KTFA:

Samson:  Economist: Two ways to bridge the deficit in the budget for the next year, one of which is borrowing from individuals

15th November, 2020

On Sunday, the economic expert, Mazhar Muhammad Salih, identified two ways for the country to fill the actual deficit in the budget for next year, while noting that this time borrowing will be from individuals

Saleh said in a press statement seen by "Al-Eqtisad News", that "the large financial surplus of individuals is important in internal investment, and reducing the deficit in the next budget

He added that if the budget for next year is built on an actual and not hypothetical deficit then it will be financed from the oil price differentials when the oil market improves for the benefit of exporters, then the deficit will only be financed by borrowing. He pointed out that

"there may be a greater role for external borrowing and internal borrowing this time and will be directly from individuals or the public, through making substantial improvements to the secondary market that handles buying and selling debt

He pointed out that "the Iraq Stock Exchange will have a fundamental role in expressing the secondary market and promoting dealing with financial debt instruments, among the public directly as individuals and institutions.

He explained, "There is a large financial surplus among the public, concentrated in the form of hoarding disconnected from the income cycle," indicating that "the national economy desperately needs it in moving real material and human resources, through investment and its financing from Iraq's internal financial energies  LINK

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Samson:  Erbil Stock Exchange announces its opening near to investors

15th November, 2020

The director of the Erbil Stock Exchange, Sherwan Mustafa, announced that the Erbil Stock Exchange will open in the coming days after removing obstacles, calling for the inclusion of large investment companies on the stock exchange

Mustafa said, that all circumstances have been removed before the opening of the Erbil Stock Exchange, as during the coming days the stock exchange will open to investors, adding that consulting companies will be present to provide advice to new investors

Mustafa called for the large investment companies to be listed on the stock exchange because they get great privileges represented by tax exemptions, explaining that there are a number of companies that create excuses for not  LINK

MilitiaMan:  The connection and timing for these articles are timed accordingly, imo. The Kurdistan stock exchange is getting incentives by tax exemptions for large companies to list on the stock exchange. All circumstances have been removed.. 

Then below is the stock exchange is effectively looking into tapping another source of large amounts of money within the secondary markets.

We were just told that the borrowing law was legislated the other day. Apparently it was done at a program rate. Yet, the salaries were yet to be fully paid it appears. Ask yourself why that would be the case, especially when they tell us that the CBI has only 35 Billion in reserves left now,  a recent drop of about 33 billion?  

Did the CBI do a bridge loan for a short term move while they get the stock exchanges interlinked in a few days while targeting the chunky money from the citizens? I don’t know, maybe Delta, Frank and WS will weigh in on the topic?

It is hard to imagine that they would have been given the nod to do so by the IMF and or WB to be able to spend that kind of money out of reserves and at such a critical time as this, with out something to be a financial offset or safeguard  It goes against all that we have learned and shown by actions from the CBI to not deplete reserves like they have suggested they did.

I wonder if the potential of a placement in new issue of IQD has been done on the platforms (noted in the final article thread) with the backing of those reserves for a short term only. They seem to have had plenty of time to cut a deal that could be equitable for all included and it would garner support from the locals in a big way..

Any one have thoughts on this love to hear it. Because when I read that the ISX is to have a fundamental roll in the secondary market and promoting, dealing with financial debt reeks that there is something much bigger afoot than a program rate for the next few months. The ISX has never ever had a fundamental role as long as I have been in this study in regard to being fundamentally active in any roll of financial debt deals on an international scale, publicly anyway!! Imo

Now, when they change the rate of the IQD internationally it should be or can be used as a debt instrument and the citizens have it on mass in their possession. Imo Now that is imo a very plausible scenario that is or could be being guarded until the last moment.. We shall see if the SA banks open soon and the Arar port!! Internationalism is the goal.. ~ MM

“Iraq Stock Exchange will have a fundamental role in expressing the secondary market and promoting dealing with financial debt instruments, among the public directly as individuals and institutions.”

Don961:  An international coalition and a white paper .. Will they save "Iraq" from economic recession?

 The Independent / Amal Nabil /

After months of conflict between the Iraqi government and parliament, the Iraqi parliament approved on November 12 a deficit law that allows Iraq to borrow 12 trillion dinars ($ 10 billion), which will give Iraq only three months to pay the salaries of public employees. .
At the same time, the Iraqi government is looking for other sources of funding, according to a report by Al-Monitor.

An international coalition to recover the looted Iraqi funds

On November 4, Finance Minister Ali Allawi said that the newly established International Financial Alliance will help Iraq recover $ 150 billion of the money stolen from the country since 2003, adding that the funds are deposited in foreign and Arab banks and that the alliance will provide technology and expertise to support the economy.

During the visit of Prime Minister Mustafa Al-Kazemi and a number of ministers to London, an international financial alliance called the Iraqi Economic Contact Group was established on 22 October.
It consists of the Group of Seven, the International Monetary Fund, the World Bank, the European Bank for Reconstruction and Development, the Iraqi Ministry of Finance, the Central Bank of Iraq, and the Finance Committee.

The coalition meets every three months to monitor progress in the Iraqi economy, and will present a roadmap to support priorities in terms of reforms, mobilize international support and benefit from international expertise to enhance economic stability and add vital changes to achieve economic growth.

The financing needs of Iraq reach 62 billion dollars

The coalition is scheduled to operate for three years and Iraq faces a stifling financial crisis, after the drop in oil prices due to the Coronavirus pandemic. According to the 2020 budget, Iraq needs $ 62 billion, of which $ 45.8 billion is for public employees' salaries, pensions and social benefits, while Iraq needs $ 6.6 billion to pay off internal debts and Eurobonds.

The remainder will be allocated to foreign oil companies and support programs, also known as the ration card, electricity imports, and to cover the expenses of some ministries.

Allawi told Al-Iraqiya TV on November 4 that the coalition will provide experts in managing economic sectors, and that they will act as advisers to the government, with a primary focus on reforming the economy and improving the administrative performance of the public and private sectors.
He pointed out that Iraq is going through a difficult economic period because the state's finances are out of control and reforms must be achieved. He added that if the status quo continues.

Allawi said that it is in the interest of many countries to help Iraq and put its economy on the right track, especially since the country is a promising market for Western investment.
He stated that the coalition will help Iraq recover more than $ 150 billion in funds that were stolen before and after 2003

At the Tokyo summit in May 2016, the G7 formed a financial coalition to support Iraq economically and financially, and provided loans worth $ 5.2 billion through the International Monetary Fund, along with a two-month reform program. In addition, the Iraq Reconstruction Conference was held in Kuwait in November 2018.

Iraq is a member of OPEC which, along with other oil-rich countries outside of OPEC, including Russia and Azerbaijan, signed an agreement called the OPEC + agreement.

93% decline in Iraqi oil revenues

The current second phase of this agreement stipulates that Iraq will reduce its oil production by 849 thousand barrels per day. Oil revenues, on which the Iraqi budget depends, declined by 93%, from $ 6.4 billion this time last year to $ 3.5 billion per month, as a result of declining exports and a drop in oil prices.

Thus, Iraq needs $ 5.16 billion a month to meet its core budget expenditures.

Ahmed al-Hajj, a member of the Parliamentary Finance Committee contributing to the newly formed financial alliance, told Al-Monitor that the International Financial Alliance had agreed to a request to exempt Iraq from OPEC + obligations. He indicated that the International Financial Alliance will provide consultations without loans because most of the countries of the world are suffering from a financial crisis due to the Coronavirus pandemic.

He added that the credit rating of Iraq stands at B-, which does not qualify it to obtain foreign loans.
Iraq's debt reached $ 133.3 billion in September, and constitutes 80% of GDP, which crosses the red line with 60% of the debt-to-GDP ratio.

Iraq's debt accounts for 80% of GDP

Iraq's debt reached $ 133.3 billion in September, making up 80% of its GDP, which crosses the red line with 60% of its debt-to-GDP ratio.

The white paper confirms the seriousness of Iraq in reforming its financial situation

The Al-Kazemi government issued a white paper on economic reforms that includes solving problems in the non-oil sector, reducing dependence on oil by 93% over the next three years, and activating the role of the private sector.

Ahmed Al-Tabakshli, a professor at the American University in Sulaymaniyah, told Al-Monitor that the expenditures are large and cannot be covered from budget revenues.

He pointed out that the white paper on economic reform shows the international community that Iraq is serious about reforming its economic and financial situation. He stressed that the international community does not want to see shy reforms as was the case in the past, indicating that the new international alliance might push the International Monetary Fund to sign a new loan agreement with Iraq.

Tabaqashli indicated that the coalition will help Iraq in the areas of technology and governance, and help it implement measures to control non-oil revenues, such as tax revenues and border crossings.
He made it clear that Iraq could not bear additional debts without the new alliance.

The post An International Alliance and a White Paper ... Will They Save "Iraq" from Economic Recession? appeared first on Independent Press Agency.  LINK

MilitiaMan:  So there is a collation or an alliance of the most powerful Financial entities out there working to facilitate alongside Iraq while the country head into a market economy. 

If they spent 33 billion of their reserves which it is truly not all that clear to me that they did. As this article suggests they have made arrangements for 12 trillion or $10 billion. They also say since they have only a B- credit rating they can’t borrow externally. They can’t get foreign loans.

\ But, take note that the coalition is working to help recover $150 billion in stolen monies. Sound to me like a carrot is out in front and they may have to go into the secondary markets to to get that money released.. Interesting.. is that why, if they did spend $33 billion of their reserves things seem to still be on track to open internationally? Kind looks like Iraq is being coaxed along the way to put her big girl dress on.. Lol imo .. Hope she doesn’t break a heal of get a run in her stockings or anything.. ha.. – MM

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MilitiaMan:  Now add this into the mix of what they have on the mind.. The articles today and recently talk about the stock exchanges and the secondary markets. The below from Dons posts, shows what we are talking about fits with going international and with proper “monetary tools” of the Central Bank! They want it back at a good level too!! Their words and not mine.. imo ~ MM

“4. Using various monetary policy tools in order to control inflation and restore the Iraqi dinar exchange rate to a good level, as it was before the Iraq - Iran war (1 dinar pound equals $ 3.30) by activating and activating the monetary tools of the Central Bank with Increasing the activity of the stock market and the banking sector. “

MilitiaMan:  Lets not forget and it is key, that they can and will be able to internally borrow with an exchange rate like they had in the past. My view is if and when they do get back to where they were, that could usher in the stolen monies in the tune of $150 billion. That along with a new exchange rate would help establish a better credit rating, just as automation at the borders and ports will..

Iraq is in the drivers seat, now to just buckle up and put her in gear now!! Lol - MM