Some "Tuesday News" Posted at KTFA 3-29-2022

KTFA:

Samson:  Saleh: The current year's budget may calculate the price of a barrel of oil at sixty dollars

29th March, 2022

Mazhar Muhammad Salih, the financial advisor to the Prime Minister, said that the current year's budget may calculate the price of a barrel of oil between 50 and 70 dollars per barrel.

Saleh indicated that this matter has not been resolved so far, expecting that a barrel of oil will be calculated at sixty dollars.

It is likely that this budget will be expansionary, and most of the increases in it will be spent on food allocations for trade and the food security project, in addition to the 100,000 grant that the government intends to distribute to a number of groups.  LINK

Clare:  Hoshyar Zebari challenges Parliament's presidency: Do you have the courage to hold the absent MPs accountable?

 29/03/2022

The leader of the Kurdistan Democratic Party, Hoshyar Zebari, announced, on Tuesday, his challenge to the parliament's presidency in holding the representatives who boycotted the parliament sessions to account.

Zebari said in a tweet on "Twitter" followed by "Mawazine News", "Does the elected Presidency of Parliament have the courage and boldness? To hold the parliamentarians who boycotted the parliament session accountable by name and list and contrary to their constitutional obligations and Law No. 13 of 2018.

He added, “There are explicit texts that they must attend parliament sessions. And no diligence in the text resource. We hope that tomorrow's session will go well."

The House of Representatives intends to hold its third session on selecting the President of the Republic, tomorrow, Wednesday.     LINK

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Clare:  It includes two paragraphs.. Parliament publishes the agenda for tomorrow's session

022-03-29 15:57

 The Media Department of the House of Representatives announced, on Tuesday, the agenda for tomorrow's session, Wednesday.

The agenda includes the election of the President of the Republic and the formation of permanent parliamentary committees.

Last Saturday, March 26, the Iraqi Council of Representatives held a session dedicated to electing the president of the republic. The coordination framework and other blocs and deputies broke the quorum of the session by not attending, which called on the Presidency of the Council to adjourn the session to Wednesday, March 30, to elect the president.

According to the data, the framework, forces and representatives that boycotted the Saturday session are still refusing to attend tomorrow's session, and it was not clear whether some of them changed their minds or joined them by new MPs.  LINK

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Samson:  What is the penultimate .. Parliament convenes tomorrow to resolve the President of the Republic

03/29/2022 09:25:57

 The House of Representatives will hold, tomorrow, Wednesday, a second session to elect the President of the Republic, after it failed last Saturday to accomplish this task as a result of differences between the coordination framework and the Patriotic Union of Kurdistan on the one hand and the allied forces in {Save the Homeland}.

With expectations of a new failure in the absence of consensus, Wednesday's session will be the penultimate; The constitutional deadline set by the Federal Supreme Court expires on April 6.

While some legal experts believe that there is no longer a solution to the political impasse, other than for Parliament to dissolve itself, other experts believe that the Federal Supreme Court is the one that takes final and binding decisions for all authorities, to disrupt the election results, or even resort to dissolving Parliament from on the premise that one of the first tasks of the elected parliament is to elect a new president of the republic.

And between defenders and opponents, the political forces continue to mobilize in order to complete the quorum for the election of the president for the first coalition, and disrupt it for the second coalition.

At a time when the “Save the Homeland” coalition failed to secure a quorum of two-thirds, which is 220 deputies, during last Saturday’s session, which was attended by 202 deputies, the counter coalition, which includes the forces of the coordination framework and the National Union, was able to disrupt the election session, after owning what had become known in Iraq as the "guarantor third".

The efforts of both parties are focused on moving independent representatives in order to win over each other to the side to achieve a quorum, with the dispersion of the positions of some independent representatives and their fluctuations with each party. 59 candidates are competing for the position of president, most notably the Patriotic Union of Kurdistan (PUK) Barham Salih and the Kurdistan Democratic Party Reber Ahmed. Saleh enjoys the support of Shiite forces within the "coordination framework", while Ahmed receives support from the "Save a Homeland" coalition.

It is customary for Sunnis to head the parliament, Kurds to head the republic, and Shiites to head the government, according to a constitutional custom that has been in place since 2003.

The elected president of Iraq is the one who assigns the parliamentary bloc's most numerous candidate to form a government. The early parliamentary elections were held in October 2021, and disagreements continue between the political forces regarding the candidates for the presidency of the country and the prime minister.  LINK

Samson:  The exchange rate in Iraq .. real or not?

28th March, 2022 by Hamed Abdul-Hussein Al-Jubouri

The exchange rate represents one of the policies that governments can resort to to address an economic problem afflicting the country, as happened in Iraq after 2003 and the last of which was in 2020.

Where the Iraqi government, through the Ministry of Finance and in agreement with the Central Bank, reduced the value of the Iraqi dinar in exchange for raising the price of the US dollar to 1450 instead of 1182 at the end of 2020, for financing (deficit financing), monetary (maintaining foreign reserves) and economic (improving production competitiveness) reasons. national) in the medium term as well as the long term.

The source of the dollar, the state or the private sector?

By virtue of Iraq owning a large oil reserve estimated at more than 145 billion barrels, producing more than 4 million barrels per day, and exporting more than 3,400 thousand barrels per day, in 2020, the Iraqi economy has become an oil economy. It depends on oil in large proportions, more than 40% of the output and more than 90% of public revenues, and more than 99% of merchandise exports.

The state also dominates over oil, as all dollar oil revenues are recorded in the general revenues section of the budget after being converted into the Iraqi dinar to feed public expenditures.

The neglect of the private sector, due to the lack of an attractive investment environment for national as well as foreign private investment, means a rise in production costs and prices, respectively, a decline in competitiveness and other commodity exports, and a recent decline in the dollar returns of the private sector. Given the economy's dependence on oil on the one hand, the state's dominance of oil on the other, and the neglect of the private sector on the third, the state has become the main source of dollars in the Iraqi economy.

Mechanism

Where the state exports oil through the Ministry of Oil and SOMO in particular, and the Ministry of Finance receives the oil dollar, and since it needs the Iraqi dinar to finance the general budget, it will sell the dollar in exchange for the Iraqi dinar.

At the same time, the Central Bank buys the dollar at a specific price (official exchange rate) from the Ministry of Finance as the main source of the dollar, and then sells it through the currency window in order to satisfy the demand for the dollar and achieve the stability of the exchange rate, which is one of the goals of the Central Bank.

Assuming that the central bank did not enter as a seller of the dollar, at this moment we will notice a significant increase in the dollar exchange rate, due to the increased demand for the dollar to meet imports, and that the main source of the dollar is the state and the central bank buys it from it, and the private sector cannot satisfy the demand for the dollar because it basically weak, as mentioned above, and therefore the exchange rate in Iraq is not real.

The real exchange rate is determined by the real forces of supply and demand

Because the real exchange rate is determined according to the forces of supply and demand in the market without the intervention of the central bank, meaning that it reflects the reality of the economy, is it a strong or weak economy? Because a strong economy will be able to provide the dollar through its competitiveness, increase exports, and provide the dollar in a way that balances the demand for it.

And the opposite is true, as is the case of Iraq, given the weakness of its real economy away from the state. It cannot provide the dollar in a way that achieves a balance because it loses production, competitiveness and export. Rather, it imports most products from abroad, which means there is an increase in demand for the dollar in order to satisfy the import in exchange for the weak supply of the dollar from Before the real economy, and if the Central Bank did not intervene to provide the dollar in the market, the price of the dollar would have risen to record numbers.

In other words, the Iraqi dinar exchange rate is a price supported by the Central Bank by entering it as a seller of the dollar, providing it in the market, through the currency window, this saving means the lack of scarcity of supply and thus achieving (imaginary) balance because it was not achieved by the forces of supply and demand on the dollar that depend mainly on the real economy.

Reforming and running the economy

It is not possible to liberalize the exchange rate and leave it to be determined according to the forces of supply and demand for the dollar in order to reach the real exchange rate without working first to provide the drivers of dollar savings in the real economy.

This requires reforming the real economy, by working to increase the contribution of non-oil revenues, increasing the contribution of other productive sectors to the gross domestic product, increasing the contribution of the private sector to the economy, and employing oil revenues in a way that contributes to revitalizing and stimulating the economy.

This reform requires, first of all, fighting corruption, providing an attractive investment environment for private investment in various real productive sectors, and involving the private sector in investment to be more capable of taking action and investing.

Conclusion

Operating the economy with high efficiency means increasing production at a lower cost, increasing exports, and providing the dollar away from the state, in a way that achieves balance with the demand for it, and here the exchange rate will be a real price because the bank did not intervene through the currency window to achieve balance.  LINK