“Investment Law Will Happen Quantum Leap In Iraq’s Revenues”
The very fact that this announcement came from the Parliamentary Committee on the Economy means that this will happen. That is my first point. But my second point is actually more important.
The second point is that the Parliamentary Committee is openly acknowledging that the system as is has existed throughout the Maliki regime was actually designed to stifle investment rather than encourage it.
Not only were there no guarantees for the investor, but in addition to that, “most of its projects stalled and lagging behind due to a large corruption in all departments, provincial councils and the center,”
Enorrste Continues: What the committee is admitting is that the corruption went all the way to “the center” which means Maliki.
In my opinion this is big, because it means that finally some people in positions of authority are speaking out directly against Maliki’s mishandling and outright corruptions of the funds.
Having said that, then, I find that what the Parliamentary Committee is saying echoes exactly what KAP and I have said for some time now, namely that once the Investment Law is passed investment will flow into Iraq and literally create a “quantum leap” for the economy.
The term I have often used is that it will be like the “wild west” was in the US at the end of the 19th century.
As I noted in another thread, foreign investment will mean that the financial crisis will be ameliorated significantly and will allow the government to return to “normal” in terms of salaries, projects, etc.
Furthermore, foreign investment will inject new money into the local economies, which means that the CBI will be enabled, finally to float the currency.
As new money comes into the economy the only way to avoid inflation (too much money chasing the same amount of goods) will be to raise the value of the dinar to offset those affects.
By reducing the amount of dinar currency in the market the REAL value of the dinar will rise, meaning that the same dinar will buy MORE goods, thus reducing the upward pressure on prices themselves.
You all may remember that I have stated before that one of the potential problems of a rising value of the dinar is DEFLATION rather than inflation. The rising value buys more, so the local prices would tend to fall.
But with the injection of new cash from outside this affect will be offset to some extent. Why? Because it will allow the CBI to reduce the money supply. It will be a difficult balancing act, assuredly, but that is, ultimately, the plan.
I was also pleased to see that the IMF is chiming in on this today, stating that early next year will see Iraq “entering the market.” This means that they expect this process to take place and that the float will begin early next year.
The phrase “entering the market” means allowing their currency to become internationally recognized. We know that because it comes from the world’s biggest money controller, the IMF.
In other words, for the IMF the phrase is extremely powerful. It is synonomous with the phrase “become a world player.” Only a country in Article 8 with an internationally recognized currency can “enter the market” in IMF terms.
Of course it may take some time for the actual movement to Article 8. That is not our concern. What is our concern is that they begin the float, and the passing of the Investment Law, as KAP and I have said numerous times, is an essential element in making that possible.
Even more importantly for us, however, is that passing that law will go a long way toward allowing the CBI to begin the float. Once the money starts coming to Iraq the CBI will leap on the opportunity to continue the execution of The Plan. Enorrste
Article Being Referenced:
Parliamentary Economy: Investment Law will happen quantum leap in Iraq’s revenues
Parliamentary Commission of Economy said on Tuesday that the investment law will happen a qualitative leap in income increase revenues for Iraq. Said committee member Burhan Almamori that “investment in Iraq’s non-existent, and most of its projects stalled and lagging behind due to a large corruption in all departments, provincial councils and the center,”
noting that “we are close to voting on the investment, which will give a lot of powers to the provinces in the activation of investment in Iraq, the role of the law.”
“The real investment must be in various areas is not limited to just oil,” explaining that “Iraq depends mainly on oil, and non-investment can do with the advancement of its economy.”
He Almamori that “the door of investment in Iraq is open to all companies, but the controls and standards, has opened the way for foreign investors and we gave him privileges Kalmattah of a local, and there are checks and accounts in the selection of companies, and there will be follow-up and the imposition of sanctions on anyone who abuses to invest in Iraq.”
“The approval of the investment law will give a qualitative leap in increased income revenues of Iraq.” It was the Presidency of the Council of Representatives member Hamoudi, it revealed earlier to resolve all contentious points in the amendment of the draft Investment Law No. 13 of 2006
which would “facilitate and support the process of investing in different stages, particularly in the residential, industrial and agricultural area,” referring to the possibility of ” a vote in the parliamentary session for next Monday.”