Tishwash: Delete zeros and evaluate the dinar
Ali Daadoush
In a newspaper column a while ago, we explained the concept of deleting zeros, and today we are talking about the concept of currency revaluation, which means a calculated upward adjustment of a country’s official exchange rate relative to a chosen baseline, which can include (wage rates, the price of gold, or a specific foreign currency), and revaluation is the opposite of devaluation.
In a fixed exchange rate system (the system followed by Iraq), only a decision from the state (the central bank) can change the official value of the currency, and developing economies are likely to use a fixed exchange rate system in order to limit speculation and provide a stable monetary system in the country.
In a flexible exchange rate system, revaluation occurs on a regular basis, as evidenced by the noticeable fluctuations in the foreign exchange market and the associated exchange rates.
For example, the United States maintained a fixed exchange rate until 1973, when President Richard Nixon decided to abandon the gold standard and switch to a flexible exchange rate system.
As for China, despite having an advanced economy, its currency remained fixed until 1994, before the Chinese government revalued its currency in 2005, which was linked to the US dollar. After the revaluation, it was linked to a basket of global currencies.
The decision to revalue a domestic currency affects the economy as a whole, as it affects both the currency being examined and the valuation of assets held by foreign companies in that particular currency.
Since revaluation has the potential to change the exchange rate between two countries and their currencies, the book values of assets held abroad may have to be adjusted to reflect the effect of the change in the exchange rate.
For example, suppose a foreign government has set 10 units of its currency to equal one US dollar. To revalue its currency, the government might change the rate to 5 units per dollar, making its currency twice as expensive when valued in US dollars as it was before.
If the above-mentioned currency revaluation occurs, any assets held by a U.S. corporation in the foreign economy must be revalued. If the value of the asset held in a foreign currency was previously valued at $100,000 based on the old exchange rate, the revaluation requires a change of $200,000. This change reflects the new value of the foreign asset in the local currency by adjusting the revaluation of the relevant currency.
Another example is what the Iraqi government did in 2023 when it raised the value of the Iraqi dinar from 1450 dinars/dollar to 1300 dinars/dollar. link
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Tishwash: Al-Araji: Iraq stands on the cusp of a historic digital transformation
National Security Advisor, Qassim al-Araji, said on Monday that Iraq stands on the cusp of a historic digital transformation to promote sustainable infrastructure, pointing to Iraq’s commitment to developing a comprehensive digital national strategy.
Al-Araji said, in a speech during the Iraqi Digital Forum, which was attended by a reporter of the Iraqi News Agency (INA): “The Prime Minister sent his greetings and apologies for not attending due to an emergency circumstance.”
“The forum represents a platform that brings together a group of local and international experts and leaders in the fields of technology and strategies to discuss and achieve a promising Iraqi digital vision,” al-Araji said.
He added that “digital transformation is the basis of countries’ progress, and Iraq stands on the threshold of a historic opportunity to determine its digital readiness and keep pace with global development,” noting that “the forum reflects Iraq’s commitment to establishing a safe and sustainable digital infrastructure.”
He noted that “the forum aims to achieve a set of objectives, most notably:
Promote intersectoral cooperation by building effective partnerships between the public and private sectors, academic institutions and international bodies.
Addressing cybersecurity challenges as a key priority.
Support e-commerce and electronic payment to facilitate economic operations.
Enabling artificial intelligence in building an advanced digital economy.
“The National Security Adviser plays a pivotal role in formulating policies and legislation, co-ordinating between security and intelligence agencies, and preparing national strategies in various fields,” al-Araji said.
He stressed “the importance of laying the foundations of a digital national strategy in line with government directions,” pointing out that “the participation of prominent figures from the Parliament and advisors to the Prime Minister, along with representatives of international institutions and the director of the Arab Regional Center for Cybersecurity, reflects a serious commitment to promote integration between scientific research and innovation.”
He praised “the efforts of Iraqi universities and the role of the private sector in supporting digital transformation,” stressing that “the Supreme Committee for Digital Transformation, headed by the Prime Minister, is working to lay the right foundations to achieve a comprehensive digital transformation that contributes to eliminating financial and administrative corruption and reducing red tape, in a way that directly serves the citizen.” link
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Tishwash: Can the population census succeed in drawing a new economic policy in Iraq?
The Iraqi government is preparing to conduct a general population census on November 20, the first census to include all regions of Iraq in nearly 4 decades.
Iraq witnessed the last general population census that included all its governorates in 1987, and although the country conducted another population census in 1997, the latter did not include the governorates of the Kurdistan Region, because they were semi-independent from Iraq during the era of the former regime.
The population census represents a vital tool for formulating economic policies based on updated facts and data that enhance the government’s ability to achieve comprehensive and balanced economic growth, while addressing economic and social challenges.
On the subject, the financial and banking specialist, Mustafa Hantoush, said in an interview with / Al-Maalouma / Agency that the Iraqi state’s funds are scattered and it does not know where to direct them or where to start the development process, indicating that “The general population census is full of positives and has no negatives.”
He comes added, “There are no higher policies or clear lines to work on, and every country that puts forward its ideas far from the needs of society, and the population census will end this chaos by clarifying a number of important matters.”
He pointed out that “Iraq has clear economic problems in work, housing and diversifying the economy, and the state cannot solve them except by conducting a general population census.”
For his part, economic expert Dhurgham Muhammad confirmed that the results of the general population census will help the government reach a realistic formula and vision during the preparation and amendment of next year’s budget schedules, while he pointed out the necessity of having a real reading of the future of oil prices for next year in order to determine a reasonable price for a barrel of oil that will be adopted by the 2025 budget.
Mohamed Ali said in a statement to Al-Maalouma Agency, “The amendments to the 2025 budget schedules will depend scientifically and realistically on the results of the general population census that will be conducted at the end of this month,” indicating that “the census Results will give the government clarity when conducting transfers and drawing up realistic development plans.”
He added that “the authorities responsible for preparing the budget must re-read it for the future of oil prices and adopt an appropriate and realistic price that is consistent with the expectations of global oil market experts, when preparing the schedules for next year, as Most indicators confirm a decrease in oil prices for security and economic reasons.”
Recently, rumors have spread on social media that the general population census will lead to the cutting of welfare salaries or the imposition of new taxes on citizens.
In this context, MP Aref Al-Hamami said in an interview with Al-Maalouma, “What is being said is inaccurate and we deny it completely and in detail through our close knowledge of the census’s progress and its great benefits in preparing the country’s strategic Plans for decades in terms of economy and development.”
He pointed out that “effective participation with the provision of accurate information will ensure the existence of comprehensive data that gives the government a vision in drawing the foundations of its future plans directly.”
The general population census will be launched on the 20th and 21st of this month in all Iraqi governorates, which will include a curfew. About 120,000 enumerators will participate in the census, while the Ministry of Planning confirmed that this census will contribute to knowing the real numbers of the population and the living conditions that will be invested for development purposes. link
