Early Wednesday Iraq Economy News Highlights 5-18-22

The Failure To Pass The Budget Poses Severe Damage To The Economy And The Provision Of Services

Posted On2022-05-18 By Sotaliraq   Translation: Hamed Ahmed   A report spoke of significant negative effects as a result of the delay in approving the budget, warning that it was not enacted as happened in 2014, indicating that this contributes to the failure to provide essential services to Iraqis. According to a report by (The National) news agency, translated by (Al-Mada),

Political officials confirmed that the Iraqi government's ability to manage urgent needs, including vital services such as electric power, water, and the construction of schools, will be impaired with the Federal Supreme Court's decision to prevent the caretaker government from spending money."

And the report continued, "The Federal Supreme Court ruled that the government of Prime Minister Al-Kazemi's conduct of business does not have the right to submit exchange decisions to Parliament or sign any commercial agreement."

He pointed out, "Finance Minister Ali Allawi said that he respected the decision, but warned of difficult days ahead."

The report quotes Allawi as saying, "The decision will have consequences for the work of the Ministry of Finance, as it will limit our abilities to mitigate the impact of high commodity prices, meet the needs of the electricity sector with the advent of summer, cover oil production expenses and support agriculture."

The report stated, "Other parties said that this is a correct decision regarding the Al-Kazemi government, as the powers of the caretaker government are supposed to be limited."

And he indicated, "The exchange will be limited to a monthly rate based on the 2021 budget, with this year's budget remaining suspended amid a political blockage over the formation of a new government."

The report emphasized that "last year's budget amounted to 130 trillion Iraqi dinars (89.65 billion dollars), with a deficit rate estimated at 28.7 trillion dinars."

He stated, "The government, in order to meet the accumulated needs, sent to Parliament a draft draft law on emergency support for food security and development."

A member of the Parliamentary Finance Committee, Mustafa Sanad, said, according to the report, that "the last amendment to the law calls for the disbursement of 27 trillion dinars."

Sanad added, "The lion's share of the financing, amounting to 8 trillion dinars (equivalent to 5.5 billion dollars) was allocated to the Ministry of Commerce to purchase wheat from local farmers and international processors to maintain the validity of the government ration card program."

Sanad pointed out that “10 trillion dinars were set aside for development projects across the country, as well as 3 trillion dinars for the Ministry of Electricity to purchase gas from Iran to keep the power plants operating.”

The report stated, "Iraq currently produces 21 megawatts of electrical energy, but the demand for electrical energy increases during the summer to reach 27 megawatts and even more, according to estimates."

He continued, "The network of electric power transmission lines in the country is still in a state of non-maintenance and repair, which means that the generated energy loses a lot of its capacity before reaching the residents' homes."

The report continues, "Iraq had planned to increase investment in improving the national electric power network, and there is a desire for the Al-Kazemi government to increase the energy generated from solar panels by 30% by 2030."

On the other hand, the report talks about “Iraq’s need for new schools, and it is reported that in December it signed an agreement with two Chinese companies to build a thousand new schools.”[/size]

He added, "The decision of the Federal Supreme Court halted any new plans within this scope, and is considered a brake on Al-Kazemi's attempt to continue running the government."

And the report quoted, “The global economic expert, Kirk Sowell, from Utica Research Service, an economic consultancy who is familiar with Iraqi affairs, said in a tweet to him: It can be said that some Cabinet decisions will be subject to challenges as well, but there is no one to challenge them, and if it is possible to Al-Kazemi from referring to a section of the policy of previous decisions that are complete, then some decisions can be defended as they are within the correct business conduct authorities.”

The expert added, according to the report, "Any other long budget delay, as happened in 2014, may have a serious impact on services that are supposed to be provided soon."

And Sowell added, "Taking into account the ineffectiveness of the government, even if the money was approved on time, the situation would be more impotent if a new government decided to try to disburse the money in huge quantities after a long delay."

About: The National news site   LINK

Payment Must Be Made Within A Month.. Iraq Owes One Billion And 600 Million Dollars For Iranian Gas Dues

Shafaq News/ The General Director of the National Iranian Gas Company, Majid Jakini, announced that Iraq owes an amount of 1.6 billion dollars for importing gas from Iran, indicating that this country must pay its debt within a maximum period of one month.

In a statement to Iranian media, Chekini said that according to the agreement signed between Tehran and Baghdad, the latter should pay 1.6 billion dollars to import gas from the Islamic Republic of Iran.

On the other hand, the Iranian official noted that Iran must supply gas to Iraq according to the volume specified in the bilateral agreement between the two countries.

Gekini continued by saying that, given the circumstances of Iraq and its need to import more Iranian gas, it was agreed to continue and increase the volume of Iranian gas exports to this country. Baghdad will repay the debt owed to Iran within one month.

On Tuesday, the Minister of Electricity, Adel Karim, had complained about the lack of funding for the ministry, which affected the level of energy production and supply in the country, in addition to impeding the payment of debts and dues for Iranian gas supplied to Iraq.

Iraq has been suffering from a chronic electricity shortage crisis for decades as a result of the siege and successive wars. For many years, residents have protested against frequent power cuts, especially in the summer, when temperatures sometimes reach 50 degrees Celsius.

Iraq is holding talks with Gulf countries, led by Saudi Arabia, to import electricity from them by linking its organization with the Gulf system, after it had depended on Iran alone during the past years by importing 1200 megawatts as well as gas fuel to feed local electric power stations.

Iraq also intends to import electricity from Jordan and Turkey, in an effort from Baghdad to fill the shortage until building power stations that are able to meet local consumption.   LINK

Gold Prices Are Back Down In The Iraqi Markets

Shafaq News/ "foreign and Iraqi" gold prices decreased in the local markets, today, Wednesday, (18 May 2022).

Shafak News Agency correspondent said that gold prices in the wholesale markets on Al-Nahr Street in the capital, Baghdad, recorded this morning, the selling price of one weight of 21 karat of Gulf, Turkish and European gold 372 thousand dinars, and the purchase price 368 thousand, while the selling prices recorded yesterday, Tuesday, 375 thousand. Dinars per weight.

Our correspondent indicated that the selling price of one 21-carat weight of Iraqi gold also increased at 332 thousand dinars, and the purchase price reached 328 thousand.

With regard to gold prices in the jewelers’ shops, the price of selling a weight of Gulf gold 21 carat ranges between 370 thousand and 380 thousand dinars, while the selling price of an Iraqi gold weight ranged between 330 thousand and 340 thousand dinars.   It is equal to one mithqal of gold (five grams).   LINK

Basra Crude Records A Rise Of More Than 5 Dollars

Shafaq News/ The price of Basra Heavy crude rose, on Wednesday, by more than 5 dollars, to exceed the $100 barrier.

The price of a barrel of Basra Heavy crude, exported to Asia, reached $5.64, with a change rate of 5.73%, to reach $104.06 per barrel.

All OPEC crude prices also rose, except for Iranian heavy blend, which recorded $11.15, down 0.15 cents, while UAE Murban crude scored $113.24, an increase of $3.73, while Saudi Arabian crude scored $112.06 a barrel, an increase of $3.76, and Algeria's Sahran blend reached $118.63. An increase of $3.28, and Nigerian Boni crude amounted to $118.12, an increase of $2.94, while Angola's Girassol crude reached $115.60, an increase of $3.12.

Oil prices rose today, Wednesday, after the European Union threatened to ban Russian oil, and China gradually eased some of its strict measures to contain the Corona virus.   LINK

Oil Rises More Than A Dollar A Barrel In Asian Trading

Economie  2022-05-18 | 02:54   On Tuesday, oil prices fell, with resistanceHungaryAn effort in the European direction aims to ban Russian oil imports.

This move may lead to a decline in global supplies, as well as investors' desire to take profits after a recent rally.

Brent crude futures fell 22 cents, or 0.2%, to 114.02 a barrel by 0327 GMT, according to the agency ""Reuters".

West Texas Intermediate crude futures were down 35 cents, or 0.3%, at $113.85 a barrel.

Both benchmarks rose more than 2% on Monday, following a 4% jump on Friday.

On Monday, European Union foreign ministers failed in their efforts to pressure Budapest to change its position on the proposal to impose an oil embargo onRussiafollowing its invasion of Ukraine.

Passage of this proposal requires the approval of all EU member states.

But analysts said sentiment about prices remained generally high, amid optimism about a recovery in demand.ChinaLooking to ease restrictions in the fight against COVID-19.

Data revealed from Ministry of Energy

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On Monday, the US announced that stocks in the strategic oil reserve fell by 538 million barrels, the lowest level since 1987.

And on Monday, the European Union's foreign policy chief, Josep Borrell, said after a meeting of the foreign ministers of the European Union in Brussels, that he "has not yet reached an agreement on a sixth package of sanctions against...Russia".

Borrell told reporters, in statements carried by him.ReutersUnfortunately, it was not possible to reach an agreement today.

Prior to that, it announcedHungaryThat the cost of stopping its purchases of Russian oil ranged between 15 and 18 billion euros, and demanded that it be exempted from the oil embargo that the European Union seeks to adopt.   LINK

The Dollar Is Rising In The Iraqi Market

Economie| 10:53 - 18/05/2022   Baghdad - Mawazine News, the dollar exchange rates rose, today, Wednesday, on the Iraqi Stock Exchange.  Selling price: 148,250 dinars per $100   purchase price : 148,000 dinars per $100 https://www.mawazin.net/Details.aspx?jimare=193504

The Rise In The Price Of The Dollar In The Local Markets

Economie   2022-05-18 | 03:50   Alsumaria News – Economy The dollar exchange rates rose today, Wednesday, on the Iraqi Stock Exchange.

The selling prices of the dollar were 148,250 dinars per $100, while the purchase prices of the dollar were 148,000 dinars per $100.  LINK

Cancellation Of The “Food Security” Project Causes A Loss Of A Third Of Electric Power And 8 Food Rations

Posted On2022-05-18 By Sotaliraq   An adviser in the Council of Ministers stated that canceling the draft law on emergency support for food security would cost Iraq the loss of a third of electric energy and food rations for eight months, and he talked about proposals that are being sought to reduce harm to the citizen.

This comes at a time when the Presidency of Parliament announced its intention to start legislating a new food security law to be presented in the form of a proposal by the House of Representatives.

The technical advisor in the government, Haitham al-Jubouri, said in a television statement, which was followed by (Al-Mada), that "the Council of Ministers confirms its respect for the decisions of the Iraqi judiciary, and what was issued by the Federal Supreme Court regarding the draft law on emergency support for food security and development is binding and is now not subject to discussion."

Al-Jubouri added, "Dangerous negative repercussions can be reflected on the citizen regarding the items of the ration card, and on farmers regarding the wheat and barley crops."

He pointed out that "8,000 megawatts can be excluded from the total volume of electric power produced, after the bill was canceled, and this represents a third of the electric power currently produced."

Al-Jubouri pointed out that "Iraq owes the Iranian side a trillion and 600 billion dinars, in addition to the required amounts next summer," stressing that "there are pledges and agreements between the two countries last month, and we were dependent on this law to fulfill those pledges."

He stressed, "The ration card items will also be affected, and given what was allocated in last year's budget and after the rise in international prices, the current amounts are sufficient to secure the share of only 4 months of the year."

Al-Jubouri spoke about "the government's possession of many options, which we have begun to discuss, and we are trying as much as possible to overcome these repercussions with sober constitutional and legal procedures and return what we can to the Iraqi citizen."

And he stated, "The Federal Financial Management Law No. 6 of 2019 does not allow the government or one of the ministries to take an advance from the Ministry of Finance, but Article 13 of it specified that there be a monthly payment of (1/12) of operating expenses from last year until the approval of the budget." .

Al-Jubouri explained, “The law did not require that the expenditure be in this percentage to the same chapters that were specified in last year’s budget. Rather, the government can spend within the permissible limits of the actual expenditures for the past fiscal year, and therefore we transfer them between the chapters provided that we abide by what the law decided, These funds will go to the food and electricity sectors.

He noted that "there are two parts of the solution for investment projects, the first is that some of the accounts revolved from last year funded investment projects in the provinces. The law allows transferring their amounts to the trust accounts of the same provinces and used for the same purpose." The governorates can be used within a legal framework.”

The government advisor stressed, “The second solution lies in the fact that the amendment to the financial management law allowed the disbursement of funds according to the pretext for approved and ongoing projects that have been contracted,” and went on to say that “this is a space to move on some important development projects.”

Al-Jubouri stated that the government discussed another proposal, which is to allow ten deputies or a specialized parliamentary committee to submit a law proposal with the same draft that was submitted and approved, since the Federal Supreme Court confirmed that the current government's transformation into a daily task is not allowed to submit bills to Parliament. .

And he goes on, "This solution is applicable if the political blocs are serious about passing it, given that the Federal Supreme Court stipulated that the House of Representatives, when proposing a law involving a financial aspect, should take the opinion of the government."

Al-Jubouri went on to "the possibility of making amendments to the draft and making it a proposed law to be adopted by the House of Representatives, by reducing the amount and making it go to food security and electricity only."

For his part, the First Deputy Speaker of the House of Representatives, Hakim Al-Zamili, said in a statement to the official news agency, which was followed by (Al-Mada), that “the new food security law was submitted by the Parliamentary Finance Committee as a draft law, and it will be read first by the House of Representatives, voted on and transferred for implementation by Government".

Al-Zamili added, "The draft law pertains to the citizen and the social welfare segment, the disbursement of farmers' rights, and allocating an amount to the Ministry of Electricity to pay debts and import gas."

He pointed out that "there are other clauses that affect food security, and without these clauses, if laws that pertain to the citizen are not enacted and deal with issues of electricity, agricultural development and social welfare, life will be disrupted. As a result, the citizen wants a lot of legitimacy from Parliament."

A member of the Parliamentary Finance Committee, Jamal Kougar, had revealed in a previous statement to Al-Mada that “the House of Representatives is heading towards presenting a proposed food security law that will be discussed and voted on soon.”   LINK