The Current Case for Iraq’ Monetary Reform, RI/RV, Challenges, Requirements and its Ultimate Success Now
The Current Case for Iraq’ Monetary Reform, RI/RV, Challenges, Requirements and its Ultimate Success Now. (1 OF 4)
Critics of an Iraq and Kuwait currency reinstatement comparison, have long pointed to the immutable fact that Kuwait was a State of the Art modern Democratic Monarchy, before it was ravaged by war, unlike Iraq which was an Archaic Dictatorship before and after its wars; so the argument goes, “you can’t compare the two”.
However, that argument is not altogether conclusive proof that Iraq can’t revalue anytime soon; especially now due to its current Parliamentary Democracy and stabilizing political reality, which has relatively improved, and most opinions to the contrary are highly subjective.
Keep in mind although Iraq was an Archaic Dictatorship and was in great need of Monetary and State of the Art Economic Reforms before it started invading its neighbors, in particular Kuwait in 1990; Iraq factually had one of the highest valued currencies in the world (1 iqd to $3.21 usd) and was exchangeable here in the US! Therefore, any subsequent REQUIREMENTS to RI/RV Iraq’s currency internationally, are rooted in PRIMARILY SUBJECTIVE DETERMINANTS of the PTB (Powers That Be = Politics) and not Numbers and History.
Furthermore, check out these much published but little considered facts regarding the circumstances in Kuwait when Kuwait Central Bank revalued its currency and was reinstated.
We all know about Kuwait’s limited public utilities days after the 1991 war; like little running water and very few lights in the country, when on March 25th, 1991 the NY Times reported Kuwait had revalued its currency by candlelight, back to the highest in the world. However, most of us have not researched the other political, societal, and economical circumstances surrounding Kuwait’s revaluation and reinstatement.
1. Did you know, the Kuwaiti Crown Prince 2nd in Charge of the Government, along with the Government’s 22 cabinet ministers did not arrive back in Kuwait until March 5th a mere 20 days before they Revalued their Currency?
2. Did you know, the Kuwaiti Emir Sheikh Jabah the number 1 ruler, did not return to Kuwait after 8 months of sheltering in Saudi Arabia until March 15th, 1991 a mere 10 days before the revaluation of their currency?
3. Did you know that a vast amount of the Kuwaiti Government workers and administrators of the Kuwaiti Government agencies before the invasion were from Pakistan, Jordan, and other countries in the middle east and they NEVER Returned after the liberation of Kuwait. Talking about instability!
4. Did you know that a large number of the Kuwaiti surviving population were street protesting in March 1991 for a FULL DEMOCRACY, in other words, let’s overthrow the ruling family who ran to safety and left us here to suffer? They felt abandoned by the ruling family and its Government for 8 months, consequently being subjugated by the invading Iraqis with unmentionable horrors?
5. Did you know that 700 Kuwaiti Oil wells were still burning (during the RV) after being set on fire by the retreating Iraqi army and the last oil well was not extinguished until November 6, 1991?
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Kuwait /Iraq 2 of 4
So Kuwait not only revalued their currency by candlelight, they did it under a dark sky filled with toxic fumes and a devastated economy!
Speaking of Kuwait’s economy, Kuwait’s inflation rate in 1991 rose ironically to 6.49% as a direct consequence of the invasion. Iraq’s inflation rate has fallen to 3.90% today, partially as a consequence of the currency rate reduction in 2020.
The point is Kuwait’s inflation rate in 1991 when they revalued was almost twice of what Iraq’s inflation rate is today! Even a first-year economic major knows that increasing purchasing power and decreasing the money notes numerically, is a mechanism that stimulates and grows the economy, NOT to control hyperinflation, so what Iraq is working towards is not a Lop, their inflation rate is controlled!
The general point I’m making is that KUWAIT revalued their currency in very unstable conditions socially, politically, environmentally, and economically. They needed to rebuild their country and understood the basic premise “you reestablish your currency FIRST, then rebuild your country“.
However, I must concede there may be two powerful factors in the Iraqi efforts to Reinstate and Revalue their currency that Kuwait did not face. 1 A “Complex Global Currency Reset Effort” riding its back. 2. It was not strapped with a somewhat timid ideology of the US Administration. In 1991 the “get the money boys were in power in the US” it truly makes a difference as to how obstacles are overcome in financial and political matters! No pun intended, just years of neutral observations. Idealism (analysis = paralysis) and $$$ money $$$ are strange bedfellows!
But all of that is just fourplay, let’s take a look under the hood, shall we? Side by Side, because numbers historically speak truth to power and intent!
Fact: In 1990, before the first Gulf War, both the Kuwaiti Dinar and the Iraqi Dinar were both over $3 USD to 1 dinar, and had been for many years. Let’s see where we are today, regarding the economy of the two countries and the numbers that matter in setting a countries REER (Real Effective Exchange Rate) !
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September 04, 2024
KUWAIT. IRAQ
Population: 4.95 million 44.5 million
Gold Reserves: 55.11 tonnes. 143.3 tonnes
Reserve Currency: 42.3 Billion USD 115 Billion USD
GDP: 175.4 Billion. 265.89 Billion
GDP/Per cap: 307 Billion. 530.86 Billion
Inflation: 3.7% 3.9%
Gas Reserves: 63 trillion Cu Ft. 131 trillion Cu Ft
Oil Reserves: 102 Billion Barrels. 145 Billion Barrels
Oil Reserve Status: 4th in Opec/ 10th in World. 2nd in Opec/5th in World
Mineral & Other Resources: Fresh Water. Phosphates, Sulfur, Salt, Gypsum, Stone.
Benzynite, Agriculture.
KWD to USD (1 dinar = $3.54 usd) & IQD to USD (1 dinar = 0.001 or 1/10th Penny)
What’s wrong with the above Numbers? To CLAIM OR DENY the Effort to RV/RI the Iraqi Dinar as a SCAM, is not only untrue it’s Stunated Foolishness Level!
Kuwait/ Iraq 3 of 4
The IQD RV/RI effort is very real and has been attempted multiple times 2011, 2013, 2017 etc.. by IRAQ and the PTB over the last 20 years; as reported last month.
The Following excerpt that is directly cited below from a (April 30, 2012) “DECLASSIFIED” REPORT TO THE US CONGRESS, FROM THE IRAQ PROVISIONAL GOVERNMENT pg. 103, that clearly proves the lifting of the 3 zeros from the IQD and Raising the Value IS A REAL EFFORT THAT WAS POSTPONED AT THAT TIME! THIS EFFORT IS NOT A SCAM!!! NOT A LOP!!! NOT A PROGRAM CBI RATE CHANGE !!! BUT A LIFTING OF THE 3 ZEROS AND A VALUE CHANGE ALL TOGETHER!!! A REER!!!!!! SEE BELOW !
QUOTE FROM REPORT:“In April 2012, the CoM postponed indefinitely plans for a currency reform that would have removed three zeros from the Iraqi dinar in 2013 and required issuance of new currency notes. The reform would have made the dinar value slightly less than $1, It is currently worth less than one tenth of a cent.” DROP THE MIKE! That’s almost 1 to 1 IN IRAQ!! In your country it would be higher due to the parity principle!!
One more notion we need to clear up is the Iraq official rate of 1310 to 1 and the “Illegal Parallel Market Rate” 1500 to 1, “needing to get closer or completely align, before Iraq can unify the rate and revalue its currency”. Really? The Turkmenistan RV model used by the IMF shows clearly that the so-called parallel market rate in Turkmenistan had a more than 6000 manat spread between the official rate and the Parallel rate, when they successfully unified the two rates rates on May 1st, 2008. The IQD has less than a 2000 spread today! Just do it!
In addition. the Turkmenistan blue print included a REER rate change 1st, then a little later they introduced there new lower denoms. It’s a major problem if the actual lower denoms are released ahead of the rate; not only because they would be valueless but more importantly, it would allow counterfeiters to get there filthy little hands on the notes and torpedo the monetary reform with counterfiet notes! No CBI would make that amature error!
The CBI will release commercials and certain photographs first at the last phase of the education like Iraq’s PM announced Wednesday on TV close to the new rate.
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Kuwait Iraq Turkeministan 4 of 4
In conclusion, Political and Economic Stability “requirements” by the PTB upon Iraq, over the last 20 years have become very Subjective, Relative and Ironic to say the least; so let’s not sweat it guys lets play along its almost over!!!! Your patience is NOW A VIRTUE!!! LOL LOL
I hope this helps with some of the doubts expressed by a few and help you to see, this is finally ready to go, it’s just politics.
By the way, all of these facts are available online FROM RELEVANT LEGITIMATE GOVERMENT SOURCES if one is truly interested, please, please stop beating up our neighborhood Gurus, some of them have been truly trying and helping many. At this point no one should be holding on for dear life on every word any Guru says now because there is to much verifiable intel available now at your fingertips. If you fail to take accountability for your own attitude and believe in this investment at this late date, you are likely the kind of person that will place your holdings in the hands of someone else and be taken advantage of. Big Kudos to our Home and Great TNT TEAM!!!
Opportunities in Iraq” after overcoming “years of turmoil” at an international conference in Washington
The American Atlantic Council Institute announced that it will organize a conference on Iraq in Washington on October 15, with the participation of current and former politicians and experts from the United States and Iraq, where it will address opportunities and challenges in relations, overcoming years of turmoil, with a focus on the energy sector, and diversifying the Iraqi economy.
According to the American Institute, the conference, which is being held within the framework of the “Iraq Initiative”, under the title “The Path to Recovery, Development and Global Partnerships in Iraq”, will bring together a diverse group of senior experts, researchers and policy makers from both the United States and Iraq, including current and former senior officials.
The report, translated by Shafaq News Agency, explained that the conference, the third of its kind for the “Iraq Initiative”, will address the major challenges and opportunities facing Iraq as it begins to overcome years of volatility, with early signs of recovery and development.
The report added that the conference will focus this year on the advancement of the energy sector, the efforts of the Iraqi government towards sustainable economic diversification, and the evolving path of the US-Iraqi relationship.
The report added that the conference will witness dynamic discussion panels that explore how Iraq, the United States and the international community can interact positively with Iraq as it moves through its unique social, political, economic and security changes.
The report added that the conference will witness direct personal participation and via video, and will include translation into Kurdish and Arabic.
The report concluded by saying that the “Iraq Initiative” program provides transatlantic and regional policymakers with unique insights and analyses on the ongoing challenges and opportunities facing Iraq as the country attempts to establish an inclusive political system, attract economic investment, and stimulate a vibrant civil society.
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Tishwash: Government Advisor: We are working on developing a tax system that is attractive to investors
The head of the Supreme Committee for Tax Reform, the Prime Minister’s Advisor for Economic Affairs, Abdul Hussein Al-Anbaki, announced today, Sunday, a three-pronged plan for tax reform. While he indicated that facilitating measures would be taken regarding the tax administration, he confirmed that previous fines would be exempted for many groups to restore the confidence of taxpayers in paying taxes.
Al-Anbaky said in an interview with the Iraqi News Agency, which was followed by “Al-Eqtisad News”, that “some media outlets interpreted the tax reform as aiming to increase non-oil revenues, and this interpretation is not scientifically sound,” indicating that “the main goal of the tax reform is to create an easy and transparent tax system that is friendly to the business environment and attractive to investors, because the tax rate is not the basis, but rather the tax rate when multiplied by the tax base is the result of the tax revenue.”
He continued: “We seek in tax reform to have a large tax base,” explaining that “when the tax base is large, tax revenue will inevitably increase, even if tax rates are the same and at lower rates.”
He added that “tax revenue is a by-product of the tax reform situation and not the basis for which the tax reform is launched,” noting that “the Supreme Committee for Tax Reform wants to achieve tax justice and make tax accounting easy and transparent and does not want there to be cases of extortion, obstruction and delay of tax procedures.”
He pointed out that “many facilities have been made, which ultimately lead to restoring the confidence of taxpayers in paying taxes in the tax administration,” indicating that “many categories have been exempted, the cases of allowances have been expanded, and they have been exempted from previous fines and accumulated interest in order to restore the confidence of taxpayers in the tax administration.”
He said, “When taxpayers come to account, this will lead to an increase in tax revenues,” stressing that “the aim of these measures is to create a tax system that is attractive to investors and not just to seek to increase tax revenues because increasing tax revenues is a foregone conclusion.” link
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Tishwash: Central Bank of Iraq announces comprehensive banking reform map
After the Central Bank delegation returned from the last round of negotiations with the US Treasury and the US Federal Reserve, it revealed the roadmap for radical and comprehensive banking reform, which begins with working to cancel…
The electronic platform for foreign transfers, which was implemented as a first stage to reorganize financial transfers in a way that ensures proactive control over them instead of subsequent control. This was a temporary exceptional measure and a gradual shift was planned towards building direct relationships between banks in Iraq and foreign correspondent and approved banks, mediated by an international auditing company to conduct pre-audit of transfers before they are executed by correspondent banks.
During the year 2024, up until now, 95% of the transfer process from the electronic platform to the correspondent banking mechanism directly between it and Iraqi banks has been achieved. This means that only about 5% of it remains within the platform, which will be transferred using the same mechanism before the end of this year, according to the plan.
Thus, some expectations about possible effects on the exchange rate and transfer operations are baseless, because the process will not be sudden or in one go at the end of this year, but rather it was originally achieved during the past period with effort and careful follow-up, except for the remaining small percentage that will be accomplished in the coming short period.
The Central Bank confirms that trade with the United Arab Emirates, Turkey, India and China represents about 70% of Iraq’s foreign trade as (imports), which prompted the Central Bank of Iraq to find channels for transfer in euros, Chinese yuan, Indian rupees and UAE dirhams, through approved correspondent banks in those countries. (13) Iraqi banks have actually begun to conduct transfer operations with a pre-audit mechanism that has been agreed upon and approved in addition to transfers in dollars.
Providing channels for personal transfers for legitimate purposes and external purchases through electronic payment channels, global money transfer companies, cash sales to travelers, and paying cash dollars for incoming transfers to the parties and purposes specified in the Central Bank’s published instructions.
The Central Bank stresses that it has placed foreign transfer operations and meeting dollar demands on sound tracks consistent with international practices and standards and the Anti-Money Laundering and Terrorist Financing Law.
He explains that providing the aforementioned channels for all purposes at the official dollar price makes this price the true indicator of economic practices, which is proven by the reality of price stability and control of inflation, and any other price traded outside those channels is an abnormal price that those with unorthodox or illegal practices resort to, who move away from official channels in their dealings, so they bear the additional costs alone by purchasing at a higher price than the official price to delude others with the difference between the official price and others.
The map and mechanisms announced by the Central Bank will certainly lead to lifting the confusion and instability in the monetary market, which is prevalent due to the continued imposition of American restrictions on our private banks and directing accusations, slander, rumors, analyses, interpretations and targeting of the Central Bank, and will create a state of optimism by lifting the restrictions imposed on some private banks.
This means that there are great efforts made by the Central Bank, in cooperation with the government, since the beginning of 2023 until now, in the field of implementing the financial and banking reform program and fruitful coordination with financial policy, which refutes the slander. And the accusations and spreading optimism and reassuring the market and citizens. This is what the Governor of the Central Bank had previously emphasized before the Central Bank delegation’s recent trip to America. And the new reform roadmap is a result of the efforts previously made and which the Central Bank has been working on for a year and eight months, and it is as follows:
– Reorganizing foreign trade financing to achieve several objectives at once, one of which is the transparency of foreign transfer operations that begin with the transfer process and the transferor to the final beneficiary and to the source through all data, documents and information that enhance and match reality.
All large and medium-sized companies are committed to achieving this goal. The problem now is the dealings of small traders outside the operations.
Foreign transfers are a pressure on the dollar money market and cause it to rise.
– The Central Bank opened channels for the Chinese, Turkish, Indian and Emirati currencies, which are currencies that represent a significant weight in foreign trade, as there was a halt for a period due to a new regulation aimed at providing sufficient control over these operations.
“A new audit mechanism has been put in place by an international company, and the process has been finalised and is now being restarted.”
The Central Bank has continuously urged the opening of relations with correspondent banks, because the Iraqi bank without having external correspondents is considered a local bank and cannot open up to the world.
The Central Bank, for its part, supports and assists this trend.”
– “In light of the new regulation of the foreign exchange process, the real price at which the Central Bank sells more than $250 million daily at the official price should be considered. This means that the bank covers foreign trade, and this explains why there is no inflation or price increases.
The parallel market is a market for those who do not want to go towards the regular methods of transfer and it is an illegal trade or trade that escapes the regular procedures or other illegal operations such as drug trafficking, human trafficking, corruption money, etc.
– Whether the dollar price rose or fell is not a correct indicator, as one must look at what and how much the Central Bank sells at the official price to liquidate various needs.
– That “the primary objective of the Central Bank is to maintain the general level of prices and limit inflation, and this is supposed to be the measure of the success of monetary policy, which has succeeded in controlling this aspect and the level of inflation compared to other countries and even in previous years is much lower, and within the target, and this means that foreign trade, on which Iraq depends primarily to meet the needs of citizens, is covered by the official price.”
– “There is great praise in all meetings with international organizations, including the International Monetary Fund, the Federal Reserve, and the US Treasury, for the transformations, management, and organization of the external transfer process in the Central Bank of Iraq at the present time.”
And that “the Central Bank’s plan until the end of the year will reach 100%, with foreign transfers between Iraqi banks and correspondent banks, without going through the US Federal Reserve.
The plan to reform and lift restrictions on banks includes two axes: the first relates to conducting an audit of previous operations that were suspected by an independent external audit office, some of which have been completed while we await the completion of the audit of others in order to determine the overall picture and classify the nature of these problems and how procedures will be carried out regarding them later.
And to reach a real, stable banking sector that is consistent with what is required at the level of the national economy, and to prevent some banks from remaining marginal and not representing a real addition to the Iraqi economy, and to gain external acceptance through agreement on their implementation of international policies, procedures and standards.
– The Central Bank has not set a quota for foreign transfers for banks, and they can submit whatever foreign transfer transactions they can attract. The Central Bank does not interfere in customers’ choices, and the banks that carry out this process rely on their capabilities to attract their customers. link
Mot: . Lately — fer Sure!!! — siiiggghhhhhh — becoming Seasoned ….
Mot: what a couple!!!
