Tuesday Afternoon Iraq Economic News Highlights 8-16-22

Tuesday Afternoon Iraq Economic News Highlights 8-16-22

The Departure Of The “Leader” Of The White Paper .. 3 Possible Reasons For The Resignation Of Finance Minister Ali Allawi

2022-08-16   Yes Iraq: Baghdad  The eyes of the popular and media circles in Iraq are looking forward to revealing the details of the “prolonged” resignation that Finance Minister Ali Allawi wrote and read during the cabinet session, as it is hoped that the resignation will include a long review of the most prominent points that Allawi records his reservations about regarding the country’s financial management and related to the bank’s policy. Central, banks and other details.

Allawi submitted his resignation today, Tuesday, during the current cabinet session, and according to sources, the resignation was written in a lengthy letter consisting of 9 pages, and Allawi insisted that it be read in full during the Council.

While Al-Kazemi, the prime minister of the business administration, tried to dissuade Allawi from the decision to resign, but the latter was insistent, which prompted Al-Kazemi to assign the director of budget in the ministry to run the ministry as an agency, before other sources talked about assigning Oil Minister Ihsan Abdul-Jabbar to run the ministry.

According to the sources, Allawi's prolonged resignation included talk about the failure of the financial sector and the inability to work according to the current context.

Allawi had previously rejected the central bank’s performance and described the bank’s billion initiatives as “thefts that destroy the country,” while he considered the state’s economic performance as “judgments and courtesies.”

Allawi's resignation included a report on the structure of the Ministry of Finance and references to the failure of the Central Bank.

One of the reasons circulating on Allawi’s resignation is the failure to implement the terms of the white paper as it is, especially since the Central Bank’s sales of hard currency, which was one of the reasons and motives for the white paper and raising the dollar exchange rate, recently rose to more than 250 million dollars per day after it was at 170 Million dollars.

Another reason is also the appeal submitted to the Food Security Law, where information indicates that the disbursement of funds began before the exchange instructions were circulated by the Ministry of Finance, in addition to the fact that it is possible that the law will be suspended after the challenge submitted to the law before the Federal Court However, it is a low probability.

It seems that the most prominent reason for Allawi’s resignation is his total dissatisfaction with the way financial matters are managed, as the pressures and government commitments pre-built on a “mistake” make the Minister of Finance and his plan to reform the economy restrictive and unenforceable.

Perhaps the Rafidain Bank “scandal” and the Ishtar Gate company case came as a main and complementary motive for Allawi’s dissatisfaction with the country’s financial management in general, which is what prompted him to insist on his resignation.

Economists and circles interested in the economy often point out that “Finance Minister Ali Allawi’s plans and vision, although correct, are far from the Iraqi reality and cannot be applied in this country and its intertwined problems,” which indicates that the reasons for Allawi’s resignation are “accumulated” and not a reason. single and candid.   LINK

The Government Cannot Live Without The Budget ,

Article at link:   https://baghdadtoday.news/ar/news/198066/A

Basra Is Suing The Finances To Obtain Funds Equivalent To One-Fifth Of Iraq's Budget

2022-08-15   Yes Iraq: Baghdad   Representatives of Basra Governorate registered a legal case against the Iraqi Federal Ministry of Finance, due to the ministry's failure to exchange 22 trillion dinars from the petrodollar budget for the province over recent years.

The Iraqi MP from Basra Governorate, Ahmed Al-Rubaie, confirmed that Basra’s deputies filed a lawsuit against the Iraqi Finance Minister, Ali Allawi, for his failure to exchange the province’s share of the petrodollar budget, which exceeds the value of the accumulated amount of which is 22 trillion dinars.

Ahmed Al-Rubaie explained that these accumulated amounts from the petro-dollar budget were not disbursed in recent years, but small amounts were disbursed to Basra and in varying periods, noting that they called the Federal Ministry of Finance several times to release the disbursement of those funds, especially since Basra is affected by the effects of oil exports on its environment. and its transportation methods.

According to the Iraqi Federal Budget Law for the year 2021, 5% of oil revenues must be spent on oil-producing governorates and spend these amounts on projects to serve those governorates.

The 20 trillion is equivalent to 20% of Iraq's annual budget.    LINK

A Foreign Report Reveals Iraqis' Resentment Over The Continuation Of The Demonstrations And Fear Of An Economic Collapse

Baghdad/The Obelisk The obelisk publishes a report in the international press that reflects the world media's view of what is happening in Iraq:

Two rival Shiite blocs have set up rival sit-ins in Baghdad, escalating tensions in a conflict-ravaged Iraq, but shop owner Mustafa says he is more concerned about how to make a living.

We have no work, said the man in his forties, while a lone fan was blowing hot summer air around his clothing store.

Political deadlock left Iraq without a new government, president or prime minister after general elections 10 months ago.

Supporters of Muqtada al-Sadr stormed the Iraqi parliament late last month and began a sit-in, first inside the building and then on its land.

The Sadrists are calling for early elections.

The framework says that it wants a new government as soon as possible, and supporters of the framework began their sit-in last Friday to press for this demand.

Supporters of the framework set up tents on the road to the Green Zone, which houses government and diplomatic buildings, including the parliament.

"We didn't even manage to cross the bridge leading to the Green Zone," said communist activist Ali Jaber, 50, recalling the 2019 protests.

Analyst Laheeb Hegel of the International Crisis Group said the protests "are not so much a popular revolution as elite fighting, with al-Sadr and his political backers essentially pitting against his Shiite opponents".

She said that the confrontation "revealed once again the fragility of the political system in Iraq after 2003."

"While the oligarchic elites have gathered after each previous election to distribute rations of the government's pie, it appears that they can no longer do so," she said.

Mustafa, whose shop is located about 5 kilometers from the area, said his customers had stopped coming.

He said both camps had begun to protest, and "economic activity had taken a hit".

"Since 2003, no politician has properly governed the country," Mustafa continued.

Mustafa said: I voted twice in my life, and both times I regretted it.

Ahmed, 23, said he was a supporter of al-Sadr, but he does not follow politics much, adding, "Today without electricity, we have to sleep with blocks of ice." In Parliament there are no blackouts.”

Iraq has suffered from decades of conflict, endemic corruption, deteriorating infrastructure, power outages and deteriorating public services.

Iraq is facing a water shortage as drought sweeps large areas of the country.

Despite his oil wealth, many Iraqis live in poverty, and about 35% of its youth are unemployed, according to the United Nations.    https://almasalah.com/archives/10824

Two Months After Its 57% Rise, Iraq Sells About One Billion Dollars In US Bonds, Instead Of Transferring Surplus Funds Into Assets

2022-08-16   Yes Iraq: Baghdad   With the “accumulation” of funds in Iraq as a result of the surplus resulting from the selling prices of oil, which is hoped to reach within a year more than 25 billion dollars, Iraq directed to raise its holdings of reserves, whether in hard currency or gold, or even purchase US bonds.

Indeed, Iraq raised its holdings of US bonds this year by more than 57%. In March, it bought US bonds with more than one billion dollars, and then bought in April more than 4 billion dollars, bringing its holdings of bonds to 32.8 billion dollars, compared to April 2021, which It was only $20.9 billion.

It is natural that Iraq's possession of US bonds will continue to rise as Iraq's oil revenues continue to rise due to the rise in the prices of raw materials, but it is strange that Iraq, after only two months of purchasing bonds with more than 4 billion dollars, sold bonds of nearly one billion dollars to decrease its holdings of bonds, the matter Which raises questions about the reason for selling these bonds and whether Iraq “needs” money despite its high revenues, as Iraq was forced to sell bonds instead of keeping them and benefiting from the potential returns from them.

The US Treasury said that “Iraq’s possession of US Treasury bonds for the month of June of 2022 decreased by 929 million dollars, or 2.82%, to reach 31.965 billion dollars, after it was 32.894 billion dollars in the month of May,” noting that “these bonds rose from the same month. From last year 2021, when Iraq’s holdings of bonds amounted to $21.2 billion.”

She added that "Iraqi bonds, including long-term guarantees amounting to 15.939 billion dollars and short-term guarantees amounting to 16.026 billion dollars," noting that these bonds represent 0.4% of the world's bonds.

And Iraq's possession of US bonds has previously increased to about 33 billion dollars, at a rate of 57% within a year, and it was hoped that Iraq would get profits estimated at more than 300 million dollars according to the new interest rate approved by the US Federal Bank.

The US Treasury said at the time that “Iraq’s possession of US Treasury bonds for the month of May of 2022 increased by 4 billion and 584 million dollars, or 13.94%, to reach 32.894 billion dollars, after it was 28.310 billion dollars in the month of April,” indicating that “these bonds also rose For the same month last year 2021, when Iraq’s holdings of bonds amounted to $20.9 billion.”   LINK

With More Than 8 Billion Dollars Annually... Iraq Is The First Importer From Iran

Shafaq News/ The Iranian newspaper "Tehran Times" revealed today, Tuesday, an increase in the value of Iran's "non-oil" exports to neighboring countries during the current year, noting that Iraq, which occupies the lead in receiving these exports, at a value of 8.9 billion dollars annually, comes Also among the most exporting countries to its markets.

And the Iranian newspaper explained, in a report published in English and translated by Shafak News Agency, that the value of Iran's non-oil exports to neighboring countries increased by 22% during the first four months of the current Iranian year (March 21-July 22), compared to the previous period. Same from last year.

The report quoted a spokesman for the Iranian Customs Administration, Rohullah Latifi, as saying that Iran exported 20.711 million tons of non-oil products worth 8.871 billion dollars to its neighbors during the mentioned four months.

The Iranian official put the non-oil trade in four months with neighboring countries at 27.35 million tons, worth 16.871 billion dollars, noting that the volume of trade shows an increase of 18% on an annual basis.

On the other hand, the Iranian official indicated that Iran imported 6.323 million tons of non-oil goods worth 8.14 billion dollars from its neighbors during the first four months of this year, a growth rate of 13 percent on an annual basis.

He pointed out that the annual volume of non-oil exports to neighboring countries amounted to 75.445 million tons, worth $26.29 billion, an increase of 29% in value and 12% in weight.

According to the Iranian report, the main export destinations of Iranian non-oil goods annually are Iraq with $8.9 billion, then Turkey with $6.1 billion, then the UAE with $4.9 billion, which are countries followed by Afghanistan, Pakistan, Oman, Russia, Azerbaijan, Turkmenistan, Armenia, Kazakhstan, Kuwait, Qatar, Bahrain and Saudi Arabia.

In an annual aggregate, Iran imported 24.686 million tons of non-oil goods worth more than $25.846 billion in the previous year, with a growth in value of 60% and an increase in weight of 68% on an annual basis.

While the UAE came as the largest exporter to Iran in the mentioned period, as it exported $16.5 billion worth of goods to Iran, followed by Turkey, Russia, Iraq and the Sultanate of Oman.

While the report indicated that Iran’s main plan in the past years is to increase non-oil exports to neighboring countries, it pointed out that the Islamic Republic shares land or water borders with 15 countries, namely the UAE, Iraq, Afghanistan, Armenia, Azerbaijan, Bahrain, Kuwait, Kazakhstan, Oman, Pakistan and Qatar Russia, Turkey, Turkmenistan and Saudi Arabia.  LINK