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Tishwash: Iraq pushes for Rescheduling of Reparations to Kuwait

5-27-2020

Iraq’s Minister of Finance, Ali Allawi, arrived in Kuwait on Saturday for talks with senior officials.

Mr. Allawi held discussions with the Prime Minister of Kuwait, Sheikh Sabah Al-Khalid Al-Sabah, on bilateral relations and delivered a written message from Prime Minister Mustafa Al-Kadhimi.

He also held talks with the Minister of Finance, Barrak Al-shootan, the Minister of Oil, Khaled Al-Fadhel, the Deputy Foreign minister, Khaled Al-Jarallah and other senior Kuwaiti officials.

The discussions focused on taking forward and implementing the decisions of the International Conference for the Reconstruction of Iraq held in Kuwait in February 2018, linking the electricity grids of the two countries, and rescheduling Iraq’s compensation payments to Kuwait.

The two sides also discussed encouraging Kuwaiti investment in Iraq, especially in the commercial and industrial sectors, and in infrastructure.

Mr. Allawi earlier visited Saudi Arabia where he held talks with Saudi officials on deepening economic and commercial and cooperation.

(Source: Govt of Iraq)   link

Tishwash:   Report: Al-Kazemi received ‘scrap’ in the state treasury … and oil prices are ‘promising’ to get out of the crisis

The London Arab newspaper said today, Wednesday, that the gradual rise in global oil markets gave Prime Minister-designate Mustafa Al-Kazemi hope to overcome the country’s financial crisis, which he inherited from his predecessor, Adel Abdul-Mahdi.

According to a report by Nass, (27 May 2020), the Iraqi Minister of Planning Khaled Battal acknowledged that the new government had received a cabinet containing some scrap, which is the common term used in the country to describe the small amounts of money.  

According to the newspaper, “The Iraqi government needs approximately four billion dollars a month to finance the salaries of millions of employees, retirees and social benefits, which are payable amounts.”

It quoted informed sources that “Iraq’s revenues from selling oil, between the beginning of last March and the end of May this year, will reach about 5 billion dollars at best, while the actual salaries need is approximately 12 billion dollars, which puts the government in the face of a devastating deficit.”

The sources said, “The Prime Minister received very promising Arab and international promises regarding providing adequate financial support to Iraq in order to overcome this economic crisis.”

Beneficiaries of government salaries and subsidies breathed a sigh of relief when the government announced that it would pay the salaries of this May in full without deduction.

But the government’s use of the term “deduction” to talk about salaries in May has fueled widespread speculation that deductions will inevitably come in the coming months.

Iraq relies on oil to finance about 98 percent of the annual spending budget, and due to the drop in global oil prices, the country has lost about two-thirds of its monthly revenue. The tragedies of Iraq did not stop there, as the “OPEC +” agreement contributed to deepening it, after obliging it to give up about a quarter of its exports to meet the oversupply in the markets.

“With the massive recession due to the outbreak of the Corona epidemic, Iraq is facing difficulty in finding buyers for its oil, which has tightened the noose on the Kazemi government, amid popular fears of failure to provide salaries, which are the main driver of the country’s internal economies, in light of the chronic paralysis that the private sector is exposed to.” “.

And added, “But Iraq does not need the money to pay the salaries of its employees only, but there are wages to extract oil for foreign companies and service the internal and external debt and support many sectors such as health, education, transportation, etc., as well as public services.”

And the report added, “In the event that the amounts allocated to the investment and development budgets are added, the amount that Iraq needs to cover all aspects of operational, investment and development spending will be about 10 or 12 billion dollars, which amounts were previously included and even spent in previous budgets during the era of former Prime Minister Nuri al-Maliki when it was Oil prices are too high. ”

“On Tuesday, Al-Kazemi received promising news about oil markets, as the Brent mix registered a remarkable increase, amid expectations that global markets will continue its gradual recovery in conjunction with the expected increase in demand due to the easing of the closing procedures in many countries.”

Previously, planners in the Iraqi Finance Ministry had set a hypothetical safe barrier for the price per barrel in the global market, which is $ 56 to build on the spending budget.

But economists believe that selling Iraq per barrel of oil now at a price revolving in the orbit of $ 40 will secure the necessary spending needs amid expectations that this price may be affordable for producers within weeks from now.

What about visiting Saudi Arabia?  

The report believes that “the rapid announcement of the provision of staff salaries during the month of May, in full and without deduction, in conjunction with a visit by the Iraqi Finance Minister Ali Allawi to Saudi Arabia, in his capacity as an envoy from Al-Kazemi, an indication of what the new government can take of decisive steps, amid Great concern among Iraqi parties, groups and militias loyal to Iran.  link