More Iraqi News Tuesday PM 7-27-21
More Iraqi News Tuesday PM 7-27-21
TLM724 Administrator BondLady’s Corner
Al-Kazemi and Biden document the strategic partnership between the two countries
Tuesday 27 July 2021 272 Baghdad: Muhammad Al-Ansari Prime Minister Mustafa Al-Kadhimi said: The partnership with the United States is strategic, and our bilateral relationship is stronger than ever.
Al-Kazemi and US President Joe Biden announced, after a round of talks at the White House yesterday evening, the end of the US forces' "combat" missions by the end of this year and their transformation into "training" and "advisory" tasks.
A statement by the Prime Minister's Media Office stated that Al-Kazemi met yesterday evening, Monday, the US President at the beginning of his visit to the United States of America, which he arrived earlier at the head of a government delegation.
The two sides held a round of talks at the White House in Washington, which dealt with various aspects of strengthening relations between the two countries in all security, economic, cultural, educational and health fields.
The meeting witnessed the mutual affirmation of the transition of the security relationship between the two parties to the tasks of advisory, training, support for building Iraqi military capabilities, providing technical support to the Iraqi armed forces, and the absence of combat forces by December 31 of this year.
Biden praised Al-Kazemi and the Iraqi government's growing role in moving Iraq towards stability, and its effective contribution to laying the foundations for peace and calm in the Middle East.
The meeting also witnessed the confirmation of the US government's support for Iraq in the course of holding the parliamentary elections scheduled for the tenth of next October.
Al-Kadhimi stressed Iraq's aspiration to build strong relations and a solid partnership with the United States of America, on the basis of respect for Iraqi sovereignty, and within the framework of the strategic agreement between the two countries and the preservation of Iraq's interests.
The two sides discussed expanding the investment horizon for American companies in Iraq, and the steps taken by the Iraqi government to provide an attractive environment for investment in promising opportunities in Iraq, in a way that enhances economic stability and increases job creation.
During the meeting, they also discussed bilateral efforts and joint cooperation in combating the Corona pandemic, and the United States' readiness to provide more vaccines in order to support the Iraqi government's efforts in prevention and health protection for our people.
After the talks of Prime Minister Mustafa Al-Kazemi and US President Joe Biden, a joint statement was issued by the Iraqi and US negotiating delegations at the conclusion of the fourth and final strategic dialogue round, which was chaired by the Iraqi side, Foreign Minister Fouad Hussein, and the US side by Foreign Minister Anthony Blinken. LINK
Adviser To The Prime Minister Calls For The Legislation Of A Partnership Law With The Private Sector
Tuesday 27 July 2021 289 Baghdad: Shaima Rashid Adviser to the Prime Minister for Economic Affairs, Mazhar Muhammad Salih, called on Parliament to legislate a law on partnership between the private and public sectors for its contribution to moving the wheel of the economy, while he believes that the (Dari) initiative launched by the government will create civilized areas.
Saleh told "Al-Sabah": "The (Dari) initiative is not just plots of land that will be distributed, as much as it will contribute to creating new civilized areas, so it is important that citizens understand this matter," adding that "and in order for the (Dari) initiative to be completed, The government must work to revive it in any way, whether by entering the private sector or alone."
He stressed "the necessity of securing the land's infrastructure, including schools, health centers and others, in addition to water, sewage and electricity networks," noting that "creating complexes with their requirements is the state's approach at the present time."
In another matter, he explained that "the housing sector has begun to move, which is an important matter as it occupies 20% of the workforce, and it moves 200 items in the country's economy," noting that "the problem today lies in the industrial sector, which does not rise in a way that compensates for the existing shortage, and the solution is With foreign companies from developed countries operating the factories, there will also be companies to transfer modern technology to move the country’s economy and employ the unemployed.”
The Prime Minister's Adviser for Economic Affairs pointed out that "the government is facing a legislative obstacle that is not approving the partnership law between the private and public sectors, because there is a dispute over it in Parliament," expressing his hope that "those differences will be resolved in the service of the country's economy." LINK
The Council Of Ministers Approves An Increase In The Capital Of A Number Of Public Companies
Money and business Economy News _ Baghdad On Tuesday, the Council of Ministers approved an increase in the capital of public companies. A statement by the General Secretariat of the Council of Ministers received by "Al-Iqtisad News" stated that "the Council agreed to increase the capital of public companies approved by the Federal Financial Supervision Bureau and the Capital Committee in the Ministry of Finance."
He pointed out that "the decision included, the Iraqi Oil Tanker Company, one of the formations of the Ministry of Oil, with an amount of one hundred and thirty-one billion and eighty-two million nine hundred and seventeen thousand five hundred and three dinars, and the Diyala State Company affiliated to the Ministry of Industry and Minerals with an amount of forty-one billion three hundred and seventy-five million eight hundred and nine One thousand five hundred and sixty-one dinars, in addition to the Ur General Company, whose increase amounted to forty-six billion dinars. He added, that "
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The Amateur Investor (The Real Estate Sector In Iraq As A Model) Evan Shaker
Unfortunately, Iraqi society suffers from a weak savings culture, and does not save its money properly, due to the limited economic culture that we have. This is the result of the wrong economic policy of the successive governments over the past 50 years, and it is still for this moment.. the same rentier approach and economic confusion, and a thought devoid of the modern economy, which is in line with economic globalization, so a society that lacks economic culture, and lacks culture, has resulted. savings.
Amateur investors and their ratings
The economic culture of society is very limited, and therefore I will highlight in my article, the real estate market, where the number of amateur investors - specifically in the real estate market - is increasing day by day, and unfortunately this vital sector, is invested unregulated by amateur investors, so it is very important that We develop our economic culture and keep pace with economic globalization.
At the outset, we can describe amateur investors in the real estate sector as coming from three classes or from three types: the first category ( A ) is from the well-off segment of society or those with above-average income, as well as among them the upper class and the amateur investor of type ( A ) , owns a certain capital, after saving part of his income for a certain period, or we can say that they are a certain group of people working in the public sector or the private sector, and they own a certain capital, after saving part of their income for a certain period, and we can consider them from the upper middle class In society if you will, and recently amateur investors have entered the real estate market, by buying apartments or real estate, for investment (profit), not for the purpose of housing.
The second category ( B ), are some real estate dealers (owners of real estate offices), who buy apartments or real estate from the owners of residential investment projects, for the purpose of trading in it (the profit is obscene), and some of the owners of real estate offices buy many apartments, exceeding 100 apartments in some Sometimes only one housing project, which causes prices to rise in a short period, and it was better for real estate office dealers to form an alliance among themselves, under the management of a joint stock company, and start creating housing projects and then selling them.
The third category ( C ), are some of the corrupt officials in the state, and they buy real estate at high prices in order to launder their suspicious money, and at the same time, they cause huge inflation in the real estate market, so we must develop and develop our economic culture, and benefit from our savings correctly and properly. and managing it with the least possible risk, so that we do not fall into the category of an economic bubble; Which is considered a suicide for capital, because its risk is very high.
Amateur investors cause real estate price inflation
Amateur investors are the main causes of inflation in the real estate market, forming a huge gap in real estate prices, so that the price of land in some areas of the capital, Baghdad, exceeded 7-10 thousand dollars per meter. As well as newly established residential projects, for example: the official price for a single residential apartment affiliated to a newly established residential project in Iraq, for example, reaches $70,000, but after a short period, we see the price rise to $100,000, and sometimes it exceeds $120,000, because Increased demand by small amateur investors, which causes abnormal jumps in real estate prices, leading to crazy high prices.
Many amateur investors buy several properties from companies based on housing projects under construction, waiting for the project to be completed, then sell them at double prices, and the fake demand for housing units increases, and sometimes the amateur investor is a victim of this speculation, and loses his capital.
Recently, amateur investors have invested in the real estate sector, and recently some of the money hoarded in homes, which is estimated at 40 trillion Iraqi dinars, began to move towards investing in the real estate sector, which caused a burden on the real estate sector, and affected it negatively, and because of The hobbyist investor has increased demand for plots of land and newly established residential projects, whether apartments (vertical construction) or houses (horizontal construction).
The amateur investor buys real estate or land for profit, not for the purpose of construction and housing, and we can also call this (fake demand) for housing, in the real estate market, and thus real estate prices became very high, and exaggerated, because demand has become more than supply, in the real estate market On the other hand, it negatively affected citizens with low incomes who wish to buy their own real estate,
which burdened them, due to their inability to buy, and to get rid of the housing rent that they have been suffering from for many years, and in general, this unregulated investment negatively affected the overall economy. It also puts pressure on the government in the housing sector, and exacerbates the problem of the housing crisis that the government has faced for not a few years and still is, which has impeded the wheel of progress, prosperity and urban renaissance.
Therefore, we can say that the amateur investor constitutes a burden on the national economy and a major cause of inflation and constitutes an economic bubble, which reflects negatively on the national economy.
Real estate prices are not commensurate with the purchasing power of the citizen
Evidence that real estate prices in Iraq are not real, is their direct relationship with the purchasing power of the individual. We all know that the purchasing power of the Iraqi citizen is very weak, compared, for example, to the Gulf countries. To be more clear: you buy an apartment in one of the Gulf countries, at a price of 400 thousand dollars, but you buy this apartment with the same specifications and area in Iraq, at a price of 100 thousand dollars, but this price does not represent the real value, unlike the Gulf countries!?
The reason is simple: the property you buy for $ 400,000, in one of the Gulf countries, the returns from the rent, are approximately $ 40,000 annually. I mean, in less than ten years, you will recover the invested capital.
But in Iraq, the property that you will buy for the amount of $ 100,000, its annual rental income will be up to $ 4,000, which means that you need 25 years, to recover your capital, meaning that the annual income is approximately 4%, in addition to the rental prices In Iraq, it is considered very high for the Iraqi citizen, due to his limited income.
This is conclusive evidence that there is a great confusion in the Iraqi real estate sector, where, according to the above example; You need an additional 15 years, to recover the capital. Real estate prices in Iraq are not in line with the purchasing power of per capita income, and this is evidence that the price of real estate in Iraq is more expensive than the Gulf countries.
The question here: How does an amateur investor in the real estate sector shift from (the demand box) to (the supply box) in real estate market ?
The answer is the establishment of joint stock companies for the real estate sector (investment funds), and the offering of the shares of these companies in the stock market, and through it there will be a gateway for amateur investors to enter the joint stock companies by purchasing the company’s shares, which leads to an increase in the capital of the joint stock company multifold,
It will also provide great liquidity for joint stock companies, to build more housing projects, speed up project completion, and in record time, and if applied, the profit margin of joint stock companies will increase, and the inflation rate in the real estate market will decrease, and it will be a major reason for market stability and competitive prices, and moves the wheel The market turns the market upside down, transforming the amateur investor from the (demand box) to the (supply box) in the real estate market, as well as eliminating the (fake demand).
In general, the supply will be more than the demand in the real estate market, and real estate prices will decrease by approximately 30-40%. Therefore, the establishment of joint stock companies is a fundamental solution for the advancement of the real estate sector, reducing inflation, and regulating the real estate market. In my next article, I will talk in more detail about the positive role of amateur investors entering joint stock companies, and its impact on the Iraqi real estate market.
* Researcher in Iraqi and international economic affairs
Views 181 Date Added 07/27/2021 https://economy-news.net/content.php?id=25792
Exxon Is Preparing To Leave, And Baghdad Wants An American Alternative
Energy Economy News _ Baghdad Prime Minister Mustafa Al-Kazemi said that ExxonMobil is considering leaving Iraq for reasons related to its internal administrative practices and decisions, noting that his country wants another American company to replace Exxon when it leaves Iraq.
Exxon, which appeared in 2019 to proceed with a $53 billion project to increase Iraqi oil production, is seeking to sell its 32.7% stake in West Qurna 1, one of Iraq's largest oil fields.
Al-Kazemi told a small group of journalists in Washington after talks with President Joe Biden on Monday that ExxonMobil is considering exiting Iraq for reasons related to its internal administrative practices and decisions, not because of the situation in Iraq.
Speaking through an interpreter, he added that when ExxonMobil leaves, Iraq will not accept an alternative but another American company.
Al-Kazemi did not specify which US companies might be interested in the stake. Chevron also has operations in Iraq.
Iraqi Oil Minister Ihsan Abdul-Jabbar had said in May that Iraq was considering buying ExxonMobil's stake in the West Qurna 1 field through the state-owned Basra Oil Company.
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