Iraqi News World Bank approves $250 million loan for Iraq. 02-26-2010

[tbush]

World Bank approves $250 million loan for Iraq

Friday February 26, 2010 (1246 PST)

WASHINGTON: The World Bank approved the first of two $250 million loans for Iraq to help plug a large financing gap caused by the sharp drop in global oil prices since 2008.

The shortfall of close to $5 billion through to the end of 2011 has posed challenges for rebuilding the country from years of conflict and just when violence has started to subside.

Iraq relies on oil exports for as much as 90 percent of its revenues, and lower oil prices mean it will not have enough resources to meet reconstruction needs.

"Iraq`s immediate needs are to manage this short-term financing gap in ways that soften the impact of this fiscal crisis on its citizens," said Hedi Larbi, World Bank country director for Iraq.

"The Bank`s loan helps Iraq protect the key social and infrastructure expenditures that the country needs to rebound," Larbi said.

The World Bank loan comes a day after the International Monetary Fund approved $3.6 billion in funding for Iraq to help the economy with the slump in oil prices and political uncertainty in the lead-up to March 7 parliamentary elections.

The Bank has 20 active projects in Iraq, including road rehabilitation, water supply, energy, health and education, Most are financed by a donor trust fund managed by the institution.

End.

http://www.paktribune.com/news/index.shtml?224983

[lars19532]

I interpret this to mean that Iraq has gained, or maybe is in the process of gaining the confidence of the international financial community or else they would not have been approved for these recent loans. IMO, lenders' assumption is that the RV/RI is very, very close giving Iraq an internationally valued currency. No one is going to loan Iraq that kind of money unless they think they are capable of and willing to pay it back.

[SexyDinar]

Here is the original story:-

http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22482723~menuPK:34463~pagePK:34370~piPK:34424~theSitePK:4607,00.html

[rvwisher]

I'm missing something- the budget is based on $60 a barrel - yes oil did come down in 2009 but it came down from an all time high. Oil has been above $60 for a long time now - so can someone explain? thanks

[lars19532]

I'm missing something- the budget is based on $60 a barrel - yes oil did come down in 2009 but it came down from an all time high. Oil has been above $60 for a long time now - so can someone explain? thanks

Yes, I'm sure you are right - that oil is the foundation for the Iraq budget - and no, I can't explain it. However, I also think someone said that a draft of the budget contained currency figures that were coded and that the writers inserted in the blank spaces where a financial figure would be, Bahrain's dinar, at an assumed $2.65. I assumed that the coded value was not to be taken literally and that the Iraqi dinar's new value, once RV'd or RI'd, would be inserted in its place.

Again, I'm making another assumption, but if this is true, doesn't it make sense that Iraq has to give their currency a value that both addresses internal budgetary demands and allows international businesses that are currently establishing themselves in Iraq, a way to more efficiently conduct business? Don't know, just guessin'...