Kurdistan Region and Iraq Unite to Tackle Housing Challenges
In a significant move towards enhanced intergovernmental cooperation, a committee for housing affairs has been set up between the Ministry of Interior of the Kurdistan Region and Iraq. This initiative is a concerted effort to tackle and collaborate on the challenges and policies related to housing within the Kurdistan Region and the broader Iraqi context.
A United Front for Housing Challenges
This formation of the committee is a testament to a unified approach to address housing issues in both regions. It marks a shift towards intensive collaboration and cooperation, aiming to improve the living conditions of residents and promote effective urban development. The committee’s responsibilities are set to include urban planning, housing regulations, and potentially, the allocation of resources or the commencement of joint projects.
Intergovernmental Cooperation for Urban Development
The establishment of such a committee indicates a significant instance of intergovernmental cooperation. It’s an initiative that aims at enhancing living conditions for residents and managing the growth and development of urban areas effectively. This move shows a comprehensive understanding of the challenges that urban housing presents and the need for joint efforts to overcome them.
A Beacon of Progress
The creation of the committee is not just a step towards addressing housing issues but also a beacon of progress in terms of intergovernmental relations. It sets a precedent for future collaborative projects, not just within the housing sector, but potentially across other sectors as well. This initiative can pave the way for a more integrated and unified approach to problem-solving, highlighting the importance of joint efforts in the face of common challenges.
It has exceeded 7 decades.. The infrastructure of Iraq’s oil export system threatens its only source of budgets
Following the deterioration of the infrastructure of the Iraqi oil export pipeline system, which is more than 70 years old, a recent press report highlighted a set of risks facing the Iraqi oil sector.
Experts have reported that the oil sector is the sole source of Iraq’s annual budget and it relies heavily on the daily pumping of millions of barrels of oil to different continents worldwide. However, there is still a need for development projects that can enhance the production capacity of crude oil to six million barrels per day.
An official from the Oil Marketing Company (SOMO) stated in a press report that they have plans to undertake projects to enhance the marine export pipeline system used to transport oil. However, due to the delay in approving the budget, and further postponement after the approval, the implementation of these projects has been affected. As a result, these projects are likely to be postponed until next year.
Iraq has abundant oil resources, but war and corruption have left the country with a dilapidated infrastructure.
The anonymous official explained that the pipeline system aims to increase Iraq’s crude oil export capacity to 6 million barrels per day.
Last year, the Basra Oil Company announced a major project to develop marine export pipelines. The project involves laying two 48-inch pipelines, rehabilitating the ports of Basra and Al-Amaya, building a marine platform, and installing measuring devices to enable flexibility in exporting different types of oil.
In May, the Iraqi Council of Ministers awarded the project to establish the third marine export pipeline to the Basra Oil Company, under the custody of the Dutch company Boskalis. The pipeline has a diameter of 48 knots and an operational capacity of two million barrels per day. The project was awarded for approximately $420 million. However, on June 21st, the Iraqi government suspended the decision related to the third marine pipeline project without providing any reasons.
The Arab World News Agency (AWP) reported that Iraqi oil expert Kovind Sherwani stated that the current government is highly interested in developing the country’s oil sector at all levels. With the recent increase in global oil prices, the financial abundance makes the implementation of large-scale projects feasible in the near future.
Sherwani stated that Iraq is currently experiencing significant challenges with its marine and land export systems. There is a pressing need to upgrade the marine export pipelines that transport oil, as the existing pipelines are in a state of disrepair and are susceptible to leaks, despite undergoing frequent repairs.
He went on to say, “The current export system in Iraq has been in place for over 70 years and urgently needs new projects to create export pipelines that will significantly increase capacity. However, implementing such large-scale projects requires huge financial investments and must be included in the budget to make them binding on the Iraqi government.”
In December of last year, SOMO unveiled a plan to upgrade marine pipelines in order to increase exports by 900,000 barrels per day.
According to Iraqi oil expert Bilal Khalifa, it is estimated that the cost of developing a marine export pipeline system would be more than 15 billion dollars. This is one of the reasons why the project is being delayed due to Iraq’s unstable economic conditions, despite the presence of international loans to complete it. There may also be technical or legal reasons that are not yet known.
Al-Khalifa emphasized the urgent need for upgrading the marine export pipeline system. The current system is outdated and almost in ruins, making it incompatible with the current production capacity. Therefore, the development process must be expedited to keep pace with the growing demand.
According to S&P Global, loading volumes at Iraq’s aging facilities in Basra are unlikely to increase in the near future. This could prevent any meaningful gains in production and hinder the country’s ability to benefit from higher oil prices.
According to oil expert Hamza Al-Jawahiri, the development of the oil-carrying pipeline system will increase Iraq’s export capacity by about 1.5 million barrels per day. This is a positive development for Iraq, especially if there is an increase in production and export by a decision from OPEC (the Organization of the Petroleum Exporting Countries).
Al-Jawahiri stated that significant oil projects often face obstruction and delay in their progress. This is contributing to the slow development of Iraq’s oil and gas sector over the past few years. Hence, the Ministry of Oil needs to focus on these projects, especially since the country relies solely on oil to support its financial budgets.
During his speech, he emphasized the importance of engaging with specialized international companies to develop the marine export pipeline system and create new pipelines. He pointed out that there are companies with expertise in this area, and national oil companies can benefit from their experience by supporting their work.
A source in the Iraqi banking sector reported the arrival of new shipments of US dollars on Wednesday.
According to an INA source, the Iraqi banks have received new shipments of US dollars at the Baghdad International Airport to meet customer needs.
The informant mentioned that more shipments are expected to arrive in the next few days. I have ensured that there are no spelling, grammar, or punctuation errors in the revised text.
In mid-November, a government official revealed that three private banks in Iraq received official authorization from the Central Bank of Iraq (CBI) to import US dollars to meet the needs of their clients.
The source confirmed that one of the banks had already shipped amounts of up to $100 million to Iraq.
The CBI is reviewing additional requests from other Iraqi banks to import US dollars, according to an official.
The Trade Bank of Iraq (TBI) is in talks with several international companies to transfer $120 million to Iraq in the coming days, according to an INA source.
The recent decision by the CBI allowing private banks to import foreign currencies via commercial flights has sparked controversy as Iraqi lawmakers and legal experts have deemed it unconstitutional according to The News Arab.
Officials from the CBI recently held intensive meetings with US officials in Abu Dhabi to discuss covering imports via external transfers.
The Dinar Will Recover.. Iraq Is Approaching An “Imminent End” To The Dollar Crisis Before The End Of 2023
Economy |11-27-2023, Baghdad today – Baghdad Today, Monday (November 27, 2023), the Parliamentary Finance Committee commented on the possibility of the Iraqi government succeeding in controlling the dollar by the end of the current year.
Committee member Moeen Al-Kazemi told Baghdad Al-Youm, “The government and the central bank are working to end the dollar crisis once and for all, and there is great progress in this file and there is control over the market, as well as a gradual decline in exchange rates in the parallel market.”
Al-Kadhimi added, "We expect that the new year will witness a significant decline in dollar prices with the rise in the value of the Iraqi dinar, especially with the presence of government decisions and directives to address all the causes of the dollar crisis, and we expect that economic and financial stability will be strongly present at the beginning of next year."
Earlier, a senior official in the Central Bank of Iraq told Reuters that the country will ban cash withdrawals and transactions in dollars as of January 1, 2024, in the latest effort to limit the misuse of the country’s hard currency reserves in financial crimes and evade US sanctions on Iran. .
Mazen Ahmed, Director General of the Investment and Transfer Department at the Central Bank of Iraq, told Reuters that the aim of the step is to stop the illegal use of about 50 percent of the $10 billion cash amount that Iraq imports annually from the Federal Reserve Bank in New York.
This step comes as part of a broader campaign to stop the economy's dependence on the dollar after residents began to prefer the US currency over the dinar. Ahmed said that people who deposit dollars in banks before the end of 2023 will be able to withdraw money in dollars in 2024. But dollars deposited in 2024 can only be withdrawn in the local currency at the official rate of 1,320 dinars to the dollar.
Official Price
Ahmed said, "You want to transfer money? To do so. You want a card in dollars? Here you go. You can use the card inside Iraq at the official rate, or if you want to withdraw cash, you can at the official rate in dinars... but don't talk to me about dollars in cash anymore."
Iraq has already created a platform to organize bank transfers that make up the bulk of demand for dollars, and which has served as a hotbed for counterfeit receipts and fraudulent transactions that have leaked dollars to Iran and Syria, which are under US sanctions.
Ahmed stated that this system, which was put in place in coordination with the authorities in the United States where Iraq's reserves of $120 billion from oil sales are kept, is now almost airtight and provides dollars at the official rate to those who engage in legitimate trade activities such as importing food and consumer goods. But he said that the misuse of cash withdrawals continues in ways that include travelers who are officially entitled to $3,000 but are looking for ways to circumvent the system.
Iraq relies heavily on its good relations with Washington to ensure that the country's oil revenues and funds are not subject to American oversight.
Dollar Shortage
Many local banks have already limited cash withdrawals in dollars over the past few months, exacerbating shortages that have caused the exchange rate to continue to rise in the parallel market.
Ahmed said that some banks are suffering from a shortage of dollars because many people are trying to withdraw at the same time in light of a feeling of unease about the financial system, while some banks are also suffering from a shortage because they provided loans denominated in dollars that were then repaid in dinars.
He added that the Central Bank of Iraq also limited the amount of dollars it provides as part of an agreement with the US Central Bank to limit cash liquidity and shift to electronic payments.
Ahmed pointed out that the Iraqi Central Bank expects the dinar to lose more of its value as the new measures enter into force, but he added that this is an acceptable side effect of formalizing the financial system, noting that the Iraqi Central Bank provides dollars at the official exchange rate for all legitimate purposes.
He said that the cost that Iraq is bearing today is not compared to the value of achieving this goal.
Ahmed stated that the financing operations that are carried out transparently and legally through the bank and at the official rate are the most important and therefore nothing else matters, even if the exchange rate reaches 1700.
He continued, saying, "The cost we bear now is nothing compared to achieving this goal, in all honesty, as long as the legitimate channels are established.
