Amer Al-Jawahiri to: Changing the value of the national currency at present .. economic confusion .. it should not be linked to additional unstable revenues
The consultant in industrial development, industrial cities and investment, Amer Al-Jawahiri, confirmed that: Changing the value of the national currency is currently…economic confusion..it should not be linked to additional, unstable revenues.
He told the National Iraqi News Agency ( NINA ) that: the change in the value of the national currency against other foreign currencies has not occurred since 2003 except twice, its price was 2500 and then to 1200, and it was changed at the end of last year, which means that during 17 years it was changed only twice.
Al-Jawahiri added that: the rise in oil prices is not fixed, it may rise for several months and decrease again, as happened previously. Noting that: Determining the economic and monetary paths does not depend on steps that occur for some months or seasons of the year.
He explained that: what is happening from changes in oil prices, we should not base them on a change in the amount of the Iraqi currency vis-à-vis other currencies, and not take place in short successive periods, and we do not advise continuing to think about the issue of the value of the currency vis-à-vis foreign currencies at the present time, because it confuses us, we need it. link
Conference of neighboring countries in Baghdad. An important step with difficult goals to verify
Baghdad – Mawazine News
Iraq hosts a regional conference in post-2003 Iraq at the end of this month, in terms of participants as well as at the level of organization and the idea itself, a conference that Iraq has not seen in nearly two decades, looking to regain its Arab and regional status and break the image that has taken root from post-U.S. Iraq.
The Iraqi government has invited leaders of neighboring countries such as Saudi Arabia, Turkey, Kuwait and other friendly and active countries in the Iraqi scene, such as France, whose president Emmanuel expressed his “full support for Iraq” and praised “balanced Iraqi diplomacy.”
The Iraqi Foreign Ministry has invited Turkish President Recep Tayyip Erdogan and Saudi King Salman bin Abdul Aziz to attend the conference, but any details of the exact date of the summit and all participants are not yet clear.
It was not clear whether Iran would also join the conference, which comes a few weeks after Ibrahim Raisi was sworn in and assumed his duties as president.
Ihsan al-Shammari, a researcher and director of the Center for Political Thinking, said the conference was “proof that there is confidence from neighbouring countries in Iraq” and an indication that it will “restore its regional role and be a factor in the stability of the region,” especially since Baghdad has hosted negotiations between Iranian and Saudi delegations in recent months to discuss improving strained relations between the two countries.
Iraq, which finds itself in a complex situation between its eastern neighbor and its neighbor to the south, has been seeking to act as a Middle East mediator since the defeat of ISIS at the end of 2017, while Baghdad is one of the few regional capitals with good relations with neighboring countries.
But despite the positive image surrounding the idea of Iraq hosting an expanded regional conference, it remains just a formal step in Mustafa al-Kadhimi’s favor, as it prepares for the questionable elections after the withdrawals expand.
University of Chicago researcher Ramzi Mardini said the conference would be no more than a “symbolic victory” about two months before the early parliamentary elections that Mustafa Al-Kadhimi’s government wants to hold more than a year after he took office following unprecedented public protests.
“The real political profit will be for Al-Kadhimi, which will certainly support his image and status,” the researcher said, while Iraq is experiencing difficulties and crises, starting with electricity, which Iraq relies heavily on neighboring Iran, as well as security tensions, to a decline in infrastructure and services, the economic crisis as oil prices fall and the Covid-19 epidemic spreads.
The summit follows Kadhimi’s visit to Washington in late July in which he agreed with U.S. President Joe Biden to end the U.S. “combat mission” in Iraq, amid factions’ rejection of any U.S. presence in the country, and repeated attacks against U.S. interests attributed to those factions.
Iraqi officials are aware that the road is long, but if Iraq is unable to exert considerable pressure, it has at least provided an arena for dialogue. Any regional lull, particularly between Tehran and Riyadh, which severed ties in 2016 and have been accused of destabilizing the region, would also benefit Iraq.
In contrast, the United States is deploying 2,500 troops in Iraq out of 3,500 members of the international coalition forces fighting ISIS, including hundreds of French.
Meanwhile, there have been no talks between Iraq and Saudi Arabia in a long
time. In 1990, when Saddam Hussein invaded Kuwait, Riyadh severed diplomatic relations with Iraq, and relations resumed only in 2017, 15 years after the fall of Saddam Hussein.
The current Prime Minister, Mustafa al-Kadhimi, is also close to Saudi Crown Prince Mohammed bin Salman.
As Baghdad seeks to bring u.S. allies in the Middle East, Saudi Arabia, Jordan, and Egypt closer together, particularly as it hosts a trilateral summit at the end of June that brought together Egyptian President Abdel Fattah al-Sisi and Jordan’s King Abdullah and Al-Kadhimi, it also supports Syria’s return to the Arab League.
As a result, Mardini said the conference remains an “important step”, but “its results should not be overestimated… I don’t think Iraq will be able to achieve anything concrete from it.”
Iraq is heading to restructure the state-owned Al-Rafidain Bank
Its deposits amount to 27 billion dollars and it has 146 branches inside the country and dozens outside it
Iraq is heading to restructure the Rafidain Bank, one of the largest and oldest governmental banks, and the move came after years of pressure and demands from the International Monetary Fund to restructure Iraqi government banks and make them more in line with the economy.
Appointment of a new director and board of directors
Finance Minister Ali Allawi said in a press statement, “We have started restructuring government banks, and the problem we have is 80% of the Rafidain Bank,” noting that “the steps include changing its internal system, cutting the link between the Ministry of Finance and it and changing its board of directors.” He added, “These steps are taking place in coordination with the Central Bank, with the introduction of governance,” noting that the Ministry of Finance is in the process of selecting a new director and board of directors for Rafidain Bank.
The former Director General of Financial Operations at the Central Bank of Iraq, Mahmoud Dagher, praises this step, stressing the need for it to be accompanied by its transfer to the private sector, an increase in its capital and a change of its name. He explained, “The Ministry of Finance’s step is good to liberate government banks from the control of the public sector represented by the Ministry of Finance, especially since the law under which the bank operates is the Companies Law and a board of directors is supposed to work that has nothing to do with any party,” noting that “the bank is governmental and for this reason.” The decisions of the board of directors were approved by the Ministry of Finance and employees below the level of the minister sometimes imposed policies on them, especially debt issues that were not commensurate with the capabilities, performance and capital of the bank.
Total deposits 27 billion dollars
Dagher explained, “The Rafidain Bank is ancient, and it occupies the first place in terms of deposits, most of which are governmental,” noting that “this step will allow it to return its capital because it is low, estimated at 130 billion dinars (89 million dollars), which is not commensurate with the size of its deposits. The amount is between 30 to 40 trillion dinars (from 20 to 27 billion dollars), and he stressed the need to convert it into a private joint-stock company, with a change of its name because it is one of the two banks that are subject to international sanctions preventing them from working flexible internationally,” calling for finding local investors or Foreigners participate in the development of the bank due to its advantages.
The two government-owned Rafidain and Al-Rasheed banks were subjected to international sanctions during the 1990s following the invasion of Kuwait by Saddam Hussein’s regime, and they are still imposed on him in international dealings with them, especially with regard to the issue of remittances. Dagher believes that “the conversion of the bank to the private sector makes it immune to international claims, because the reason for international decisions on the Rafidain and Rasheed banks is because of the Iraqi government before 2003.”
A late step with international pressure
He continues, “This step came late, as the International Monetary Fund and one of the international financial companies entered to liquidate the budget of the Rasheed and Rafidain banks and took a wide discussion, but there was no government courage to take such a decision for the interest that the Ministry of Finance and the Public Treasury reap by borrowing from this bank.” Noting that “government banks do not keep pace with technology and do not have a large capital, so we can call them modern banks.”
In turn, the specialist in economic affairs, Safwan Qusay, stresses the need to privatize government banks to develop their banking system and be able to enter the global banking market, while indicating that this step will develop the Iraqi economy. He added, “The process of privatizing Rafidain Bank and selling its shares is necessary to have a board of directors independent of the Ministry of Finance that can implement economic development away from government interference, and we are with the start of privatizing public banks in order for their government counterparts to operate with an investment mentality.”
30 billion dollars outside banks
Qusay points out that “there are more than 30 billion dollars in savings for Iraqis away from the banking system, and the start of offering various banking products that will contribute to moving them towards the banking system, thus financing small, medium and large projects.” He adds, “Partnership with international banks, with their local counterparts having an advanced level of technology, contributes to encouraging local, regional and international investment, especially that the initiation of the privatization process in public banks will make a leap for the Iraqi economy at the medium level.”
He continues, “The Ministry of Finance is supervising the financial policy and the Central Bank is the one who will supervise the banks,” noting that “the formation of independent boards of directors elected from shareholders working to manage this sector will lead to openness to international banks.” He points out that “the Trade Bank of Iraq monopolizes the banking sector at a high rate because the government depends on it,” stressing that “creating a strong competitor will lead to justice in the distribution of opportunities and competition between banks, which pushes the banking system towards integration. In addition, the Rafidain and Al-Rasheed banks need to be rehabilitated. And the introduction of technology and human resources that could not keep pace with modern mechanization systems.” He pointed out that “Al-Rafidain Bank has an international reputation and that the Central Bank is keen to rehabilitate these banks, and we expect it to be followed by the step of rehabilitating Al-Rasheed Bank.”
The plan has been in place since 2006
The economic advisor to the Prime Minister, Mazhar Muhammad Salih, confirms, “The plan to restructure banks has been in place since 2006, but great difficulties have faced the process of change, including the adoption of modern banking as a basis for the bank’s work, which requires dealing with fewer employees and greater technology, which has met with negative resistance. Internal affairs from the bank itself,” noting that “there is a so-called financial restructuring, and this requires ridding the bank of a huge legacy of losses it incurred from the debts of the former regime that were supposed to have been settled within the 2004 Paris Club Agreement, in addition to the losses of wars.”
Saleh explained, “The recent war on ISIS terrorism and the exposure of many of the bank’s branches to looting and burning requires the development of new capital, or a broader financial leverage that has the ability to absorb losses, and at the same time constitutes support in facing the risks of the bank’s operations such as bad credits granted by the bank in different times, and it became difficult to collect and turned into a loss.”
The necessity of legal structuring
Saleh points out that “there is a necessity for legal structuring, which must give the bank’s board of directors sufficient legal strength and independence from the dominance of the Ministry of Finance, which has become even today’s staffing movement in the bank, for example, through it, and not the bank’s management, which weakened the board of directors and this requires Greater governance by separating management from ownership to ensure the efficiency and flexibility of the bank’s activities to achieve its goals and implement its sound banking policies.
On the level of international banking, “the bank needs broader banking standards in the field of compliance, governance, accounting and control in order to raise the level of dealing with international correspondent banks and restore its health in financing foreign trade for the private sector,” according to Saleh, who indicated that reform is not an easy thing. He needs a strong will.
In turn, a member of the Finance Committee, Jamal Cougar, stresses the need for both the public and private sectors to be present in the banking field and to be under the supervision of the government, while criticizing the work of government banks. He adds, “The mechanism that government banks rely on came as a result of the financial problems in the Iraqi state and the control of political parties over the government’s joints.” He stressed, “The banking system in the world has become more developed, and because of the wars we have been delayed, especially as the parties entered the financial battlefield and have banks and financial outlets.” link
Source: Dinar Recaps
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