Monday, September 30, 2024
RV UPDATE BY KAPERONI, 30 SEPT
Kaperoni
This is a good quote from that article "The expected path of the Iraqi economy"
Quote: "The most important indicator, in my opinion, is that despite all the attempts to put obstacles in the way of economic development, intentionally or unintentionally,
the government is moving forward with its program, leaving all attempts at obstruction in its wake, and this is one of the secrets of success and the key to hope."
Why does the US still control every penny of Iraqi oil revenues?, 30 SEPT
Why does the US still control every penny of Iraqi oil revenues?
Washington has maintained control over Iraq’s oil revenues since its illegal 2003 invasion – a financial and economic subjugation that undermines Iraqi sovereignty and denies it access to its own national treasure.
In July, the Iraqi Central Bank halted all foreign transactions in Chinese Yuan, succumbing to intense pressure from the US Federal Reserve to do so. The shutdown followed a brief period during which Baghdad had allowed merchants to trade in Yuan, an initiative intended to mitigate excessive US restrictions on Iraq’s access to US dollars.
While this Yuan-based trade excluded Iraq’s oil exports, which remained in US dollars, Washington viewed it as a threat to its financial dominance over the Persian Gulf state. But how has the US managed to exert such total control over Iraqi financial policies?
The answer lies in 2003, with mechanisms established following the illegal US-led invasion of Iraq.
A legacy of ‘Operation Iraqi Freedom’
Since the signing of Executive Order 13303 (EO13303) by President George W Bush on 22 May 2003, all revenues from Iraq’s oil sales have been funneled directly into an account at the Federal Reserve Bank of New York.
EO13303, titled “Protection of the Development Fund for Iraq and Other Property in Which Iraq Has an Interest,” has been renewed annually by every US president, including Joe Biden in 2024. This executive order essentially places control over Iraq’s oil revenues under the discretion of the US President, leaving Baghdad with limited control over its resources and earnings.
The roots of Iraq’s financial dependence on the US stretch back to the 1990s. Following Iraq’s invasion of Kuwait in 1990, UN Security Council Resolution 661 imposed severe economic sanctions to isolate Iraq from international trade. These sanctions, exacerbated by former president Saddam Hussein’s refusal to comply with withdrawal demands, crippled the Iraqi economy.
Control over Iraq’s finances
UNSC Resolution 687, passed in 1991 after the Persian Gulf War, extended these sanctions while introducing the controversial “Oil for Food” program. Although it allowed Iraq to sell oil in exchange for humanitarian goods like food and medicine, the sanctions resulted in immense human suffering, with over one million Iraqis, half of them children, dying during this period. Then-US secretary of state Madeleine Albright infamously defended the sanctions in a 1996 interview, stating that the deaths were “worth the price.”
Following the invasion of Iraq, the US occupation of the country became a reality after the collapse of Saddam’s government. Faced with a fait accompli, the UN Security Council had to accept the new status quo.
According to International Humanitarian Law, occupation forces – in this case, the US and UK – become responsible for the well-being of the populations they occupy. So, UNSC Resolution 1483 was issued on 22 May 2003 to establish the US-led Coalition Provisional Authority (CPA) as Iraq’s administrator and create the Development Fund for Iraq (DFI) to manage Iraqi oil revenues.
Note that Resolution 1483 did not mention the US Federal Reserve as the depositary of Iraqi funds, nor did it assign a location for the DFI headquarters or account. In fact, the resolution specifically states directed that the DFI should “be held by the Central Bank of Iraq.” It was the CPA, led by Paul Bremer, that decided unilaterally to house the account at the Federal Reserve Bank of New York.
This decision allowed the US government to maintain tight control over Iraq’s oil revenues. From that point until today, the Iraqi Ministry of Finance has had to submit requests for funds to the US Treasury, which then approves or denies these requests based on its own criteria.
This monthly transfer of US dollars – which are literally flown into Baghdad in pallets of hard cash – determines Iraq and its 40-million-population’s ability to pay for basic needs like salaries, food, and medicine.
Blackmailing Iraq
Whenever Washington feels that Iraq is not compliant with US regional goals, these fund transfers can be delayed or reduced. In January 2020, for instance, after the Iraqi Parliament voted to expel US troops following the assassination of Iranian Quds Force General Qasem Soleimani and Iraqi Popular Mobilization Units (PMU) Deputy Commander Abu Mahdi al-Muhandis, the Trump administration threatened to freeze Iraq’s access to its oil revenues.
Today, Iraq’s financial situation remains dire. Despite having oil revenues piling up in the Federal Reserve Bank of New York – estimated today at around $120 billion – Iraq is burdened with a growing debt that matches this amount.
The country’s inability to control its own funds has prevented long-term reconstruction and development, forcing it to rely on international loans. Ironically, Iraq has also become one of the largest holders of US Treasury bills, with investments totaling $41 billion in 2023.
In addition to its economic challenges, Iraq has been drawn into the escalating regional conflict amid the ongoing Gaza war and the intensification of Israel’s aggression against Lebanon. Iraqi resistance forces have actively participated in military strikes against Israeli targets in solidarity with both Palestinian factions and Hezbollah.
The involvement of Iraq in this conflict is not isolated. Iraqi factions have routinely targeted US military bases in Iraq and Syria – viewed as illegal foreign forces subjugating Iraq’s sovereignty – contributing to a broader escalation that has drawn in actors from across West Asia .
These troops have vowed to continue their campaign against both US and Israeli targets, aligning their actions with the region’s Axis of Resistance.
The UN shutters DFI, but the US refuses to comply
Iraq ceased to be under occupation, at least formally, when it signed the “Strategic Cooperation Framework” agreement with the US in 2008, which says that American forces are present in Iraq only at the request of the Iraqi government.
Attempts by the UN to restore Iraq’s control over its finances have largely failed. In 2010, UNSC Resolution 1956 demanded the closure of the DFI by no later than 30 June 2011 and the transfer of all proceeds to the Iraqi government.
Despite these clear legal directives, the DFI account remains under US control at the Federal Reserve Bank of New York in defiance of the UN Security Council resolution. Worse yet, enduring US dominance over Iraq’s financial resources has deeply exacerbated the corruption and dysfunction plaguing the country.
Ending the work of the UN International Advisory and Monitoring Board of the DFI was one way of obscuring the massive corruption and theft of resources by American and Iraqi actors.
The unprecedented corruption that was spread throughout Iraq and its institutions can be laid at the doorstep of this policy. The gargantuan amounts of hard cash that are flown into the country monthly, the unaccounted-for astronomical sums that disappear from various ministries, and the dollar exchange shops (banks) set up by political groups that thrived alongside the US occupation forces have turned Iraq into one of the most corrupt countries in the world.
Iraq’s dependence on the US for access to its own oil revenues, combined with its growing debt has significant impacts on its sovereignty, while its involvement in the regional war also will have implications on its relations with the US.
While Iraq may no longer be under formal occupation, the mechanisms of financial control established after the 2003 invasion persist. These controls not only limit Iraq’s economic development but also entangle it in broader geopolitical struggles.
Today, both the US Administration of Joe Biden and the Iraqi government led by Mohammad Shia al-Sudani – which has not taken steps to free Iraq’s sovereign funds – can be considered in violation of United Nations Resolution 1956 issued in 2010. link
The expected path of the Iraqi economy, 30 SEPT
Yasser Metwally
The expectations of economists and those interested in economic affairs, including me, are based on the indicators that appear on the ground.
In order to build our expectations about the path of the Iraqi economy, we must read and analyze the indicators to complete the picture of the future of the Iraqi economy.
The broad and long-term package of decisions and measures that the government has taken and is still taking in the context of the path of economic reform attempts are the indicators that we rely on in reading and forecasting the future.
The size of the accumulated distortions in the structure of the Iraqi economy requires a huge amount of measures to correct the course, and this is what Al-Sudani’s government has adopted during its short life, and certainly the results need some time for the citizen to see them.
Perhaps this package of decisions and procedures contains many advantages, but it is not without disadvantages, based on the principle that no work can be 100% complete, as it may contain some errors, and this is clearly evident in implementation.
How can we weigh the advantages over the disadvantages? Achieving this principle depends on the quality and volume of follow-up and sustainable monitoring of implementation processes.
In the midst of this amount of measures, which are absolutely required due to our delay in correcting the course of the economy, some mistakes will appear and some will address them without focusing on the positives and the results achieved, and this is a strange culture among some short-sighted people.
According to this perspective, the expected path of the Iraqi economy bodes well and is a relief, if these measures and decisions are implemented well. It is noted that the government is serious about achieving the goals set out in its program.
Perhaps the optimism indicator for our expectations lies in the unity of objectives for most corrective decisions and measures and their interconnectedness.
To give an example of this trend, the decisions to reform the banking sector, in parallel with supporting the Iraqi private sector and involving it in implementing some important projects, while considering correcting the tax policy, draw before you a picture of the encouraging path to achieve development based on the unity and interconnectedness of the sectors concerned with achieving it through a package of decisions and procedures.
If we add to it, in the other corner, the activation of the services sector, especially in attempts to resolve congestion and provide the time required for the speed of work and achievement, then the interconnection between the path of the sectors at a parallel pace establishes a correct and clear path confirmed by the percentage of achievement in the investment budget that is being achieved for the first time in two decades, in which the percentages of achievement of the planned investment projects match the implemented investment projects.
We do not forget that such a great achievement may not be without obstacles and requires sufficient time to achieve the goal of the decisions and procedures.
The most important indicator, in my opinion, is that despite all the attempts to put obstacles in the way of economic development, intentionally or unintentionally, the government is moving forward with its program, leaving all attempts at obstruction in its wake, and this is one of the secrets of success and the key to hope.
As an observer of economic affairs, I sense citizens’ satisfaction and comfort, whether in public meetings and private conversations or in their comments on social media platforms regarding new trends and their sense of the reality and importance of ongoing measures.
We hope for the best, God willing link
EXCERPTS: "THE CBI HAS DECIDED TO DO IT THIS FALL" FROM MNT GOAT , 30 SEPT
Let’s start with an interesting article titled “IRAQ PLANS CURRENCY REDENOMINATION AMID ECONOMIC CHALLENGES“. My goal today is to show you that this is just not another article about the Project to Delete the Zeros but much, much more. I also want to show you that I believe this project is going to move forward this fall, and I am told not until after the US election.
In this article they state, and I quote – “The Central Bank of Iraq (CBI) has announced that discussions regarding the project to remove zeros from the Iraqi dinar are ongoing,” Oh….
but we already knew that, didn’t we? But here is the important part. It is the timing of all these articles yes, there were many articles on this topic this period of news.
It is September and if you recall my CBI contact told us the committee was planning to begin the roll out of the currency swap out in November.
Then the article went on to say and I quote – “To address these issues, it has amended some monetary policies in line with the international situation, aiming to increase confidence in the Iraqi dinar and prevent a significant decline in its value.” Is this not one of the main reasons for the Project to Delete the Zeros?
Okay, so here are the real goodies in this article. I quote again – “Earlier this year, the Iraqi federal government decided to postpone a plan to remove three zeros from the nominal value of its currency notes, citing that the current economic climate was not suitable.”
Earlier this year?
Is it suitable now? Is this what they are telling us? Did you read it? All I can now say is “I told you so”.
Yes, just as I was telling you that they planned to do it in June but for reasons they postponed the process. The US Treasury decided to stop it and we know the rest about the banks and the corruption that we read.
Now the CBI has decided to do it this fall. This is why they occupy an entire floor in the CBI. The reasons are really two-fold:
1. One is to help reform their banking system to allow them to do it and
2. the other is to be onboard to assist in the actual swap out. You will not see the US Treasury leave the CBI until this is done and the Project to Delete the Zeros (swap out) is completed.
Another piece of the puzzle also surfaced in this article and I quote -“Last year, the central bank indicated plans to redenominate the Iraqi dinar to simplify financial transactions in an economy that remains heavily centralized and oil-dominated, where deals are often conducted in cash.“
So, what the CBI is saying is that they reminded us that last year they indicated plans to do it and this year they are going forward with it. This is what I get out of this article. You can go read it in the Articles Section of today’s Newsletter.
What do you think? But I also have to add what my CBI contact told us and so there is also another verification too of this article that what I think most likely is the correct thinking. You see, I don’t go by rumors, bullshit bank memos or someone being put on alert in an exchange center… bla, bla, bla …. as all these so-called intel gurus will tell you. I go by FACTS and only the FACTS. Get it?
-
Frank26 [Bank story] This time we didn't go down, we just called [the bank]... We said we want to see if we can exchange some cu...
-
Bank appointment for Currency EXCHANGE Instructions/Checklist Bank Name_________________________________________ Bank 800#____________...
-
Walkingstick All these meetings that the CBI had with all these agencies that were helping them with their monetary reform are done. Al...