Special Representative of the President of the Russian Federation visits Baghdad and meets a number of officials
2/7/2025 Baghdad /
Baghdad received the Special Representative of the President of the Russian Federation for the Middle East and Africa, Mikhail Bogdanov.
Bogdanov met with Prime Minister Mohammed Shia al-Sudani, Foreign Minister Fuad Hussein and several important figures. During the talks, current issues related to strengthening traditional and friendly Russian-Iraqi relations were discussed, including the implementation of agreements reached at the highest levels.
During the meetings, Moscow and Baghdad's commitment to active political dialogue and strengthening mutual cooperation in various fields, with a focus on trade, economy and energy, were emphasized.
The Russian side expressed its support for the efforts of the Iraqi leadership to enhance internal political stability, combat terrorism, confront security challenges, solve economic and social problems, and enhance Iraq's regional role in the Arab arena. There
was also an in-depth exchange of views on regional issues of common interest, where the need to maintain the ceasefire in Lebanon and the Gaza Strip, find a just and rapid solution to the Palestinian issue, and launch a comprehensive political process in Syria with the participation of all ethnic and sectarian components and political forces to ensure its territorial integrity and sovereignty was emphasized. LINK
As the article says it will be signed in the first half of February,what can possibly be the hold up.
Imagine of they were to bring in USD now and convert to IQD and it revalues they will be making huge loss on the forex conversion.
Say initially they bring whatever amount in USD at 1310 IQD/USD. If IQD were to revalue to even 0.76 they are going to take hit on conversion.
If they were given indication that IQD will be revalued in the near future it would be prudent for such a huge investment deal to be signed post the revaluation.
I am not speculating on the date but this article is significant as Sudani stayed back 3 extra days to change the security status from red to orange and announced this deal. He must have given assurances for such a large private sector investment.
I may be wrong but that's how I see it.
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"Sharing profits" .. British Petroleum prepares to invest $ 25 billion in Kirkuk.
For context the investment is one fourth the size of Iraqi reserves.
ERBIL (Kurdistan24) – Iraqi Prime Minister Mohammed Shia al-Sudani reaffirmed Iraq’s commitment to a balanced foreign policy, regional stability, and national economic reform in an exclusive interview with Asharq.
Speaking with journalist Hadeel Alayan in Baghdad, al-Sudani addressed pressing regional and domestic issues, including Iraq’s approach to Syria’s transition, ties with key international players, and efforts to combat corruption and boost economic growth.
The future of the U.S. military presence in Iraq
The Iraqi Premier described the nature of Iraq’s relationship with the United States as “based on shared interests, governed by a single agreement—the Strategic Framework Agreement”.
“This agreement covers various fields, including security, economy, energy, and education,” he added.
Al-Sudani emphasized that Iraq and the U.S. remain partners in the fight against terrorism.
“Even after the official conclusion of the international coalition’s mission, bilateral security cooperation will continue to play a crucial role. Moreover, major American companies are actively engaged in Iraq’s energy sector, with both governments exploring additional investment opportunities,” he stated.
“Our government is seriously committed to strengthening these ties, and we have received positive responses from the U.S. administration regarding collaboration in various areas,” al-Sudani noted.
Iraqi Prime Minister Mohammed Shia al-Sudani reaffirmed that Iraq reached an agreement with the U.S.-led international coalition to conclude its mission within the next two years, with a full withdrawal scheduled for 2026.
He emphasized that the withdrawal process is part of his government’s official agenda, which was approved by the Iraqi Parliament.
He stated that discussions with coalition partners began in August 2023 to establish a clear framework for the gradual reduction of foreign military presence in Iraq.
“We have agreed on a timetable for ending the coalition’s mission, and by 2026, the transition will be complete,” al-Sudani explained. “Following the withdrawal, Iraq will move towards bilateral security cooperation with key international partners, including the United States, the United Kingdom, France, Spain, and Italy.”
The Iraqi government has long emphasized the need to reassess the role of foreign military forces in the country, particularly as the fight against ISIS has evolved from large-scale combat operations to intelligence-based counterterrorism efforts.
The planned withdrawal signifies Iraq’s growing confidence in its own security forces while maintaining strategic defense partnerships with key allies.
While the coalition’s military footprint in Iraq has gradually decreased in recent years, the formal agreement to phase out its presence represents a significant milestone in Iraq’s post-war security planning.
The transition to bilateral security cooperation is expected to focus on military training, intelligence-sharing, and defense strategy development.
Iraq’s decision to formalize an exit plan for coalition forces reflects broader regional shifts, with Baghdad seeking to balance its relations with both Western allies and neighboring countries such as Iran.
The move is also likely to influence ongoing discussions regarding Iraq’s military modernization and security self-sufficiency.
Kurdistan-Baghdad Relations and Economic Reforms
Iraqi Prime Minister Mohammed Shia al-Sudani highlighted the progress made in resolving disputes between Baghdad and the Kurdistan Regional Government (KRG), outlining his government’s approach to economic cooperation, salary disbursements, and oil export agreements with the Kurdistan Region.
Al-Sudani acknowledged the longstanding challenges in Baghdad-Erbil relations but emphasized significant strides in addressing key disputes.
Among the most pressing concerns have been salary payments for KRG employees and the legal framework for oil exports.
“While challenges remain, we have ensured salary disbursements and are committed to working with Erbil on sustainable economic solutions,” he stated.
He pointed out that the complications surrounding salary payments are largely technical rather than political, stemming from integrating KRG employees into the federal budget.
The government has worked to ensure that salary payments are processed through the Federal Ministry of Finance in compliance with recent legal rulings.
Additionally, he reaffirmed that efforts to finalize an oil and gas law are ongoing, which would create a more structured mechanism for the Kurdistan Region’s oil exports.
The recent amendment to the federal budget law, which allows for the resumption of oil exports through the port of Ceyhan, was cited as a key achievement in fostering cooperation between the two governments.
Al-Sudani also addressed the broader economic development of Iraq, emphasizing the importance of investment and tourism.
“With our rich history, religious sites, and diverse landscapes—including Kurdistan Region’s mountains and the Mesopotamian marshes—tourism will play a key role in economic growth,” he noted.
The Prime Minister reiterated his government’s commitment to ensuring that Kurdistan remains integrated into Iraq’s national economic framework.
He pointed to ongoing negotiations over energy policies and revenue-sharing agreements as critical steps toward fostering long-term stability.
As Iraq navigates economic reforms and regional diplomacy, al-Sudani stressed the need for continued dialogue and partnership with the Kurdistan Region.
He acknowledged that while historical grievances remain, his administration is focused on practical solutions that benefit both Baghdad and Erbil.
With economic diversification and energy independence as key priorities, the Iraqi government’s cooperation with the Kurdistan Region will remain essential in shaping Iraq’s broader economic and political landscape.
As negotiations continue, both sides appear committed to forging a framework that ensures mutual stability and prosperity.
Al-Sudani also underscored the government’s aggressive anti-corruption campaign, detailing new measures in governance, digital payment systems, and institutional oversight.
“We have restructured key anti-corruption bodies and pursued the recovery of stolen funds from abroad, making accountability a cornerstone of our administration,” he explained.
Iraq’s Regional Neutrality and Foreign Relations
Al-Sudani emphasized that Iraq seeks to maintain a neutral stance in regional politics, striving to be a mediator rather than aligning with any particular bloc.
He reiterated Iraq’s strong yet balanced relationships with both Iran and the United States.
“We have strategic partnerships with the U.S. in counterterrorism, while simultaneously maintaining robust ties with Iran at multiple levels,” he stated.
The Prime Minister also highlighted Iraq’s flourishing relations with Saudi Arabia, particularly in areas of security coordination, energy markets, and investment.
He described Baghdad’s ties with Riyadh as being at their strongest, signaling a growing Arab consensus on economic and geopolitical cooperation.
Regarding Syria, al-Sudani acknowledged the recent political shift and revealed that he had sent messages to the new Syrian administration.
He advised Damascus to avoid repeating the mistakes Iraq made following the fall of Saddam Hussein’s regime in 2003, urging inclusive governance and long-term stability efforts.
Iraq’s Energy Independence and Infrastructure Development
Al-Sudani outlined Iraq’s ambitious plan to achieve self-sufficiency in natural gas production by 2028, reducing reliance on imports. He cited strategic agreements with companies like TotalEnergies and Crescent Petroleum to maximize domestic energy resources.
Additionally, he stressed the importance of large-scale infrastructure projects, such as the Development Road initiative, which aims to transform Iraq into a regional trade hub linking the Middle East to Europe.
Balancing Relations with Global Powers
When questioned about Iraq’s ties with both Washington and Tehran, al-Sudani reaffirmed Iraq’s non-aligned position. “Our role is to bridge dialogue between conflicting parties, ensuring Iraq remains a platform for peace rather than a battleground for geopolitical rivalries,” he said.
He further emphasized that Iraq’s foreign policy is guided by national interest and non-interference, principles that have shaped its engagement with neighboring countries and global powers alike.
As Iraq prepares to host the upcoming Arab League summit and continues to position itself as a stabilizing force in the region, al-Sudani’s remarks underscore Baghdad’s commitment to economic resilience, diplomatic balance, and long-term national development.
Experts in the Iraqi economic affairs saw that the Mesopotamian reserves and its investment portfolio, after the reserves recorded 106.7 billion dollars during the year 2024, fortified Iraq and its incubator in providing overall stability and protecting the national economy from external shocks that are reflected on the Iraqi balance of payments, as well as its role in stabilizing the general level of prices internally through policies of intervention in the organized monetary market.
Iraq ranked third in the Arab world in terms of foreign exchange reserves for 2024, as this reserve is considered “very large” and “reassuring” because it represents 20-40% of the volume of the exporting currency, and the foreign reserves of any country contribute to maintaining the value of the local currency and liquidity to meet international financial obligations, as well as financing internal projects and reassuring investors, in addition to diversifying investment portfolios.
Cash reserves are defined as the total deposits and bonds of foreign currencies held by central banks and monetary authorities in the state with the aim of supporting the local currency and paying the outstanding debts of the state. Monetary reserve usually consists of several elements, namely foreign currencies, such as the dollar, the euro, the Japanese yen and other currencies, as well as gold.
Semi-fund for sovereign wealth
In this context, the financial adviser to the Iraqi Prime Minister, Mazhar Muhammad Saleh, says that Iraq’s foreign reserves, their composition and management are a semi-sovereign wealth fund (which is currently managed by a diversified investment portfolio in different currencies and short-term derivative investment instruments), and the aforementioned portfolio of reserves performs two basic functions simultaneously.
Saleh reviewed these two functions by saying to the “Jabal” platform: “The first is to protect macroeconomic stability, that is, stabilizing the general level of prices internally by adjusting the levels of domestic liquidity in accordance with the real flows of goods, services and benefits that finance part of those reserves and their consequences are called here as international reserves, by affecting the control of growth in the money supply by intervening in the money market by withdrawing excess liquidity by exchanging it for foreign currency, in order to finance foreign trade for the private sector specifically, indicating that these activities are called in monetary policy (cash sterilization) using a mechanism called open market operations, which is the operational (quantitative) aspect of monetary policy objectives Called operational objectives to combat the growth of monetary inflation rates and the stability of cash flows.
The second is the use of these foreign reserves in part by intervening in the monetary market to provide (price) stability in the exchange market by adhering to (signals) the fixed and stable exchange rate, which is the regular exchange market in foreign currency the basis of that market and the leader of the stability of the exchange rate itself, according to the valid.
In his talk to “Al-Jabal”, the adviser stressed that there is a specialized central management of these reserves, as the foreign portfolio is subject to high-precision investment criteria in the adoption of short-term international financial instruments that generate interest returns, including investment in treasury bonds for central countries in the world that are guaranteed high-rated return, but they are semi-liquid, and this is what distinguishes the sovereign wealth fund from stability funds. I mean the foreign reserve portfolio, which requires it to be almost liquid to cope with fluctuations in the national balance of payments when needed.
Cash gold, which may constitute a percentage of more than 10% of those reserves, is also a safe haven within the aforementioned investment portfolio for the reserves that are subject to research against the risks of currency fluctuations and the interest that make up the portfolio itself, because the gold asset cycle is one of relatively long-term and stable cycles, as monetary authorities can issue gold bonds guaranteed in the same reserve gold and at interest when needed, which are globally desirable bonds, according to the advisor to the Iraqi government.
Saleh added that “Iraq currently enjoys foreign reserves that are high in the efficiency scale, especially in the issue of its coverage of the cash supply in its broad sense, which covers 75% or more, which is the global measure required to measure the efficiency of foreign exchange reserves in preserving the stability of the national economy, as well as the fact that the said foreign reserve covers about 15 months of import trade, which is a measure superior to the global scale, which indicates 3 months of commercial efficiency,” and thus “Iraq’s reserves and investment portfolio are Iraq’s fortress and incubator in providing overall stability and protecting the national economy from external shocks that are reflected on the Iraqi balance of payments as well as their role in stabilizing the general level of prices Internally, through policies of intervention in the regulated monetary market.”
It gives Iraq the ability to control the exchange rate of the dinar
On the other hand, the professor of international economics, Nawar Al-Saadi, acknowledged that “these reserves go beyond just numbers registered with the Central Bank, as they represent the basis on which the state relies in the face of economic crises, whether they are caused by the decline in oil prices, which is the main source of revenue, or due to turmoil in global financial markets that may affect cash flows and investments.”
Al-Saadi added in his talk to “Al-Jabal” that “having strong foreign reserves gives Iraq the ability to control the dinar exchange rate, which reduces its violent fluctuations, which may lead to high inflation rates and an increase the cost of living for citizens. These reserves are used to finance vital import operations, especially basic goods such as food and medicine, which ensures the continued flow of these materials to Iraqi markets without much affected by external conditions.”
He added that “the level of foreign reserves directly affects Iraq’s credit rating and the confidence of international financial institutions in the local economy. The higher these reserves, the greater the confidence of investors, which enhances the opportunities to attract foreign capital and supports investments in non-oil sectors, which is what Iraq needs to reduce its dependence on oil as the only source of revenue.”
He considered that “the existence of large reserves alone is not enough to ensure economic stability, as they must be accompanied by sound financial and economic policies. These reserves cannot be considered a resource consumed just to cover the fiscal deficit, calling for “investing them wisely to promote economic development and support the productive sectors, because the use of the reserve ill-considered may lead to its depletion over time, exposing the country to great risks when unexpected economic shocks occur.”
Al-Saadi concluded his speech by saying that “Iraq needs a clear strategy in managing its foreign reserves, so that they are employed in a way that balances monetary and financial stability on the one hand, and supports development and investment projects on the other hand. Keeping these reserves at secure levels enhances the resilience of the Iraqi economy in the face of crises, and gives decision-makers more room to maneuver in the face of future economic challenges.
The Trump administration has banned Iranian electricity and gas from Iraq, something that should have by this time been already cutoff years ago. Be careful in thinking these are sanctions. These are NOT sanctions.
So, Iraq has had almost seven years to develop this infrastructure for these utilities since the last Trump administration when Trump waived the electricity and gas sanctions back then.
So, Trump is only making Iraq live up to their obligation and promises to get their grid. You see if you claim you want to be independent than do it. Part of this independence is to be fully operational and extract their gas for in-country use and market it.
But there is more to this issue too since we all read the articles that Iraq has already developed it’s own electric grid (Seman and GE, remember?) and is now self-sufficient and no longer needs Iranian electricity or gas. So, what goes on here? Why is Iraq still purchasing these utilities from Iran? This is Trump’s point. Get it?
Oh…but there is some good news too:
😊 Please check out the article titled “NATO INVITES IRAQ TO PARTICIPATE IN BRUSSELS GATHERING, PRAISES GOVERNMENT EFFORTS”. NATO Secretary General Mark Rutte extended an official invitation to Prime Minister Mohammed Shia al-Sudani to participate in the NATO gathering that will be held soon in Brussels, and to deliver a speech on behalf of Iraq during the meeting. What will Al-Sudani say?
😊 Then article titled “SAMI STRESSES IMPORTANCE OF PARTNERSHIP WITH AMERICA IN SUPPORTING FINANCIAL STABILITY AND ECONOMIC REFORMS”
