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Iraq news now A deputy in the regional parliament denies the lack of agreement with Baghdad and confirms that Erbil will deliver to Baghdad the oil and revenues from the ports and is waiting for the salaries to be sent. https://iraqakhbar.com/2825184 News source / Iraq Today Agency News source / Iraq News Agency today Baghdad - Iraq today: Bahjat Ali, a member of the Finance Committee in the Kurdistan Regional Parliament, denied today, Saturday, that there is no agreement between Baghdad and Erbil regarding the region's share of the 2021 budget. Ali said, "The region has reached many agreements and committed itself to all the conditions of the federal government and expressed readiness to begin handing over the oil and revenues from the outlets, and there are parties and representatives who want to challenge the regional government and move the street against it." He added that "the region's share of the 2021 budget has been agreed upon, and we are waiting to send the salaries of employees in the coming days after the region's commitment to all the conditions." He pointed out that "whoever raises the disagreement of the region is his political goal, because the presence of the Kurdish delegation in Baghdad for more than two weeks was for a radical solution to the outstanding problems."

Anticipation and fears of a massive revolution after the dollar's shock https://shafaq.com/en/Report/Anticipation-and-fears-of-a-massive-revolution-after-the-dollar-s-shock 2020-12-24 12:26 Shafaq News/ Depressed markets, a confused economic situation, and worried people are some of the dollar's shock's effects that hit Iraq and resulted in the collapse of confidence and prices. The dinar's devaluation at a significant rate - the highest since 2003 - immediately led to a rise in commodity prices and negatively affected the living standards. Economists: Shock style fails "The appreciation of the exchange rate in this way was a surprise to all observers following the Iraqi economy; even to those working in the Iraqi banking. The shock method is a failed method of managing monetary policy in any country in the world. The rise was supposed to be gradual to avoid problems between the seller, the buyer, and the markets", economist Hilal Al-Tahhan told Shafaq News agency. "This rise has been reflected very negatively on the prices; in addition to some traders' greed and their monopoly on materials. This sudden rise has affected the economic activity's movement, the market's movement, led to a recession, and leads to the termination of the middle class and employees.. while the poor class may naturally increase with the rise of food, goods, and services' prices", Al-Tahhan added. "The country's poor economic situation will lead to a massive popular revolution across the country and have unwelcome consequences.. So how were such decisions taken?", Al-Tahhan wondered. "The shock was great in the local market - and on individuals and traders as well - because it raised the prices of materials significantly. It will lead to a rise in the inflation index, and the government will not be able to control it", said Abdul Rahman Al-Mashhadani, a professor of political economics at The Iraqi University. "The market's price rate has risen by about 24%, and these prices will remain confused for a while.. The dollar will need a long time to stabilize at a certain price; maybe after the 2021 budget is approved", Al-Mashhadani told Shafaq News agency. Deputy: The government floated the currency MP Nada Shaker Jawdat said that the government had raised the dollar's exchange rate, resulting in waisting the local currency's prestige, "Baghdad's wholesale markets have increased prices by one quarter to a third.. so The Iraqi citizen has been sacrificed by reducing his allowances and taxing his salaries, in addition to raising the dollar's price". "The government used floating the currency's method after it devalued the Iraqi currency. No country with these oil resources and bounties is depreciating the dinar in this way - especially if we know that all goods are imported from abroad. The government has turned to the weakest link in society because it cannot eliminate the corrupt, manage its affairs, and follow its policies in the right way", Jawdat added. Traders: Markets are depressed "All the goods we deal with are imported, in the dollar, from Turkey and Iran", Mohammed Al-Hassani, a trader who sells single-use dishes in the Jamila Market, told Shafaq News agency. "The appreciation of the dollar in this way has pushed the prices of commodities to increase by nearly 20%. This price difference will be paid by the citizen, not the trader. Since the Central Bank's announcement to increase the dollar's exchange rate, and the Jamila Market is experiencing a near-total recession..The sale is limited to only asking about the prices – mostly by mobile phone", Al-Hassani added. For his part, Abu Sajjad, owner of the Al-Jayyashi food store, confirmed, "The Jamila Market was almost empty of customers today. The prices are very high than they were a week ago. Most of the food is imported and therefore has been affected by the dollar's rise". "The rise included not only the imported food but also the local one.. local eggs have risen by more than 10,000 dinars, to reach 70,000 dinars for the parcel", Abu Sajjad added. Citizens worried about the future Many citizens expressed their fear for the future; especially as the worsening living situation portends an increase in unemployment and poverty in the country. "The state has tended to punish the financially exhausted citizen instead of raising his living standard.. This rise in the exchange rate will increase unemployment and poverty rates in Iraq", Mohammed Ali Amin, told Shafaq News agency. "All the decisions made by the government - the latest of which is raising the dollar's exchange rate – affected the citizen negatively and increased his suffering even further", Amin added. For his part, Mohammed Hamza, told Shafaq News agency, "Citizens are losing faith in the Iraqi dinar as a result of this sudden and ill-considered rise in the dollar". "The citizen will give up many of the goods and services he used to receive, as his income will be limited to basic needs. A popular movement may break out against the government due to the deteriorating living conditions", Mohammed Hamza added. The Iraqi Central Bank has decided to raise the dollar's selling price to banks and exchange companies from 1,182 to 1,460 dinars per dollar; to offset the decline in oil revenues after the slump in oil prices. 90% of the Iraqi income relies on oil revenues.. the last time the state devalued the dinar was in December 2015, when it raised the dollar's selling price to 1,182 dinars from 1,166 dinars.

Traders are heading to sue the fiscal and central currency over devaluation https://iraqakhbar.com/2822970 News source / Independent Press Agency News source / Independent Press Agency The independent .. Commercial circles across Iraq are heading towards registering a lawsuit against the Minister of Finance and the Governor of the Central Bank of Iraq for approving the law of devaluation of the Iraqi currency. The trade expert and a consultant to the Baghdad Chamber of Commerce, Salah Al-Shami, said that the decision to devalue the currency does not carry any positive trends, but rather harms the national economy and the commercial sector in particular. He pointed out that all the measures adopted by the affected business family are in accordance with the law in force in order to reverse this decision, which paralyzed the commercial movement and inflicted great losses on the Iraqi merchant. He indicated that the type of damage that the national economy was subjected to will be determined in detail, so that everyone can be informed of the great imbalance that the economy was exposed to as a result of devaluation. The post Traders head to sue the Finance and Central Bank over currency devaluation appeared first on the independent press agency

Why has the price of the dollar increased in Iraq? It is well known that the Iraqi economy is an oil-based economy by virtue of its possession of large quantities of it and the occupation of oil of great global importance. As Iraq produces oil and sells it to the outside world in exchange for obtaining the US dollar, and given that oil is considered a public wealth, all its imports belong to the Ministry of Finance and the latter sells the dollar to the Central Bank in exchange for the Iraqi dinar in order to inject it into the economy through the public spending channel. The link of public finances to the oil dollar has made it in unenviable positions, by virtue of the failure of the oil dollar to flow steadily due to the fluctuation of oil prices for many reasons that may be political, or may be climatic, or may be healthy, as in light of the spread of the Corona pandemic. The state's hegemony over oil and linking public finances to the latter has pushed the Iraqi economy as a whole to be overly dependent on oil, which led to the liquidation of other economic sectors by two points: - The high prices of national products in front of the foreign importer due to the increase in the value of the Iraqi dinar. - Workers left their jobs in other sectors to work in the oil sector in the desire for high wages, and this caused the increase in the production costs of other sectors, then their prices, and the loss of their competitive advantage. The liquidation of other economic sectors led to a decrease in the flow of foreign currencies, especially the US dollar. Corruption also contributed to the decline of the business environment, making it a repellent and not an attractive environment, so it had a major role in the decline in the flow of the US dollar, while if the business environment was attractive to business, this would lead to an increase in domestic and foreign investments and this will lead to an increase in the flow of dollars, which will contribute to supporting the Iraqi dinar. And due to the weakness of the Iraqi economy due to its excessive dependence on oil, its currency has become weak and quickly responds to any event that happens even in the media, and this is exactly what happened during the current period when the draft general budget law for 2021 was leaked and it was found that the Ministry of Finance would sell the dollar to the Central Bank at a high price, which is 1450 each Dollars. This means the decline of the oil dollar at the Ministry of Finance at a time when it is in dire need of the oil dollar in order to sell it to the Central Bank and obtain the Iraqi dinar to cover public spending, especially the inflated current spending. The decline of the dollar while not reducing the inflated public spending means that the general budget will suffer a flagrant deficit, and in order to address this matter, the Ministry of Finance will resort to the option of selling a dollar at a high price at the aforementioned price, as was evident from the solution of the leaked draft, so that the bank would sell it to banks for 1460 and the latter would sell it to the public for 1470, and because of fear, the dollar will rise to more in the parallel market. After the draft budget was leaked to the media and informing the public about it, there was an expectation that the price of the dollar would rise significantly, so speculators rushed to buy the dollar in the hope of benefiting from the rise in its price in the future. This prompted an increase in demand for the dollar and a rise in its price. The prevalence of corruption and the absence of citizens' confidence in the government prompted many of them to explain the high price of the dollar for political motives, given that many banks belong to the political parties in power, so the latter worked through the Central Bank to raise the price of the dollar to gain more money at the expense of the Iraqi people. Perhaps this explanation was not acceptable to workers in the Central Bank and that the issue of expectations and speculation that came against the background of the leakage of the draft budget is the most acceptable explanation for them and they have lost their minds that the leakage of the draft budget is a political leak with an economic motive to ignite the price of the dollar and reap more money. It must be noted that the value of the Iraqi dinar would not have expressed its true value had it not been for the intervention of the Central Bank through what is known as the "currency sale window", where the central bank enters as a seller of dollars and a buyer of the dinar in order to preserve the value of the Iraqi dinar. Because if the central bank did not enter the currency window to sell the dollar in exchange for the continued demand for the dollar, this would have led to the rise in the price of the dollar and to the devaluation of the Iraqi dinar significantly. The demand for the dollar results from the weakness of the productive apparatus in generating dollars by exporting surplus production after meeting domestic demand, and increasing imports to meet the local demand for goods and services that are high and diversified. Therefore, working to reduce the price of the dollar requires working to increase the sale of the dollar in order to absorb the increase in demand for it, so the price of the dollar will decrease and bring it to the desired level, and this is what the central bank will work on by allocating three trillions to sell it through the currency window. It should be said that the continued support of the Iraqi dinar by the central bank is not consistent with the direction of the Iraqi economy towards a market economy, and support for the Iraqi dinar must be gradually abandoned, not all at once, but after achieving political stability. In sum, the rise in the price of the dollar is a result of Iraq's dependence on oil, its low prices, and expectations of a rise in the price of the dollar for a certain event at another time. * Researcher at the Al Furat Center for Development and Strategic Studies / 2004-2020 www.fcdrs.com

12/24/2020 20:21 https://almasalah.com/ar/news/202928/الكاظمي-يجتمع-برؤساء-اللجان-النيابية-للتأكيد-على-ضرورة-الإصلاحات-الحكومية-لوضع-البلد-في-الطريق-الصحيح Al-Kazemi meets with the heads of parliamentary committees to emphasize the need for government reforms to put the country on the right path Baghdad / Al-Masalla: The Prime Minister, Mustafa Al-Kazemi, held a meeting, on Thursday, December 24, 2020, with a Prime Minister Mustafa Al-Kazemi held a meeting with a number of heads of parliamentary committees --------------- The Prime Minister, Mr. Mustafa Al-Kazemi, held a meeting today, Thursday, with a number of heads of parliamentary committees. During the meeting, they discussed the federal general budget for the fiscal year 2021, which was approved by the Council of Ministers, and reviewed the economic and security conditions that are going through Iraq in light of the current challenges, represented by the Corona pandemic and the financial crisis that accompanied it, and the need for government reforms was emphasized, to put the country on the right path. . The Prime Minister reviewed the procedures of government agencies and the directives of his sovereignty on the path of reform and ways to overcome these crises. The meeting was attended by a number of ministers and advisors. Media Office of the Prime Minister 24-Dec-2020 Follow the obelisk

Will reducing the "dinar" save the Iraqi economy from sinking? Posted 4 hours ago https://iraqakhbar.com/2822509 News source / Independent Press Agency News source / Independent Press Agency The Independent / Amal Nabil / The devaluation of the Iraqi currency will add inflation to the list of difficulties faced by the population recovering from a devastating war with ISIS. Without major spending cuts, this will not be sufficient to prevent further economic pain, according to a Bloomberg report. On Saturday, the government announced that it would devalue the currency for the first time since the US-led invasion in 2003, and devalued 23% of the dinar's value to reduce pressure on public finances as it tries to secure billions of dollars in foreign aid. But the move, part of a broader plan to overhaul Iraq's oil-dependent economy and cut bloated public salaries, has already met opposition among parliamentarians who fear angering voters after mass protests that rocked the country last year. It wouldn't be the last cut So far, the devaluation has not caused a repeat of those deadly unrest in the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), and the government said the devaluation would be a one-off. Ziad Daoud, an emerging market economist, said devaluation is painful for ordinary citizens , But it is unlikely to be a one-off. The decrease in foreign exchange reserves envisaged by the budget is likely to lead to further adjustment in the currency - either formally or, more likely, on the black market. 11% contraction in the Iraqi economy Although Iraq is the world's third largest oil exporter, its economy has suffered as the coronavirus pandemic depletes global demand for energy supplies. The quotas agreed with other oil exporters to stabilize the market also mean that the number of barrels that Iraq can pump is restricted, which narrows its options for increasing revenues. According to the latest estimates of the International Monetary Fund, the Iraqi economy has shrunk by 11% this year. This is better than the Fund's initial forecast of a 12.1% drop, but still leaves Iraq with the largest contraction among OPEC members subject to production caps, highlighting its over-reliance on hydrocarbons. The International Monetary Fund expects that the net foreign assets of Iraq will continue to decline sharply until 2024. The debt-to-GDP ratio is among the highest in OPEC +, a group that includes non-OPEC oil exporters such as Russia. $ 45 billion expected budget deficit Oil exports in the 2021 budget are estimated at an average of 3.25 million barrels per day, with an assumed average price of $ 42. That would leave a budget deficit of about 58 trillion dinars ($ 45 billion). According to the budget plan, which was approved by the cabinet on Sunday but not yet approved by Parliament, the amount of support from the International Monetary Fund is about six trillion dinars, which is a fraction of the gap. Several analysts said the devaluation was necessary to show international lenders that Iraq is serious about reform, but not sufficient to trigger the aid the government wants. More budget cuts "Budget cuts will be needed to get substantial financial support," said Mark Bullund, senior credit research analyst at Red Intelligence. Since the announcement of the devaluation, the gap between the official exchange rate and the currency rate on the black market has narrowed, indicating that the adjustment helped relieve pressure for now. But the government formed after protests last year that toppled former Prime Minister Adel Abdul Mahdi remains fragile. Now it is battling opposition to plans to roll back the public sector in a country where politicians have bought their loyalty for decades by creating government jobs. "They will have some problems with passing budget reforms through parliament," said Ahmed Al-Tabakshli, chief investment officer for Iraq at Asia Frontier Capital and assistant professor at the American University in Iraq - Sulaymaniyah. “But they will have to deal with it. The post Will reducing the "dinar" save the Iraqi economy from sinking? appeared first on Independent Press Agency

Iraq's markets are devoid of shoppers after the price drop Posted 39 seconds ago https://iraqakhbar.com/2822890 News source / Noon Agency For the first time in years, the Shorja market, one of the largest commercial markets in the center of the Iraqi capital, Baghdad, is witnessing reluctance by those who are shoppers due to the great rise in prices after the exchange rate of the dinar was sharply reduced against the US dollar. Since last Sunday, the Iraqi government has implemented the decision to reduce the national currency to 1450 dinars per dollar, from 1184 dinars previously, with a decline of 23%, which caused great confusion to the markets with the sudden rise in prices. On Thursday, the commercial centers (the Shorja commercial market and other markets) were empty of shoppers, while they were crowded with people on such days every year. Aziz Al-Kinani, owner of a major food store, said: “For the third day in a row, the Shorja Market is empty of shoppers who previously flocked to buy all their needs. The market is in a state of fear that their living conditions will deteriorate more than they are now. Al-Kinani considered that "the huge rise in prices is beyond the will of traders because of the great losses they suffered after the national currency was reduced against the dollar." In turn, Ali Al-Basri, director of a center for selling electrical appliances, said that "store owners may suffer great losses after the accumulation of goods as a result of citizens' reluctance to buy, as well as the instability of the dollar exchange rate." Al-Basri explained that "the rise in prices is very large in some materials, especially electrical appliances, mobile phones and home furniture, as prices rose from 30% to 40% of the original purchase value before the rise in the dollar price," expecting that the current situation will continue for months in light of the deteriorating economic situation. For most Iraqis, especially those with limited incomes. But the professor of international economic studies at the Iraqi University, Abdul-Rahman Al-Mashhadani, said that the great rise in prices does not match the rise that the dollar exchange rate recorded, as it exceeded it by far. Al-Mashhadani added, that the stagnation of the Iraqi market and its emptiness of those who are not shy are an actual result of the total decisions taken by the Ministry of Finance represented in reducing the price of the dinar and deducting a percentage from the salaries of employees and increasing taxes, noting that these decisions reflected negatively on people, due to the adoption of the Iraqi market by up to 90% on Imported goods sold in dollars, not dinars. The Ministry of Finance justified the decision to reduce the value of the dinar in the face of the financial crisis facing the country, following the decline in oil selling prices in global markets, due to the repercussions of the new Corona virus. And Iraq, one of the countries with a rentier economy, relies on revenues from selling oil to finance up to 95% of state expenditures. But MP Hamid Al-Mutlaq said that “all the measures and decisions taken by the government are wrong and illogical, and the citizens who are most affected are the citizens. The country is going through economic, security and political conditions. He added that "the government's continued work with its wrong financial policy that has exhausted the citizens and tied them up with debts may lead to a popular explosion and the situation out of control." Yesterday, Wednesday, the Supreme Judicial Council directed, in a statement, to “take all legal measures against everyone who causes harm to the national economy, whether from foreign currency dealers or monopolistic traders of goods, food commodities and the necessary commodities that people need daily. The Council called on the Ministry of Interior to conduct inspection tours to wholesale stores and places that sell foreign currency to arrest those who violate the law

Al-Kazemi reviews his government's plan to overcome the country's crises https://shafaq.com/ar/سیاسة/الكاظمي-يستعرض-خطة-حكومته-لتجاوز-زمات-البلد 2020-12-24 13:34 Shafaq News / On Thursday, Prime Minister Mustafa Al-Kazemi reviewed his government's plan to a number of heads of Iraqi parliament committees to overcome the crises afflicting the country. Al-Kazemi's office said in a statement received by Shafaq News that it held a meeting with a number of heads of parliamentary committees, in the presence of ministers and advisors. During the meeting, they discussed the federal general budget for the fiscal year 2021, which was approved by the Council of Ministers, and reviewed the economic and security conditions that are going through Iraq in light of the current challenges, represented by the Corona pandemic and the financial crisis that accompanied it. The statement stated that "the necessity of government reforms was emphasized, to put the country on the right path." The statement added that Al-Kazemi "reviewed the procedures of government agencies and the directives of his sovereignty on the path of reform and ways to overcome these crises.

Parliamentary Finance issues an explanation regarding the dollar exchange rate Time: 12/24/2020 18:58:12 https://alforatnews.com/news/المالية-النيابية-تصدر-توضيحاً-بشأن-سعر-صرف-الدولار {Baghdad: Al Furat News} On Thursday, the Parliamentary Finance Committee issued a clarification on the exchange rate of the dollar. The committee stated in a statement that the Euphrates News received a copy of it, that "determining the exchange rate of the dollar is a governmental matter and its exclusive authority is that it is the one who draws and implements the fiscal and monetary policy." She pointed out that "the arrival of that price in the draft federal budget law for 2021, is to calculate the value of oil revenues and international loans, which are calculated on a dollar basis." The committee explained, "As it is converted into the Iraqi dinar depending on the exchange rate, and that the price is mentioned in the budget, it is not intended to acknowledge or not, but to be approved in the calculation of revenues and expenditures only, as mentioned above." Wafa Al-Fatlawi

Iraq ... A request to raise the exchange rate of 1600 dinars against the dollar ... and two alternative official proposals - urgent https://iraqakhbar.com/2822413 News source / Baghdad today News source / Baghdad today Baghdad Today - Follow-up Two measures that could have saved more money than the difference in the exchange rate of the dinar against the dinar were revealed by an economist, who pointed out that the Ministry of Finance requested that it be set at 1600 dinars to the dollar. Economic expert Nabil Al-Marsoumi said - a televised statement that “the difference currently evident between the central bank’s rate and the market will continue until the budget is passed due to the state of uncertainty and uncertainty because everyone is waiting for the Iraqi parliament’s position on the 2021 budget, and what happens from the difference between the official exchange rate and the exchange rate is caused by speculation and reaping. Through the exchange offices, huge sums of money may be eased soon. He added that "some believe that the decision to raise the exchange rate of the dollar is technical and was done through the central bank, although it is political and was made by a government decision from the Ministry of Finance." Parliamentary statements throw more uncertainty and lead to repercussions in the market. He talked about government financial decisions in a deeper way, saying that “the timing of the recent government measures is very wrong. There is no country in light of the Corona crisis and the global recession that has devalued its currency and deducted from the salaries of its employees. All countries have a layer of quantitative management packages and injected money and aid to the public and private sectors.” He believed that "raising the exchange rate to reduce the budget deficit, according to what the government deems, is unsuccessful because it will not provide more than 4 billion dollars to the budget, and this could have been covered through two measures presented by the Ports Authority and rejected by the Ministry of Finance." He explained that "the two procedures require that customs duties be collected from imported goods upon opening documentary credits and that fees are collected when granting import licenses, even according to the financial obtained the same value of the money it wanted by reducing the value of the dinar and ending the problem of money laundering." He pointed out that "raising the dollar exchange rate will not support the local product for three reasons, the first of which is that most of its requirements and raw materials are imported from abroad and because there is dumping of goods from neighboring countries in Iraq, and thirdly, the cost of production in our country is double the cost in those countries." He pointed out that "reducing the exchange rate of the dinar and imposing taxes on salaries reduced its value in some segments by 50%, because the reduction included 25% of the salary and the exchange rate difference, which reduced its value by 25% as well." Earlier, a member of the Parliamentary Finance Committee, Jamal Cougar, confirmed today, Wednesday, that the House of Representatives has the authority to cancel or amend the article on tax deduction, as well as with regard to deducting employee salaries allocations. Cougar said in an interview singled out (Baghdad Today), "Parliamentary Finance will study the draft federal budget law for the country for the year 2021 accurately and amend the loopholes if they are contained in the draft law." He added that "Parliament has the power to cancel or amend the article on the deduction of part of the employee allocations or with regard to tax deductions." And that "the high rates of deductions, we will work to reduce them, provided they do not affect the employee significantly." Last Tuesday, the reporter of the Parliamentary Finance Committee, Ahmed Al-Saffar, spoke about the most prominent remarks on the 2021 budget bill, and while noting that the budget is inconsistent with the country's economic reality, he suggested returning the bill to the government. Al-Saffar said, in a televised interview, followed by (Baghdad Today): “Until now, the 2021 draft budget has not been sent to Parliament, which will take 4-5 days to study the project legally, after which the project will be transferred to the Finance Committee and we may use our powers to reduce spending.” Al-Saffar added, "This budget is inconsistent with the financial and economic situation in which the country is running, because it has high spending of 150 trillion dinars, according to the leaked version, which is very exaggerated," noting that "most of the paragraphs of the leaked draft are confirmed today that they are the same final draft." And he continued, "The price of a barrel of oil on which the budget was built is illogical because it was $ 42 while the current price of a barrel was $ 52." Covering the entire market. ” The reporter of the Finance Committee in Parliament stressed that “the 2021 draft budget, and in case it does not comply with the government program and economic reality, will be returned to the government,” indicating that “we need 30-45 days to study and approve the project if there are no internal and external political interference, and it may disrupt it. More". He suggested that "Parliament will not accept the passage of more loans in the 2021 budget," again calling for the need to "reduce public spending and raise the price of a barrel of oil in the budget, because every dollar can add one trillion dinars annually." You can read the news also from the source

2020/12/24 16:20 Parliamentary Finance: The raising of the dollar’s price was directed by the International Monetary Fund and the World Bank and with the knowledge of political blocs, not the government https://almasalah.com/ar/Archive/48/العراق/1 Baghdad / Obelisk: Member of the Parliamentary Finance Committee, Majida Al-Tamimi, revealed, Thursday, December 24, 2020, that the IMF and the World Bank faced Iraq by increasing the price of the dollar and reducing the currency, and it was not a special decision by the government, noting that this matter is with the knowledge of political blocs. Al-Tamimi said in a statement followed by the obelisk, that a previous meeting was held between her and the Chairman of the Committee Haitham al-Jubouri and the Vice-Chairman of the Committee Muthanna al-Samarrai on the one hand and the World Bank on the other hand, and they indicated that the process of reducing the dinar against the dollar is the last financial reform solution that Iraq will take, and that it must proceed with financial reforms according to periods They reach long-term solutions and not temporary solutions within an annual budget. Tamimi said that their opinion changed and it was agreed with Iraq to reduce the dinar against the dollar, and this matter was reported to the political blocs by the Finance Committee. Follow the obelisk

Deputy: Parliament will refuse to impose a tax or raise the price of the dollar 15:08 - 12/24/2020https://www.almaalomah.com/2020/12/24/511906/ The information / private ... The representative of the Saeroun coalition, Badr Al-Ziyadi, confirmed, Thursday, that it is not possible to impose a tax on the total salary of employees and raise the exchange rate of the dollar together through the budget law, while the parliament will reject one of the paragraphs. Al-Ziyadi said in a statement to / the information /, that "the House of Representatives will have a position on raising the price of the dollar and imposing a tax on the salaries of employees and may resort to canceling one of the paragraphs." He added that "passing the tax on the total salary of employees and raising the exchange rate of the dollar together during the budget law for the next year is something that will not be achieved," indicating that "the budget will need 30 days to complete it within the House of Representatives." The deputy for the Al-Fateh Alliance, Mukhtar Al-Mousawi, confirmed, last Monday, that the House of Representatives will refuse to accept the draft federal budget bill for 2021. Last Monday, Al-Fateh coalition deputy, Abdel-Amir Al-Taiban, called for the dismissal of Prime Minister Mustafa Al-Kazemi's government as soon as possible. 25 T

The price of the new dollar may push Kurds to quit smoking .. Pictures https://shafaq.com/ar/كوردســتانيات/سعر-الدولار-الجديد-قد-يدفع-كوردستانيين-لترك-التدخين-صور 2020-12-24 08:11 Shafaq News / It seems that the decision to increase the price of the US dollar has been reflected in the overall life in Iraq and the Kurdistan Region, including the owners of cigarettes in the city of Sulaymaniyah, between welcoming the decision and resenting the material losses, there is light at the end of the dark tunnel. One of the cigarette dealers in the suffocating market in Sulaymaniyah, Ibrahim Mustafa, told Shafaq News that the decision to raise the price of the foreign currency, the dollar through the Central Bank of Iraq, was correct to solve the economic crisis and provide salaries for employees despite the losses that caused us as cigarette dealers, indicating that the prices increased by 25 % For goods, since most of them are imported from international origin. " Mustafa believes that "the fluctuation of the price of the dollar will not last for long," explaining that "the Iraqi government is waiting for the results of this decision and its repercussions, and the results of solutions will appear soon after the stability of the dollar and the launch of salaries that stimulate the movement of the market." Citizen Aziz Amin, while buying a pack of cigarettes, notes that "the prices have risen, as I used to buy one pack for 1,000 dinars, and now I buy it 1250 dinars and this is a lot," adding sarcastically that "the government is trying to quit smoking." Some believe that the high exchange rate of the dollar was a correct decision, especially in the field of selling cigarettes, which is a step to quit smoking and preserve human health. On Monday, January 21, the Iraqi Council of Ministers approved the country's financial budget for the next year 2021 in preparation for sending it to Parliament for a vote on it, after an emergency session of the Council that lasted for three consecutive days. The budget was estimated, the exchange rate of the Iraqi dinar at 1450 per dollar, according to what was announced by the Central Bank, while the region’s share of it was determined at about 12 percent.

Iraq judicial council calls for prosecuting those who harm the economy December 24, 2020 at 11:31 am | Published in: Iraq, Middle East, News An Iraqi counts his dinar banknotes on 22 June 2017 [Ali Choukeir/AFP/Getty Images] December 24, 2020 at 11:31 am https://www.middleeastmonitor.com/20201224-iraq-judicial-council-calls-for-prosecuting-those-who-harm-the-economy/ The President of the Supreme Judicial Council of Iraq, judge Faiq Zaidan, yesterday issued a directive to all investigative courts in the country to take legal measures against anyone who causes harm to the economy. Zaidan called on the courts to take legal measures against anyone who harms the national economy, including foreign currency dealers, traders who monopolise food commodities and/ or essential goods. He also called on the Ministry of Interior to instruct the competent police directorates to conduct inspection visits to wholesale stores and places that sell foreign currency and arrest anyone who violates the law. Iraqi courts concerned with combating money laundering have recently started an investigation into the possible auctioning of foreign currency in the Central Bank of Iraq and other violations by some banks. Authorities recently devalued the country's currency. In a statement, the Central Bank set the new rate for the dinar, which is pegged to the US dollar, at 1,450 IQD causing an unprecedented rise in the price of basic commodities.

Iraq’s Economic Woes Hit Harder Than U.S. Injustice Bobby Ghosh, Bloomberg News https://www.bnnbloomberg.ca/iraq-s-economic-woes-hit-harder-than-u-s-injustice-1.1540836 (Bloomberg Opinion) -- Outrage over President Trump’s decision to pardon four American mercenaries for the murder of 17 people in Baghdad may bring a perverse form of respite for Prime Minister Mustafa al-Kadhimi and Iraq’s political elite: For this news cycle, at least, people will be madder at Trump than at them. But the insult and injustice of the pardon for the Blackwater guards will not long distract Iraqis from the injuries and indignities that their own leaders have inflicted on them. Minds dwelling on the gruesome Nisour Square massacre in the fall of 2007 will soon revert to today’s grim realities, and the coming year’s glum prospects. An intimation of the ill winds heading their way came last weekend, when the government devalued the Iraqi dinar by about 20% against the dollar. The government can thereby eke out more dinars from its dollar-denominated oil exports, which pay for 90% of state expenditures. Kadhimi defended the devaluation — the first since the U.S.-led invasion in 2003 — by arguing that it was “a preemptive step” to control inflation. But most Iraqis now face a spike in the cost of living, because so much of what they consume, including essential food items, is imported in dollar-denominated purchases. There were grimmer tidings still in the draft budget for 2021 approved this week by Kadhimi’s cabinet and pending parliamentary approval. The proposal bound to get the most attention was a new tax on the incomes of mid-level and senior public-sector employees. The prime minister sought to soften the blow by cutting his own salary by 40%, and those of ministers and members of parliament by 30%. But a population that regards the entire political class as irredeemably corrupt is unlikely to be mollified. Public-sector employees face a triple-whammy: The government that struggles to pay their salaries has reduced the value of their income and, for mid-level and senior staff, is proposing to keep 15% in taxes. Remember that the state is the country’s biggest employer, with around 4 million people on government rolls and 3 million pensioners. Another million people are on welfare. The anger swelling in the public sector has already spilled over into the public square, which has been crowded with anti-government protesters for more than a year. Earlier this month, security forces opened fire on government workers demanding their salaries in the Kurdish north, killing at least seven people. The protesters had set fire to government offices and the headquarters of political parties. The leadership in Baghdad is now bracing for more such conflagrations across the country. Much of the anger will be directed at the prime minister, just when he needs support from the street to push through plans for vital economic reforms. A caretaker with no significant political base of his own, he can expect little solidarity from Iraq’s political parties, which rely on control of government ministries and agencies to maintain patronage networks. Worse may be yet to come for Kadhimi if oil prices continue to soften amid fears that new strains of the coronavirus will prolong the pandemic’s economic pain. Iraq’s 2021 budget assumes oil at $42 a barrel. Even leaving aside the effects of the pandemic, that price may be hard to sustain if U.S. President-elect Joe Biden eases sanctions on Iran, allowing it to ramp up oil exports next year. Heavily reliant on oil exports for revenues, and constrained by OPEC production cuts from exporting more, Iraq is already feeling the strain of lower prices. In desperation, the government is seeking upfront payments in exchange for long-term contracts. So far, only China ZhenHua Oil Co has proved game, agreeing to a $2 billion deal. It won’t salvage the wreck of the Iraqi economy in 2020: The International Monetary Fund reckons it will have shrunk by 12% this year, and that the budget deficit will reach 22% of GDP. The United Nations expects Iraq’s poverty rate to double, to 40%. With the political upheaval to come, the outlook for 2021 is, if anything, worse. And starting Jan. 21, Kadhimi will no longer have Trump to provide outrageous distractions. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Bobby Ghosh is a Bloomberg Opinion columnist. He writes on foreign affairs, with a special focus on the Middle East and Africa. ©2020 Bloomberg L.P.

The struggle of the dollar and the dinar is "getting hotter": determining the duration of the "exchange rate hike" and revealing "steps" that will sabotage the "government goal"! 2020-12-24 Yes Iraq - Baghdad https://yesiraq.com/صراع-الدولار-والدينار-يزداد-سخونة-تح Two measures that could have saved more money than the difference in the exchange rate of the dinar against the dinar were revealed by an economist, who pointed out that the Ministry of Finance requested that it be set at 1600 dinars to the dollar. Economic expert Nabil Al-Marsoumi said - a televised statement monitored by "Yass Iraq": "The difference currently evident between the central bank and the market rate will continue until the budget is passed due to the state of uncertainty and uncertainty because everyone is waiting for the Iraqi parliament's position on the 2021 budget, and what happens in terms of the difference between the exchange rate." The official exchange rate is caused by speculation and through which the exchange offices are making huge sums of money, and it may be less severe soon. He added that "some believe that the decision to raise the exchange rate of the dollar is technical and was done through the central bank, although it is political and was made by a government decision from the Ministry of Finance." Parliamentary statements throw more uncertainty and lead to repercussions in the market. He talked about government financial decisions in a deeper way, saying that “the timing of the recent government measures is very wrong. There is no country in light of the Corona crisis and the global recession that has devalued its currency and deducted from the salaries of its employees. All countries have a layer of quantitative management packages and injected money and aid to the public and private sectors.” He believed that "raising the exchange rate to reduce the budget deficit, according to what the government deems, is unsuccessful because it will not provide more than 4 billion dollars to the budget, and this could have been covered through two measures presented by the Ports Authority and rejected by the Ministry of Finance." He explained that "the two procedures require that customs duties be collected from imported goods upon opening documentary credits and that fees are collected when granting import licenses, even according to the financial obtained the same value of the money it wanted by reducing the value of the dinar and ending the problem of money laundering." He pointed out that "raising the dollar exchange rate will not support the local product for three reasons, the first of which is that most of its requirements and raw materials are imported from abroad and because there is dumping of goods from neighboring countries in Iraq, and thirdly, the cost of production in our country is double the cost in those countries." He pointed out that "reducing the exchange rate of the dinar and imposing taxes on salaries reduced its value in some segments by 50%, because the reduction included 25% of the salary and the exchange rate difference, which reduced its value by 25% as well." Earlier, a member of the Parliamentary Finance Committee, Jamal Cougar, confirmed today, Wednesday, that the House of Representatives has the authority to cancel or amend the article on tax deduction, as well as with regard to deducting employee salaries allocations. Cougar said in televised statements that "Parliamentary Finance will study the draft law of the general federal budget for the country for the year 2021 accurately and amend the loopholes if they are contained in the draft law." He added that "Parliament has the power to cancel or amend the article on the deduction of part of the employee allocations or with regard to tax deductions." And that "the high rates of deductions, we will work to reduce them, provided they do not affect the employee significantly." Last Tuesday, the reporter of the Parliamentary Finance Committee, Ahmed Al-Saffar, spoke about the most prominent remarks on the 2021 budget bill, and while noting that the budget is inconsistent with the country's economic reality, he suggested returning the bill to the government. Al-Saffar said, in a televised interview, "Until now, the 2021 draft budget has not been sent to Parliament, which will take 4-5 days to study the project legally, after which the project will be transferred to the Finance Committee and we may use our powers to reduce spending." Al-Saffar added, "This budget is inconsistent with the financial and economic situation in which the country is running, because it has high spending of 150 trillion dinars, according to the leaked version, which is very exaggerated," noting that "most of the paragraphs of the leaked draft are confirmed today that they are the same final draft." And he continued, "The price of a barrel of oil on which the budget was built is illogical because it was $ 42 while the current price of a barrel was $ 52." Covering the entire market. ” The reporter of the Finance Committee in Parliament stressed that “the 2021 draft budget, and in case it does not comply with the government program and economic reality, will be returned to the government,” indicating that “we need 30-45 days to study and approve the project if there are no internal and external political interference, and it may disrupt it. More". He suggested that "Parliament will not accept the passage of more loans in the 2021 budget," again calling for the need to "reduce public spending and raise the price of a barrel of oil in the budget, because every dollar can add one trillion dinars annually

Economy news For the third day in a row ... Central Bank sales of dollars fell https://iraqakhbar.com/2822132 News source / Iraqi Media News Agency "INA" News source / Iraqi Media News Agency Baghdad / Follow up The Central Bank of Iraq announced, on Thursday, that its sales of dollars continued to decline for the third consecutive day. The Central Bank’s daily bulletin on the currency auction stated that “the total sale for purposes of strengthening balances abroad {transfers, appropriations} amounted to 76 million, 600 thousand and 801 dollars. This amount is considered the total sales, while the bank did not sell any dollar in cash. The central bank sells dollars for the sums transferred to bank accounts abroad at a price of (1460) dinars per dollar, and cash sales at a price of (1460) dinars also per dollar, in implementation of its recent decision to raise the exchange rate. The central bank’s sales for Thursday and last Wednesday and Tuesday indicate a significant decline, in contradiction to the statements of the Central Bank’s governor, Mustafa Ghaleb, who said earlier that the bank “will double the sale of dollars to exchange companies,” indicating that “the abundance of the dollar will make it stable in the market

The decision to reduce the dinar: to feed the treatment or to stop the collapse Dr. Muhannad Talib Al-Hamdi https://economy-news.net/content.php?id=23295 Articles Muhannad Talib Al-Hamdi * Riot police were sent to protect the headquarters of the Central Bank of Iraq in central Baghdad before the announcement of the devaluation of the local currency, fearing the outbreak of popular protests. The Iraqi government's decision to reduce the value of the dinar against the US dollar by nearly 20% sparked an uproar in the Iraqi street. A statement of the Central Bank of Iraq regarding this reduction indicated, "It must be emphasized here that this change (reduction) in the value of the Iraqi dinar will be one-time only and will not be repeated." "The central bank will defend this rate and its stability by supporting its foreign exchange reserves, which are still at stable levels," the statement added . The bank blamed poor economic policies over the past decade. He said that he "had no choice but to intervene" because poor economic planning and financial policies on the part of Iraqi politicians led to the transformation of Iraq into an oil-exporting country only, with the bulk of state expenditures directed to pay money to the bloated public sector. Unofficial estimates indicated that the successive Iraqi governments that followed the formation of the first Iraqi authority after the invasion in 2003 were responsible for the disappearance of about a quarter of a trillion dollars, which were dedicated to reforming the health, education, electricity and public services sectors. The Iraqi government reached this decision after it was unable to pay the salaries of its employees for two consecutive months, and was forced to borrow from the Central Bank of Iraq and other internal parties . The government sells oil in US dollars, which it uses to buy Iraqi dinars from the central bank to finance salaries and public services. Reducing the value of the local currency against the dollar means that it will get more Iraqi dinars from the central bank. Years ago, the Central Bank of Iraq fixed the exchange rate of the Iraqi dinar against the US dollar, which is 1119 Iraqi dinars per dollar. Despite the emergence of a parallel black market selling dollars at a higher price, the difference was within the permissible margin of economic maneuver. However, recent months have witnessed many fluctuations in the exchange rate, due to the Corona virus pandemic and the accompanying global financial crisis, and the decline in Iraq's oil revenues after reducing the volume of its oil exports . Although the CBI is independent, the government pushed for the cut, the largest in Iraq since 2003, to enable it to pay dinar-denominated salaries to more than four million government employees. The decision to devalue the currency angered public sector workers. Many fear that the weakening of the dinar, as well as the proposed budget plans to cut salaries and impose taxes, will amount to harsh wage cuts. Popular reaction: The decision of the Central Bank of Iraq to reduce the value of the dinar sparked a state of panic among Iraqis, many of whom rushed to exchange offices to buy dollars, and to supermarkets to buy and store supplies . Several hundred demonstrators gathered in the famous Tahrir Square in Baghdad, to protest against the sudden decline in their purchasing power and to urge the government to reconsider its decision. A young protester held up a banner reading "Before the dinar, the government must collapse." Particularly among the demonstrators were numbers of seniors and retirees who criticize the measure that greatly reduced the value of their pensions . Hundreds of demonstrators also gathered on Monday in the city of Kut, where merchants said they would now have to reduce imports because they are paying in US dollars for the products they buy from abroad. Agri-food traders and wholesalers in the city of Nasiriyah raised their prices by 20%, according to an AFP correspondent. In the city of Basra, the head of the local branch of the High Commissioner for Human Rights, Mr. Mahdi Al-Tamimi, confirmed that the price hike came as a shock to consumers. The curse of oil or its blessing: The second-largest producer of crude oil in OPEC depends entirely on oil exports, and Baghdad's revenues have in fact been cut in half due to the collapse in oil prices. This left the government unable to cover its costs. The International Monetary Fund expects that Iraq's fiscal deficit will widen to 20% of GDP this year . The decline in oil revenues has put pressure on the CBI's foreign exchange reserves, which the World Bank said had fallen to about $ 50 billion by last September, forcing the government to borrow heavily to pay salaries. The size of the public sector in Iraq has more than quadrupled since the invasion in 2003, and the government has simply become the largest employer in the country. But she was late in paying the salaries of employees and retirees in November, causing social unrest . With the World Bank expecting the poverty rate to rise sharply as the oil-dependent economy shrinks, the financial situation of Iraq, exhausted by wars and corruption, is so dangerous that Iraq is in talks with the International Monetary Fund for support . Sajjad Jiyad, a fellow at Century Research Institute from its office in Baghdad, says that the devaluation "sends a signal to the International Monetary Fund and others about the extent of despair the situation has reached and that Iraq is ready to take some of these painful steps," meaning the march towards more fiscal austerity. . But with Iraq dependent on imports, a weakening of the dinar is likely to lead to inflation. Prices have remained low so far, in part because Iraq's two largest trading partners, Iran and Turkey, have seen a significant depreciation of their currency. "For the general population, there is concern that food prices will rise, as the country still imports most of the foodstuffs," says Mr. Sajjad. The Minister of Finance, Mr. Ali Allawi, warned that Iraq must take serious measures to reform the expenditures, which were inflated with the use of politicians using public employment to buy votes and loyalties. This month, the International Monetary Fund advised the Iraqi government, in building its budget for 2021, to give priority "to reversing the unsustainable expansion of the cost of salaries and pensions, reducing ineffective energy subsidies, and increasing non-oil revenues ." The Minister of Finance added, "One of the main reasons for the devaluation of the dinar is to push the economic cycle forward and revitalize the private sector and domestic production to avoid severe budget deficits . " He also said, "What has been done is a preemptive step. Without this step, huge inflation will occur. We will encounter problems that we will not accept ." The minister says the country's foreign reserves could be depleted within six to seven months if government spending remains on the current path without changing the exchange rate. Without this step, the budget deficit in 2021 could reach 100 trillion dinars ($ 84 billion) . The International Monetary Fund expects Iraq's economy to contract by 12% this year, more than any other OPEC member state. "The devaluation was inevitable in light of low oil prices and budgetary pressures facing Iraq," said Ziad Daoud, an economist who specializes in emerging market studies at Bloomberg. "It is also important to monitor the popular response to the resulting increase in the cost of living and the government's austerity program, " he adds . Since the collapse of oil prices earlier this year, Iraq has been suffering from an unprecedented liquidity crisis. The state has had to borrow from the bank’s dollar reserves to pay nearly $ 5 billion a month in public sector salaries and pensions. But oil revenues, which make up 90% of the budget, come in, on average, at $ 3.5 billion . In a move toward austerity, the state's proposed budget for 2021 also calls for record spending, projecting a deficit of nearly $ 40 billion. The Cabinet voted on the budget and sent it to Parliament, where it is expected to face strong opposition. But those familiar with the insights of Iraqi politics say that it will eventually pass according to the desire of the leaders of the blocs and the influential political parties. Over the past two decades, corruption has created a double-edged problem for Iraq. Weak, totalitarian Iraqi governments built on the basis of sectarian quotas mean that every major political party runs one or more ministries. They run these bureaucracies not in the interest of the country but as huge patronage networks: corruption machines that suck oil revenues from the treasury and pass them on to their constituencies in the form of jobs, contracts, and other perks. The spread of graft has stifled what was previously owned by the small private sector in Iraq, which means that there are not many alternatives to public sector jobs . Therefore, it is not surprising that there has been a more than fourfold increase in the number of public sector workers since 2004, and the government pays 400% more salaries than it was 15 years ago. Thus, the government and its oil revenues became the main engine of the Iraqi economy, which gives the Iraqi people the opportunity to live. The Iraqi economic expert, Mr. Munir Al-Obaidi, said in an interview with Al-Hurra channel that the impact of the devaluation will be negative at the beginning of the stage, which "will continue for six months or a year", and after that "it will contribute to improving the domestic product from various sectors such as the industrial, agricultural and service sectors, because it will increase the activity of these sectors." ". But Iraqi industrialists say that the talk about the decision to devalue the Iraqi currency will lead to the encouragement of local industry, "too simplistic ." The Iraqi industrialist, Mr. Moataz Kamouneh, said in an interview with the same channel, that "the industry needs infrastructure such as electricity, sewers, water lines, transmission lines, import and export facilities, and all of these are not available ." And he adds that "the raw materials have increased in value after the devaluation of the dinar because it is imported, which means that costs have increased, and the years of Iraqi industrial inactivity have made Iraq lose the advantage of keeping pace with other countries with technology and destroying old infrastructure ." Is there a hand that extends into Iraq : The devaluation of the currency, without accompanying economic reforms that the political forces in Iraq refuse to consider, will paralyze imports, undermine savings and increase hardship. If the United States government is willing to provide some aid, it is likely that many other countries will also participate. International financial institutions such as the World Bank, the International Monetary Fund, the Gulf states, and even some European and East Asian countries are expected to provide some funds . Iraq crisis is a liquidity crisis. Iraq will need money to prevent the collapse of its financial system, which may lead the country into a spiral of violence that its borders do not contain. If the United States pledged to provide a certain amount, perhaps one billion dollars, it would be possible to assemble a package of up to 5 billion dollars to help Iraq in cooperation with other countries. The idea of providing one billion dollars to support the emergency budget for Iraq may seem very difficult at the moment. But this should not be seen as such. The United States should have learned over the past 20 years two important lessons about this part of the world. First of all, what happens in the Middle East does not stay there. Second, one ounce of prevention is better than a pound of cure, as Washington's tragic policies toward Iraq, Syria and Libya have shown. * Professor of Economics and Political Science, Kansas State University, USA. Number of observations 368 Date of addendum 12/24/2020

Leaked 2021 draft budget set to pauperise Iraqi workers and their familie https://www.wsws.org/en/articles/2020/12/24/iraq-d24.html The leaking of Iraq’s federal budget has provoked widespread anger. The budget will devalue the Iraqi dinar and cut public sector salaries, amid an escalating healthcare, economic and political crisis. Thousands took to the streets, blocking the main roads leading to oil installations and bridges in oil-rich Basra city, and the port of Umm Qasr in the south of the country, demanding unpaid wages. There were protests in several areas of Basra province by day-rate employees of the government, including in the energy sector, demanding payment of salaries they have not received in months. This follows similar protests earlier this month demanding unpaid wages in the semi-autonomous Kurdistan Regional Government (KRG), which employs three out of four workers. Protesters in Sulimaniya burned down the regional government buildings and the offices of the two main Kurdish political parties. Protests have continued, on a smaller scale, after the KRG’s security forces cracked down viciously, leading to 10 deaths–eight protestors and two members of the security forces--scores injured, hundreds detained and journalists threatened with violence. Iraqi cabinet (Source: Government of Iraq) Prime Minister Mustafa al-Kadhimi’s government faces a catastrophic financial crisis following the collapse in oil revenues which provide more than 90 percent of its income. It has borrowed from the Central Bank to pay the public sector wage and pension bill of $5 billion a month, as income fell to $3.5 billion, depleting the country’s dollar reserves. According to the leaked draft 2021 budget, al-Kadhimi has agreed to devalue the dinar as a means of raising government income. With oil prices denominated in dollars and the dinar pegged to the dollar, this will give the government more money to spend. The draft budget assumes a devaluation of around 23 percent, is based on an exchange rate of 1,450 dinars per dollar, compared to the current 1,182 dinars per dollar. The value of the dinar has already fallen on the street, ahead of the official devaluation, as exchange houses in Baghdad sell the dollar for 1,300 Iraqi dinars. The International Monetary Fund estimated that Iraq’s economy will shrink by 11 percent in 2020. It had proposed an exchange rate of 1,600 dinars to the dollar as part of a package of economic and financial conditions for granting a loan to Iraq’s desperate government. That loan will only be forthcoming if Baghdad falls in line with Washington’s political and economic requirements—curbing the power of Iranian-backed militias and politicians and implementing economic “reforms,” including the restructuring of Iraq’s large state-owned banks, privatisations, and above all the slashing of public sector wages and benefits. The devaluation means a huge cut in workers’ living standards as their purchasing power falls, pushing ever more into poverty, and raising fears that the dinar's value will continue to slide. As a doctor at a Covid-19 ward in Baghdad told AFP, “Our salaries will be worthless.” Day labourers and those without work face immediate destitution. Even after the devaluation, there will be a record $40 billion budget deficit. The budget envisages expenditure of $103 billion, with just $63 billion in revenue. The government’s White Paper had sought to halve the public sector wage bill, slashing it from 25 percent of GDP to 12 percent, threatening not only workers’ jobs and wages but also the patronage system from which most of the political parties draw their funding and power. The draft budget appears to have retreated a little from this target figure, but has cut salary benefits, including danger pay, higher education degrees and expenses for high-level officials. Nevertheless, the slashing of benefits, which can in some cases serve to double workers’ paltry wages, combined with the devaluation is a massive assault on the working class. As Ali Kadhim, 50, a teacher told Al Jazeera, “The majority of Iraq’s work force are government employees. We are the middle class, but (the government’s latest) decisions are going to make us the poorest class.” He added, “I am paying off two loans that take up a third of my salary. After these decisions I don’t know how much I am going to earn.” In October, the United Nations Development Programme (UNDP) warned that the slump in demand and plummeting oil prices, along with the limited restrictions put in place to deal with the pandemic—Iraq has confirmed more than 585,000 cases and 12,700 deaths—would deepen inequality. At least 13 percent of Iraqis and 36 percent of young people are officially unemployed. According to ReliefWeb, around 8 percent of households (3 million people) were not getting enough to eat in September, while the World Bank’s November report estimated that up to 5.5 million of Iraq’s 39 million population were at risk of falling into poverty, meaning that more than 40 percent of Iraq’s predominantly young population—the median age is 20 years--would be living in poverty. Iraqi children have been some of the worst affected by the trauma of war, poverty and the disastrous state of the country’s education system, once one of the best in the Arab world. Some 3.2 million school-aged children are out of school. In conflict-affected areas, almost all school-aged children are missing out on an education, leaving them vulnerable to exploitation, abuse, early marriage, child labour, and recruitment by Iraq’s numerous militias. With one in every two schools damaged, many have up to 60 children in a class and operate a shift system. The number of qualified teachers has fallen at all educational levels as spending on education has declined and Iraq’s educated and professional class fled abroad following the wave of assassinations of colleagues since the US-led invasion of the country in 2003. The closure of schools earlier this year due to the pandemic affected more than 10 million children, causing a further educational decline for those who have already lost years of schooling. The budget is likely to exacerbate tensions with Kurdistan, which is dependent upon the federal government in Baghdad for cash to pay its employees. The budget requires the KRG to contribute 250,000 barrels of oil per day in return for its budget allocation of $8.6 billion, while containing provisions for reducing or eliminating its transfers to the KRG. Kadhimi, a former intelligence officer with close ties to Washington, became prime minister earlier this year after the previous government was brought down by mass protests that started in October 2019, against inequality, poverty, corruption and the sectarian political system. While he promised an investigation into the more than 600 protesters who were killed by the security forces during the crackdown, those responsible have not been identified or brought before the courts. He pledged to hold elections next June based on new legislation that would overturn Iraq’s sectarian political system but has been unable to secure the necessary political agreement in parliament. Writing in Foreign Policy, Farhad Alaaldin and Kenneth Pollack warn that Iraq’s economic collapse could lead to a civil war drawing in its neighbours. If Iraq’s government continues to lose credibility, “armed groups and tribes, including the armed militias backed by Iran, would try to fill the vacuum and usurp the role of the primary security forces in Iraq.... These same groups would also fight for territory to control. They might try to take control of revenue-generating resources such as oil fields, ports, border crossings, large businesses, agricultural land, and private properties.” Iraq, which has strong trading and commercial links with Iran, has become a key political battleground in US imperialism’s militaristic confrontation with Tehran. The Trump administration has insisted that Baghdad rein in the Iran-backed Shi’ite militias that have repeatedly fired rockets into the Green Zone, the heavily fortified area that houses the US Embassy, military forces and contractors. In September, Secretary of State Mike Pompeo threatened to close the embassy in Baghdad as a prelude to US military attacks aimed at “liquidating” Shia militia elements charged with responsibility for attacks on US facilities. Earlier this month, the US withdrew some of its staff from the embassy in the run up to the first anniversary of the January 3 US air strike that killed Iran’s top general, Qassem Soleimani, and Abu Mahdi al-Muhandis, a prominent member of the Iraqi government and deputy commander of Iraq’s Hashd al-Shaabi, an Iran-backed umbrella militia group, in Baghdad.

SULAIMANI — Head of the Kurdistan Region's Investment Board Muhammed Shukri said on Wednesday (December 23) that the Board is discussing a mechanism to make it easy for people to repay their debts to companies that run residential projects with Iraqi dinars, rather than US dollars, in order to reduce the impact of the dinar's devaluation. Shukri said in a statement that devaluation puts pressure on people, especially public sector workers. The Kurdistan Regional Government (KRG) has struggled to pay its employees in full and on time this year, making it difficult for them to make ends meet. He added that the plan will likely be implemented in the new year, after the 2021 Federal Budget Law is approved by the Council of Representatives. Iraq looks set to devalue the dinar significantly as a part of the 2021 Federal Budget Law to 1,450 Iraqi dinars per US dollar, from the current official rate of 1,182. According to a statement posted on its official Facebook page, the Central Bank said the official rate would be 1,460 for other banks and 1,470 on exchanges. Market rates will likely be higher. (NRT Digital Media)

Efforts to pay premiums for companies in Kurdistan in dinars instead of dollars https://economy-news.net/content.php?id=23286 The President of the Investment Authority in the Kurdistan Region, Muhammad Shukri, announced, on Wednesday, that the authority is working with housing companies to receive their installments from citizens in dinars instead of dollars. In a press interview, Muhammad said, "The high price of the dollar against the Iraqi dinar will negatively affect the payment of installments by citizens who have bought apartments in installments from housing companies," noting that "housing companies have been approached in this regard." He added, "The commission is currently working to find a mechanism that helps citizens pay their premiums to companies in the Iraqi dinar currency instead of the dollar to alleviate the burdens of citizens in these circumstances," noting that "this process is scheduled to start at the beginning of the new year." Number of observations 298 Date of addendum 12/23/2020

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Shankali: The central bank governor does not have the experience and the bank is selling its cash reserves Time: 12/23/2020 23:37:21 https://alforatnews.com/news/شنكالي-محافظ-البنك-المركزي-لا-يملك-الخبرة-والمصرف-يبيع-من-احتياطاته-النقدية (Baghdad: Al Furat News) The former deputy of the Kurdistan Democratic Party, Majid Shankali, said, "The governor of the Central Bank does not have experience and the bank sells from his cash reserves." "All the political blocs knew of the government's intention to raise the exchange to 150 thousand for one hundred dollars," Shankali explained (to the Euphrates News), indicating that "the government’s decision to raise the currency is correct; He added, "All countries of the world choose bank governors with experience, and the governor of the Central Bank of Iraq does not have economic and financial experience and he is a man of law." "The Minister of Finance, Ali Abdul Amir Allawi, raised the price of the dollar with a stroke of a pen, and he did not care about the harm to citizens, while most of the private banks benefited and affected the expense of the citizen, and his ministry did not sell its share to the central bank, which was selling from its cash reserves," Shankali added. And between "Gradually raising the price that could have been absorbed away from the shock policy. The debts caused problems among traders because of the surprise in this decision, and the first was to activate the tax system and customs tariffs to address the economic imbalance. And Shankali added, "As for the demands to dismiss Prime Minister Mustafa Al-Kazemi, electoral increases and the political blocs are not serious about that." "The government may not be able to hold early elections as scheduled (6 June 2021), and Al-Kazemi has set the date to fulfill his promise," he said. With regard to the Kurdish delegation, ankali concluded, "The Kurdish delegation should have worked in coordination with all political blocs before the government to end the crisis between the center and the region, and it should know that Baghdad is able to pay the region's dues according to data and documents by agreement that guarantees the rights of both parties." Wafa Al-Fatlawi