Al-Adad: Iraq is in a transitional stage in electronic payment, and there is no scarcity of dollars
The advisor to the Prime Minister, Amer Al-Adad, denied any scarcity of dollar liquidity in Iraq, while confirming that the country is undergoing a transitional phase in electronic payments.
In a televised interview, Al-Adad stated that electronic payment points are a device that enables individuals to pay with an electronic payment card at points of sale. This technology is intended to increase the transparency of money movement in the country and preserve public money. It is part of a larger program aimed at transforming the country’s banking system. The objective is to leverage electronic technology to boost citizen confidence in the banking system and to channel household savings into the banking system. This will help stimulate the circular flow of the economy.
He said that the BUS system can help reduce corruption and cash loss. The government is making decisions to promote electronic payments and the possibility of using the payment system via phone. There is a strong political will to adopt this system. However, some merchants are hesitant to use electronic payment methods due to concerns about tax assessment. To ease their apprehensions, the government has provided many reassuring messages and exemptions to encourage the adoption of this system.
Al-Adad stated that there are currently between 7 million to 9 million cards in Iraq and this number will increase due to the imposition of fees. We are currently in a transitional period to avoid any confusion in the market. After this period, the emphasis will be on the electronic payment system. Al-Adad also mentioned that the culture of electronic transactions promotes transparency and helps in avoiding financial blackmail.
According to him, the reason behind the difficulties faced in development is the lack of a proper plan since the Reconstruction Council. He denied the claim that the government is facing financial instability due to a shortage of liquidity, and emphasized that there is enough money available, including hard currency earned from oil sales and currency auctions.
Al-Adad mentioned that there exists a reform management cell which is not solely responsible for administrative reforms, but also oversees the implementation of reform projects approved by the state within the government’s curriculum. The cell has a clear vision and aims to ensure effective execution of these projects.
During a recent discussion, he stated that there are two tracks they are working on: the government program and the implementation of the program and reform plan by the ministries. Additionally, the economic reforms currently being implemented by the government are being taken seriously and closely monitored. Upon further review of the reform program, it was discovered that the targets did not align with the goals. As a result, new targets have been established for each goal.
Al-Adad stated that the current government is the first to create a plan that benefits future administrations. He acknowledged that external variables, such as fluctuations in currency values, and internal political stability, play a role in economic growth. However, he emphasized that Iraq is fortunate to have both political stability and high oil prices, which have contributed to the improvement of the Iraqi economy.
During a recent interview, the speaker highlighted some of the challenges that the state faces in terms of structure and circular flow. These challenges include the collection of taxes and customs, as well as weak confidence in the banking system. To tackle these issues, the government is focusing on developing a new plan for the knowledge economy and is seeking new ways to diversify financial revenues. The speaker emphasized the government’s commitment to changing the structure and diversity of the Iraqi economy. Finally, the speaker expressed their belief that the mixed sector experience has been proven to be a failure in Iraq and is therefore useless.
Al-Adad stated that although collection is the responsibility of the state, the private sector has taken over this type of contract. The experience of electronic collection of electricity has been largely successful, as demonstrated in Anbar. Investment in this sector depends on reforming the banking system.
The government led by Muhammad Shiaa Al-Sudani is being very careful when it comes to the issue of people’s assets, lands, and residential complexes. They are working on a plan to support prices. When the former regime fell, it was discovered that Iraq had a debt of 200 billion dollars due to the purchase of materials without paying for them to operate factories.
Al-Adad stated that they are conducting a study to enhance the status of state-owned industrial companies, which include both mixed and governmental sectors.
Al-Adad has concluded that the government’s plan to improve the agricultural situation is crucial. With the current scarcity of water, the government is taking action towards sustainable agriculture through high-tech and closed agriculture. This will help reduce water consumption by up to 90%. Although Iraq lacks this technology, the government is working to include it in their development plans.
The government is watching very closely two sectors today.
One is the war between the proxy Iranian Hamas fighters vs the Israeli army in the Gaza strip.
An article in today’s news describes the possible impacts of this war on Iraq but not yet.
Also in the news is yet more de-dollarization efforts as they convert the remaining of the border crossing stations all to “all dinars” only for custom fees.
The Parliamentary Finance Committee renewed on Tuesday, its support for the Central Bank’s measures to control the exchange rate and address any obstacles.
Remember in my last Newsletter dated 10/31 that we learned that the new government of Al-Sudani made promises in his administrations curriculum to bring back the dinar stronger than the dollar.
Is this why he has openly in public stated the dinar is already stronger than the dollar?
Well then….. where is it?
As investors we wait for it.
We can see many events in-line with January 2024.
I want to bring you up to date on my latest conversation with my CBI contact as of this past Wednesday, yesterday. It was told to me that the re-education campaign is still going forward but not yet rolled out as of yet.
There is talk in the CBI it may be postponed due to the Gaza strip conflict, but no action or direction has been given to signify this as of yet.
I think they, like us, are holding our breath and praying his conflict will be short-lived and not the beginning of the huge middle eastern drag our war engulfing many other countries.
Why America's invasion of Iraq should be a warning to Israel
IIsrael’s ground offensive against the Gaza Strip has started in earnest. The Israeli government maintains that its objective is toeliminate Hamas, but if it is successful in that aim, it is unclear what – if anything – it is planning for the day after.
Numerous American and European officials have warned Israel against the consequences of what might follow. In a clear reference to the war in Iraq, US President Joe Biden said: “After 9/11, we were enraged in the United States. When we sought justice and got justice, we also made mistakes.”
Mr Biden is correct that what happened in Iraq in 2003 should be instructive for Israel. However, based on his comments and on what has transpired since, he appears to have learned the wrong lessons from the invasion that took place two decades ago.
The US President appears to have told the Israelis that America’s catastrophe in Iraq was caused by poor or inexistent planning, and that that was caused by the fact that the US was still in a state of rage after the 9/11 attacks.
The first obvious point here is that the US invaded Iraq 18 months after 9/11, and that whatever rage it felt in the days and weeks after the attacks had clearly dissipated by then. Indeed, any review of the historical record will unearth countless analysts and decision makers who openly argued that the US had already achieved its objectives in Afghanistan and who wondered why an invasion of Iraq was necessary.
The second problem with Mr Biden’s comments is that planning was never the issue for the US in Iraq. The real issue was that there was no amount of planning that would have led to a good outcome.
The main reason for that is that the US did not invade in a historical vacuum. It had already been engaging with Iraq for decades, including in the 1980s when it supported Saddam Hussein in his war against Iran, in 1991 when it bombed vital civilian infrastructure, and during the 1990s with its totally ineffectual and inhumane sanctions regime.
The point is that by 2003, the US was so distrusted and indeed so hated in Iraq that its invasion was bound to start an insurgency and was always going to motivate the international extremist movement to fight against it in Iraq.
Of course, Mr Biden is correct to suggest that the US engaged in faulty planning in 2003.
The original plans were drawn up based on exchanges with a section of the Iraqi community in exile who fed US officials with delusional expectations of what would happen after an invasion. Those plans were abandoned and replaced twice by the summer of 2003. However, although it is easy to stop there and to attribute everything that followed to this poor planning, there is much more to it than that. In fact, less than a year into the occupation, the US authorities had already recovered and were outmanoeuvring Iraqi political and social forces.
But the point is that there was almost nothing that the US could have done to overcome the levels of distrust and bad will that had been accumulating for decades and that were then translated into violence.
The lessons for the Israelis here are obvious: if it ends up reoccupying all or parts of Gaza, it will have to deal with the historical legacy of its own behaviour, including mass expulsions of Palestinians, decades of occupation, a system of apartheid that is increasingly overt, human rights abuses and much more. All of this has given rise to levels of distrust and hatred that will make it impossible to govern that territory.
In response, Israeli officials and analysts have been suggesting that, if Israel is successful is conquering the entire enclave, some type of arrangement will be struck with other actors to take control of Gaza. Some have suggested that the Arab League should step up and lead a stabilising force. Others have said that the Palestinian Authority should be invited to govern Gaza. Others still have said that an international force could assist.
And on this point, Iraq is also instructive.
In 2014, after ISIS took control over large parts of Iraq, the Iraqi government mobilised to liberate its territory. Many analysts, officials and commentators suggested at the time that it could not be done based on the assumption that the local population was so supportive of ISIS that it would always resist a takeover by the Iraqi state.
In fact, the opposite was true – residents in Tikrit and elsewhere were begging for the government to liberate their cities as their only viable escape from ISIS. And the Iraqi government received support from an international coalition for that purpose, which collaborated on several fronts.
After the liberation was complete, the same people who had been described as irrecoverable ISIS supporters all gladly returned to their homes, under the cloak of relative safety that had been provided by the Iraqi government.
The difference with the situation that Israel is now facing in Gaza could not be starker.
The reality is that if it manages to reoccupy Gaza, no one will provide any manpower to support it. No one will step up to occupy the territory on Israel’s behalf. There is no army in the region that will provide assistance, and western nations have no direct interest in getting involved. Finally, Gaza’s local population will be overtly hostile to any form of renewed direct occupation.
Whatever Israel does, it will not be able to overcome the legacies of the past century on its own. Its only solution is to strive for justice for all, a goal that is perhaps more distant today than it has ever been.
Iraq’s al-Sudani Government, One Year Later, 3 NOV
It’s been an eventful year for Iraq, with mixed results. But on balance, the prime minister has navigated it with relative stability.
Last week marked one year since Iraq’s Prime Minister Mohammed Shia al-Sudani assumed office. His ascension to the role came after a year of deep political tensions, several alarming but contained episodes of violence, and no annual government budget. A political agreement among the Shia coalition known as the Coordination Framework and major Kurdish and Sunni Arab parties set the stage for the al-Sudani government to form — meanwhile, the biggest winner in the 2021 parliamentary elections, cleric and political leader Moqtada al-Sadr, decided to withdraw from the political process altogether.
USIP’s Sarhang Hamasaeed explains how al-Sudani has fared in Iraq’s fractured political environment, examines the status of the government’s ambitious economic and developmental agenda, and looks at how Iraq is currently navigating the developments in Gaza.
How has al-Sudani managed the tense and fractured political environment he inherited?
On balance, with a glass-half-full view, al-Sudani’s first year as prime minister can be viewed favorably. But one has to look beyond his performance to get a fuller view of the dynamics surrounding him and what they may mean for future stability in the country.
Even though he was relatively unknown to many both inside and outside Iraq before becoming prime minister, he’s gradually built an image for himself as a leader who is serious, pragmatic and willing to work with all sides — in short, someone you could do business with. In this, he is being met halfway by key interlocutors’ actions (or inaction).
After withdrawing from the political process, al-Sadr has not challenged the al-Sudani government as he had al-Sudani’s predecessors, although the situation in Gaza may change that.
And even though al-Sudani’s government could not meet their commitments on timelines for deliverables — such as passing a national oil and gas law and amending amnesty law — the interested political actors, the Kurds and Sunni Arabs, mostly held the lack of progress against the political coalition that brought al-Sudani to office rather than against the prime minister himself.
The Sunni Arabs, the Kurds and Iraq’s ethnic and religious minorities hope to address their issues through al-Sudani, rather than challenge him, as they fear the failure of his government could bring greater adverse consequences at the hand of actors that would push a more extreme political, security and economic agenda against them.
Iraqi youth — who have been at the forefront of several major protest movements in recent years — are more skeptical and cynical about al-Sudani, both in terms of meeting their aspirations and his ability to operate beyond the restrictions that his political coalition puts on him.
Iraq passed a three-year budget in June, which could give al-Sudani, his backing coalition and the country some budgetary continuity, predictability and stability going forward. However, it could also embolden certain political factions to feel they no longer need the Sunni Arabs and the Kurds since they already formed the government, passed the budget and ensured a degree of acceptability for the government domestically and externally.
This is where Iraq would risk going back to instability, especially if you overlay some other developments — such as the Federal Supreme Court invalidating a Kurdistan regional oil and gas law, and later the parliament of the Kurdistan Region itself. Additionally, pressure tactics on the speaker of the Council of Representatives have suggested he could lose his office. There lies a chronic Iraqi challenge — a positive agenda being undermined by narrow pursuits of power in different political circles.
Iraq has begun playing a larger role in the Middle East both diplomatically and economically. How has al-Sudani navigated regional tensions between Iran and Arab states?
Indeed, Iraq has played an important role in Iran-Saudi and other rapprochement efforts in the Middle East for a few years now. As prime minister, al-Sudani has continued on the path toward regional integration and collaborative engagement.
He has promoted what he calls “productive diplomacy,” meaning that he seeks economic and other interests beyond simply good relations. Even more, the al-Sudani government’s economic agenda connects domestic and foreign policy ambitions. They have leveraged the relative political stability and security of the current moment to pursue the “Development Road,” a project that promotes Iraq as a dry canal of ports, highways and railways that connect Asia to Europe — as ambitious and big a vision as other countries in the region.
Iraq has also signed contracts with General Electric, Total Energies, Siemens and others to improve energy production domestically while sharing a piece of the economic pie. The al-Sudani government’s support for financing the al-Muhandis company and connecting Iraq and Iran by rail might be seen as entrenching Iran’s interests and agenda — which are often viewed as malign by many of Iraq’s citizens, neighbors and western supporters. But another view might see the move as part of a pragmatic approach to portray Iraq as a web of mutually beneficial economic interests in the region.
In his first year, al-Sudani also had to work with Iran and the Kurdistan Region leadership to prevent further Iranian missile and drone attacks on Iranian opposition based in Iraq. Khor Mor gas field was attacked multiple times, with fingers pointing to Iran and its proxies attempting to hamper Kurdish and Iraqi aspirations to become a player in the global gas market.
Relations with Turkey is also a mix of working through difficult portfolios, including the expansion of Turkish military attacks inside Iraq against the Kurdistan Workers' Party, water issues, oil export via Ceyhan, trade and construction.
Furthermore, Iraq’s Federal Supreme Court ruling that a 2012 Iraq-Kuwait maritime agreement was unconstitutional raised alarms among gulf neighbors regarding Iraq’s commitment to its obligations.
How has the Israel-Hamas war played out in Iraq?
Historically, Iraq has been an active supporter of the Palestinians and has not recognized Israel. When al-Sadr originally pursued a majoritarian government after the 2021 elections, his political opponents — many of whom are now in the government coalition — suggested that al-Sadr was implementing a scheme backed by Israel and the United States. Al-Sadr responded by sponsoring and ensuring the passage of legislation that would criminalize normalization with Israel, which carried a penalty of capital punishment or life in prison. Given the past, it’s not surprising that Iraq has taken a strong and vocal stance in support of the Palestinians now, and the developments in Gaza have unleashed reactions on multiple fronts.
Meanwhile, armed groups attacked Iraqi military bases hosting U.S. military personnel in Anbar, Baghdad and Erbil provinces, causing injuries to U.S. service members and one fatality due to cardiac arrest. Similar attacks occurred on U.S. military targets in Syria. The United States believes Iran supported those attacks and conducted strikes in Syria in response. Members of the Popular Mobilization Forces blocked the transfer of Iraqi oil to Jordan as a form of economic pressure, given that Jordan has normalized relations with Israel.
Besides al-Sudani, a number of other prominent Iraqi figures have publicly weighed in on the situation. In a statement, Supreme Shia Cleric Grand Ayatollah Ali al-Sistani stressed the need to end the suffering of the Palestinians and support their rights, otherwise violence would not end.
Al-Sadr’s public posture has unfolded incrementally, starting with calls for prayers and solidarity with the Palestinians. This was followed up by calls for organized public protests in Iraq, which occurred, and for peaceful protest on the Lebanese side of the Israel-Lebanon border. Most recently, al-Sadr called on the al-Sudani government and the Council of Representatives to close the U.S. embassy — albeit without attacking diplomats. While al-Sadr’s position might be seen as a way to get payback on his political opponents and the United States for the pressure he faced in 2021, some Iraqi elected officials have taken up this call, and a letter calling for a special session to vote on the closure of the U.S. embassy has already gained signatures in the Council of Representatives.
These developments further complicate an already fraught situation for al-Sudani. Iraq and the United States have been trying to pursue a common agenda under al-Sudani’s government, and al-Sudani had been given a standing invitation to the White House — a visit that was generally expected to come before the end of the year, but whose timing now seems uncertain given unfolding events.
What’s the outlook for al-Sudani’s second year in office?
Looking ahead to the second year of al-Sudani’s term, he possesses the important ingredients to proceed with key economic, development and diplomatic agendas that would solidify his position, stabilize the government and bolster Iraq’s progress.
However, key tests are also on the way. The political impact of the Israel-Hamas war is still unfolding, and the attacks on U.S. military personnel have added another wrinkle to the situation, but al-Sudani publicly defended U.S. troops by stating they were in Iraq at the invitation of the Iraqi government.
The fight against corruption and illicit drugs, concerns about shrinking civic space and human rights, the return and reintegration of displaced Iraqis from places such as the al-Hol camp in Syria, and the impact of climate change will remain on the radar of Iraq’s various stakeholders. The outcome of provincial elections this December will be a major insight into the mood of the Iraqi people and will undoubtedly factor into al-Sadr’s next political move. Meanwhile, the stability of the economy and the value of the Iraqi dinar, political partners’ continued patience with the slow implementation of commitments, the actions of regional countries (primarily Iran), and the international community’s level of engagement will all help determine the course of the al-Sudani government’s second year in office and the trajectory of Iraq overall.
There's so many things happening...We got elections coming up here soon. Al-Sudani has been taking many good steps to warrant an opportunity to be the Prime Minister once again but if he doesn't control that currency it'll destabilize the economy as well as the currency itself and this is not going to go over very well with the people of Iraq.
If he increases the value of the Iraqi dinar that gives the people of Iraq a little bit more purchasing power at the same time stabilizing the currency and hopefully closing the gap between the fixed exchange rate versus the parallel rate.
Two more months until the end of the year. Is Iraq going be able to tough it out with this currency exchange rate for two months? As long as the market doesn't get any more out of whack than it is, we'll see. IMO they should do something with the exchange rate a little bit to help this situation.
Article: "As of the beginning of next month, Kurdistan will adopt the Iraqi dinar in crossings and airport transactions"
This is what I was talking about - Steps towards straightening the Iraqi dinar...This is a major move. This is awesome. This is great for the Iraqi dinar. This helps strengthen the Iraqi dinar..
Thank you MarkZ for all your time, and encouragement daily….. PDK
MarkZ Update- Some highlights by PDK-Not verbatim
MarkZ Disclaimer: Please consider everything on this call as my opinion. People who take notes do not catch everything and its best to watch the video so that you get everything in context. Be sure to consult a professional for any financial decisions
Member: Happy Friday everyone!
Member: Hoping something wonderful happens today!
Member: hey Matk …whats on your Radar and the Rumor Mill?
MZ: Some interesting news coming out of the bond side. From a couple of bond sources……and I had another confirmation that Chinese Elders are upset with the bond process and they are going to go ahead and pay 1% of the bond payments in fiat right now. Then they want the reset and pay the rest in gold/asset backed money.
MZ: Originally (as I understand it) They were going to pay the fines and penalties in fiat…then RV ….then Reset….then pay the rest in gold backed money. All of this in about a 10 day period.
MZ: I don’t know how this affects our timing or not. But, its good news to hear that they have done all their work on compliance on all the Historic bonds and are ready to issue payments. But that is the chatter I am hearing from the bond people who will talk. And there are not many that will talk.
MZ: A number of group leaders that have been in place since last week think this is it. .
MZ: Bankers are really stoked and excited for this weekend.
MZ: No news on CMKX….yet. It’s been very quiet. They still update fines and penalties twice a month.
MZ: Pretty quiet in Iraq as of this morning.
Member: Fridays are Iraq’s Holy days……usually are quieter.
MZ: Just be sure to manage your expectations until we cross the finish line.
MZ: This is a good one from the American Media Group: “The changing of the guard: 21 major countries are refusing to use the US dollar for oil transactions” This is the deterioration and the death of the Petroddollar.
MZ: “Exclusive: Swiss authorities –Banks mull new rules to prevent bankruns-Source” This tells you where their concerns are right now. So if you want to take our your money from the banks…they will limit the amounts you can withdraw to prevent bank runs. Its obvious Swiss authorities think there is a high possibility of bank runs. This is a big one to watch.
Member: Thanks Mark and Mr.C…..Everyone have a great weekend.
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