Samson » August 17th, 2021
40 billion dollars are smuggled from Iraq annually… How and where does it go?
16th August, 2021
Representative Riyadh Al-Masoudi said that approximately 40 billion dollars are smuggled from Iraq annually to several countries, including Arab countries.
Al-Masoudi said that “all Iraqi official reports confirm that Iraq’s need for goods and services annually ranges between 15-20 billion dollars, but the dollar sold in the currency auction (for the purpose of importing from abroad), ranges between 60-70 billion dollars, meaning that there are about 40 One billion dollars is outside the actual needs of the Iraqi markets.”
He added, “These money surplus to the markets’ need for foreign goods (which the Central Bank sells on this basis), is smuggled to Turkey, Iran, Jordan, the UAE, Egypt, America, Europe and other countries, and is invested there in real estate and assets.”
He continued, “This matter has been repeated for many years, and there is a need for unconventional measures, without there being a media side in attempts to combat corruption,” saying that “some corrupt people call for combating it, but they are in fact the basis of the problem.”
Official and unofficial reports estimate that about 150 billion dollars of Iraqi public funds were smuggled out of Iraq after 2003, and while the President of the Republic, Barham Salih, presented a draft law to restore these funds to Parliament last May, deputies and experts say that there are many obstacles standing in the way. without getting the stolen money back. LINK
Economist: Iraq is poised to be among the G-20
16th August, 2021
Deputy Chairman of the Parliamentary Program Implementation and Strategic Planning Committee, Muhammad Al-Baldawi, confirmed on Sunday that there is an Iraqi will to implement the Chinese agreement and complete the Faw port and the dry canal, but it is hampered by American restrictions and pressures.
Al-Baldawi pointed out that “in the event of the completion of the port and dry canal project and the implementation of all Chinese agreements, the oil resources of the treasury will be secondary
Are there obstacles placed by Washington in the way of implementing this agreement?
On this subject, the guest of the “Where is the Truth” program on Radio “Sputnik”, the economist Dr. Safwan Qusay says
“The Iraqi government is continuing to implement the Iraqi-Chinese agreement, but under the supervision of the US Treasury Department in terms of project financing sources and how the money is spent, and therefore there are no real concerns about the implementation of this agreement
And Qusay continued by saying: “The Iraqi Prime Minister, during his visit to Washington, raised the issue of justice in distributing opportunities between Chinese and American companies, given that American companies also want to work in Iraq in the same way that Chinese companies operate. The issue is not an obstacle as much as it is sharing opportunities.”
Qusay added, “Iraq has achieved an advanced classification in terms of available resources, and its geographical location is one of these resources. Iraq is seeking to diversify its economy and not rely on oil. Iraq is poised to raise its economic strength to be within the scope of the twenty largest countries
OPEC + does not respond to US pressure to increase oil production
17th August, 2021
Reuters quoted 4 sources as saying that the Organization of the Petroleum Exporting Countries and its allies, including Russia, believe that “the oil markets do not need to pump more”, contrary to what they plan to pump in the coming months, despite US pressure to provide more crude to stop the rise in oil prices
One of the four sources stated: “I don’t think there is a need (for additional oil beyond what is already planned)
Last week, the administration of US President Joe Biden urged OPEC and its allies, “OPEC +”, to increase oil production to counter the rise in gasoline prices, which it sees as a threat to the global economic recovery and “OPEC +” agreed in July to increase production by 400,000 barrels per day, starting in August, until its current production cuts of 5.8 million barrels per day were gradually phased out
But despite that, oil prices fell more than 1 percent on Monday, falling for a third session, after official data showed a slowdown in refining productivity and economic activity in China, in an indication that the new outbreak of Covid-19 is affecting the second largest economy in the world. Brent crude fell 90 cents, or 1.3 percent, to $69.69 a barrel by 06:49 GMT. US crude fell 97 cents, or 1.4 percent, to $67.47 a barrel
The data showed growth in China’s factory production and retail sales slowed significantly in July, contrary to expectations as a new outbreak of Covid-19 and a wave of floods disrupted business activity. “Weaker oil futures is likely to be a result of weaker-than-expected growth data in China, a major oil consumer,” said Kelvin Wong, market analyst at CMC Markets in Singapore
Crude oil refining in China fell last month to the lowest level on a daily basis since May 2020, as independent refineries cut production amid cutting quotas, rising inventories and declining profits. China is the largest importer of oil in the world
In Japan, the fourth largest importer of crude oil in the world, many analysts expect modest economic growth in the current quarter, as household spending was affected by the renewal of work restrictions aimed at containing Corona injuries LINK
Will Central Bank Digital Currencies Be the End of Dollar Dominance?
15th August, 2021 by Barry Eichengreen
August 13-15 will mark the fiftieth anniversary of the “weekend that changed the world,” when US President Richard Nixon suspended the convertibility of the dollar into fixed-rate gold and brought down the Bretton Woods international monetary system.
The following half century brought many surprises. From a monetary perspective, one of the greatest surprises has been the continued dominance of the dollar as a tool for cross-border transactions.
Under the Bretton Woods system, the dollar’s supremacy was easily explainable. America’s financial position at the time of its exit from World War II was fortified. At that time, changes in the price at which the dollar could turn into gold were unimaginable, first because of this financial strength and then, with America’s weak monetary position, because of the possibility of a currency devaluation creating expectations of another devaluation.
Many thought that Nixon’s move would reduce the dollar’s international role. With a currency as fluctuating as any other currency, it would be very dangerous for banks, companies and governments to put all their eggs in the dollar basket. Thus, you will have to diversify by holding larger amounts of reserves and making more transactions in other currencies.
Now, it is clear why this did not happen. The dollar had the advantage of necessity: because customers and suppliers also used the dollar, it became impossible to switch to alternatives. Moreover, the alternatives were – and still are – unattractive.
As for the euro, there is a shortage of premium government bonds (AAA) denominated in euros that central banks can hold as reserves. Thus, these authorities are reluctant to allow those they regulate to do business in euros, because they cannot lend the currency to banks and companies that need loans. China’s capital controls are complicating the international use of the renminbi, as well as well-founded concerns that Chinese President Xi Jinping may suddenly change access rules. The currencies of smaller economies lack the scale to move huge amounts of transactions across borders.
Some observers say the issuance of digital currencies by central banks would change the status quo. In this brave new digital world, it will be as easy to use any national currency for cross-border payments as any other. This would not only erode the dollar’s hegemony, according to this argument, but also significantly reduce transaction costs.
In fact, this conclusion is not necessarily correct. Let’s imagine here that South Korea issues a centralized “retail” digital currency that individuals can hold in digital wallets and use for transactions. In this case, an exporter of coffee from Colombia to South Korea could get paid in Korean digital currency, assuming that non-residents are naturally allowed to download a Korean wallet. But the Colombian exporter will still need someone to convert the Korean won (won) into something more useful. And if that person is a correspondent bank with offices or accounts in New York, and if that thing is the most useful thing in dollars, then we’re back where we started.
Alternatively, the central banks of Colombia and Korea could issue a “wholesale” digital central currency. Each will transfer the digital currency to local commercial banks, which will in turn deposit it into customer accounts. Now, the Colombian exporter ends up having a credit balance in a South Korean bank rather than a South Korean wallet – assuming that this time non-residents are allowed to get a reporter to convert that digital balance into dollars and then into pesos in order to get something to use.
The rules of the game may change if the central digital currency is interoperable. At this point, the South Korean payee asks his bank for a balloon-denominated deposit receipt, thereby repaying an equivalent amount in the central digital currency into the payer’s account. The deposit receipt is then transferred to a dedicated international ‘corridor’, where it can be exchanged for a pesos deposit receipt at the best rate offered by the merchants authorized to operate there. Finally, the Colombian payee’s account is credited with a corresponding amount of digital pesos, and the deposit receipt is thus paid. The transaction is then completed in real time at a fraction of the current cost without involving the dollar or correspondent banks in the matter.
Unfortunately, the conditions for doing such work are enormous. The two central banks must agree on a unified architecture for their digital corridor and jointly manage their operations. The two banks will have to issue a license and regulate the work of traders who keep stocks of currency and deposit receipts to ensure that the exchange rate inside the corridor does not differ from the rate outside. They must also agree on who will provide emergency liquidity, and in return for any guarantees, in the event of a serious failure in the system.
In a world of 200 currencies, arrangements of this kind require the conclusion of 200 approved bilateral agreements, and this is clearly not feasible. The availability of corridors for a large number of countries, though sometimes conceivable, requires more detailed rules and governance arrangements than those of the World Trade Organization and the International Monetary Fund. It is clear that this will not happen.
The reality is that centralized cryptocurrencies are coming soon. But it will not change the face of international payments. It will not remove the dollar from its throne.
Barry Eichengreen is professor of economics at the University of California at Berkeley and a former chief policy advisor at the International Monetary Fund. LINK
Source: Dinar Recaps
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