DOZENS OF IRAQI COMPANIES PARTICIPATE IN AN INVESTMENT SUMMIT IN AMERICA
The US Ambassador to Baghdad, Alina Romanowski, announced on Sunday that more than 30 Iraqi companies will participate in a summit related to investment projects in the United States available to foreign companies.
Today, Romanowski wrote in a blog on the “X-Twitter” platform, “Best wishes to the 33 Iraqi companies heading to the SelectUSA Investment Summit in Washington, D.C., next week.”
She added, “The investment process is through linking Iraqi companies with American companies and resources to help them develop their businesses.”
(Mnt Goat – Remember when in the past years I said – What is the US waiting for? Why have they not yet invested the US companies in Iraq? There is billions to make over there. – Well the spigot had to be opened first and now its opened. The spigot analogy means that the sanctions are over, war reparations paid and now they can do business easily with the rest of the world. But as you know with Iraq nothing happens overnight and so it took a year and a half to open the spigot but now it’s opened up wide.)
Based on this information from my Saturday call to Iraq, I will summarize it for you. We are still waiting for the US to give assurances. The project to delete the zeros was scheduled for June and we will still have a week remaining in June. This is all I know and can tell everyone at this point. But don’t go off too excited and forget all the other information my contact just told us either. You must put everything into its proper perspective.
Will this be held up until January 2025?
I can’t say and how should I know for certain. This is not a fair question as I do not control the process. You might also be thinking if we have to wait until the end of 2026 as their new phase, the 3rd phase of their strategic plan of reforms is now kicking in. You can go read the full article too in the Articles Section of today’s Newsletter. But I will tell you that I was told last month that for us to see the RV, there was only two phases and that they were completing the 2
nd phase in June. So go figure… What would you now think? Do I have to spell it all out for you again?
What else is in the news?
So, let’s talk about this strategic plan of the CBI for the economic and financial reform. In the recent news, and I quote from the article – “Samir Al-Nusairi, advisor to the Iraqi Private Banks Association, confirmed that the Central Bank’s third strategy has drawn up a road map and programs with clear goals and initiatives for a period of three years in a special, complex, and risk-filled economic and financial situation”
This Central Bank’s third strategy is for the years (2024-2026), which began in June. They say thisnew part of the overall strategy has drawn up a road map and programs with clear objectives and initiatives for a period of three years (but really it's’ only two and half years). I am almost certain the CBI will come out with a further explanation and details of the phase 3 in the coming days. Stay tuned.
Economy | 06/24/2024 Baghdad - Mawazine News The financial advisor to the Prime Minister, Mazhar Muhammad Saleh, today, Monday, identified the most important economic gains achieved due to the rise in oil prices, pointing out that global energy market sources indicate that the current rise in oil prices will continue until the end of the year 2025.
Saleh said, “There are There is a clear link between the rise in revenues from Iraqi sourced oil due to the rise in energy prices in global markets on the one hand, and the sustainability of financing investment projects whose allocations are estimated in Federal General Budget Law No. 13 of 2023 (the tripartite budget), which exceeds 55 trillion dinars annually.”
He explained, “The rise in oil prices above their estimated rates leads to reducing the hypothetical deficit gap in the annual general budget, which is estimated at approximately 64 trillion dinars, and provides sustainability of spending on development projects,” stressing that “the hypothetical deficit is no longer a reason for faltering or delaying reconstruction projects and expenditures.” Related investment.
Saleh added, "The government program has prioritized, in its philosophy and general directions, the policy of diversifying sources of income in the national economy."
He stated, “For the first time, sovereign guarantees are granted to market activities and the private sector as a partner in development, with priority to major economic diversification activities, by providing appropriate financing to the private sector from global financial sources in order to finance the transfer of modern technology, especially the manufacturing and petrochemical industries, as well as industries related to the provision of high-quality products.” “A link to reconstruction, to ensure stable and high growth rates and provide the requirements for sustainable development and operation.”
He pointed out, “Global energy market sources indicate that the current oil prices will continue to rise until the end of the year 2025, with an average price of one barrel of crude oil at no less than $82, which is an average that exceeds the conservative price mentioned in the general budget law above, which was estimated at about $70 per barrel.” https://www.mawazin.net/Details.aspx?jimare=250173
I wanted to come on today and discuss a conversation I had with my CBI contact on Saturday. Since I could not arrange a call on Wednesday, as planned, the conversation was extra-long and enlightening. I want to share this conversation with you today. Also I want to share a couple main points today in the progress of the economic reforms in Iraq and their impact. I will anticipate a few questions many of you might be thinking while I go through the news.
So, what did my CBI contact tell me?
To sum up what my CBI contact told me was for investors from the west to relax and not follow every little (or big) event as a target to get the reinstatement of the Iraqi dinar. They watch and read what these conference calls say on the effort of informing people and it simply is not all true. Also we talked about June and so we are well into June already and still no Project to Delete the Zeros. I did not dare ask when it would happen after the lecture I just received …lol..lol..lol.. 😊 Shame, shame on me. My friend and contact does not like it when I ask questions that I should already know the answers to.
In this regard, I was told that the effort to roll out the new ATMs should be an indication of the progress with the project and not to worry as the committee is working closely with the banks to track the ATMs, their locations and to have sufficient supplies of the lower denominations available to load the machines when they distribute them to the banks when ready.
But the majority of the government run banks DO NOT yet even have the newer notes as the CBI just does not hand out FREE money to people, especially worthless notes (at this time). In order for the banks to receive the notes they will have to exchange the 3 zero notes for them. This exchange will happen when and only when the CBI is ready to begin the process of the swap out. This has NOT yet begun. This effort has to be a well calibrated and coordinated event.
I was also reminded once again that June marks a pivotal point as the CBI is moving now into a third phase of their strategic plan. It is a calibrated plan not some random happening of events where the CBI is in a panic mode or reactionary mode all the time. I was told that the dollar prices are coming down as predicted after the EID holiday. Soon they will be inline with the reform plan which is within limits to the “official CBI rate”. This new phase of the plan will run from June to 2026.
Again, I was told that NO insider, backdoor, international trading or otherwise was being conducted on the Iraqi dinar. If you hear rumors of otherwise it is all lies. Investors can come to the ISX and purchased Iraqi dinar at the “official CBI rate”. There is not yet the availability to trade on FOREX or any of the other foreign exchanges. There is still a benchmark on FOREX displaying the ISX rate and a link back to the ISX. Again, this rate may vary by slight fluctuations from the official CBI rate because of some minor responsiveness by some investors and their demand for it. The ISX dinar does float already but is still solely pegged to the dollar. Investors really can’t do much with the dinar at this time as in the west there are still US Treasury sanctions effective on the currency.
I then asked how the rate of the dinar would be determined in the future and if there is another system to be used to determine the rate of the dinar based on all of its newer resources and economic changes. I was then told that “you know and I know that the rate of the dinar is now being artificially suppressed” and that it is the “global order” that is holding the CBI back. I was told that Iraq is in a much better situation now prior to the 1990 embargo and so why not have an international rate again with at least a rate equivalent to the late 1980’s prior to the invasion. Also, it was pointed out that all the UN sanctions are now lifted from Iraq and so why has the US Treasury not also yet lifted their sanctions too on the dinar? So, you see, she said, it is all a political game being played. She said she would leave this game up to the board of directors at the Central Bank as she is just part of a team doing her job. I then thanked her for her opinion in this matter.
She said that her committee was directed to be ready in June and did plan in June to begin the project to delete the zeros but the Central Bank as not yet received the assurances needed in writing from the US Treasury that they would support us fully all the way through the process. To me this meant to conduct the project to delete the zeros, swap out the notes and then onward to the reinstatement of the dinar. I was assured I was correct in my thinking. I already knew this as this was all in the Dr Shabibi plan anyway. This was just a confirmation that they are still closely following this part of the plan anyway. My feeling after this conversation was not negative but it was not so positive either since the US is still holding back and not fully supporting the financial reforms and the events that were supposed to happen at the end of the second phase of the reform process.
Parliamentary recommendation for Finance and Planning to launch instructions for implementing budget schedules
Today, Tuesday, the Parliamentary Finance Committee recommended the Ministries of Finance and Planning to release instructions for implementing the 2024 budget schedules, while indicating that all appeals are normal and did not rise to the rejection of some paragraphs.
Committee member Nazem Al-Shibli said, “The budget is effective after its publication in Al-Waqa’i newspaper, but it needs instructions issued by the Ministries of Finance and Planning in order for it to be clearly implemented in the ministries, agencies, and governorates,” explaining that “the budget is not devoid of complaints and appeals every year, but the court It is the one who decides the authority to implement or legi
slate.”
Al-Shibli added, “The court will hear all appeals,” pointing out that “the budget is subject to appeal if any party objects to a part of it,” noting that “all appeals are normal and do not rise to the rejection of some paragraphs.” link