Clare: Professor Frank Gunter launches a new white paper on de dollarisation of Iraqi economy.
29th May 2024
‘Two Cheers for Iraq: The Dinar – Dollar Exchange Rate Challenges’
Professor Frank Gunter publishes a new paper commissioned as part of a series by IBBC’s advisory council on the challenges of de-dollarisation for Iraq.
The Advisory Council members and IBBC members have actively contributed to the paper in the past 4 months. It will be presented online on the 18th June in a webinar and in person at the Spring Conference on 2nd July. The Arabic translation will be published soon.
Professor Gunter provides an analysis of the drivers of impact on the dinar exchange rate and examines how best to deal with the parallel market of dinars to dollars. He outlines the practical policy initiatives that should reduce the gap between the official and parallel exchange rates in the medium-term.
In particular he lauds the Government of Iraq on its commitment to tackle corruption and to modernise the banking system in one fell swoop but warns of the pressure on the dinar exchange rate as budgets are overstretched and the new banking recipients (state banks) receive the liquidity to enable the economy to perform.
He writes ‘All three of these forces – the anti-corruption effort, the banking liberalization, and the lavish 2023-2025 budget – will create challenges for the management of the dinar exchange rate. One could argue that over the last two decades the Government of Iraq (GoI) had little control over its exchange rate; that exchange rate policy was determined by other sectors of the political economy in Iraq. But even if this is true, the level of the exchange rate and changes in that level are believed by many Iraqis and foreigners as providing valuable insight into the quality of economic management in Iraq.
This importance is exemplified by the current efforts to de-dollarize the Iraqi economy while there is excess demand for dollars. This excess demand is shown by a parallel exchange rate of roughly 1500 dinars per dollar compared to the official exchange rate of 1310 dinars per dollar.
An important cause of this exchange rate gap is that the GoI, with the strong encouragement of the U.S. Federal Reserve, is attempting to reduce the use of the U.S. dollar in both Iraq’s internal economy and its external transactions.
Since 2003, the U.S. dollar has facilitated economic growth in Iraq by providing a widely accepted medium of exchange for purchases as well as a reliable store of value for savings. In the long run, whether de-dollarization will have a significant adverse impact on the Iraq economy will depend on how rapidly the GoI can increase both the efficiency of alternative mediums of exchange and the perceived security of alternative stores of value.’
The report is available here to download.
https://iraqbritainbusiness.or…..qi-economy
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Clare: Al-Sudani announces the opening of 48 electrical power transmission stations throughout Iraq
5/30/2024
Today, Thursday, Prime Minister Muhammad Shiaa Al-Sudani announced the opening and operation of 200 electrical stations throughout Iraq’s regions and cities.
Al-Sudani’s media office stated in a statement that the latter opened and operated “48 electrical power transmission stations for ultra-high and high pressure, and 152 electricity distribution stations throughout all governorates of Iraq, within the first phase of a package of projects to resolve bottlenecks in electricity transmission and distribution networks in Baghdad and a number of governorates.” LINK
Clare: Hisham Al-Rikabi confirms the government’s interest in restoring Iraq’s status on the Arab and international levels
5/30/2024
Member of the Board of Commissioners of the Media and Communications Commission, Hisham Al-Rikabi, confirmed today, Thursday, the government’s interest in restoring Iraq’s status on the Arab and international levels.
Al-Rikabi said in a blog post on the “X” platform: “The decision to choose Iraq to head the Council of Arab Information Ministers and to host Baghdad for its fifty-fifth session came as a result of the government’s interest in restoring Iraq’s position on the Arab and international levels and the keenness of the Media and Communications Commission to develop this sector and continue consolidating the foundations of freedom of opinion and expression.” In the country.” LINK
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Clare: Sudani: Receiving international events reflects the state of stability in Iraq
5/30/2024
Today, Thursday, Prime Minister Muhammad Shiaa Al-Sudani expressed his appreciation for the distinguished results of Iraq in the West Asian Athletics Championships held in Basra, stressing that the reception of international events reflects the state of stability in the country.
Al-Sudani said in a tweet on his website on the “X” platform: “Greetings to the athletics champions as they reap distinguished results in the West Asian Championship for women and men, which is hosted by Basra Governorate with the participation of several Arab and Asian countries.”
He added, “Hosting Arab and international sports events, in Baghdad, Basra, and our beloved governorates, reflects the state of stability that our country is witnessing in various fields, and enhances government support for the plans and programs that we have directed to advance the sports sector in general.” LINK
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Clare: Iraq executes 8 terrorists
5/30/2024
A security source led by the Dhi Qar Governorate Police said today, Thursday, that the Ministry of Justice carried out the death sentence against 8 terrorists in Nasiriyah Central Prison, known as “Al-Hout” Prison.
The source stated, “Today, a team from the Ministry of Justice supervised the execution of the death sentence against 8 ISIS terrorists in Nasiriyah Central Prison (Al-Hout),” pointing out that “among those carrying out the death sentence was a terrorist nicknamed (Al-Sumaidaie).”
The source stated, “The implementation of the death sentence against the terrorists came after their rulings became final and were approved by the President of the Republic.” LINK
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Clare: Customs explains the importance of implementing the single window system
5/30/2024 Baghdad – IA – Hassan Al-Fawaz
The General Authority of Customs confirmed today, Thursday, that work is underway to implement the single window system, while indicating that the system simplifies procedures for the importer and exporter, and contributes to facilitating the movement of legitimate trade.
The head of the authority, Hassan Al-Ugaili, told the Iraqi News Agency (INA): “The authority works with two systems, the developed electronic declaration system that is applied in 6 centers, and the Asycoda system, which will replace the electronic declaration system.”
Al-Ugaili explained, “The Authority has begun implementing the ASYCUDA system, which is an international system, more reliable and more robust, and therefore it will replace the electronic declarations system in all those centers, but it will be implemented successively.”
He added, “The authority is working on a single window system, which is linking all state institutions concerned with customs work in one window, so the work will be completed faster and more accurately.”
He stated that “the system will simplify procedures for the importer and exporter, and will contribute to facilitating the movement of legitimate trade,” adding, “This is one of the stages of the ASYCUDA system, which is access to the single window for trade.” LINK
