An economist revealed the most prominent creditors of Iraq.
“The amount of the authorized external debt is approximate, because there are external debt in the form of investment projects such as the construction of hospitals and schools, especially the Japanese International Agency, these have complex accounting treatments in order to be installed in the records of the Ministry of Finance,” Salah Nuri, former director of the Financial Supervision Bureau, told {Euphrates News}. He pointed out that “the most prominent creditors are the International Monetary Fund, the World Bank, foreign international agencies, German and Japanese, and Islamic international development funds, and there are no debts to Arab countries after 2003.”
Nouri pointed out that the external debt settlements through the Paris Club agreement ended, and they are related to debt before 2003, and as I know, there are no new consultations, and the rest of them belong mostly to the Gulf countries. He explained, “As for internal debts, the creditor bodies are government banks (Iraqi trade TBI, Mesobia, Al-Rasheed) in addition to the employees’ retirement fund, which is within (60) trillion Iraqi dinars.” On April 8, the Iraqi government announced the reduction of external public debt by more than 50%, reducing the debt from $19.729 billion in late 2022, to $15.976 billion in 2023, reaching nearly $8.9 billion this year.
IRAQI SUPREME MILITARY COMMITTEE AND ITS COUNTERPART AFFILIATED WITH THE INTERNATIONAL COALITION AGREED TO ESTABLISH A FIRM SECURITY PARTNERSHIP WITH THE UNITED STATES
Shafaq News / The spokesman for the commander-in-chief of the armed forces, Major General Yahya Rasool Abdullah, announced on Tuesday evening that the Iraqi Supreme Military Committee and its counterpart affiliated with the international coalition agreed to establish a firm security partnership with the United States.
“The Iraqi Supreme Military Committee held a meeting in the capital Baghdad with the Supreme Military Committee of the International Coalition in Iraq, which is concerned with ending the mission of the international coalition in Iraq,” Abdullah said in a statement received by Shafaq News.
He pointed out that “during the meeting, the work of the subcommittees since their inception in January 2024 was discussed, and the threat of ISIS terrorist gangs was evaluated, the operational environment, the current security situation and the capabilities of the Iraqi security forces.”
The members of the two military committees praised, according to the statement, “the achievements and sacrifices made in the battles to defeat ISIS, and the continuous efforts to prevent the return of these terrorist gangs, as well as support for the sovereignty, unity and stability of Iraq.”
The two sides stressed “the capabilities and capabilities of the Iraqi security forces to defeat ISIS, and also, the continuation of the subcommittees work to present the assessments to the Supreme Military Committee to make recommendations for decision-making regarding the timetable for the transition of the international coalition in Iraq to the establishment of a bilateral security partnership between Iraq and the United States, which contributes to raising the capabilities of the Iraqi security forces and working to develop them, which enhances the stability and security of Iraq and the region.”
(So, why then this visit then to the Washington on Aprill 15th? Is it just to establish good diplomatic relations?)
The Prime Minister’s adviser to economic and financial affairs, Mazhar Mohamed Saleh, confirmed on Thursday that Prime Minister Mohammed Shiaa Al-Sudani is interested in reforming the course of the private and government banking system, while noting the start of the implementation of the reform plan for government banks.
Saleh said, in a statement reported by the official news agency, seen by “Economy News”, that “the banking market is a big division, for example, the capital of private banks or their share of capital from the government is about 78 percent, while the capital of government banks are 22 percent.” “While government banks account for activities and assets by 85 percent, while the private banking activity is 15 percent, so there are large disparities between private and government banks,” he continued.
He explained, “The private banks almost coexisted on government allocations, whether by window or by opening the guarantee writings for projects, in the sense that any vibration exposes private banks to serious problems, so nearly 29 banks have been deprived of dealing in foreign currency.”
Saleh added that “Prime Minister Mohamed Shiaa Al-Sudani is very interested in reforming the course of the civil and government banking system,” stressing “the existence of a reform plan for government banks, and there is a foreign company that evaluates banking work, its capital and functions until they parallel the work of international banks.”
He pointed out that “private banks are facing a dilemma, especially after being denied foreign currency trading, although they have coexisted with this issue, so the government is trying to create a supportive internal environment for them, and it needs to correct their situation first.”
He went on to say that “the Prime Minister is properly supportive of private banks, on the condition that those banks improve their course of work,” stressing that “there is a reform plan to correct the course of private banks will be implemented soon.”
A government source revealed, on Tuesday, that Prime Minister Mohammed Shiaa Al-Sudani issued a number of measures and steps to activate the private banking sector, while directing the study of the possibility of enhancing the needs of branches of private banks abroad in foreign currency.
The source said that “within the framework of the Iraqi government’s equest to devop a strategy that stimulates the activity of the private banking sector during the next phase, allowing it to engage more in efforts to diversify the economy and strengthen its pillars, Prime Minister Mohammed Shiaa directed Sudanese to adopt a number of measures and steps in this regard, including:
1. The Ministerial Council for the Economy to study the proposal to increase deposits to government institutions and the central government with private banks, in order to enable them to provide more banking operations and contribute to the development of various vital sectors and increase their ability to provide various financing services inside and outside Iraq.
2- Supporting the Iraqi government and the Central Bank of Iraq to the Iraqi private banks through external institutions and banks, provided that the credit classification of each bank is taken into account.
3- Studying the possibility of enhancing the needs of branches of private banks abroad in foreign currency for the purposes of financing foreign trade – the private sector and according to the applicable contexts.
4. The Board of Directors of the Central Bank of Iraq determines the contribution of foreign capital in Iraqi banks and evaluates the reality of the situation to benefit the Iraqi economy, in accordance with the Banking Law No. 94 of 2004.
5- Participation of representatives of the private banking sector when discussing relevant issues in all state institutions, including meetings of the Board of Directors of the Central Bank of Iraq.
6- Studying the reactivation of the financing initiative submitted by the Central Bank of Iraq and according to the contexts proposed by the Central Bank in this regard.
7. The Council for Competition Affairs and Prevention of Monopoly shall take what is required under Law No. 14 of 2010 to prevent monopoly in banking services, provided that the Council shall submit reports to the Central Bank of Iraq and in coordination with it periodically and in accordance with the aforementioned law.
The average dinar holder only holds 250,000 dinars...
Question "Do you think Iraq's government is sovereign?"To some degree yeah, but no.
If that were the case Iraq wouldn't have to keep sending their budget over to us to get it approved. They would stand on their own feet.
People have been asking about how much dinar does the International Monetary Fund hold...or World Bank...or World Trade Organization or US Treasury...There is no proof in writing anywhere that the United States is holding any Iraqi dinar. Yes there could be some Iraqi dinar being held in our foreign reserves but it's not 4 trillion...Google it, go on any website, go anywhere and see if you could find if these organizations are invested into currencies or any other investments whatsoever...you're not going to find it. That's not what they do...They don't hold the Iraqi dinar. That's not what they do.
THE SECRET OF THE STRENGTH OF THE KUWAITI DINAR…THE STRONGEST CURRENCY IN THE WORLD
Kuwait issued its own currency, which is now considered the strongest in the world, on April 1, 1961. This was before its independence was completed by officially getting rid of British protection on June 19, 1961.
Preparation for the issuance of the first series of the Kuwaiti national currency, the “Dinar,” began with the issuance of the Kuwaiti Currency Law and the establishment of the National Monetary Council in 1960, while the circulation of national currency notes began to replace the previous currency, the “Gulf Rupee,” on April 1, 1961.
The Kuwaiti dinar has maintained its position as the most expensive currency in the world for many years, and its exchange rate against the dollar is currently 1 to 3.25, while one Kuwaiti dinar is equal to 3.03 euros and 2.59 British pounds.
The strength of the Kuwaiti dinar is due to several factors:
1.enormous oil reserves, which the authorities currently estimate at about 100 billion barrels. This country, which is small in area and sparsely populated, occupies third place in terms of oil production in the Gulf region after Saudi Arabia and Iran, in addition to its wealth of natural gas. The quantity produced last year amounted to approximately 5 billion cubic metres.
(In my last Newsletter they told us Iraq is now 2nd in oil production and Saudi Arabia was 1st in the region. So their data for this article is outdated.)
2.Kuwaiti oil is distinguished by its quality, homogeneity, unique chemical composition, and low sulfur content, which is why it is described as the most ideal for refining operations.
3.Kuwait’s richness in oil, in addition to its strategic location, has been reflected in its citizens, and it is considered one of the richest countries in the world in terms of per capita GDP.
4.Kuwait was able to maintain relative stability, and despite the huge material losses that resulted from Iraq’s invasion of it on August 2, 1990 and its occupation of it for nearly 7 months, its national currency did not decline or lose its advantage.
Regarding the history of the Kuwaiti dinar, the exchange rate of the new national currency was initially calculated by focusing on the de facto British pound until the exchange rate of the Kuwaiti national currency was later changed in 1975, when the National Monetary Council took this decision in the wake of the British Bank abandoning the exchange rate. Fixed row for pounds.
Over the next 28 years, the Kuwaiti dinar exchange rate was calculated using a basket of multiple currencies until 2003. Since then, a fixed exchange rate for the dinar against the dollar has been set at a ratio of 1 to 3, with a maximum permissible fluctuation of 3.5 percent.
(Yes, Kuwait took up this fixed peg to the US dollar for favors from the US and to provide military support and protection.)
Four years after this step, Kuwait stopped pegging its national currency to the US dollar and began calculating the dinar’s exchange rate against a basket of currencies that was not disclosed in 2007 .
(The IMF has said that Iraqi will soon stop pegging its national currency to the US dollar on a fixed rate also and plans to begin calculating the dinar’s exchange rate against a basket of currencies and then float it. I believe this will be the same process for Kuwait.)
Until now, the Kuwaiti dinar has a fixed exchange rate that protects it from brokers and speculators, and makes it, along with other economic features, the most expensive and strongest in the world.