq’s economic development.
These advancements provide a legitimate rationale in support of considering the eventual revaluation of the Iraqi Dinar.
This report outlines a comprehensive set of factors contributing to this perspective, aiming to provide a thorough analysis of the landscape surrounding the case for an Iraqi Dinar revaluation (RV).
1.1 The Evolution of the Iraqi Dinar
The history of the Iraqi Dinar dates back to its introduction as Iraq’s official currency in 1932. At its inception, the IQD was at par with the British pound, reflecting a stable economy and strong financial position.
However, the subsequent decades witnessed a series of significant events that led to the devaluation of the IQD.
1.1.1 The Impact of Wars on the IQD
The Iran-Iraq war (1980-1988) and the subsequent Gulf War in 1991 had profound effects on Iraq’s economy and its currency.
These prolonged conflicts strained resources, disrupted economic stability, and resulted in the devaluation of the Iraqi Dinar.
Economic sanctions, imposed by the international community due to various political and security issues, have played a pivotal role in the fluctuations of the Iraqi Dinar’s value.
Sanctions often limited Iraq’s ability to engage in international trade, leading to a decline in foreign currency reserves and contributing to the devaluation of the IQD.
1.2 Popular Reasons Fueling Speculation around an IQD Revaluation
Despite these challenges, speculations about the potential revaluation of the Iraqi Dinar have persisted.
Proponents of an Iraqi Dinar RV often highlight several primary arguments supporting their position.
These include:
1.2.1 Iraq’s Abundant Oil Reserves
Likely the most popular reason supporting expectations of an Iraqi Dinar revaluation is that Iraq possesses one of the world’s largest oil reserves, and the successful exploitation of these resources should significantly boost its economic potential.
This substantial oil wealth is a critical factor in the potential revaluation of the IQD.
SIDEBAR: Oil Credits for the USA?
Many argue that Iraq could support a high exchange rate to the U.S. Dollar because of a much rumored “Oil Credit Agreement” purportedly set up between Iraq and the USA after the Gulf War.
However, there is no conclusive evidence (other than what’s posted on various RV related internet sites) that supports such an agreement actually exists.
The trickle of oil imported from Iraq renders any Oil Credits insignificant. Source: US Energy Information Administration.
Furthermore, if such an Oil Credit Agreement did exist, the fact remains that in 2022:
The USA consumed 19.1 million barrels/day of petroleum
The USA produced 19.99 million barrels/day of petroleum
The USA imported 8.32 million barrels/day of petroleum
The USA only imported an average of 332 thousand barrels/day from Iraq (4% of USA’s total petroleum imports)
Given that the USA imports such an insignificant amount of petroleum from Iraq, the value of any “Oil Credits” would not support any meaningful role in an Iraqi Dinar RV.
1.2.2 Iraq’s Prospects of Economic Growth
Another popular reason offered in support of an IQD revaluation is Iraq’s potential for continued economic growth.
Underpinned by its oil resources and untapped economic potential, the community of IQD RV’ers has continued to grow over the years with committed interest.
Certainly there is a valid case to be made for a successful Iraqi Dinar revaluation being closely tied to Iraq’s ability to harness its economic potential.
Does Iraq now have a robust economic credentials to support a stable, high-value exchange rate?
A detailed analysis of Iraq’s key economic indicators will be presented in Section 3 of this report (link).
1.2.3 Political Stabilization in Iraq
Finally, Iraq’s purported progress in establishing political stability is another popular argument made in support of a significant currency revaluation.
Iraq’s journey towards political stability has been marred by challenges like corruption, security concerns, and political instability.
As Iraq takes steps towards establishing lasting political stability and independent governance, the probability of a major currency revaluation (RV) would definitely increase.
Yet, has the government of Iraq (GOI) really made significant inroads to political stability?
This subject will be outlined in Section 3 of this report.
1.3 International Agencies and their Effect on Exchange Rates
It’s important to clarify that international agencies, such as the United Nations Security Council (UNSC) and the International Monetary Fund (IMF), do not possess the direct authority to arbitrarily set a country’s currency exchange rate (valuation).
This means that no international agency can mandate that the Iraqi Dinar (IQD) be changed from $3.00 per IQD to $0.0007 per IQD – or visa versa.
Currency exchange rates are primarily shaped by market forces, economic indicators, and the nation’s own financial policies.
While these agencies do not directly dictate exchange rates themselves, they do exert influence through mechanisms such as economic and geopolitical sanctions which may significantly impact a nation’s currency value.
1.4 Executive Orders and Economic Sanctions were a backdrop for an Iraq Dinar Revaluation
In the aftermath of the Gulf War and during the reconstruction of Iraq, a series of Executive Orders were issued to address assets, legal issues, and economic stability.
These Executive Orders collectively aimed to protect Iraqi assets, maintain the stability and security of Iraq, and support post-conflict reconstruction and development. Notably:
Here’s a list of every EO and U.S. Treasury Sanctions related to Iraq.
Executive Order 13303 (May 22, 2003)
Purpose: Protect the Development Fund for Iraq and Iraqi assets from being seized by creditors.
Safeguard the Development Fund for Iraq.
Prohibit attachment or judicial processes against Iraqi assets.
Ensure oil proceeds are used for Iraq’s reconstruction.
Maintain the stability and security of Iraq.
Executive Order 13315 (August 28, 2003)
Purpose: Expand measures to address security threats to Iraq’s stability, security, and reconstruction.
Broaden sanctions against individuals and entities.
Counteract threats to Iraq’s peace and security.
Support economic reconstruction and political reform.
Provide humanitarian aid to the Iraqi people.
Executive Order 13350 (July 29, 2004)
Purpose: Terminate previous national emergencies and modify EOs to address Iraq’s stability and security.
End prior national emergencies.
Modify EOs to counter Iraq’s stability threats.
Protect Iraq’s assets.
Promote reconstruction and development.
Executive Order 13364 (November 29, 2004)
Purpose: Modify protections for the Development Fund for Iraq while recognizing changes in Iraq’s circumstances.
Terminate prohibitions related to the Development Fund.
Balance asset protection with Iraq’s needs.
Address the evolution of Iraq’s financial situation.
Maintain the national emergency declared in EO 13303.
Executive Order 13438 (July 17, 2007)
Purpose: Block the property of individuals and entities that threaten Iraq’s stabilization efforts.
Block assets of those threatening Iraq’s stability.
Prohibit contributions to or from blocked individuals.
Counteract violence undermining peace and reconstruction.
Support Iraq’s economic and political progress.
Executive Order 13668 (May 27, 2014)
Purpose: End immunities granted to the Development Fund for Iraq, considering Iraq’s changing circumstances.
Terminate immunities related to the Development Fund.
Recognize changes in Iraq’s situation.
Balance asset protection with Iraq’s progress.
Maintain the national emergency declared in EO 13303.
1.4.2 Specifics Regarding Executive Order 13303
EO13303 Signed May 22, 2003. Photo: The American Presidency Project
There is much speculation over Executive Order 13303, issued by President George W. Bush in 2003, regarding the revaluation (RV) of the Iraqi Dinar.
Aimed to safeguard the Development Fund for Iraq and protect Iraqi petroleum-related assets, this order prohibited the attachment, judgment, or lien against these assets, aiming to facilitate Iraq’s reconstruction and stability.
Executive Order 13303 has been continuously extended beyond its initial issuance in 2003.
On May 16, 2023, a notice was issued to extend the national emergency with respect to the stabilization of Iraq, originally declared by Executive Order 13303 on May 22, 2003.
The order aimed to prevent obstacles to the orderly reconstruction of Iraq, the restoration of peace and security, and the development of political, administrative, and economic institutions in Iraq.
Executive Order 13303 does not directly mention the Iraqi Dinar currency or address a potential revaluation of the Iraqi Dinar but plays a role in protecting Iraq’s economic interests.
1.4.3 Economic Actions and Sanctions Levied Against Iraq by the U.S. Treasury
There were a number of Actions and Sanctions-related documents issued by the U.S. Treasury against Iraq. Below is a summarized explanation of each document.
OFAC Sets Out Expectations for Compliance with U.S. Sanctions
Establishing the Central Bank of Iraq/Oil Proceeds Receipts Account (May 22, 2003)
This document, issued on May 22, 2003, establishes the Central Bank of Iraq/Oil Proceeds Receipts Account.
The purpose of this account is to receive funds generated from the sale of Iraqi petroleum and petroleum products. It plays a crucial role in managing and allocating the revenue generated from oil sales for the benefit of Iraq.
Establishing the Iraq Stabilization and Insurgency Sanctions Regulations (June 13, 2003)
This document serves as an overview of the Iraq Stabilization and Insurgency Sanctions Regulations (ISISR) and was created around the same period as the ISISR.
It discusses several aspects of the sanctions on Iraq, including exporting to Iraq, financial transactions, prohibitions related to Iraqi cultural property, immunities from attachment, and exemptions for U.S. military forces operating in Iraq. The document provides a broader perspective on the sanctions’ context and application.
The Termination of Iraqi Sanctions and Removal from Chapter V of 31 C.F.R. (September 13, 2010)
What is 31 CFR Chapter V?
Title 31: Chapter V – OFFICE OF FOREIGN ASSETS CONTROL, DEPARTMENT OF THE TREASURY
Title 31 refers to Code of Federal Regulations (CFR) for the U.S. Department of Treasury
Subtitle B refers to Regulations Relating to Money and Finance
Chapter V refers specifically to the Office of Foreign Assets Control under the Department of the Treasury
In September 2010, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) marked a significant milestone by formally ending economic sanctions on Iraq. This marked the removal of the Iraqi Sanctions Regulations from 31 C.F.R. Chapter V and introduced the Iraq Stabilization and Insurgency Sanctions Regulations (ISISR).
This transition was in line with several Executive Orders, including Executive Order 13303 (May 22, 2003), Executive Order 13315 (August 28, 2003), Executive Order 13350 (July 29, 2004), Executive Order 13364 (November 29, 2004), and Executive Order 13438 (July 17, 2007).
On September 13, 2010, the ISISR replaced the earlier Iraqi Sanctions Regulations, and as of that date, there were no comprehensive economic sanctions remaining against Iraq.
The ISISR contain the current OFAC restrictions related to Iraq and Iraqi property. As of the date of this document, there were no broad-based sanctions against Iraq. However, specific individuals and entities associated with the former Saddam Hussein regime were subject to prohibitions and asset freezes.
These individuals and entities were determined to have committed or posed a significant risk of committing acts of violence that could threaten the peace, stability of Iraq, the Government of Iraq, or undermine efforts for economic reconstruction, political reform, or humanitarian assistance in Iraq.
On September 13, 2010, the ISISR replaced the earlier Iraqi Sanctions Regulations, and as of that date, there were no comprehensive sanctions against Iraq.
Summary
This section has provided a detailed historical context surrounding the Iraqi Dinar, including its evolution, the impact of wars, the role of economic sanctions, the popular reasons for speculations regarding an Iraqi Dinar revaluation, and the role of international agencies and Executive Orders in currency exchange rates.
Coming Soon
Section 2 will identify and explain every key economic and political stability indicator that directly influences and supports a strong and stable currency exchange rate.
Section 3 will bring everything together to analyze and present a comparison between economic and political indicators for Iraq and the three strongest currencies in the world – Kuwait, Oman, and Bahrain.
Iraq’s PM announces conditional financial settlement with KRI, highlights workforce concerns, 24 OCT
Shafaq News / Prime Minister Mohammed Shia Al Sudani announced on Tuesday a conditional financial settlement with the Kurdistan Region (KRI), simultaneously hinting at "concerns" regarding the Region's workforce numbers.
Speaking at a press conference following a cabinet session, Al Sudani stated, "There will be a settlement next month between KRI and Baghdad, and this settlement will be conditional on a genuine audit of the workforce in KRI," adding, "The Financial Control Bureau has submitted a report to the government, highlighting concerns about the number of employees."
The Prime Minister emphasized, "These concerns must be addressed before the settlement is finalized, and the allocated funds are disbursed to KRI."
Regarding the resumption of oil exports from the Kurdistan Region, Al Sudani said, "Iraq and Turkey have expressed their readiness to resume oil exports, but the production companies in KRI have issues with the allocation of production costs. They believe these allocations do not align with actual production costs, and, therefore, they refuse to export oil until this matter is resolved."
He clarified that "the companies have informed the government that they can resume exports 30 days after the issues are resolved."
Article: "Iraq recovers $70 million smuggled into Switzerland" Remember I spoke about this before that there's a lot of unaccounted for Iraqi dinar that's somewhere. It's considered stolen.
So before they do any kind of RV or major RI they have to make sure to account for as much of it as possible to make sure when they do this they're not enriching some terrorist group...This is great news. That's a huge chunk of money they got from over there in Switzerland. Let's hope they continue to recover it all. The sooner the better.
People keep asking me, 'In your opinion Pimpy are we going to see a change in the exchange rate before the end of the year?'
I say no but if we do it's not going to be very significant. If anything you might see it go from 1320 down to maybe 1,200. It's at least a step in the right direction and I'll take it...I don't care how small it is just as long as they're doing something with the current exchange rate. Baby steps that's fine. [NOTE: Going "down" from 1320 to 1200 is good for dinar investors.]
They need to 100% de-dollarize. And I mean all markets with stiff penalties. We understand they have to do it [Use the dollar] when they're doing sales of oil but everything else stiff penalties.
Nobody else is allowed to use US dollars. I wouldn't even sell them to the locals. There's always going to be a black market. You have countries under sanctions like Iran, Turkey Syria all under sanctions by the United States and they want US dollars. This is a poor predicament Iraq is in but they need to do something...