...Just look at all the progress made just since December 2022 when Iraq announced they were finally entirely out of Chapter VII. And now the spigot is wide open...the final issues preventing the reinstatement are being dealt with one by one...my contact in the CBI told me there is a very high probability that we would see the currency swap out in this month of June and so we watch and wait.
...Iraq’s exit from the list of “high-risk countries" ...was officially announced by the International Task Force (FATF) last week.
Yes, “the writing is on the wall” now as this is the BEST news...Iraq’s exit from the list of high-risk countries could not get any better. They are slowly clearing the way to the reinstatement, one obstacle at a time...They were not about to release the currency back to FOREX with this in place...WOW! WOW! WOW! news for us today
Al-Fatah calls on the government to limit the role of the new American ambassador to Iraq
Ayed Al-Hilali, a member of the Al-Fatah Alliance, stressed today, Saturday, that the Iraqi Foreign Ministry must respond to the new American ambassador’s statements regarding Iraqi internal affairs, stressing that the Iraqi government should limit the ambassador’s role and refrain from interfering with the country’s internal affairs.
Al-Hilali issued a statement to the effect that “the new ambassador’s statements will not affect the government’s confidence in the Iraqi security forces, especially the popular crowd” and that “the former American ambassador, Elena Romanski, interfered a lot in internal Iraqi affairs, and therefore the role of the new ambassador must be limited to prevent the violations from recurring.”
He proceeded, “The festivals that the Iraqi road is seeing on the event of the commemoration of the fatwa of equipped jihad and the establishing of the Well known Preparation Powers, within the sight of the Sudanese Head of the state, is decisive proof of the public authority’s dismissal of the assertions of the new representative,” approaching “the Iraqi Unfamiliar Service to address the American specialists and decline impedance in inside undertakings.”
Tracy Jacobson, US President Joe Biden’s chosen one for the place of US Minister to Iraq, gave her initial discourse before the Senate Board of trustees on Unfamiliar Relations, focusing on her obligation to safeguarding American interests.
What can we investors do to help the RV situation?
We must now buckle down and pray and pray like never before for the success of Al-Sudani and his agreements with Washington are implemented. You do want the RV don’t you? Pray for Iraq and also the U.S. in that there are strong enough representatives in Congress and the Senate who will stand up and continue to fight to uphold the US Constitution and keep fighting this Washington corruption. Pray that that God’s Hand will intervene and save our great country.
Remember you can say the Rosary daily or use the prayers and links I provided from the Auxilium Christianorum for your prayers. Folks your prayers so far ARE WORKING and God has heard your cries. Just look at all the progress made just since December 2022 when Iraq announced they were finally entirely out of Chapter VII. And now the spigot is wide open the final issues preventing the reinstatement are being dealt with one by one. Can you see it too.
I am trying my best to help you see it. We don’t’ need this foolishness of this everyday / any day garbage intel. You think this is all just coincidental? God’s Hand is at work here. He has given Iraq his anointed leader Al-Sundani to help in this work. Even I have to sit back in amazement of what he has accomplished so far. Pray for him and all his success. It is June already and this month is proving to be a very significant month again. But my contact in the CBI told me there is a very high probability that we would see the currency swap out in this month of June and so we watch and wait. I will get more news tomorrow when I make my call to Iraq.
Iraq's ambitious Development Road Project: Concerns and challenges
Shafaq News/ The Turkish President Recep Tayyip Erdoğan's first visit to Iraq in 13 years, last May, resulted in the signing of 26 memorandums, one of which is for the Development Road Project. This project aims to establish a trade corridor from Basra to Turkey and eventually to Europe, enhancing regional stability and prosperity.
Burak Yildirim, a Defense and Security Analyst, published an article at "The Wilson Center," identifying the opportunities, challenges, and obstacles associated with Iraq's ambitious "Development Road" project.
According to Yildirim, "the trade corridor from Basra, Iraq, to Ovaköy, Turkey, entering European Union customs, known now as the "Development Road," promises its stakeholders the possibility of commerce and stability in the region. "
"Due to the narrow and shallow coastal regions near Basra and the Shatt Al-Arab, constructing a high-capacity port there was not feasible. Consequently, Iraq was compelled to channel its energy exports through Kuwait, Saudi Arabia, and Turkey.
The construction of the Grand Al Faw Port on the Persian Gulf, the largest infrastructure project in Iraqi history, was planned to address this challenge. The Development Road will link the Al Faw Port to Turkey's border and extend into Europe." The analyst said.
The project's objective is to establish an uninterrupted highway and rail corridor between Basra and London, with the initial phase of the project anticipated to be completed by 2028.
"Although the project's cost was announced at $17 billion, it will likely exceed $24 billion. Given that the railway cost between Gaziantep and Ovaköy alone could reach $5 billion, it becomes clear that $17 billion is an unrealistic estimate. However, the other signatories of the memorandum, namely the governments of the UAE and Qatar, possess resources that can alleviate uncertainties regarding the project's financing." Yildirim explained.
According to him, the Development Road's "greatest promise" lies in its high speed and low cost. "Transporting products to the European market from Al Faw via the Development Road offers a 10-day advantage over the Suez Canal. Since Iraq is the only country outside the EU Customs Union along the route, it also provides significant bureaucratic benefits. Costs are substantially reduced. Besides the planned infrastructure between Basra and Türkiye, the logistics lines in Türkiye are already mostly complete. In this regard, the Development Road presents an undeniable advantage in terms of speed and transportation capacity compared to the India-Middle East-Europe Economic Corridor (IMEC) announced in September 2023."
Despite the importance of this Project, Iraq and Turkiye shared concerns.
"The expectations of the governments of Iraq and Turkey for the project are high, as shown by the willingness of both sides to take political risks. Notably, the Iraqi central government has declared the PKK an illegal organization for the first time, despite opposition from PUK-influenced groups in the Kurdistan Region of Iraq (KRI). This is a significant development. The Iraqi government and the Kurdistan Regional Government's (KRG) positive response to Turkey's security concerns is likely due to their high hopes for this project, which will position Iraq as a key economic player. Supporting Turkey's security stance is a manageable cost for Iraq in exchange for such a gain." Yildirim pointed out.
"In the summer of 2024, Turkey, Iraq, and the KRG will initiate a significant military operation to secure the route and address Turkey's terrorism concerns. This three-fold alliance aims to eliminate the presence of the PKK and ISIS. Turkey's participation at the corps level is expected to make this the largest cross-border military operation in its history."
Furthermore, Yildirim said that the KRG portion of the project faces frequent criticism from PUK leader Bafel Talabani and his allies, who question the KRG's gains amid the Talabani-Barzani rivalry. "The route between Al Faw and Ovaköy passes through Mosul's administrative borders, mainly avoiding the KRI due to its mountainous terrain. However, the project benefits the KRG by providing a significant rationale for the agreement on oil exports between Baghdad and Erbil and reducing the cost of imported goods to the KRG. The project motivates the parties to resolve the dispute between Baghdad and Erbil regarding oil and gas exports."
Another concern, according to the analyst, is the unresolved water-sharing issue between Turkey and Iraq, which resurfaced during Erdogan's visit to Iraq.
"The decrease in Euphrates and Tigris river levels could lead to drought and famine. Iraqi officials have been highlighting the impact of reduced water levels, particularly from Turkey, since 2021. This reduction, along with decreased water flow from Iran, has reduced agricultural land use by 50% in Iraq. Turkey contends that the decreasing water flow is also a major problem for itself and emphasizes the need for cooperation between the two countries to address this issue, which is exacerbated by global warming."
In addition to the concerns, The Development Road is not without challenges.
Yildirim stated that Turkey's security policies and efforts to combat terrorism significantly impact the project. "The eradication of PKK and ISIS from northern Iraq is essential. Turkey must address this issue with Iraq and the KRG within a foreseeable timeframe."
"Eliminating terrorist organizations that pose security risks in the region is quite challenging. The demography in Iraq and Syria provides resources, including labor, weapons, and finances, for both PKK and ISIS. The elimination of these terrorist organizations, at least in practice, cannot be achieved without the support of Kurdish and Sunni Arab tribes."
A second challenge is "Iraq's struggle to achieve political and economic stability and widespread corruption among decision-makers pose additional obstacles to the project. Iran can sway some Iraqi politicians and bribe decision-makers to disrupt the project, thereby generating substantial risks. Delaying the project's schedule will reduce its productivity."
Meanwhile, China, which is not a stakeholder in the project, "will lose significant leverage for its Belt and Road Initiative. Consequently, it will not hesitate to manipulate the parties involved. China may use the investments and loans that regional countries expect as tools of manipulation; existing loans become threats to countries that act against its interests and new loans can be offered to do things in its favor."
The analyst added that the Development Road could significantly impact Iran's Middle East policy and its sway in the region as well. In the short term, Iran risks losing its logistical routes supplying weapons to its proxies from Iraq to Lebanon. If the project's economic promise takes shape, it will become less feasible for Iran to allocate resources to proxy forces and maintain its spheres of influence. Faced with these strategic risks, Iran may engage in ventures that could destabilize Iraq.
"The Development Road clearly faces significant obstacles. Its competitors, especially the IMEC, face even greater challenges in cost and feasibility. However, supporting alternative development programs instead of merely isolating China's Belt and Road Initiative could yield more effective results for the United States. The US should show it offers more options than China and can develop multiple alternatives simultaneously. This could persuade regional countries that disapprove of Israel's military actions in Gaza to join a new alliance against Iran and its Chinese enablers for the economic as well as security benefits."
Yildirim concluded that Iraq could use this project as a milestone to transform its deep-rooted corruption problem and inefficient economy. It could convince Iraqi society to unite around a common goal, countering the internal instability caused by strong Iranian influence and reducing separatist sentiments of the Kurdistan Regional Government (KRG). Iraq could solidify citizenship and shared identity for its entire population, preventing the rapidly growing population from triggering a new global migration crisis from the outset.
Regarding Turkey, "with its strong industrial presence in the Middle East, could increase its market share and expand its output with greater profits, thereby reducing inflation, increasing employment, and creating a stronger foundation for its economy. It could also rid itself of security threats from groups like the PKK and ISIS through greater security cooperation with its southern neighbor."
"Middle Eastern and European stakeholders could earn billions through decreased shipping costs. Furthermore, achieving lasting peace in the Middle East requires regional consensus on a plan designed by regional counterparts. Mere summit meetings and diplomatic texts lacking binding authority are insufficient. However, gradual transformation through initiatives like the Development Road can foster enduring peace. The ensuing stability would benefit both regional populations and Western countries grappling with economic and political unrest of their own."
Do you believe that its almost mid-June already? So, the hot news this period is GOLD. Is Iraq going to back their dinar with gold? I have many people asking me this question. So, I decided to ask my CBI contact on my Wednesday call to Iraq and I was told that YES, the dinar will be backed by gold. Or more like they told me it is being NOW being backed by gold. It is a process to get there. They are moving quickly in this process.Choo-Choo!!!
😊 What more GOLD?
Then because of a negative article this period on this subject of gold, of citizens purchasing gold and keeping this money out of the banking system, I asked if this was harmful and could it negatively impact their effort to revive the banking sector. I was told it was not an major issue as they are tracking the notes and dollars as they are used to buy gold. To buy large sums of gold they must go to special dealer that is registered to sell. Petty jewelry sales will not impact. They are watching large buyers. Also I was told that they may place a limit on personal gold possessions. This also by itself confirms that the dinar is going to be backed by gold soon.
What else is of importance in the news?
😊 Stock exchange and Securities
Today, Wednesday, the Iraqi Securities Commission announced the signing of an agreement with the International Finance Corporation (IFC), affiliated with the World Bank. Al-Youm Al-Akhbariya said and I quote- “We continue our efforts aimed at incorporating good international practices in developing the performance and effectiveness of the Iraq Stock Exchange and other activities related to securities.” Wow! Just read the Pillars of Financial Reform. Here we go again more of it. They are attacking all these sectors.
😊 Diversification of Revenues
Specialists in economic affairs called for the necessity of working to enhance non-oil revenues and reduce dependence on oil in a manner consistent with economic reforms. The specialist in economic affairs, Dr. Ahmed Al-Rawi, explained oil because of its international and strategic importance, oil is considered a causal commodity.” For economic activity or even influencing political decisions it has become necessary to take practical measures regarding reconsidering revenues away from rentier expectations of oil alone and raising all forms of unnecessary revenues for public expenditures.
Activating non-oil revenue systems, such as the system of taxes and public fees, and revitalizing economic sectors so that the economy becomes capable of providing revenues for the budget as job opportunities for the young workforce and diversifying incomes, as well as developing nonoil production.
We already knew this is the path that Iraq is taking and so this news should not be a shock to anyone reading my newsletter. Over the course of months we read article after article telling us of this diversification strategy.
😊 Sovereign Wealth Fund (SWF) an unusual idea?
Then also in the news the economic and financial advisor to the Prime Minister, Mazhar Muhammad Saleh, proposed an “unusual” idea to establish a sovereign wealth fund. Unusual idea? Really? Whoever wrote this article is not telling the entire story. Just months ago, we read an article telling us this was the plan. So, the plan to establish the fund is not new and is already in the making. So, today let’s us instead learn about what they propose to do and why. Why will this fund be so important to Iraq?
Saleh said {to Al-Furat News} that: “The SWF sovereign wealth funds, which Kuwait started with the Generations Fund since the 1950s, were followed by surplus countries exporting raw materials in general and oil in particular, on the basis of diversifying the investment of those financial surpluses in financial and real investment opportunities in major economies.” Outside their countries through a fund called the Sovereign Wealth Fund (SWF) whose function is to manage the investment of surpluses in financial and real assets outside their countries, and the reason is due to an issue called “weak absorption capacity.”
He explained, “that is, the weakness of the ability to convert those surplus savings from revenues from exporting natural resources into investments within the state itself due to many internal structural factors. Those revenues from exports are immediately invested in operations within the economy, noting that those surpluses are capital assets that can be reinvested and generate value-added chains that multiply the national income of their countries many times over.
So, in other words what Saleh proposed in establishing the SWF is to invest the surplus revenues and not just piss them away on projects. Instead, if you invest this revenue you can multiply the money many times over and then just draw from the fund to meet deficits when needed. The principle in the fund always exists and is there also in times of dire emergencies. Unlike the CBI reserves that are mandated by the IMF to cover the government expenses in time of emergencies, the SWF is more flexible and gives an additional pad of money for stability and security. This fund will also cut down the reliance on oil revenue and help them move more quickly out of the rentier economy WOW!
😊 Is the parallel market now under control?
In recent news I showed you articles on the departure of the UNAMI mission from Iraq. They told us it would not fully conclude until the end of 2025. But already just the news of it gave a feeling of relief and renewal that Baghdad will emerge from international guardianship, and this strengthened the confidence in the Iraqi dinar. It’s called “perception”. Get it? Investors invest on perception and research for their speculative investments. In addition to the policies of the Central Bank having an impact too on the dinar, but the dollar will remain within a safe range from the dinar. There will be some difficult changes that that Iraq must go through in the coming months but the groundwork has been laid.
It was pointed out in the article, and I quote from it – “that Iraq is currently led by a services government and it seeks, according to economic paths, to build paths that contribute to financial stability in the private sector,” noting that “parallel market prices are not worrying, and their variables will remain within a slight range.” To me this sounds like they have the parallel market under control and that is what matters. Yes, we still see fluctuations but what is the average that matters. Is it now stable for the most part? The CBI tells us it is.
Yes, “the writing is on the wall” now as this is the BEST news of this period of my Newsletter as observers and specialists in political affairs expressed their optimism about Iraq’s exit from the list of “high-risk countries” that was officially announced by the International Task Force (FATF) last week. I quote from the article – “noting that the international declaration represents an important step in the correct path that the Sudanese government is taking in achieving reforms. Financial and economic along with political stability.” Iraq’s exit from the list of high-risk countries could not get any better. They are slowly clearing the way to the reinstatement, one obstacle at a time. This is yet another stop on our choo choo train that needed to be released. They were not about to release the currency back to FOREX with this in place. Get it? So this is all WOW! WOW! WOW! news for us today.