Important update from Birdieorbust, Liberty Lounger Extraordinaire 💥 4.22.24
💢 Birdie: Well now I can say a bit about what I could not before since Frank told it - but Al Alaq made another speech where he guaranteed the citizens they would be getting a new rate and lower denoms soon to just be patient...
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Al-Alaq takes files of sanctioned banks to New York and meets with US Treasury and Federal Reserve officials
The central bank governor left Baghdad last Saturday to meet with US Treasury and Federal Reserve officials.
The central bank governor was accompanied by an executive specializing in supervision and funds transfer issues
The central bank governor has in his possession a report compiled by an international auditing firm on the dollar-stripped banks.
The report includes an assessment of the risk, creditworthiness and ability of the sanctioned banks to comply with banking regulations.
During his visit, Al-Alaq is trying to negotiate with some American banks to open accounts in banks that have not been dollar-stripped.
Prime Minister Al-Sudani's Washington Visit: Aims for Dinar Liberalization and Economic Stabilization
In August 2024, Iraqi Prime Minister Muhammad Shia Al-Sudani embarked on a pivotal visit to Washington, D.C., with the intent to liberalize the Iraqi dinar and stabilize the country's economy. This move comes amidst broader efforts to diversify Iraq's economy and modernize its financial and banking sectors, which have been hindered by political dynamics in the country.
A Delegation Focused on Economic and Strategic Relations
Accompanied by key ministers and Iraqi businessmen, Al-Sudani's visit aimed to discuss bilateral security, trade, economic, energy, and cultural ties with the United States. The agenda included pressing issues such as the US military presence in Iraq and the impact of US Treasury sanctions on Iraqi financial networks. The Shia Coordination Framework, including Shia political and militia groups, pressured Al-Sudani to prioritize these topics due to their antagonism toward the US and its allies.
Economic and Security Concerns
During Al-Sudani's visit, the US and Iraq convened the Higher Coordinating Committee of the 2008 Strategic Framework Agreement. The symbolism of the visit, including the delegation's size and itinerary, underscored Baghdad's desire to shift focus to economic, educational, and people-to-people domains. Al-Sudani sought to manage domestic and Iranian pressure to reduce the US military presence in Iraq while not detracting from his broader political and economic agenda.
The Delicate Balance: Security and Economic Engagement
The visit took place against a backdrop of heightened regional tensions, including Iran's aerial assault on Israel, which further complicated the US-Iraq relationship. Despite this, Al-Sudani and President Biden aimed to focus on economic cooperation and strategic relations, reinforcing the commitment to a comprehensive partnership.
A Strategic Engagement with Challenges
Al-Sudani's visit was meticulously planned to strengthen US-Iraq relations post-Gaza war. However, Iran's direct attack on Israel, involving drones and missiles flying over Iraqi airspace, threatened to overshadow the meeting's objectives. The challenge for both leaders was to find a way to restrain Iranian-backed Iraqi militias while addressing regional security concerns.
Economic Collaboration and Security Cooperation
Iraq's Prime Minister emphasized the importance of expanding economic and diplomatic ties with the US. He sought to boost US investment in Iraq's economy and broaden the relationship beyond security concerns. Al-Sudani's visit to Washington was a strategic move to liberalize the dinar and stabilize Iraq's economy, reflecting the country's aspirations for economic diversification and financial sector modernization amidst regional turmoil.
Iraqi Prime Minister Sudani's White House visit will discuss US forces in Iraq, sanctions, and bilateral relations. Amid pro-Iranian pressures, the visit seeks to balance diplomatic and economic interests with the US, highlighting the complex US-Iraq dynamics and regional geopolitical implications.
Iraqi Prime Minister Mohamed Shia Sudani will lead a prominent delegation to Washington, DC in mid-April, marking his first visit to the White House since assuming office in October 2022. The delegation includes key ministers of oil, finance, trade, and electricity, as well as the president of the central bank, accompanied by five Iraqi businessmen. Sudani’s seven-day trip to the United States will include a meeting with President Joe Biden on April 15 at the Oval Office. He plans to talk with American businesses, the Iraqi community, and think tanks in Washington before heading to Houston to engage with US energy companies.
Agenda of Sudani’s Visit
The delegation will focus on the US military presence in Iraq and the US Treasury sanctions and discuss bilateral security, trade, economic, energy, and cultural ties. These talks are anticipated to be primarily centered on military and sanctions issues.
The Shia Coordination Framework, which includes Shia political and militia groups with strong animosity toward the US and its allies, has pressured Prime Minister Sudani to prioritize these issues. They perceive the US military as a threat, and the Treasury’s sanctions have severely impacted the
financial networks of these anti-American factions.
The US sanctions were triggered by the misappropriation of US dollars by Iraqi banks and individuals linked to the Coordination Framework. These entities have significantly aided Washington’s opponents, such as Iran, Syria, and Russia, by channeling vast sums of money from Iraq to the aforementioned countries, thereby circumventing sanctions.
If negotiations are successful, Baghdad and Washington are expected to establish a timetable for the withdrawal of US combat forces from Iraq or agree on a new framework for the US military’s mission in the country, addressing the demands of the pro-Iranian groups. However, such agreements may come at a cost, potentially involving easing sanctions on blacklisted banks in exchange for flexibility regarding a controlled US military presence. However, this will mean granting more financial power to these groups, which will translate into growing political and military influence, posing long-term threats to US strategic interests and its allies.
However, the failure of the Biden administration to address the persistent onslaught by the Coordination Framework on the post-2003 Iraqi political framework to re-centralize political and economic power in Baghdad could re-drag the US into the country.
Iraqi Divisions
The Kurdistan Region, once a prominent political, diplomatic, economic, and energy force, is now in a state of paralysis. It has faced multiple crises, stemming partly from Baghdad’s detrimental policies and the Iraqi Supreme Court’s rulings, sometimes compounded by the international community’s indifference, greatly affecting the welfare of ordinary Kurds.
The Coordination Framework has consistently pursued power re-centralization at the expense of Washington’s partners under the watchful eye of Prime Minister Sudani’s government. Baghdad’s highest court rulings against the Kurdistan Regional Government’s (KRG) oil exports have already resulted in over $11 billion in financial losses for Erbil and international oil companies, plunging Kurdistan into unprecedented economic turmoil. Additionally, the Iraqi court dissolved the Kurdish parliament and the provincial councils, revoked parliamentary seats held by minorities in Kurdistan since 1992, invalidated the Kurdistan Region’s high election commission’s authority to oversee parliamentary elections, and most recently, interfered in the administrative and budgetary affairs of the Kurdish region by instructing the Iraqi finance ministry to cover KRG employee salaries, again another measure to undermine the KRG’s legitimacy in the eye of the Kurds.
The Sunni community has also become another victim of the Iraqi judiciary. Last November, the Federal Supreme Court oustedSpeaker Mohammed al-Halbousi, a Sunni, from Parliament on fraud allegations. Despite Halbousi deeming the ruling unconstitutional, he resigned. Many attribute the action to pro-Iranian factions in the Iraqi government who perceived Halbousi as a threat. Sunni attempts to replace Halbousi have been hindered by internal divisions worsened by Shia interference. The Coordination Framework's systematic approach shows no intent to cede legislative control to Sunnis. With Shias now dominating all branches of government, Sunnis and Kurds are increasingly marginalized.
Meanwhile, in Iraq, the judiciary seems to show significant leniency towards Shia individuals linked with the Coordination Framework.
Meanwhile, in Iraq, the judiciary seems to show significant leniency towards Shia individuals linked with the Coordination Framework. Specifically, the Court of Cassation in Baghdad, seemingly under political influence, acquitted and reinstated Ahmed Hamdawi al-Kinani, a former police officer within the Iraqi Interior Ministry. Al-Kinani had previously been convicted and sentenced to death in 2023 for the murder of the prominent academic and security expert Hisham al-Hishami in 2020, known for his outspoken criticism of Shia militia groups.
While Sudani has aimed to portray himself as a leader capable of making decisions independently for the good of Iraq, he finds his political and popular support not as strong as needed to confidently navigate the challenges posed by influential leaders within the Coordination Framework. Thus, he is more vulnerable to political pressures.
The dynamics of intra-Shia competition, alongside the need for a somewhat independent and internationally appealing technocratic figure who can uphold Iraq's relations with the West and promote its interests, often pave the way for lesser-known Shia politicians to step into this role. Sudani, following in the footsteps of his predecessors, was chosen as a consensus candidate and supported by the Coordination Framework to reflect their interests. This support is rooted in the less favorable perception of the coalition's true power players, who are seen as less appealing, particularly by Western standards.
Some positive qualities make Prime Minister Sudani a standout leader in post-2003 Iraq. Unlike his predecessors, he has spent his entire life in Iraq. His journey to power began as the mayor of Amara, providing him with an organic and close understanding of Iraq’s political and social landscape. His government’s agenda has prioritized service delivery to ordinary citizens and has shown commitment to addressing critical issues, including finance and oil, with the KRG.
On the foreign policy front, Sudani has maintained balanced relations with neighboring countries, including the Arab Gulf states, with increased diplomatic and trade relations. Probably most notable has been his firm stance on Iran, condemning Tehran’s missile attack on Erbil. Thus, it’s no surprise that a recent Gallup poll rates him as the most favorable prime minister in a decade.
Long-term Prospects and Challenges
Sudani’s positive traits have ignited a wave of euphoria in Washington and among his advisors, reinforcing the optimism surrounding his political trajectory. Privately, confidence in his prospects is steadily rising. They seek to transform the upcoming White House trip into a state-of-the-art publicity campaign, portraying Sudani as a respected Iraqi statesman on the global stage. The goal is to make this trip a pivotal moment, laying the groundwork for his campaign in the 2025 legislative elections.
While Washington might view this as a strategic move to reduce the influence of pro-Tehran actors in Iraq, freeing Sudani from pressure, the blueprint is not merely ill-advised; it poses a direct threat to US strategic interests. While this approach may offer an illusion of relief and success in the short term, it ultimately sets the stage for instability.
By investing heavily in a single figure, Sudani, the US inadvertently alienates its allies and emboldens its adversaries.
By investing heavily in a single figure, Sudani, the US inadvertently alienates its allies and emboldens its adversaries. The once-celebrated strategy, championed for former Prime Minister Haider al-Abadi in 2018, portrayed him as a hero—a beacon of hope for Iraq and a staunch ally of the West. However, despite these grandiose projections, the harsh reality emerged when Abadi’s electoral defeat shattered these illusions, leaving Washington disappointed. Even worse, it had unintended consequences by empowering anti-American forces, fueling their determination to gain control of Iraqi institutions. Subsequent elections have only reinforced anti-American sentiment, consolidating power among traditional, Western-hostile factions in Baghdad.
For Iraq to achieve stability, it necessitates the support of a foreign patron. Washington is in a favorable position to fulfill this role with a pragmatic strategy requiring a minimal footprint. This entails prioritizing investment in actors aligned with US values and objectives. Such an approach involves strengthening alliances with Kurds, Sunnis, and certain Shia moderates who prioritize Iraq’s interests. Doing so can help restore a much-needed balance of power in Baghdad, safeguarding against the emergence of a tyrannical centralized authority.
While no political system is flawless, the post-2003 consensus governance model and a balanced political climate in Baghdad deserve credit for preventing Iraq from becoming a disruptive force in the region and a source of menace for its people. However, the recent trend toward centralization in Iraq carries significant risks and has far-reaching implications. It could exacerbate Iraq’s authoritarian tendencies, posing substantial threats to its citizens and regional stability. Moreover, this development may divert crucial Western strategic resources from areas like Ukraine and East Asia, potentially benefiting US rivals. Washington should take these developments seriously.
Impact of the Saudi Investment Protection Law on Iraq in August 2024
Amidst the evolving dynamics in the Middle East, the Saudi Investment Protection Law is poised to make significant waves, particularly in Iraq. . This legislation, scheduled to be legislated during the next stage, aims to enhance the investment landscape by providing a protective shield for Saudi investments in Iraq.. However, the Iraqi Parliament has expressed a lack of knowledge about the details of this law, raising questions about its implications and the potential impact on Iraq's economic and political landscape. .
Economic Rapprochement and Investment Trends
Recent years have seen a burgeoning rapprochement between Gulf Arab states and Iraq.
. This trend is marked by a significant increase in Saudi investment in Iraq, indicative of a wider strategy that includes economic engagement and political overtures. However, tensions may arise if these investments are perceived as interference in Iraqi affairs by Iran and its allies, posing a delicate balance for Riyadh. .
Legislative Framework for Investment Protection
The backdrop against which the Saudi Investment Protection Law emerges is one of increased investment protection treaties between countries. . These treaties, such as the bilateral investment treaty (BIT) between Iraq and the UAE, aim to mitigate risks for foreign investors by offering protection and enhancing the investment climate. . The ratification of such treaties signals a commitment to establishing investor-friendly environments, which the Saudi Investment Protection Law similarly seeks to achieve.
Major Changes and Future Implications
The new investment law of Saudi Arabia, which is set to replace the current Foreign Investment Law, is poised to bring about significant changes. . These changes are designed to develop and enhance the competitiveness of the investment environment in the Kingdom, aligning with Vision 2030 and the National Investment Strategy. . With a focus on creating job opportunities and providing an attractive investment climate for both Saudi and non-Saudi investors, the law is expected to have far-reaching impacts not only within the Kingdom but also in neighboring countries such as Iraq. .
Regional Geopolitics and the Role of China
The recent rapprochement between Iran and Saudi Arabia, facilitated by China, has underscored the shifting geopolitical landscape in the Middle East. . This development raises questions about the potential for China to assume a larger role in the region, traditionally dominated by the U.S.. Moreover, the impact of this rapprochement on managing or resolving conflicts in the Middle East, including those in Syria and Yemen, remains a subject of speculation and analysis. .
In conclusion, the Saudi Investment Protection Law, set against the backdrop of changing regional dynamics, holds significant potential to reshape the economic ties between Saudi Arabia and Iraq. Its impact on Iraq will be multifaceted, encompassing economic, political, and geopolitical dimensions. As the law progresses through the legislative process, its eventual effects on Iraq will be closely monitored by regional and global stakeholders.
Parliament Knows Nothing About The "Saudi Investment Protection" Law.. What Is Its Impact On Iraq? - Urgent
Economy | Baghdad Today – Baghdad Member of Parliament, Jawad Al-Yassari, confirmed today, Monday (August 26, 2024), that Parliament does not know the details of the Saudi Investment Protection Law that is scheduled to be legislated during the next stage.
Al-Yassari told Baghdad Today that "the Iraqi parliament has not yet reviewed the Saudi investment protection law that is scheduled to be legislated during the next stage," noting that "it is certain that this law will go through several stages of study and discussion before it is passed."
He added, "Iraq has good investment laws, and we do not believe that there is a need to legislate an investment law specific to a particular country," noting that "this step will open the door to the country that wants its own law, and this will be at the expense of Iraq, as there are fears about this matter."
He added: "But there may be agreements to protect investors' money, and this is a natural right for any investor, especially since Iraq is going through conditions that are still unstable."
He continued: "We are waiting for the draft law to be presented to the House of Representatives, which will be submitted by the government, for the purpose of reviewing it and knowing its paragraphs and what they include, so that it can be discussed to determine the extent of the necessity of legislating such a law specific to Saudi investments, and how it is possible to protect those investments with a law that is binding on Iraq to implement."
Iraq is preparing a draft law to protect Saudi investment, with the aim of submitting it for discussion in Parliament, in preparation for its approval in the coming months, with the aim of enhancing economic cooperation between the two countries.
This was announced during a meeting between the Chairman of the Federation of Saudi Chambers, Hassan bin Mujib Al-Huwaizi, and the Chairman of the Iraqi-Saudi Friendship Committee in the Iraqi Parliament, Shaalan Al-Karim, and his accompanying delegation, as part of an official visit to the Kingdom.
Regarding the impact of the law, experts confirm that after its approval, there will be a gradual increase in the level of trade exchange between the two countries, which currently exceeds approximately one billion US dollars per year, with a growth rate estimated at around 10% annually.
On July 18, 2023, the Iraqi Council of Representatives postponed voting on (the draft law to ratify the agreement on the encouragement and mutual protection of investments between the government of the Republic of Iraq and the government of the Kingdom of Saudi Arabia), and it has not been included on the Council’s agenda yet.
Economic relations between Iraq and Saudi Arabia are diverse in different fields, especially in the energy sector; where a $27 billion agreement was signed last year to develop a solar power plant, with the participation of TotalEnergies, and the Saudi company ACWA Power was invited to join part of this deal. LINK