Some "Iraq and Vietnam News" Posted by Samson Friday 1-21-2022

KTFA:

Samson: The International Monetary Fund Sends A Warning Message To Countries Whose Debts Are In Dollars

21st January, 2022

International Monetary Fund Managing Director Kristalina Georgieva stressed that an increase in US interest rates could have significant effects on countries with high levels of debt dominated by the dollar.

Georgieva said the Fed’s rate hike could “throw cold water” on the weak economic recovery in some countries. Georgieva warned of the repercussions of raising interest rates in the United States on the weak economic recovery in some countries,

She indicated the need for the US Federal Reserve to clearly communicate its policy plans. The official called on countries with a high level of dollar debt to take action. And the International Monetary Fund’s message to countries with high levels of dollar-denominated debt is: “Act now. If you can extend the maturity, please do so.”

The warnings of the Director of the International Monetary Fund came during her participation in the “Davos” economic forum, held online due to the Corona pandemic, and indicated, during her discussion of the selections for the year 2022, that the International Monetary Fund expects the continuation of global economic recovery, but she stressed that it is “losing some momentum.” Due to the re-spread of the infection, the increase in inflation and the high level of debt.

The official stressed that fighting inflation is not the task of central banks alone, as other policy makers have to play a major role, including by promoting vaccinations to end the Covid-19 pandemic. She added that inflation was a country-specific phenomenon, which made policy responses more complex in 2022 compared to 2020, the first year of the epidemic.  LINK

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Samson:  Iraq throws off the mantle of compensation debts and launches the new year with a stronger economy

19th January, 2022

Iraq has paid all the financial compensation to Kuwait amounting to 52.4 billion dollars more than 31 years after the invasion of Kuwait, which adds new money to the budget.

A report for Al-Monitor prepared by writer Adnan Abu Zeid said that Iraq is moving towards a new economic situation in 2022 after completing the payment of the amounts approved by the United Nations as compensation to Kuwait for the invasion on August 2, 1990, which leads experts to be optimistic about a better future for the country through improved financial conditions.

On December 22, 2022 the Central Bank of Iraq announced the completion of the payment of all financial compensation to Kuwait, amounting to $52.4 billion, more than 31 years after the invasion of Kuwait.

Mazhar Muhammad Salih, financial policy advisor to Prime Minister Mustafa Al-Kazemi, talks about the ability to pay external debt services, especially the outstanding debts, which currently amount to about 20 billion dollars (until the end of the year 2021), and after Iraq paid annual debt services dues, nearly 3 billion dollars during the year.

Last year, Iraq’s credit rating was boosted by accredited international rating agencies by placing Iraq within the B region and giving a positive signal to the international financial community on Iraq’s effective financial capabilities, according to Al-Monitor.

Salih reveals an external debt that is still indicated by international reports without sufficient analysis. It nominally belongs to about 12 countries, including 4 Gulf countries. It belongs to the pre-1990 period. It is still suspended and has not been settled under the Paris Club agreement signed between Iraq and its international creditors, which should be written off by a percentage 80%, or it is equivalent to 41 billion dollars, and it appears in the books of these countries, and if this debt is correct, it is equivalent to only 8-9 billion dollars, and it was linked to the Iran-Iraq war and I expect it to be written off completely.

Saleh believes that the cost of these compensations, according to current oil prices and Iraq’s export capabilities, represents a deduction of 3% of every barrel of oil exported from Iraq, so that its proceeds go to the United Nations Compensation Fund UNCC in Geneva.

 Salih says that the annual accumulation of these compensations means saving at least $2 billion annually, which will benefit Iraq’s budget and will cover an important financial space, whether in the face of the upcoming annual external debt dues or in providing sums that go to productive investment projects.

The economic expert, Salam Sumaisem, says that extinguishing compensation debts improves financial capabilities, provided they are used in development and investment, warning against the loss of the upcoming financial abundance, as many opportunities were lost in the past years, according to Al-Monitor.

Writer and political researcher Abbas Abboud, editor-in-chief of the former government newspaper Al-Sabah, talks about the political repercussions of the end of the compensation file as it turns a page of modern Iraqi political history, and its negative impact. Abboud believes that the end of the compensation file will reduce the psychological impact on the Iraqis, as well as the political impact towards balanced relations with the Gulf countries in general and with Kuwait in particular, and this issue is left to the Kuwaiti side and how it can open a new page with Iraq because the Iraqi-Kuwaiti relations are still stagnant .

Political analyst from the Summit Center for Strategic Studies, Qassem Al-Gharawi reveals that government parties are trying to redirect the funds that were intended to pay compensation towards establishing sovereign funds for the future in which funds will be collected and invested internationally as a fund for generations. Al-Azzawi considers that the idea may not be appropriate at the present time, as the additional financial abundance that was allocated to Kuwait’s compensation is better to put it in a local development fund that participates in developing a development program to create profitable and sustainable development projects for the fund and outside the authority of the government, and contributes to strengthening national development plans, instead of of annual borrowings.

The economic analyst and official spokesman for the extension movement, Manar Al-Obaidi, expects that Iraq’s official completion of paying its debts for Kuwait’s compensation will increase Iraq’s income, especially since 5% was deducted from oil sales to pay compensation, and this matter will contribute to enhancing Iraq’s revenues, noting that the debts Iraq’s foreign affairs have fallen to their lowest level to reach about 20 billion dollars, which represents a percentage of about 15% of the Iraqi GDP, which is a low percentage compared to other countries.

Al-Obaidi says that Iraq’s budgets have turned into a payroll rather than an actual budget aimed at implementing strategic plans and achieving growth rates. Al-Obaidi believes that Iraq, despite spending more than 1,000 trillion dinars since 2011, has gone up to 230 trillion for investment expenses, but the volume of growth in infrastructure and services facilities is still low.

The economic media specialist and the economic editor in the Iraqi Al-Sabah newspaper, Hussein Thaghb, talks about an additional balance after the conclusion of the compensation, which can be employed to serve the national economy when a court mechanism is adopted to employ this amount, which is not considered large in the world of economy, in a particular sector or in supporting small and medium enterprises.

There shall be an evaluation oversight of these projects. Thughab believes that the fiscal policy needs reform and clarity in the performance paths that are set by experts in financial affairs and international consultations that help in setting a financial policy, and that the budgets law needs reform that makes public revenues supportive of economic advancement.

Most of Iraq’s debts were not for development and reconstruction, but rather as a result of uncalculated military adventures by the former Iraqi regime, and that the end of compensation resulting from the losses of the Kuwait war will add new financial leverage, and financial abundance that can be benefited from if we reform the economic decision-making process, and move away from the mentality routine administrative.  LINK

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Samson: Al-Kazemi returns to the fore as a “strong” candidate to head the next government

21st January, 2022

Al-Sadr puts the “coordinating framework” at a critical angle because of his insistence on excluding al-Maliki.

Although the position of the leader of the “Sadr movement” Muqtada al-Sadr was not clear in terms of the talks held with him by the commander of the Iranian “Quds Force” Ismail Qaani, the position of al-Sadr did not budge, according to the ongoing movement between the “Sadr movement” and the “coordinating framework”, in terms of accepting some of the Coordination framework only.

Al-Sadr, who used to express his position regarding his adherence to the government of the national majority when meeting with any official or delegation, is still the master of silence for him, especially after his meeting with Qaani. But he violently attacked what he called “the prosecutor of the resistance”, against the backdrop of the attack on the headquarters of the second deputy speaker of parliament, Shakhwan Abdullah, in Kirkuk.

According to political observers, Sadr’s violent attack on the armed factions; None of which claimed responsibility for a series of attacks that included the headquarters of Sadr’s allies from the Sunnis (“Progress” and “Azm”) and the Kurds (the Kurdistan Democratic Party), which means that Sadr is still seeking to include those he described in a previous tweet on Twitter as “He still thinks well of them.” What is meant by that is the “Al-Fateh Alliance” led by Hadi Al-Amiri.

On their part; The forces of the “coordinating framework” (which includes several Shiite forces whose results varied in the elections, namely: “Al-Fateh Alliance”, “State of Law”, “The Wisdom Movement”, “Victory”, “National Contract” and “Supreme Council”) are still continuing. Hold almost daily meetings, but without issuing a statement as was the case in previous meetings. Even days before the visit of Qaani and the Lebanese, Wajih Kawtharani, responsible for the Iraqi file in the Lebanese “Hezbollah”, the forces of the “coordinating framework” were expressing their positions in an official statement after each meeting, summarizing that the position of the forces of the “coordinating framework” is unified on all issues related to the formation of the next government. 

But that has changed over the last four days; Since the start of a meeting of the leaders of the “framework” is announced, the outcomes of the meeting remain confidential, while the leaks begin either through media close to one of the framework’s parties, or through leaders in these alliances. However, according to information obtained by Asharq Al-Awsat from close sources, “the (framework) forces are in a critical situation; Especially since al-Sadr’s position did not budge from adopting not only the idea of ​​a majority government; Rather, his absolute rejection of the accession of all forces (the framework) to this government, by his insistence on the exclusion of the leader (coalition of state law) Nuri al-Maliki. 

According to the same sources; “The forces of (the coordinating framework), although they see that the exclusion of al-Maliki, who has 34 seats, which is about half of the seats (the coordinating framework); Which means that the forces (the framework) if they agreed to exclude al-Maliki from among their ranks; Its position will be weak regarding the cohesion of (the Sadr bloc), which has 75 deputies in Parliament.” 

While the idea of ​​distributing a number of representatives of the State of Law coalition to the forces of the “coordinating framework” has been popular over the past few days, as a way out to resolve the crisis between the “current” and the “framework,” as long as al-Sadr’s position appears personally to al-Maliki without his coalition, the representative of the State Law» Dhurgham al-Maliki denied the existence of such an idea. 

Al-Maliki said in a statement that “(The State of Law Coalition) represents the main force within the (framework) because of the number of parliamentary seats it possesses, which reached 35 after two minorities joined it,” denying that “there is an idea to distribute a number of deputies ( The rule of law) over the rest of the forces of the (coordinating framework) as a way out to resolve the crisis between (the framework) and (the current). Al-Maliki explained that “the State of Law coalition is cohesive and organized under the tent of the (coordinating framework),” stressing that “the forces of the (framework) are coherent as well, and there is no withdrawal or alliance of any of its forces outside the (framework).”

According to these statements and other opinions expressed under different names; This in itself means that there are differences within the “framework” forces, but they have not been made public so far, while al-Sadr’s position remains the same. According to this political movement; It is among the positions and opinions that all of this has repercussions on the personalities nominated for the next government. 

Among them is the current Prime Minister Mustafa Al-Kazemi. At a time when there was a veto regarding the three presidencies (the republic, ministers and parliament), the election of Muhammad al-Halbousi for a second term to head the House of Representatives and the nomination of the current president, Barham Salih himself for a second term, practically dropped this veto, while the position of the prime minister remained dependent on the major bloc.  While the forces of the “coordinating framework” presented themselves as the ones that would form the largest bloc and put forward their candidates for prime minister.  LINK

Samson:  Vietnam : Three scenarios to help the digital economy make a breakthrough by 2025

19th January, 2022

The goal for the digital economy to account for 20 per cent of GDP by 2025 is very challenging. 

However, Nguyễn Trọng Đường, Deputy Director of the Department of Enterprise Management, Ministry of Information and Communications, believes that with a breakthrough scenario, the Vietnamese digital economy could account for 26.2 per cent of GDP in 2025.

Under the normal development scenario, the Vietnamese digital economy will only reach 10.5 per cent of GDP by 2025. To achieve this goal, it was necessary to maintain the average annual growth of the digital economy at about 20 per cent, three times higher than the expected GDP growth at 6.5-7 per cent per year, he said.

Based on the analysis and assessment of digital economy development, three development scenarios could be proposed for the Vietnamese digital economy by 2025, said Đường. In the normal scenario, with only average efforts for digital transformation and digital economy development, the digital economy will account for about 10.4 per cent of GDP by 2025, of which ICT, telecommunications and the internet economy account for about 7.9 per cent of GDP.

In the quicker scenario in which digital transformation and development of the digital economy are strongly promoted, the digital economy will account for about 19.9 per cent ​​of GDP by 2025, of which ICT, telecommunications and the internet economy account for about 13.1 per cent.

In the breakthrough scenario, digital transformation and digital economy development are strongly deployed, accompanied by measures to ensure a market balance between Vietnamese digital enterprises and foreign counterparts. At the same time, with policies to support Vietnamese technology start-ups, the digital economy will account for about 26.2 per cent of GDP by 2025, of which ICT, telecommunications and the internet economy account for about 16 per cent.

Đường said that first, it was necessary to quickly develop and promulgate national strategies and programmes on developing the digital economy and digital society.

Second, it was necessary to urgently review, amend and supplement legal regulations to improve the legal framework, mechanisms and policies for the development of the digital economy and digital society.

Third, it is necessary to accelerate the implementation of the national digital transformation programme, especially solutions for skills training and digital human resources development; digital transformation; and the domestic digital market.  LINK

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Samson:  WTO membership the driving force behind Việt Nam’s growth: experts

17th January, 2022

World Trade Organisation (WTO) membership and the signing of 15 free trade agreements (FTAs) has been moving Việt Nam’s economy forward for years, according to experts at the 15th anniversary of Việt Nam’s accession to WTO.

The WTO’s World Trade Statistical Review reported that among the top 50 merchandise traders, Việt Nam has recorded the biggest increase in world ranking, improving its position from 39th place in 2009 to 23th in 2019. In 2020, the country positioned itself among the 20 leading exporters in international trade.

Economic expert Nguyễn Minh Phong noted the admission to WTO had turned Việt Nam into an economy with high trade openness (200 per cent GDP), with a trade surplus since 2016. Notably, total trade increased nearly eightfold from US$84.7 billion in 2006 to $668.5 billion in 2021. Between 2016 and 2020, the trade balance continued pick up steam and reached a peak of over $19 billion. Despite the pandemic, last year’s total exports still hit $336.25 billion, marking a surplus of $4 billion.

According to Ministry of Industry and Trade (MoIT), Việt Nam’s economy has been forging ahead with many upturns in exports thanks to WTO membership. The country has successfully expanded its trade footprint in almost all markets worldwide and actively participated in global value chains and production networks.

Việt Nam’s exports have become more processing-oriented with processed goods’ contribution to exports rising from 80.3 per cent in 2016 to nearly 89.2 per cent in 2021. The number of products that commercially fetch more than $1 billion ballooned from nine in 2006 to 35 last year.

Nguyễn Thị Thu Trang, director of WTO and Integration Center under the Việt Nam Chamber of Commerce and Industry, said that the strict compliance to WTO frameworks had allowed Vietnamese firms and the economy to grow steadily in the past 15 years.

Remarkably, firms and the economy had successfully adapted themselves to the ensuing FTAs and turned the new situation to their advantage without experiencing any trade shocks. In the future, it is all about institutional reforms, competitiveness enhancement and human resource improvement, which will help firms and the economy to continue to move forward, Trang added.   

Lương Hoàng Thái, director of Multilateral Trade Policy Department, believes Việt Nam has developed into an investment magnet thanks to the implementation of FTAs.

According to US News&World Report, Việt Nam was ranked 8th among the 20 best countries to invest in 2019, moving from 23th in 2018. The country is an attractive investment location for many of the world’s leading corporations including Samsung, Microsoft and LG.

There are about 34,500 projects in Việt Nam funded by foreign investors so far. Total registered investment topped $408 billion. In 2021, the country continued to draw in around $31.15 billion of foreign investment, up 9.2 per cent compared to 2020. 

Undoubtedly, WTO membership and FTAs have been giving impetus to Việt Nam’s growth in trade and investment.

Trần Quốc Khánh, MoIT deputy minister, said the the ministry would continue to implement ratified FTAs, diversify exports and export markets, improve export quality, and stick to rules and regulations on product quality and origin to get the most out of WTO membership and FTAs.

Việt Nam was admitted to the WTO on November 7, 2006 and became an official member of the world’s largest trade organisation on January 11, 2007.  LINK