Article: "Al-Sudani in Tehran: A new alliance to confront terrorism and the challenges of the post-'fall of Syria' "
Iraq as a mediator in the region is going to go along way to keeping stability ...
There have been meetings with the "new" USA administration by phone at the highest level and an unannounced delegation from the same prior to his Sudani's visit. He is home now. I imagine things went well for all included...
Like it or not Iran is a very large trading partner. There has to be a very strong agreement by all parties public and private...Iraq...is taking her place again in the region. She has always been in that position as mediator.
Liquidity ‘shortage’ dismissed by economic expert Dagher, calls for focus on non-oil revenues
Economic expert Mahmoud Dagher rejected the notion of a liquidity crisis in Iraq due to sufficient financial revenues and stable oil prices exceeding $70 per barrel. In an interview with Al-Rasheed TV, Dagher emphasized that Iraq’s financial situation remains stable and capable of covering salaries, even in the event of a drop in oil prices below the budgeted threshold.
He further noted that in scenarios of declining oil revenues, the government has the option to reduce or halt investment expenditures to secure operational budget requirements, a strategy previously adopted during former Prime Minister Haider Al-Abadi’s tenure.
He concluded by urging a focus on non-oil revenues to diversify Iraq’s financial resources, cautioning against populist approaches to economic policy and calling for pragmatic decision-making to address the country’s structural financial challenges.
Excerpts from Mahmoud Dagher’s interview:
We have three types of salaries in the state: employees, retirees under the Pension Authority and the Social Welfare Network, which is covered by the Ministry of Finance through its dollar revenues, converted into dinars via the Central Bank. In case of a liquidity shortage, borrowing becomes the alternative.
There is no liquidity shortage, but rather poor management and coordination. Revenues are sufficient, and oil prices remain above $70 per barrel. Therefore, salaries cannot be stopped.
However, there is a coordination issue between the Ministry of Finance and the Central Bank, as approval takes 30–40 days to be reinforced, and we need some accounting adjustments to resolve the matter.
If oil prices drop, the investment budget can be reduced or halted to ensure the operational budget is secured. Previous governments adopted this approach several times, particularly in 2015 and subsequent years.
I support an annual budget because it accounts for all variables. The three-year budget did not achieve the financial stability it was supposed to, as it remains merely a set of future plans. Moreover, we have not benefited from the annual budget system in past years due to delays in its approval.
A weak economy with limited options does not allow for ambitious moves. It requires a wise decision-maker. So far, the Iraqi government has been prudent in its economic decisions. However, Mr. Ammar Hakim’s warnings about the Syrian currency scenario are directed at political leaders, cautioning them against the risk of U.S. sanctions.
In politics, we can talk about rising growth rates, but in economics, it’s a different story. On the ground, Iraq still lags in infrastructure development. We must increase non-oil revenues, and if some are displeased, so be it—because we must move away from populism. link
🌍Iraq’s Readiness for International Market: Sudani’s announcement indicates a major shift in Iraq’s economic strategy, focusing on attracting foreign investment.
🤝 Memorandums with Iran: The signing of eight agreements with Iran signifies a strategic partnership aimed at enhancing regional stability and cooperation.
📈 Currency Revaluation Discussions: The potential for the Iraqi dinar’s revaluation is being actively discussed, with indications that the necessary frameworks are in place.
💼 World Bank’s Role: The World Bank’s engagement is crucial for Iraq’s infrastructure projects and overall economic stability, positioning Iraq as a global player.
🏛️ Legislative Developments: Ongoing discussions regarding the oil and gas law and other legislative measures are essential for Iraq’s economic growth and independence.
📊 Impact of Foreign Investments: Sudani’s government is focused on creating a favorable environment for foreign investments, which could stimulate job creation and economic growth.
🙏 Community Reflection: The video begins with a heartfelt tribute to a fallen community member, showcasing the personal connections within the audience.
Key Insights
🌟 Iraq’s Economic Transition: The recent statements from Mr. Sudani signal a pivotal moment for Iraq as it seeks to transition from a post-conflict economy to one that can actively participate in global markets. This transition requires not only financial reforms but also a cultural shift towards embracing foreign partnerships and investments.
💡 Strategic Alliances: The memorandums signed with Iran highlight Iraq’s strategic approach to fostering regional relationships. By collaborating with neighboring countries, Iraq aims to enhance its security and economic viability, which is crucial given the historical complexities of the region.
💵 Potential for Currency Revaluation: The discussions surrounding the Iraqi dinar’s potential revaluation suggest that the government is aligning its financial policies with international standards. This move could significantly impact the purchasing power of the dinar and the overall economic landscape, making it a focal point for investors.
🏗️ Infrastructure Development: The emphasis on infrastructure rehabilitation by the World Bank is indicative of a long-term vision for Iraq’s economic recovery. Efficient infrastructure is vital for attracting investments and facilitating trade, which are essential for sustainable growth.
🔑 Legislative Frameworks for Economic Growth: The ongoing legislative efforts, particularly concerning the oil and gas law, are critical for establishing a robust framework that governs Iraq’s natural resources. Such laws are not only constitutional requirements but also pivotal for ensuring that the benefits of these resources are maximized for the Iraqi people.
🔄 Currency Mechanisms: The shift towards utilizing global exchange companies and correspondent banks indicates a move away from traditional reliance on the US dollar. This diversification could provide Iraq with more autonomy over its currency and reduce vulnerability to external economic pressures.
📈 Community Engagement and Awareness: Melanie’s call for community engagement reflects the importance of staying informed in rapidly changing economic conditions. This aspect of community involvement is vital for individuals looking to navigate the complexities of currency exchange and investment opportunities in Iraq.
Head of Parliamentary Finance to World Bank delegation: We support any loans that bring benefit
On Wednesday, January 8, 2025, the head of the Parliamentary Finance Committee, Atwan Al-Atwani, met with a delegation from the World Bank headed by Jean-Christophe Carré, Regional Director for the Middle East, to discuss supporting the railway rehabilitation project within the Development Road Project, stressing support for borrowing.
We support any loans that are beneficial.
According to a statement by Al-Atwani's office, seen by "Ultra Iraq", "the meeting reviewed the economic and regional vision of the development road project and its strategic importance in stimulating investment movement, maximizing non-oil revenues, and providing job opportunities. It also discussed the possibility of the private sector contributing to its implementation."
The meeting also "discussed the multi-stage support provided by the World Bank for the Development Road Project, including modernizing and rehabilitating the current railway network and linking it from southern Iraq through the north and reaching Turkey."
The statement added: "Al-Atwani reiterated his emphasis that the infrastructure of the development road should be in the hands of the government so that this important project that links Iraq to the countries of the world is not subject to influences." The head of the parliamentary committee pointed out that "our vision is that the development road project should not be a mere transit point, but rather we seek to make it a gateway to activate various economic and commercial activities and develop the infrastructure," calling on the World Bank delegation to present new visions and ideas regarding achieving the optimal investment for this huge project that is hoped to make Iraq an economic corridor linking Asia to Europe."
Al-Atwani stressed the "necessity of expediting the submission of the feasibility study related to the railway development plan within the development road project, and contributing to mobilizing international expertise and attracting the private sector to invest in it in a way that achieves the country's interest."
He added: "We look forward to holding joint workshops and extensive meetings with the World Bank, to provide a full briefing on the project details and discuss its details in a way that secures broad parliamentary support for this borrowing," indicating that "the Finance Committee supports any loans that are economically feasible and bring great benefit to the Iraqi economy, especially since investment in the railway sector is a successful trend and achieves a large financial return."
For his part, according to the statement, "the World Bank delegation appreciated the valuable comments made by Al-Atwani within the framework of the rapid transition from the planning and vision stage to the implementation stage, stressing the World Bank team's readiness to submit the feasibility study, project path and details by next February." link
What they're doing is selling US dollars to pay for and fund imports coming into Iraq...What they've done with this new transfer system is they've made back end changes that are not visual...
What they've done...is transition so that they can allow their banks to do these international transfers...There's only so much they can do with banking reforms at this time until the rate physically changes.
Again, what they're doing is they're positioning the banks to...do foreign transfers with the US dollars...now instead of that money being sent directly from the central bank it's being routed and sent from the local banks within Iraq.
That prepares Iraq to be ready towards going international...