Wed. AM TNT News Articles/Thoughts 2-9-22

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TNT

Tishwash:
The first comment from Al-Sadr after the meeting with Ismail Qaani

The leader of the Sadrist movement, Muqtada al-Sadr, confirmed that the next government will be a “national majority government”, in his first opinion, following a meeting with the commander of the Quds Force in the Iranian Revolutionary Guard, Ismail Qaani.   

Al-Sadr wrote, in his own handwriting, the phrase: “In His Name, come, neither eastern nor western, a national majority government”, in red.  ink

EJ:
I wish I knew the truth about all this, it would be easier than what we all go through now. They are just feeding us with what we need to keep us going, we should never believe the articles out of Iraq, they are proven to have been wrong ever week. There is more going on than we know.

JCNoble:
Ej truth is a rare commodity

Chevy:
Take it all with a grain of salt and it won’t be painful…or a shot of bourbon…lol?

SMitty76:
Hopefully soon this will be in the rear view mirror, Let it be So

Tishwash:
Oil prices rise after the decline in US oil stocks

Oil prices jumped on Wednesday, after two sessions of losses as industry data showed an unexpected drop in US crude and fuel stocks, offsetting fears of a possible increase in supplies from Iran.

Brent crude futures rose 41 cents, or 0.5 percent, to $91.19 a barrel by 04:22 GMT, while US West Texas Intermediate crude recorded $89.74 a barrel, up 38 cents, or 0.4 percent.

US crude, gasoline and distillate stocks fell last week, according to market sources citing figures from the American Petroleum Institute on Tuesday. Crude oil stocks fell by 2 million barrels, according to the American Petroleum Institute.

However, concerns about a possible Iran nuclear deal that could unleash more oil in global markets weighed on prices.

Oil prices close to $100 a barrel could attract more production from the United States. The Energy Information Administration expects U.S. crude production to rise by 770,000 barrels per day to 11.97 million barrels per day in 2022.

Meanwhile, governments from the United States to Japan are looking for ways to tackle high oil prices with rising inflation  link

Harambe:
Iraq oil revenue set for record $9bn a month, but will people benefit? | TNN

(2/8/22)

Iraq’s oil revenue is approaching a historic high, hitting $8.27 billion in January — on track to beat the April 2012 all-time record for the country of $8.8bn if oil prices keep rising.

“Revenue could be more than $9 billion a month,” says Sajad Jiyad, an analyst at the Century Foundation think tank, citing a tight oil market and relatively stable Iraqi production.

That would give Iraq more money in a single month than Sudan’s entire 2022 proposed budget — a country with two million more people.

It is also nearly $4 billion more than Syria’s entire 2022 budget.

However, Ahmed Tabaqchali, a fellow at the Atlantic Council, is not optimistic that bumper revenue will be spent wisely.

“Previous governments have been using revenue on salaries and pensions. This is very difficult to cut back on,” he says.

Experts point out that a growing proportion of revenue is wasted by political parties who fill the payrolls of ministries with loyalists.

In 2018, Iraq spent almost five times as much money on salaries and pensions than on desperately needed water, electricity and healthcare facilities.

That year, a water crisis caused by dilapidated infrastructure in Basra poisoned around 100,000 people, causing a political storm in parliament.

But the crisis did not lead to more funds being set aside for public works.

A proposed 2018 hiring freeze that could have made room for new infrastructure spending was not implemented amid widespread protests calling for jobs.

Last year, the government salary outlay was still extremely high, at 77 per cent of the budget.

Meanwhile, one of Basra’s main water projects, Al Shuaiba, is currently funded by the UN — despite Iraq’s 2021 budget coming in at $89 billion. In comparison, Algeria, with a population of over 43 million, had a 2021 budget of $58 billion.

Parliament and the budget process

Despite this long-term trend, Iraqi MP Hussein Arab is optimistic that a new government could be different.

“We need to know first the new government vision in regard to the country’s needs and how it will manage the abundance of revenue we have now,” he says.

Iraq has a Ministry of Planning that is supposed to co-ordinate with the Ministry of Finance to assess spending needs for infrastructure. But pressure from parliament often derails the budget formulation effort, with some MPs saying salary cuts are a “red line.”

“The previous governments drastically failed at pouring money in agriculture, industry and public service and that’s what we are going to look at,” Mr Arab says.

Nearly a decade after Iraq’s 2012 oil revenue spike, the country needs as many as 15,000 new schools, according to the Ministry of Planning.

Mr Arab says parliament is planning to discuss the budget thoroughly this time, given the colossal challenges the country is facing.

“The problem is that after an election, winners will have supporters to reward and costs to recoup,” says Omar Al Nidawi, senior researcher at EPIC, an Iraq-focused NGO

“This means the winners will need to push for more questionable public sector jobs, more corrupt contracts, and more favourable conditions for allies to displace competition and corner the private sector,” he says, referring to political control of state-run firms.

“So long as there’s enough cash flowing in, few would feel pressure to make tough, unpopular decisions like cutting subsidies or a new hiring freeze,” he says.

Mr Nidawi’s reference to corruption is another notorious challenge — in 2012 for example, Iraq embarked on an ambitious plan to build 1,200 new schools.

The project ended amid a corruption probe, according to the Organised Crime and Corruption Reporting Project (OCCRP), an NGO. Only around 10 per cent were finished, OCCRP said.

“Going forwards, there’ll be lots of debate on whether we will have an inclusive government. We’ve had a low participation rate in the election, which puts the government under a lot of pressure to meet the public’s needs,” Mr Tabachali says.

Budget delay

Mr Jiyad notes another challenge for Iraq is the risk that political deadlock could delay the budget, hurting all sectors of the economy. In 2014 and 2020, political wrangling led to no budget being passed.

“There’s no budget for 2022 in Iraq at the moment, so we are now spending according to the 2021 budget, and only month to month spending,” he says, referring to a law that limits spending in the absence of a new budget.

“So the government is spending on operating costs, salaries and keeping ministries functioning. They will take the 2021 budget, divide it by 12 and apply it every month,” he says.

Mr Jiyad says if there’s any room for optimism, Iraq’s currency reserves could remain stable in a high oil price environment.

“Even though we have high revenue at the moment, part of it will go towards increasing foreign reserves which helps keep the dinar stable and for us to have dollar cash in hand,” he says, noting that Iraq is often unable to spend surging revenue during price booms.

Mr Tabaqchali believes that whatever the outcome of political negotiations with regard to oil revenue, the fundamental question is whether the public can regain faith in politics.

“I think it doesn’t really make a difference who comes in. The one thing that will be a constant whatever new government comes in, is legitimacy,” he says, referring to the idea that a legitimate government is one that is seen as delivering services and opportunities for the public.

Mr Tabaqchali recently warned that Iraq’s “powerful demographic pressures will, over time, erode the buying power of increasing oil revenue.”

Iraq’s population is projected to reach 50 million by 2030, placing even more pressure on the government to provide jobs and services.

https://www.thenationalnews.com/mena/2022/02/08/iraqs-oil-revenue-could-break-records-but-will-it-help-ordinary-people/

Source: Dinar Recaps

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