Parliament’s finances regarding the 2024 budget: still ambiguous
Information/Baghdad.. Member of Parliamentary Finance, Jamal Kujar, confirmed on Wednesday that things are still ambiguous regarding the 2024 budget, and what paragraphs will be changed, while he indicated that the issue of Kurdistan region salaries will be resolved in the budget. Cougar said, in an interview with the official newspaper, followed by Al-Maalouma, that “the government is supposed to send this year’s budget to Parliament with all its financial paragraphs because they are subject to change, as some of them include sums allocated to projects that have been fully implemented and completed or partially implemented, in addition to… Other paragraphs, the goal is to study them and make changes, if any.” He added: “We still do not know what the current year’s budget contains, even though the operating budget has increased significantly from last year’s budget.” He pointed out that “the 2024-2025 budget schedules are supposed to change when it is sent to Parliament, as well as the salary schedules, because there are those who will be retired and there are promotions and bonuses.” He continued: “We do not know the government’s expectations for the oil price on which the budget will be based, and the release of raises and allowances in the budget depends on the government’s assessment of resources and the economic situation.” Cougar pointed out that “the issue of the region’s salaries will be resolved in this budget, and it is among the paragraphs that do not contain numbers, but rather texts, and they will be changed.”
[via PDK] Question: What’s the impact of Iraq joining the Bank of international Settlements?
MarkZ: It’s their acceptance and elevation to the World Trade Organization and all the other organizations they were removed from when they were sanctioned many years ago. These sanctions are quickly all going away which means they will be able to reinstate or revalue their currency. It is just one more clear indicator of how close we are getting.
Question: Is tomorrow the big day ?
MarkZ: We will see soon.
There is an enormous piece of news...Somewhere in the last 48 hours appearing on the website of the Bank of International Settlements (BIS). “Central Bank and Monetary Authority Websites” ...In Iraq they have made it to the BIS website now as a “Central Bank” I believe this is an enormous sign that we are about to see a “boom“ in the World Trade Organization. To me this is a big one.
Corrupt Money Is Raiding Baghdad's Real Estate... Prices Are Astronomical, Higher Than London Areas, And Citizens' Suffering Is Increasing
Posted On 01-24-2024 By Sotaliraq Baghdad/ Haider Hisham Real estate prices in the Iraqi capital, Baghdad, have witnessed a noticeable rise in recent years. This rise has made it difficult for many Iraqis to obtain suitable housing, especially those with limited income.
A real estate investment company revealed shocking statistics about real estate prices in some areas of the capital, Baghdad. In the Yarmouk area, they ranged between $4,000 and $20,000 per meter. As for the Al-Harithiya area, real estate prices ranged between $3,500 and $14,000 per meter, while the Prices in the rest of the capital’s areas range from $3,000 to $20,000.
Member of the Parliamentary Services and Reconstruction Committee, Mahma Khalil, identified a number of reasons behind the rise in real estate prices in the capital, Baghdad, while explaining the relationship of “money laundering” to the real estate file.
Khalil said, in an interview with (Al-Mada), that “the rise in real estate prices in the capital, Baghdad, is due to several real reasons, which in one way or another cause the phenomenon to worsen,” indicating that “the first reason is the failure of the Iraqi governments to distribute lands within the borders of the capital’s municipality for many years.” “.
He points out, “The second reason revolves around the increase in the number of people in the capital, in addition to the absence of future government visions regarding the residential buildings sector, and the development of investment plans to accommodate the increase in population numbers.”
During his talk about the “theft of the century,” Prime Minister Muhammad Shiaa al-Sudani revealed that a large portion of the stolen tax money was used to “purchase important real estate in important areas in Baghdad.”
Regarding the relationship of “corrupt money” to the rising crisis, a member of the Services Committee explains, “There are huge amounts of money that have entered the real estate market, and have been invested in this field, by the corrupt, through (money laundering), which is one of the main reasons for the rise in real estate prices in Baghdad".
Khalil points out “the reverse population migration from the provinces to the capital, which led to an increase in the number of people,” noting that “all these factors came together and caused an increase in demand for Baghdad real estate, compared to the rest of the provinces.”
In a report published by The Century Foundation Research Center, it confirms that “more than a billion dollars of the stolen tax money, amounting to 2.5 billion, was invested in 55 properties in Baghdad, and another billion was distributed among properties, lands, and other assets.”
In turn, economic affairs expert, Ali Daadoush, explained ways to control “money laundering” operations in the real estate market, while he considered the imaginary rise in Baghdad real estate prices “a natural thing.”
Daadoush mentioned in an interview with Al Mada, “Most money laundering operations take place within the scope of the real estate market in the world because it is considered one of the easiest ways, and the same is true in Iraq.”
He notes, “The rise in real estate prices in Baghdad to very large amounts is a normal condition,” stressing that “money laundering is the main reason for the astronomical rise in Baghdad real estate.”
Regarding ways to control “corrupt money,” Daadoush explains that “controlling corrupt money that negatively affects the real estate market is possible through disclosing the financial assets of influential people before and after assuming government positions.”
The economic affairs researcher points out “activating the law (Where did you get this from), which will work to create a qualitative decline in the extent of financial and administrative corruption in the country.”
The head of the Federal Integrity Commission said at the end of last year that the implementation of the campaign (Where did you get this from?) on graft will not only apply to employees and officials, but will include the heads and founders of parties, governmental and non-governmental organizations, and civil society organizations.
It is noteworthy that Iraq is a country ranked 157 out of 180 in the Transparency International Organization’s corruption perceptions index, and that the issue of high real estate prices in Baghdad is linked to money laundering, according to representatives and economists. LINK
The basket of currencies is what they intend to peg to instead of just pegging to one currency - the USD...This is what the CBI and the GOI has stated...If they are pegged to just one currency, if the value (purchasing power) of that currency drops significantly, so does the value (purchasing power) of the IQD. If they are pegged to a basket a currencies, if one drops the others keep the IQD "propped up". This is extremely important to Iraq as they are predominantly an import country. This is precisely what they stated years ago...Bottom line, the pegging to a basket is to maintain the purchasing power and stability of the currency and not a singular event to increase the IQD purchasing power.
Clare: With the closure...the dollar price decreased
1/20/2024
The main stock exchange in the capital, Baghdad, closed today, Saturday, due to the decline in the exchange rate of the dollar against the Iraqi dinar.
Selling prices in money exchange shops in local markets in Baghdad reached 153,250 Iraqi dinars for 100 dollars, while purchasing prices reached 151,250 dinars for 100 dollars. LINK
Sir_Shawn: IMO- CBI official rate 1310 1 USD ~ 1310 IQD = 0.000763 Drop the three zeros 1USD ~ IQD 0.763 = 1.310 Anyone for a mic drop…
Question is when….
Paulette:IMO......I don't believe .76 USD for one IQD (1.31 IQD/1USD) would be adequate for the Iraqis to want to abandon the more valuable USD......The MOP/MOI study all the way back in 2009 stated 1.14-1.18USD to 1 IQD to start for 3 years prior to reinstating the true value of 3.22USD per 1 IQD
Sir_Shawn: Well in my opinion, you are right, so this brings up the basket of currencies and the float. The Dinar will correct itself probably instantaneous. The question is the second set of books where I believe they were using the 1.31 per Dinar. We know that all those buildings and cities were not built on 1310 Dinars. But still we wait… IMO
Paulette: IMO......the basket of currencies is what they intend to peg to instead of just pegging to one currency - the USD. At least this is what the CBI and the GOI has stated in the past. If they are pegged to just one currency, if the value (purchasing power) of that currency drops significantly, so does the value (purchasing power) of the IQD.
If they are pegged to a basket a currencies, if one drops the others keep the IQD "propped up". This is extremely important to Iraq as they are predominantly an import country. This is precisely what they stated years ago and those articles are probably somewhere within the pages of the Final Article thread. Bottom line, the pegging to a basket is to maintain the purchasing power and stability of the currency and not a singular event to increase the IQD purchasing power.
The issue I still see is in order to peg to a basket of currencies, they would "officially" have to depeg from the USD. While I have yet to see the US relinquish their receivership status over Iraq and the fact that the US is desperate to try to keep the USD propped up, I am unsure the actual mechanism of how they will be allowed to depeg and then repeg. It seems like receivership would need lifted first for that kind of move.
The buildings and cities were built on the USD value predominantly from oil sales. The number of IQD to the USD value seems irrelevant. Look at Vietnam and all they have accomplished with a currency value of less than a tenth that of the IQD. The big difference is Vietnam expanded their currency supply and Iraq has not. Iraq clearly has full intent to RI their currency and change their currency structure to rid itself of the 3 zeros. These articles are definitely contained in the FA thread.
If they are truly heading to a simple 3 decimal space move on their exchange rate and as you said they are heading to 1.31USD to 1 IQD, they would have to make another move first to 763.4 from 1310. Frank has said they had planned on one more move. As of now, a simple decimal move of 3 places would mean 1310 IQD to 1 USD would become 1.310 IQD to 1 USD or 76 cents per IQD
The Finance Committee Reports Violations Against The Federal Government: Sending Money To Kurdistan Outside The Scope Of The Law
Posted On 01-24-2024 By Sotaliraq Baghdad/Zayer Ali The Parliamentary Finance Committee in the Iraqi Parliament believes that the central government committed violations by sending more than 700 billion Iraqi dinars to the Kurdistan government, while indicating that sending money is outside the scope of the law.
Member of the Parliamentary Finance Committee, Muhammad Nouri, says, “The federal government committed a violation, and it is not the first time,” noting that “the Baghdad government had previously paid more than 7 billion Iraqi dinars to the Kurdistan Regional Government outside the scope of the law and through legal loopholes that are not real.”
He added, "The government exceeded the provisions of the general financial budget, which obligated the region to pay imports to the central government, as well as to pay what is collected from oil and revenues from border crossings."
Al-Nouri pointed out, “The region did not pay any of these revenues, according to what Finance Minister Taif Sami stated during her meeting with the Parliamentary Finance Committee during the current week.”
The member of the House of Representatives pointed out that “the government’s violation casts a shadow over the allocations of the other 15 governorates,” noting that “the government justifies these allocations by saying that they are to pay the salary entitlements of the region’s employees. The regional government did not pay the employees’ allowances and forced them to compulsory savings.”
In December 2023, the Federal Ministry of Finance announced the launch of a loan worth 700 billion dinars to finance the salaries of Kurdistan Region employees.
The Federal Ministry of Finance also stated in a statement, “In implementation of the directives of the Prime Minister and the follow-up of the Minister of Finance, Taif Sami Muhammad, the Ministry issued letters granting the regional government a loan worth 700 billion dinars to cover the salaries of the region’s employees by guaranteeing a deposit provided to the Federal Ministry of Finance, provided that it is settled from dues.” The region after their commitment to the provisions of the budget law, based on the approval of the Council of Ministers and in implementation of what was stated in its resolution No. (23520) of 2023.”
The ministry added that this “came out of keenness to implement its procedures in accordance with what was stated in the Federal General Budget Law No. 13 of 2023, including securing the financial rights of those entitled to it, and as confirmation of the government’s keenness to meet the requirements of employees in the Kurdistan region, and to implement financial reforms aimed at promoting economic growth.”
Economic affairs researcher Nabil Al-Marsoumi believes that “the confusion that occurred is due to two reasons. The first is the cessation of the region’s revenues after the cessation of exports to Turkey,” noting that “the other reason is that Kurdistan’s share is calculated by the value of actual spending, not planned.”
He added, “The loan approved by the Council of Ministers was preceded by a group of loans amounting to 2.5 trillion dinars,” pointing out that Kurdistan’s share of 12.67%, which is equivalent to approximately 16 and a half trillion, but what should be transferred is actual spending.[/size]
Al-Marsoumi pointed out, “This is one of the mistakes in the budget, and the salaries item should have been excluded from actual spending because it is the largest percentage, which is equivalent to 9.3 trillion dinars.”
In January 2023, the Federal Court issued a decision canceling all government decisions related to transferring funds to the Kurdistan region.
The court stated in a statement that it “decided to rule that the decisions issued by the Council of Ministers in the years 2021 and 2022 were invalid” regarding transferring funds to the Kurdistan region, adding that “the ruling is now binding on all authorities.”
Last Sunday, Finance Minister Taif Sami confirmed that the Kurdistan Region did not deliver any revenues to the federal government during 2023.
The Parliamentary Finance Committee, headed by Atwan Al-Atwani, hosted the Minister of Finance, Taif Sami, to discuss a number of important files, including preparing to make the required amendments to the budget tables for the year 2024.
The head of the committee, Al-Atwani, confirmed that “the meeting came to review the financial path in implementing the items of the tripartite budget and to determine the funding ratios with regard to the implementation of projects and in a manner consistent with the government program and other governing entitlements, as the minister noted that there is a problem with the data for including projects within the investment budget, and that it No funds will be disbursed to government institutions for the year 2024 unless the project components are marked and the imbalance in the allocations for last year’s schedules is addressed.”
He explained, “The most important problems and obstacles facing the implementation of the budget law were also reviewed, most notably the paragraph related to appointments and contracts, and it was agreed with the Minister of Finance to complete the tables for calculating financial costs with a view to launching them in 2024.”
Al-Atwani pointed out that “the Kurdistan region’s oil file was present in today’s meeting with the Minister of Finance, where the latter confirmed that the region did not deliver any financial revenues to the federal government during 2023, and was only satisfied with supplying government refineries with 50,000 barrels of oil per day.”
The Chairman of the Finance Committee stressed “the necessity of finding radical solutions to all outstanding problems with the region, especially after the Turkish side agreed to resume oil exports through the port of Ceyhan, and this requires resolving the issue of production and transportation costs for oil produced from the region’s fields, as well as addressing the problem of salaries of the region’s employees and deportation.” This file is free from any political tensions, calling at the same time on the Kurdistan Regional Government to fully commit to implementing the federal general budget law.” LINK
