Samson: Abdul – Mahdi comment on Article 140 and the budget of Kurdistan
7th November, 2018
The Iraqi Prime Minister Adel Abdul-Mahdi, on Tuesday, the need to find equitable solutions to the issue of Article 140 in the Iraqi Constitution and the budget of the Kurdistan Region
Abdul Mahdi said during the weekly conference, “We will discuss the issue of Article 140 and the budget of the Kurdistan Region,” asserting “I can not make a final decision
He added that “the House of Representatives and the Council of Ministers and the concerned parties will discuss the subject,” noting that “the committee formed to discuss the issue of the budget will discuss this issue with the House of Representatives
Abdul Mahdi stressed that “it is the duty of all to reach an agreement and financial and legal justifications for the fairness of all provinces and all the people of Iraq LINK
Samson: KRG repays debts of $500 million to private banks
The KRG also owes nearly $2.5 billion to contractors and to cover uncompleted projects
The Kurdistan Regional Government (KRG) has started repaying its debts, clearing half of what it owes to private banks and 10 percent of what it owes contractors. It will now service its remaining debts every month.
The KRG has dedicated $100 million from its oil revenues to pay contractors in the Kurdistan Region, KRG finance minister Rebaz Hamlan told Rudaw.
“The KRG owes nearly $2.5 billion to contractors and for uncompleted projects, including more than $1 billion to contractors who had received a cheque. The rest belongs to incomplete projects. The government is repaying 10 percent – 75 percent will be given back to contractors who had received a cheque, 25 percent to uncompleted projects,” Ibrahim Rekani, head of media for the Kurdistan Contractors Union, told Rudaw.
“We as the union of contractors have called on the ministries of finance and planning to give contractors some money monthly so that they resume their work or pay back their debt and expenses,” Rekani added.
A promise was made to pay $100 million back to contractors a week ago, but no contractor has received any cash.
“Repaying $100 million is underway. The cash was put in a private bank and was then transferred to the Region’s Bank, and then to Minara Bank. This took some time. The money is in the bank and will be distributed – $34 million for Erbil, $23 million for Duhok, and $43 million for Sulaimani, Garmian, and Raparin,” Saro Ismael Dizayee, head of the Erbil branch of the Kurdistan Contractors Union, told Rudaw.
“The government has promised us to give us $20 million monthly so that contractors can finish their projects,” Dizayee added.
According to Rekani, there are nearly 3,500 contractors in the Kurdistan Region. There are 1,482 contractors in Erbil, including 200 foreign contractors. There are over 1,100 contractors in Sulaimani, more than 900 in Duhok.
The KRG is indebted to nearly 60 percent of these contractors.
The KRG borrowed money from private banks after the Kurdistan Region was hit by a financial crisis.
“The KRG borrowed nearly $1 billion from private banks during the financial crisis and after the emergence of ISIS in 2014. It repaid 50 percent ($500 million) of the debt nearly two months ago. This will help build trust between the government, people and private banks,” Sherwan Anwar Mustafa, head of private banks in the Kurdistan Region, told Rudaw.
“According to sources, the KRG is due to repay private banks the remaining 50 percent in cooperation with the Iraqi central bank. It is however unclear whether the government will repay it all together or in installments,” he added. LINK
Samson: Russia seeks to give up the dollar in the face of new US sanctions
9th November, 2018
Moscow is stepping up efforts to stop its economy dependent on the dollar as Washington seeks more tough sanctions that would deny Russia access to foreign debt markets and cut off the greenback from its banks
President Vladimir Putin has long condemned the dominance of the US currency on the world stage, but Russia’s previous efforts to stop its economy’s dependence on the dollar have so far failed.
Amid concerns from Russian business circles of a new round of US measures against Moscow over the annexation of the Crimea and the conflict in Ukraine, the Russian authorities have now taken concrete steps in the hope of achieving their old goal.
It is expected that the Ministry of Finance and the Central Bank of Russia will soon introduce to Prime Minister Dmitry Medvedev measures to increase the use of other currencies in international trade deliberations. Putin said last month: “We will definitely go in this direction.” “Not because we want to undermine the dollar, but because we want to ensure our security, because they are constantly imposing sanctions on us and simply deprive us of the opportunity to use the dollar.”
Observers have warned that the mission to Russia is very ambitious, but an unpredictable US policy, new US sanctions on Iran and Washington’s trade dispute with China could actually help Moscow. Euler Hermes, a French-based credit insurer, said in a recent report that “a large-scale dependence on the dollar will take time, estimated at 1.5-1.5 years.” Russia’s efforts to stop dependence on the dollar “may now be easier in a world of rising US protectionism,” she said.
Russia’s dealings with the EU and China, which account for about 60 percent of Russian foreign trade, can be transferred to the euro and the yuan, while trading with the former Soviet Union could be carried out in the ruble, Euler Hermes said. Putin and his Chinese counterpart Xi Jinping have repeatedly stressed their desire to increase the use of ruble and yuan in cross-border trade.
In October, Russian authorities said they were preparing an agreement on the use of national currencies with China.
China’s trade with the ruble and the yuan has quadrupled in the past four years, although it still accounts for about 18 percent, according to Ining Bank.
Deputy Prime Minister Yuri Borisov said India would pay for Russia’s Russian S-400 surface-to-air missile batteries. In turn, the governor of the Russian Central Bank Elvira Nabiolina said it wants to encourage banks to deal with the ruble.
Russia, which has been under US sanctions since 2014, has developed its own financial transaction system to protect itself from a possible ban on the use of Swift International’s secure messaging system.
Dmitry Bolivoy, chief economist at the sovereign wealth fund, the Russian Direct Investment Fund, said more trade and vital trade between countries could strengthen the pattern of relinquishing dependence on the dollar. “There has been a real and substantial reduction of dollar payments over the years,” Bolivoy told AFP.
He added that the Russian sovereign fund was a “pioneer” in establishing two funds with China to settle deals in the two national currencies. “The first transactions are due in 2019, and similar investment mechanisms can be established in other countries,” he said.
According to central bank data, the ratio of dollar payments to exports of goods and services fell from 80 percent to 68 percent between 2013 and 2017. At the same time, the ratio of euro transactions rose from 9 percent to 16 percent, while the ruble ratio rose from 10 to 14 percent. The pattern is less obvious for imports, with dollar payments falling from 41 to 36 percent.
Russia will not be able to completely eliminate the dollar soon because its economy is still heavily dependent on oil, which is priced in dollars. But the country has cut US government debt by about $ 80 billion this year. “Other measures could be to remove major Russian companies from foreign stock exchanges and increase gold and euro reserves,” Euler said.
“There are still many obstacles to using national currencies,” said Oleg Kuzmin, economist at Renaissance Capital. “No one needs, for example, the Russian ruble in Croatia and the Croatian currency in Russia,” he said.
“But if there is an easy and effective mechanism to turn a currency directly into another currency, then it can work well.” LINK