DINAR REVALUATION REPORT: Baghdad's New Chapter in U.S.-Iraq Relations, 16 SEPT

Baghdad's New Chapter in U.S.-Iraq Relations

Iraqi Prime Minister Mohamed Shia Sudani, since assuming office in October 2022, has embarked on a pivotal journey to reshape Iraq's political landscape and strengthen diplomatic ties. As of September 15, 2024, Iraq stands at a critical juncture, navigating complex domestic and international challenges while pursuing an ambitious agenda for economic and political reform. 

Sudani's visit to the United States in April 2024 marked a significant milestone in Iraq's foreign policy, aimed at revitalizing and broadening the bilateral relationship beyond military cooperation. 2 The Iraqi delegation, comprising key ministers and business leaders, engaged in discussions on trade, economics, energy, and culture, reflecting Baghdad's desire to foster a comprehensive partnership with Washington. 1

Security and Sanctions

The agenda for Sudani's visit prominently featured discussions on the U.S. military presence in Iraq and U.S. Treasury sanctions. 1 These topics were of paramount concern to the Shia Coordination Framework, a coalition of Shia political and militia groups that has historically opposed U.S. interests in the region. 1 The sanctions were imposed due to the misappropriation of U.S. dollars by Iraqi banks and individuals associated with the Coordination Framework, which had facilitated the circumvention of sanctions against Iran, Syria, and Russia.  1

Economic and Political Agenda

Sudani's administration has prioritized an agenda centered on economic development, investment, and governance reform. His visit to the U.S. was aimed at attracting American business interest and investment in Iraq's economy. 2Additionally, the Iraqi leader sought to engage with the Iraqi diaspora in the U.S., encouraging their participation in Iraq's growth and further strengthening the bilateral relationship. 2

Domestic Challenges and Achievements

Political Environment

Sudani has navigated the complex and often fractious Iraqi political landscape with a pragmatic approach, attempting to balance the demands of various factions while pursuing his policy agenda.  3 Despite the challenges, he has managed to maintain relative stability and support from key stakeholders. 3

Economic and Developmental Agenda

The prime minister's first year in office has seen mixed results in implementing economic reforms and developmental projects. 3 While progress has been hindered by political and budgetary constraints, Sudani's government has made efforts to address corruption and promote transparency. 6

Visualizing Iraq's Economic Progress

To better understand the economic landscape under Sudani's leadership, let's examine a timeline of key economic reforms and developments. 4

Al-Sudani: Iraq today is on the right path, 16 SEPT

 Prime Minister Mohammed Shia Al-Sudani, during a dialogue seminar by the Anki Foundation for Studies and Research on the path to development, in the presence of Mr. Al-Hakim:

Iraq depends on oil as the only source to cover its expenses, which have begun to increase.

The development path needs more study and clarification.

We must think properly to activate sectors that support oil.

- There must be projects that suit Iraq to be a focus of development.

We have started establishing and implementing the development road project, which will transform Iraq into an open country.

We have unnatural materials that have not been exploited in industries and the strategic location of Iraq. 

We are in the planning, design and other studies phase and we have approached the World Bank to begin implementing the development road from Basra to Mosul.

Capital finds opportunity in Iraq amid security and political stability

- Many capitals want to invest in Iraq

Iraq today is on the right track

Iraq is witnessing recovery and stability and everyone needs his return

Iraq will enter the gas market after investing in several fields

Iraq is the best corridor in the communications and optical cable file 

Providing job opportunities is one of the reasons that prompted us to proceed with the development road project.

We concluded the Faw Investment Refinery contract and it was activated.

With these projects, we will recreate the experience of the sixties and seventies to work in the private sector to provide job opportunities.

- The railway designs for the development road project have been fully completed.

- The third meeting of the Ministerial Council on the development path will be held next November.

We have started preparing a study on forming a body to manage the development road project.

- We have made real reforms in the tax and banking system.

There is no spot on Iraqi territory outside the control of our security forces, and we have directed the preparation of a comprehensive plan to secure the path of development.

The development road project needs 5 years to be completed.  link

SANDY INGRAM CC NOTES HIGHLIGHTS, 16 SEPT

 Summary

US sanctions on 14 Iraqi banks reveal a financial plot involving Iran and the UAE, exploiting banking loopholes to fund terrorism.

Highlights

• 💰 US Treasury sanctioned 14 Iraqi banks in 2024.
• 🏦 Iraqi banking system, established post-2003 invasion, has flaws.
• 🇮🇷 Billions funneled to Iran despite international sanctions.
• 🕵️‍♂️ Investigations uncovered a $3.5 billion money trail.
• 🚨 Funds linked to Iran’s Islamic Revolutionary Guard Corps.
• ✋ US aims to disrupt financial flows supporting terrorism.
• 🔍 Enhanced scrutiny and cooperation necessary for enforcement.

Key Insights

• 🔗 Financial Loopholes: The Iraqi banking system, initially designed for stability, became a conduit for terror financing due to inadequate oversight. This highlights the need for stronger regulatory frameworks.
• 🌍 International Cooperation: The situation underscores the importance of global collaboration to address the complexities of financial systems that allow sanctions evasion.
• 💼 Shell Entities: The use of shell companies in the UAE demonstrates how easily illicit activities can be masked within legitimate frameworks, necessitating better monitoring practices.
• 🚫 Terror Financing: The connection between Iraqi banks and Iran’s IRGC shows the dire consequences of unregulated financial practices, directly impacting U.S. national security.
• 🔍 Increased Scrutiny: The U.S. Treasury’s measures signal a more aggressive approach to identifying and severing ties with banks involved in terrorist financing, setting a precedent for future actions.
• 📜 Press Release Strategy: The U.S. Treasury’s communication strategy emphasizes their commitment to protecting Iraq while addressing security threats, shaping public perception.
• ⚖️ Regulatory Measures: The proposed rules to sever banks from the U.S. financial system illustrate the ongoing battle against money laundering and the need for stringent compliance.

DINARLAND HIGHLIGHTS: IRAQ IS INTRODUCING NEW ATM CARDS FOR CITIZENS @DI...

Iraq’s August electronic transactions surpass $1.5 billion, 15 SEPT

 Shafaq News/ The executive director of the Iraqi Private Banks Association, Ali Tariq, revealed, on Sunday, that the volume of electronic transactions in Iraq during August exceeded two trillion Iraqi dinars (approximately $1.5 billion).

In a statement to Shafaq News Agency, Tariq said, “This amount was transferred and circulated using various electronic payment systems, including cards and other payment methods.”

He highlighted that “This figure is expected to double in the coming months.”

Tariq also noted that around 20 million electronic payment cards have been issued, covering approximately 50% of Iraq’s population, with some individuals owning two or three cards.

He concluded by mentioning that “the number of electronic payment devices has exceeded 30,000 in both the public and private sectors.”

In October 2023, the Iraqi Council of Ministers issued several executive measures regarding the electronic payment system and point of sale (POS) devices, aiming to enhance the use of electronic payments and facilitate financial and commercial transactions in Iraq.

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PIMPY CC NOTES HIGHLIGHTS, 15 SEPT

Summary

Iraq’s economy heavily relies on oil prices, and a drop below $70 per barrel may lead to currency devaluation.

Highlights

• 💼 Iraq’s budget relies 89% on oil sales.
• 📉 Oil prices fluctuating around $71 may impact the economy.
• ⚖️ Risks of currency devaluation loom if oil prices drop significantly.
• 🔍 Speculation and manipulation affect the foreign exchange market.
• 🏦 Iraq continues to buy gold, indicating a shift in central bank strategies.
• 🔒 Employee salaries are secured despite economic challenges.
• 🚧 Infrastructure projects may slow due to reduced oil revenues.

Key Insights

• 📊 Dependence on Oil: Iraq’s economy is still too reliant on oil sales, making it vulnerable to price fluctuations, which can impact fiscal stability. This dependency could lead to severe economic consequences if oil prices continue to dip.
• 🔄 Currency Risks: Should oil prices fall below the budgeted $70 per barrel for an extended period, Iraq may have no choice but to devalue the Iraqi dinar to manage its financial obligations. This historical pattern raises concerns about future economic health.
• 📈 Gold Purchases: The ongoing acquisition of gold by Iraq suggests a strategic move by central banks to diversify assets and strengthen financial security amidst global economic uncertainties. This trend reflects a proactive approach to safeguarding against currency volatility.
• 🔍 Market Manipulation: The presence of market speculators and the disparity between official and parallel exchange rates highlight significant challenges in Iraq’s foreign exchange market, exacerbating economic instability and complicating currency valuation.
• 📉 Employee Salaries: Despite oil price concerns, Iraq has secured funds for employee salaries, indicating a short-term buffer against economic downturns. However, long-term sustainability remains a question as oil revenues are crucial.
• ⚠️ Project Delays: Infrastructure and development projects may experience delays due to reduced oil revenues, impacting economic growth and job creation in the long term. This slowdown could hinder Iraq’s recovery and development plans.
• 🌐 Global Economic Impact: Iraq’s economic stability is closely tied to global oil demand. Any downturn in the global economy, particularly from potential shutdowns, could severely impact Iraq’s oil revenues, highlighting the interconnected nature of today’s economies.

🚨 Breaking News: U.S. Greenlights Iraq's International Status! 💵