Mike’s question is well put: What, exactly are the conditions to begin removing the zeros? The answer to that question, not surprisingly, is really quite simple. The one condition that is needed is the assurance that the value of the dinar will rise when they move to the international currency market and Article VIII.
The problem with discussing “remove the three zeros” is that it is seen as an event…when in fact it is a process, as will be the case in Iraq. The ONLY way that the three zeros will be eliminated in Iraq is through a gradual rise in the value of the currency… It has been shown conclusively that the RV concept is not tenable because there is too much currency in circulation to effect an RV.
The ONLY way to get to our goal is to see the currency move to a float and then see a gradual removal of the large notes as the value of the currency rises. Therefore, “remove the three zeros” can only occur over time with the gradual rise in the value of the currency.
The fact that the most recent articles are stating that the only thing holding the implementation of the project is a “suitable environment” brings us closer to Mike’s question. What is the “suitable environment?” This phrase is a little more specific than Mike’s question concerning a “condition” needed. A suitable environment could involve any of a number of factors.
We know one of them: security. For well over a year this was what was holding up the implementation of the project. More recently, however, it seems that the security issue is now either solved or secondary. A second issue might be the coming election. After all, if Abadi doesn’t win re-election then the suitable environment will clearly not exist, right?
I personally don’t see any other significant factor that would constitute a need for the creation of a suitable environment. A recent article stated that education efforts are once again being implemented to inform the people of what to expect. This has occurred before, as we know, and seems somewhat minor to be a significant factor. There has been ample education and discussion on this matter.
Where economists used to argue entirely against the project, that has waned and now the arguments are “how” to implement rather that “if” they should implement. So, in that sense, the environment educationally is already suitable. Therefore I am left with the conclusion that the election is the key. It is a significant factor and could throw a real wrench into the gears if it doesn’t go down with Abadi on top.
On the other hand, with a victory, and especially a significant victory, the environment would be suitable for implementation of the plan. Consider it sort of like the Trump election: a lot of promises were made, but only implemented once the election was in his hands. With that accomplished, he ran like a race horse and has, in a little over a year, accomplished 64% of his promises, the best record in history. Is Abadi looking at Trump as a “guru” to help him jump start his second term? Perhaps he is. What better kick off to a new term than to implement the project?