US Treasury sees 'window of opportunity' for Iraq economic reform
02/29/08
WASHINGTON (Thomson Financial) - Iraq's government has made real progress on economic reform over the last year, and with better security now has a chance to make much more progress improving the standard of living of its people, a senior US Treasury official said today.
"There is a window of opportunity on the economic reform side that has been created by the security improvement," Undersecretary of Treasury for International Affairs David McCormick told reporters in a briefing after returning from two days of meetings with Iraqi economic officials in Baghdad. Now, it is "critical that they seize the opportunity on the economic side," he said.
Over the past year, for example, headline inflation has fallen below 2 pct from more than 65 pct at the end of 2006. The government has also signed a new economic program and stand-by lending agreement with the International Monetary Fund. It sets out economic benchmarks but does not provide immediate loans.
The IMF said "despite difficult conditions, Iraq has made progress toward stabilizing the economy," but that the economic outlook "hinges on improved security." The 2008 program includes maintaining lower inflation and expanding infrastructure projects in electricity, water, sanitation, education and health care.
McCormick emphasized that US Treasury technical assistance will focus on what officials call "budget execution" as the key reform goal ahead. That is a somewhat euphemistic way of referring to the fact that Iraq has lacked even the basic administrative ability to spend the oil revenue or aid accumulating in the government accounts, and lacked any reasonable accounting system to prevent massive portions of what it did spend from being diverted by corruption.
But McCormick said Iraq has made enough progress that there is a shift from reconstruction to development and toward building governing and banking capacity. Treasury also plans on doubling its assistance staff in Iraq to 24.
McCormick would not accept the wording, but he did seem to be describing a situation in which, despite ongoing stalemate at the political level, there are bureaucrats in the government who still manage to make progress on some basic economic issues.
One particular political stalemate, the inability to pass an oil revenue distribution law, does remain a significant barrier to economic reform and progress in the average Iraqi's standard of living, McCormick said.
You asked, "I would like to get you're opinions regarding M2 and the value of the Dinar. Does either an increase or decrease in M2 affect the value of the Dinar?"
My view is that NOTHING affects the value of the Dinar directly. It all goes through a process which is not market or demand driven, really. It is not in that sense "free"... therefore the value of the Dinar may be moved up or down but it isn't a direct relationship, someone (think of it as a cartel) is behind it moving the levers of economic value. So the M2 will only affect the Dinar value if the persons who are behind the daily values base their valuations on the increase or decrease of the M2. There is no direct relationship as it is not free floating with market force volatility affecting its value. It is what they call "a managed float". We see it move up and down, but it is not really in response to the market, but in response to the managers who are "managing" the float and what they call once they see various factors which may affect its value (such as the M2, economy, etc). Have you noted in all the money documents which come out that they praise the Iraqi money managers for doing a good job with setting the value of the Dinar and keeping it well managed? Iraq does not have a true free market value or a free float. It has money managers who manage the value of the Dinar and do so within set guidelines, as those documents point out.
If I think what your asking for I have an answer to you, but I'm a bit in the blue as to what bank you are referring to when you say that "The Dollar was bought up and the Dinar buying was down at one point".
I assume you are referring to the CBI's official page where the daily auction is announced and where it says how much Dollar was sold and how much was bought.
Well, actually it is not Dinars that are bought and sold, it is Dollars.
CBI issues Dinars, and have as many of them as you could wish for, but have to control the amount in circulation.
The auction is a mean for CBI to legitimize a value for the Dinar.
Imagine you are sitting on a desolate island, and have only monopoly money, worth nothing, but there are a couple of other people on this island, and you have all declared it a nation of your own.
Na monopoly money was perhaps not a good example, but lets say you have printed up a lot of bills, and you call them Credits.
You have 1, 5, 10 25 Credit bills, and you have a bundle of them.
You must create some kind of value to those bills, and one of the simplest ways is to have those bills exchanged somewhere toward a big and known currency. (Dollar)
You are producing fish, fish oil, and sheep wool in abundance from that small little island.
From those products you are getting Dollars.
Here is the trick...set any value you want on your Credit's, and make an auction out of it,.... but you can only buy the Dollar offered, with your Credits that you have neatly printed up in different denominations for your island kingdom.
If you bought much or little doesn't matter, because you have already in before hand set the exchange rate.
Just by the fact that you now have an auction and have in fact done an exchange between Dollar and Credits, make the Credits officially exchangeable with Dollar to that rate you set for that day.
The amount of Dollar bought or sold is of less importance. That's just smoke and mirrors, the RATE you bought or sold it for is the key.
Once you have established an exchange rate with one currency you will automatically have a level of exchange rate with other currencies as well.
You can now officially circulate your Credits on your island kingdom, and announce that they have already been exchanged for Dollars with such and such value, so...that is the value your Island Kingdom Credits are worth.
The Iraqi auction is an in-house auction, they're basically selling to themselves, so the money bought and sold stays in the house.
The amount you see on the auction site doesn't really reflect anything more other than how much Dollars they sold that day, it doesn't reflect the total state income.
Usually they put up as much Dollar on the auction that they need for their daily state budget.
Iraq is not a poor nation with any means, just a confused nation. Iraq have very big reserves both in Dollar and Gold.( and of course very very big reserves in oil)
Some bloggers have been spinning on the idea that the Iraqis are buying up Dinars with Dollars on the auction.
That's not the way it works.
They can withdraw and destroy as much Dinars they wish without auction, for heavens sake, they're sitting on them.
No need to buy anything with any Dollars, you just need to open a door and cart out a load of Dinars, if you want more in circulation, or burn some, whatever you wish.
The Dinar, the vast amount of bundles of paper they're storing...THAT is what they fork up for the Dollar.
Dollars that are bought by Dinars (in the auction) can be bought by either new issued Dinars OR old circulated Dinars.
So Laura, the amount of Dollar sold one day in comparison with another day, is of lesser significance.
===end quote===
So you see, we are not dealing with a real world scenerio.. we are in an "Island Kingdom" playing a monopoly game.. which has no relationship to the real world, the real Dinar value or the cash, gold and oil reserves of Iraq. It is based on the value set by the "king" in the scenerio that Roger outlined, not on the value of the cash, gold or oil.. or the M2 supply.
You then ask, "What if the Dinar is allowed to free float within the specific limits of cash reserves and gold? How will this affect the value of the Dinar?"
Here we are finally speaking of real market value.. a FREE FLOAT.. within the limits of its cash reserves and gold. This is now out of monopoly land. Certainly within that scenerio, Iraq would come out at LEAST as valuable as its neighboring countries.. in the 30 cent USD range. I cannot see that Iraqi currency is worth LESS than their neighboring countries' currency, in a free floating REAL market value.
As for the higher valuations often mentioned on other Dinar sites, it is only when people figure in the idea of monetizing the oil reserves.. which adds to the cash and gold figure.. that they come up with those larger valuations. Put on the market now at its current value, I think it is worth around 30 cents USD.
I think the 30 cents USD valuation is a good starting point for a truly free Iraqi currency and I believe it would have that value as solidly as the surrounding countries do. Why do they not allow this to happen? One scenerio which I have supposed is that they consider the potential for war with Iran so great that this would harm the fledgling new value so they are unwilling to allow it. Iran making war a constant reality (through helping militants) and threat (through seeking nuclear arms) could be a very influential factor preventing the "money managers" from being comfortable with giving Iraq the ability to trade freely (as do other currencies) based on their real worth (cash and gold reserves). Perhaps we are stuck in a monopoly game without end or real value to the Dinar instead of the real world based on their fears of Iran creating war if they go to real time instead of fairytales. In the monopoly world they have created, they can live in their imaginary kingdom forever.. without it affecting their currency. If they let it go to market.. they don't know what will happen. Stability is a key to investment so they keep their currency stable this way. Smoke and mirrors as Roger said... indeed.
Another scenerio I toy with when I read a lot about the corruption in Iraq is this.. We keep hoping for a RV.. but they never have to give one. They can live in fairyland forever if they wish to. They don't ever have to join the real world. They just make it LOOK real. There are no market forces changing the value of the Dinar. It is completely internally driven. They take our dollars when we buy Dinars and that is real money for monopoly money. They take real money for the goods they sell, too. But they never have to make their monopoly money worth anything on the market if they do not want to. They are insulated from the real world and can choose to stay that way.. impoverishing the population forever while the king and his court get their cut of the real money and wealth flowing through the country. They are monetary imperialists.. that is, they extend their authority over the people by establishing an economic stranglehold on the wealth of the country by their artificially setting the value of the Dinar.
Take your pick.. or suggest one of your own. Why do you think they live in monopoly land instead of in the real world? Are they unwilling to let the "infidels" get the real value of their currency, and so enrich us? Is it religiously motivated? Is it due to fears of war? Due to corruption and greed? Due to a desire to have power over the people and keep them impoverished? There are many scenerios.. only God knows I guess. Which do you think most viable?
I go back to the spiritual causes (because they are the highest and rule over all). Remember what I shared about seeing those huge spirits of Persia which have been there since the time of Daniel? Spiritually, there are forces which do not wish to allow it. Do they use false religious views about enriching the evil West, Iraqi greed, corruption, power-mongering and fears of war to further their aims to keep the Iraqi people impoverished and at their mercy? (They have no mercy, by the way - see the news for what they motivate men to do to keep Iraq unstable.) Well.. I certainly think they are doing so... manipulating us humans for their infernal purposes, I mean. My view is to wait on God until He moves to make this happen.. as I am certain He wills it to go and will work it all out somehow in His way and time. I don't think the problem is political.. it is spiritual as the powers of darkness use these factors to prevent the RV... playing on fears, corruption, greed or lust for power. I'm just sad to see so many are their puppets. They have come so close to doing the right thing.. then pull back as the powers of darkness appeal to the human factors of greed, lust, fear, false religious zeal or false patriotism, etc. I wonder how long they can continue to do so.. how long they will remain in their grasp.
Tuesday, February 26, 2008
Fortunes of War: Death and Chaos No Problem for Profit-Seekers in Iraq
Written by Chris Floyd
Monday, 25 February 2008
We have long been told that the "security situation" in Iraq is the reason why the loudly promised "reconstruction" of the shattered nation by altruistic Western firms has been thwarted. Foreign corporations, particularly the oil companies, are eager to come to the aid of the suffering Iraqi people with expertise, technology and massive investment -- just as soon as those quarrelsome Arabs settle down and stop killing each other.
So the story goes. But as usual, the truth is far from that. As the British government's top advisor revealed this week in a remarkably candid interview with the Observer, Western business leaders don't care how many Iraqis die -- or who kills them -- just as long as their own profits can be guaranteed. It is the oil law -- not civil war, sectarian strife, or the cynical U.S. "surge" policy of arming all sides to guarantee continuing conflict -- that is holding up Western investment.
That's the word from Michael Wareing, chief executive of the multinational consultancy firm KPMG. Prime Minister Gordon Brown has put Wareing in charge of the Basra Development Commission, the Big Business quango tasked with developing southern Iraq -- where British forces once held sway, but now hide away in a remote enclave while Shiite militias and criminal gangs battle for control of the lucrative region.
Wareing told the paper that security in the area "was no longer an issue for investors." After all, he said, you will often find a spot of bother amongst the dusky peoples who have unaccountably found themselves living on top of America and Britain's oil:
"If you look at many other economies in the world, particularly the oil-rich economies, many of these places are quite challenging places in which to do business," he said. "Frankly, if you can successfully operate in the Niger Delta, that is a very different benchmark from imagining that Basra needs to be like London or Paris."
Indeed. You don't have to bring the savages up to the level of white folks in order to get in there and grab their oil. (And certainly not to the level of London or Paris! The very idea!) Again, Wareing is quite frank on this point:
Iraq's parliament has yet to pass a hydrocarbon law setting out the terms oil companies will operate on and how profits will be split. "My sense is that many of the oil companies are very eager to come in now, and actually what they're waiting for is the hydrocarbon law to be passed and various projects to be signed off. That is what is causing them to pause, rather than the security position," he said.
And what is the "security position" in this very juicy slice of the Iraqi pie? (As the Observer notes, the Basra region "accounts for 90 percent of government revenue and 70 percent of Iraq's proven oil reserves.") Commondreams.org gives us the lowdown on a situation that is perfectly acceptable to KPMG, the oil companies, Her Majesty's Government -- and Her Majesty's Government's true masters in Washington:
In Basra, Iraq’s second largest city, 2008 was ushered in with an announcement of the 2007 death toll of women targeted by Islamist militias. City officials reported on December 31 that 133 women were killed and mutilated last year, their bodies dumped in trash bins with notes warning others against “violating Islamic teachings…” But ambulance drivers who are hired to troll the city streets in the early mornings to collect the bodies confirm what most residents believe: the actual numbers are much higher.
The killers’ leaflets are not very original. They usually accuse the women of being prostitutes or adulterers. But those murdered are more likely to be doctors, professors, or journalists...Their crime is not “promiscuity,” but rather opposition to the transformation of Iraq into an Islamist state. That bloody transition has been the main political trend under US occupation.
It’s no secret who is killing the women of Basra. Shiite political forces empowered by the US invasion have been terrorizing women there since 2003.
The Observer story on Wareing has more:
Basra fell largely under the control of Shia militias after the ousting of Saddam Hussein and has witnessed a violent turf war, as well as high rates of murder and kidnapping. Corruption is rife, residents are afraid to use banks in case they are robbed and smuggling of oil and other goods helps fund militias and criminal gangs. Unemployment has been put at between 30 per cent and 60 per cent, and the agricultural sector is in serious decline as cheap imports grow.
An insight into the situation in Basra is also provided in a second candid interview that appeared in the same issue of the Observer, this time with one of Britain's top military men in the region:
In an unusually frank analysis, Colonel Richard Iron, military mentor to the Iraqi commander General Mohan al-Furayji, said "There's an uneasy peace between the Iraqi Security Forces [ISF] on the one hand and the militias on the other. There is a sense in the ISF that confrontation is inevitable. They are training and preparing for the battle ahead. General Mohan says that the US won the battle for Baghdad, the US is going win the battle for Mosul, but Iraqis will have to win the battle for Basra."
Basra has been the scene of a violent power struggle between rival Shia factions, prominently Jaish al-Mahdi (JAM) led by the radical cleric Moqtada al-Sadr, who last week announced an extension to its six-month ceasefire. It has seen armed groups move into hospitals and university campuses to impose their religious and political ideology, bullying or even beheading women for going out to work or dressing inappropriately.
Asked who runs the city now, Iron, who has been in Basra since December, said: "There's no one in charge. The unwritten rules of the game are there are areas where the army can and can't go and areas where JAM can and can't take weapons."
"There's no one in charge." Think of that: five years after the invasion of Iraq, a trillion dollars gone, a million people killed, and still, "there's no one in charge." The extremist Shiite militias -- including the militia known as the American-armed, American-funded, American-backed Iraqi government – are sharpening their knives for the eventual showdown within the sect; women are being killed and mutilated; professionals, doctors and teachers are being snatched off the streets, murdered or driven out; the city and region are being carved up into warring fiefdoms; murder and thievery are rampant; the chance for an ordinary, decent human life is receding for a population plunged into violent anarchy and immense suffering ...but none of this is "an issue for investors." They could not care less. If the Green Zone gang back in Baghdad can just get this damn oil law signed already, then Big Oil and its attendant industries will move in and start restoring and expanding the infrastructure of the Iraqi economy.
Naturally, since Nigeria is the openly stated model for what's to come, the actual people of Iraq will get the barest trickle of this bumper harvest of their national wealth. As in Nigeria, most of it will be shipped back to the West and spread around a thin layer of corrupt and corrupting local elites, while the majority lives in poverty and the society is riven with ethnic, religious and political conflict spurred by the twin goads of greed and vast injustice.
Wareing's revelations tie in to what we've been saying here (and elsewhere) for years: the Bush Faction (and the various elites it represents and embodies) has already "won" the war – no matter what happens. As I wrote here last fall, combining threads from a series of articles going back to August 2003:
In a world of dwindling petroleum resources, those who control large reserves of cheaply-produced oil will reap unimaginable profits – and command the heights of the global economy. It's not just about profit, of course; control of such resources would offer tremendous strategic advantages to anyone who was interested in "full spectrum domination" of world affairs, which the Bush-Cheney faction and their outriders among the neocons and the "national greatness" fanatics have openly sought for years. With its twin engines of corporate greed and military empire, the war in Iraq is a marriage made in Valhalla.
And this unholy union is what Bush is really talking about when he talks about "victory." This is the reason for so much of the drift and dithering and chaos and incompetence of the occupation: Bush and his cohorts don't really care what happens on the ground in Iraq – they care about what comes out of the ground. The end – profit and dominion – justifies any means. What happens to the human beings caught up in the war is of no ultimate importance; the game is worth any number of broken candles.
And in plain point of fact, the Bush-Cheney faction – and the elite interests they represent – has already won the war in Iraq...They've won even if Iraq collapses into perpetual anarchy, or becomes an extremist religious state; they've won even if the whole region goes up in flames, and terrorism flares to unprecedented heights – because this will just mean more war-profiteering, more fear-profiteering. And yes, they've won even if they lose their majority [in November 2006] or the presidency in 2008, because war and fear will still fill their coffers, buying them continuing influence and power as they bide their time through another interregnum of a Democratic "centrist" – who will, at best, only nibble at the edges of the militarist state – until they are back in the saddle again. The only way they can lose the Iraq War is if they are actually arrested and imprisoned for their war crimes. And you know and I know that's not going to happen.
So Bush's confident strut, his incessant upbeat pronouncements about the war, his complacent smirks, his callous indifference to the unspeakable horror he has unleashed in Iraq – these are not the hallmarks of self-delusion, or willful ignorance, or a disassociation from reality. He and his accomplices know full well what the reality is – and they like it.
Well I'm thinking, that it is in the better interest of Turkey Iraq and the US if the Turks are going in, doing what they are doing, (I think they claimed over 250 PKK's or there about) , and then get out, there is no indication if they were to get back in, and do another hit.
Who would this favor, well what is PKK, they are a terrorist band, in their eyes they are probably another version of "freedom fighters" with their own reasons, but either way, they are 1. Not a regular force. 2. Not under Kurdish official regime. ( there might very well be sympathy , silent agreements and mutual understandings on many issues , but still PKK is NOT under the official Kurdish Government.)....in fact not under ANY government. 3. They need funding, for weapons and materiel. 4. Iran need to move convoys of Katusha rockers to Lebanon via Syria.5. Iran needs to take the shortest route between Iran and Syria.5. Look at your map, where do they do that, and who do they buy out?.
Iran is for sure not sending convoys via Baghdad, Kuwait, Jordan or anywhere else.
So, northern Iraq is unstable AS LONG AS THERE IS AN INDEPENDENT ENTITY CONTROLING LAND, ROADS, BRIDGES, RIVERS, MOUNTAINPASSES, AND NOT BEING UNDER GOVERNMENTAL CONTROL.
Kurds in general, not PPK members, for sure are ducking, and may have a silent disapproval of the operations taking place, but can't do much about it. Kurdistan is prospering more than any other region in Iraq, and the Kurds will have a very hard time, starting smashing windows, and overturn cars in the streets about this.
They have got so much lately, and even in their eyes, the PKK movement that in the past must have really been the only way out for them, have now dropped into fifth or sixth priority between Coca Cola, Internet, Cellphones, good wages, decent living and funny TV shows.
Who wants to go and muddy down the shoes in the mountains, they're Italian and handmade.
The era of PKK is over, and the PKK only exist now as an annoyance to Turkey, but there is more.
Turkeys part in this...follow the money line,...in the report posted by "investor" the scenario is outlined.
A new energy hub is created, where Turkey is a major part of the plan. There can not be a bunch of ragtag guys running around in the mountains, blowing up pipelines between Iraq's northern oil fields and Turkey.
Israel is part of that energy hub. Israel will not be part of an energy hub that have paid off PKK terrorists either getting bribes, and letting the oil flow or blow it up, or letting Iranian Katusha rockets reach Lebanon.
It all depends on reliable oil getting to Turkey.
Also, as the pan called out for,... is a little bit more global than that.
With Turkey getting in on the energy heavy weight side, this will start to make a leverage on the Russian oil.
Russia are kind of rouge, and are not too diplomatic, and doesn't mind stepping on a toe here and there. The development of eastern Europe have taken good steps, but have been slowed down by Russian arm wrestling with Russian oil.
There are conflicts, between Russia and the smaller former Soviet republics, and even instances where the Russians have just turned the oil tap off.
The key to a counter leverage is Turkey. Oil to Europe will make Turkey Europe's supplier, and with Turkeys interest in entering the European Union, this will fit like the hand in the glove.
So it looks like it is a matter of mopping up the last rest of the rouge bands running around in the hills, and it seems that Turkey got the honor this time. It is the natural enemy after all, and it wouldn't seem really in the eyes of the Kurdish public to be too tasteful if the US went after them with full force.
No Sara, I don't think this is something that will escalate into something ugly, on the contrary, the involved parties, are cheering on. The only parties that would lose is Iran and Syria. Their inter connecting "highway" would be no more.
So this is business as usual.
Your analysis of the free floating currency is very spot on.
No need to develop more on that, you nailed that one.
Then to get in a bit on the philosophical side of things, your last posting, got me thinking, the forces that are holding Iraq down, and for what reason.
Well, you may have perception of big old spirits having a powwow over there, but me, for my part I would like to have something more tangible to designate the causes to.
I would perhaps put it this way.
Confusion in itself is not a feeling, or intention, but it is a condition of something.
Confusion in itself is not evil, but when evil is present, confusion is present.
When you KNOW all the particles, their purposes, their natural places and their order of importance, you will not have confusion. You will even be able to observe confusion and have no problem with confusion because you can assign all the particles their correct order of importance, know their correct places, and know their ranks and order.
If you know, it will get in order. and what is not in order will get there (eventually, when the snow melts, when I get my next paycheck, or when the paint dries, or whenever, but you know the order, so that particles have no effect on you)
Thus, when you are told lies, misinformation or wrong order of importance, you will get confusion.
The confusion I can observe in Iraq is on many levels.
It's the old way of living, where old truths (that are false) will slowly be replaced by working applicable truths.
It is the lies and confusion that follows in big entities like the UN, and all it's organization's, we have IMF, we have the WB and we have a very uneducated Iraqi work force in the economical field, that will be very hard pressed to get everything straight right at this moment in Iraq.
We have the lies and confusion on the educational field, old false lies that are following generation after generation and false, or wrong economical moves are done over and over again, just as they were taught by the good ol professor.
We have a field of politics, where the power brokers are playing over and under the table, with their own agenda as the first priority, books have been written about this earths human race doing politics, so not much have to be added to the lies and deceits that have, and are floating around there.
In all parts of life there is always this insane solution that always seem to hang in, and prevail, even after the crowd on the street are screaming and pointing to the obviously, it will be "decided" that it will be there, stay there and stay in effect, in the interest of the public, or something like that.
So to go back to Iraq, and why the Iraqi Dinar is kept in a ridiculously low range year after year, and the correct steps have never been taken, I see the thing as a collective stupidness, where the intention of a self is governing the action of many.
It is like when a movie theater is burning.
If everyone is acting with full responsibility for each other, and acted in unison, not pushing and walk out in unison, like a fast marching marching band, the whole movie theater would have been vacated in no time.
But as the interest of the individual is higher than the interest of the whole group of individual, everyone is acting in the exact way that will kill everybody.
I agree with you that self-interest is the key to what is happening with the Dinar right now. When you said, "So to go back to Iraq, and why the Iraqi Dinar is kept in a ridiculously low range year after year, and the correct steps have never been taken, I see the thing as a collective stupidness, where the intention of a self is governing the action of many."
I believe this evaluation of yours is spot-on. (I just think that the collective stupidity through self-interest is being manipulated from a higher dimension for unkind purposes against the Iraqi people. But how it manifests in this earthly realm is as you said, as collective stupidity and self-interest.) Another factor I mused upon after my last post is the fear of death which the terrorists give to the Iraqi government.. including kidnappings and so on.. such extortion is likely also a great factor in why they have not RVed. But if one man (Maliki) is too scared to do what is right, there are other Iraqis with the internal fortitude to do it and he should step down and let someone else take the lead and do the revalue who has the bravery to do so instead of his timidity. Because some Iraqis do see that it is the only way the Iraqi people will be set free and a necessary leg to victory and freedom. Without it, the Iraqi people remain impoverished and held under false control and manipulation. So there are those who will do the right thing and RV if given the power to do so. May God give us that person (and/or persons) in power who will RV for the good of the Iraqi people.. and the good fortune of the currency of Iraq (both of which we Dinar investors would cheer).
Even Investor's post of a rant from the lunys on the left fringe has some truth to it (though not much). Such as when they said, "Wareing told the paper that security in the area "was no longer an issue for investors." Good news which shows the improvement in Iraqi security to date and how the troops have been doing a wonderful, blessed job in protecting the Iraqi people and gaining peace for them. In spite of his denials, it WAS an issue before, and that situation has changed. Kudos to the troops and forces on the ground for a job well done!
He also notes the death of innocent Iraqi women, saying, "Their crime is not “promiscuity,” but rather opposition to the transformation of Iraq into an Islamist state." So the ENEMY here is those seeking to transform Iraq into an Islamist state, NOT the Bush Administration and oil.. BUT, he will find a way, stepping back from that very plain situation one step at a time and adding on layer after layer of accusations, to shift the blame from the real cause of the deaths stated here of "opposition to the transformation of Iraq into an Islamist state" - onto the government of the US which he so dispises and anyone seeking to help the Iraqis develop their oil sector.
The article goes on to deprecate all attempts to give Iraq prosperity and make money in the process. Making money? After all, businesses are in the business of making money, ask your employer. And businesses want to make money in Iraq. As for the characterization of them and President Bush as totally demonic for wishing to make business deals which do make a profit - which is the basis of a free economy (how evil, right?) when the article concludes, "So Bush's confident strut, his incessant upbeat pronouncements about the war, his complacent smirks, his callous indifference to the unspeakable horror he has unleashed in Iraq – these are not the hallmarks of self-delusion, or willful ignorance, or a disassociation from reality. He and his accomplices know full well what the reality is – and they like it."
THAT turns my stomach. Because it is without respect or dignity to a great man whose heart is not callously indifferent, nor is his having confidence in what he is doing for the good of the Iraqi people an evil. When the Iraqis appealed to his humanity and begged him to rid them of Saddam and his rape rooms, his heart was moved. I swear God, who knows the thoughts and intents of the hearts will judge these detractors who speak such evil things very harshly for their slander of the man. They are truly of those who dispise government and speak evil of dignitaries:
2Pe 2:9 The Lord knows how to deliver the godly out of temptations, and to reserve the unjust to the Day of Judgment to be punished:
2Pe 2:10 But chiefly them that walk after the flesh in the lust of uncleanness, and despise government. They are presumptuous, selfwilled, they are not afraid to speak evil of dignitaries.
Who are these people who speak such evils of a duly elected official and those who stood and voted to go into Iraq? When they talk of unleashing "unspeakable horror" in Iraq.. all war is hell, always is. But sometimes it is necessary. Has the surge ended up bringing nothing but "unspeakable horror" to the Iraqi people? Are the Iraqis better off under the Parliament now or Saddam? The Iraqis themselves state they believe they are better off now.
2007 - Four years into the war, the biggest poll since coalition troops entered Iraq on March 20, 2003 showed that by a majority of two to one, Iraqis preferred the current leadership to Saddam Hussein’s regime, regardless of the security situation and a lack of public services. http://www.conservapedia.com/Operation_Iraqi_Freedom#Liberation_From_Ba.27athist_Tyranny
That poll saying 2/3rds say it was a good move was pre-surge, and things have only gotten better since then. Iraqis are returning in droves, and violence is down. From that same url/section: "Since the surge, this has ceased as 60-80% of the violence has been stopped. On Sat Feb 16, 2008 reuters reported, "Attacks by insurgents and rival sectarian militias have fallen up to 80 percent in Baghdad. The U.S. military says attacks have fallen across Iraq by 60 percent since June on the back of security clampdowns and the deployment of 30,000 extra American troops."
So war isn't always "unspeakable horror" and evil. It does accomplish some very worthwhile things for people (like freedom from a dictator called the Butcher of Baghdad). Sometimes, war is necessary to attain good goals. In this ongoing war against Islamic extremist terrorists, he notes, "Basra fell largely under the control of Shia militias after the ousting of Saddam Hussein and has witnessed a violent turf war, as well as high rates of murder and kidnapping. Corruption is rife, residents are afraid to use banks in case they are robbed and smuggling of oil and other goods helps fund militias and criminal gangs. Unemployment has been put at between 30 per cent and 60 per cent, and the agricultural sector is in serious decline as cheap imports grow."
What could help this.. more military action to remove the militias, certainly - we have seen how the surge has brought more peace to the people in Iraq already, and removed violence and fear. But the unemployment is a HUGE factor there. Does this article say get the money going and people back to work by stimulating the economy of Iraq which means developing their oil? No. It is all a grab to steal their oil from the greedy monsters. What will help is seen as wickedness. The article has nothing but bad and evil to say on the question of how the government has and is conducting the war. Instead of the fault lying with the terrorists, somehow these detractors always put it back on the US government and oil, particularly anyone daring to try and make money in Iraq for themselves and the Iraqis (true business deals are win-win, both must profit for people to enter into business deals, that is real life and reality).
This anti-US-government article is correct in that going to war wasn't self-delusion, willful ignorance or dissasociation from reality, that is true. But neither was it from malicious intent to steal Iraq's resources which motivated President Bush AND both houses of Congress to endorse the war in Iraq. As I posted before, President Bush would not have approved the war measure without the stimulus of 911. And, it HAS helped the Iraqi people and they will be better off for it in the long run. AND, the making of profit by the oil industry is a normal business practice done throughout the world and not a horribly wicked thing.. so long as the Iraqi people are properly compensated for it. My concern is that the Iraqi government will not RV and they will only give the Iraqi people their "fiat" or monopoly money, keeping the real profit to themselves. They can take in real money for their product (oil) then give the people only tiny amounts based on their falsely set Dinar exchange rate. This will give the Iraqis more than they have now, but never get them to a world-class economy or economic standard of living. The corrupt (or scared) government can then keep the gravy train to themselves.. because they are making very sure that Iraq will prosper through this. By that, I fear they mean themselves and not really the people.
It would take a man of great bravery and faith to RV the Dinar while running the Iraqi government. We have not seen one yet. I believe Maliki will never RV the Dinar. He hasn't the faith, vision or ability to hope for good for the Iraqi people. What the motives he has are.. fear for his life or his loved ones, greed or corruption, misplaced religious zeal, an agent for Iran.. I cannot tell. But he isn't the man for this task. I pray the Iraqis replace him with someone who will do what is necessary to get prosperity for the masses by joining the world economy and not living in their monopoly money kingdom. Maliki, and any others who will not RV, have a lot of blood on their hands for their inaction. I say that because the lack of an RV is a direct cause of more instability and fosters terrorism as well as a lack of prosperity for everyday Iraqis. It steals jobs, prosperity and hope from the Iraqi people, and some of them have turned to terrorism as a result. Sins of OMISSION are as evil as sins of commission. And this omission (to RV) is a very great sin against the good of the Iraqi people.
Instead of it being wicked interests spurring on and endorsing keeping the prosperity from the Iraqi people as stated in the article when it slanderously says, "Naturally, since Nigeria is the openly stated model for what's to come, the actual people of Iraq will get the barest trickle of this bumper harvest of their national wealth. As in Nigeria, most of it will be shipped back to the West and spread around a thin layer of corrupt and corrupting local elites, while the majority lives in poverty and the society is riven with ethnic, religious and political conflict spurred by the twin goads of greed and vast injustice. And this unholy union is what Bush is really talking about when he talks about "victory.""
Instead of this, I think it is the West taking their rightful profit from a normal business venture and helping Iraq to have prosperity, which is not evil. The problem is not the rightful profit from a successful business venture, but the corrupt Iraqi officials keeping the Iraqi part of the profits out of the hands of the Iraqi people by not doing the RV. That way they keep the money to themselves and live on in monopoly land.. where they stay rich and the ordinary Iraqis have little. Look at Iraq today.. see how it is now? That is the way they wish to keep it, for whatever motives. It isn't the US government or big oil's fault.. it is the Iraqi government's fault for not doing the RV and joining the real world so their people can have normal lives and prosperity. My view and belief is that the Iraqi people can have as much prosperity as Kuwait or Saudi Arabia has.. if they have a good enough government... one which will live in the real world and let the prosperity flow to its people in real terms not the current fiat monopoly money.
Investor - My taking umbrage at the article in your last post was not meant in any way as a deprecation of you or your posts, which I have appreciated very much. I just differ in my opinion from the views expressed within that particular post.. and I discussed my views of it since it fit with the dinar discussion Roger and I were having about the RV. Again, no offense was intended, and I hope to hear your viewpoint on advancing the good fortune of Iraq for the people of Iraq and the Dinar.
U.S. casualties drop in Iraq in February
Sat Mar 1, 2008
By The Associated Press
BAGHDAD - An Associated Press count finds 29 U.S. troops died while serving in Iraq in February, the third-lowest monthly casualty toll for the U.S. military since the American-led invasion in 2003.
Troop fatalities declined from 40 in January, and also dropped steeply from February 2007, when at least 81 troops died in Iraq.
Three factors are widely credited with reducing violence in Iraq over the past six months: an increase in U.S. troop levels; a ceasefire by radical cleric Muqtada al-Sadr's Mahdi Army militia; and the decision by tens of thousands of Sunni fighters to accept U.S. funding and turn against al-Qaida in Iraq.
Did you know that 47 countries have re-established
their embassies in Iraq?
Did you know that the Iraqi government
currently employs 1.2 million Iraqi people?
Did you know that 3100 schools have been renovated,
364 schools are under rehabilitation,
263 new schools are now under construction
and 38 new schools have been completed in Iraq ?
Did you know that Iraq 's higher educational
structure consists of 20 Universities,
46 Institutes or colleges and 4 research centers,
all currently operating?
Did you know that 25 Iraq students depar! ted
for the United States in January 2005
! for the re-established Fulbright program?
Did you know that the Iraqi Navy is operational?
They have 5 -100-foot patrol craft, 34 smaller vessels
and a naval infantry regiment.
Did you know that Iraq 's Air Force consists of three operational squadrons,
which includes 9 reconnaissance and 3 US C-130 transport aircraft
(under Iraqi operational control)
which operate day and night, and will soon add
16 UH-1 helicopters and 4 Bell Jet Rangers?
Did you know that Iraq has a counter-terrorist
unit and a Commando Battalion?
Did you know that the Iraqi Police Service has over 55,000
fully trained and equipped police officers?
Did you know that there are 5 Police Academies in Iraq
that produce over 3500 new officers every 8 weeks?
Did you know there are more t han 1100
building projects going on in Iraq ?
They include 364 schools, 67 public clinics,
15 hospitals, 83 railroad stations,
22 oil facilities, 93 water facilities
and 69 electrical facilities.
Did you know that 96% of Iraqi children under the age of 5
have received the first 2 series of polio vaccinations?
Did you know that 4.3 million Iraqi children were
enrolled in primary school by mid October?
Did you know that there are 1,192,000
cell phone subscribers in Iraq
and phone use has gone up 158%?
Did you know that Iraq has an independent
media that consists of 75 radio stations,
180 newspapers and 10 television stations?
Did you know that the Baghdad Stock Exchange
opened in June of 2004?
Did you know that 2 candidates in the Iraqi
presidential election had a televised debate recently?
OF COURSE WE DIDN'T KNOW!
WHY DIDN'T WE KNOW?
BECAUSE...
OUR MEDIA WOULDN'T TELL US!
Instead of reflecting our love for our country,
we get photos of flag burning incidents at Abu Ghraib
and people throwing snowballs at the presidential motorcades.
Tragically, the la! ck of accentuating the positive in Iraq serves two purposes:
It is intended to undermine the world's perception of the United States
thus minimizing consequent support,
and it is intended to discourage American citizens .
---- Above facts are verifiable on the Department of Defense web site..
Fiat money, (money that are valued because of a decision(controlled) or opinion(bought and sold), as opposed to backed money), will always have a tendency to be manipulated in one way or the other, as Gold or Silver or cows in the corral, is not the basis of it's value.
Another aspect of why I think the Iraqi Dinar is held where it is held is very much in the culture of the Arabian and Persian countries, Saudi Arabia, Kuwait , Dubai and other oil producing states, have such a strong economy, and could have had their currency free floating, but as their neighbours to the east doesn't, the neighbour to the north doesn't, and the neighbour to the west doesn't, well then, that is what we are suppose to do, it is an accepted thing to do.
So the truth about money in those part of the world, would be, an expectancy to control it artificially.
Leave a room empty, and leave it uncontrolled, and in no time it will be a storage space. Some one will take over that control, and make a decision in how to use it.
Walk to a crowded area and look confused, and you will almost as an automatic function, pull in people that are willing to take control, -"do you need help sir?"
The hard part is when someone that have taken control over something , will have to give up that control, he will fight for keeping the control.
The teenager that filled all his stuff in the empty room with make all kind of problems and try to convince that the stuff has to stay there, and the person that helped you when you were confused, giving you directions, almost can't stop, and are explaining it three times for you, and keep explaining how to get there, long after you have got it.
Control over something is not easily taken, when someone or something is already controlling it.
In the Middle East, monetary control is expected, and I have very little faith in that it will be less controlled.
It may, but the resistance of letting it lose on the Forex, and let the market decide on it's value will probably be very hard fought. This will be about the same as yanking an electronic video game control unit out of the hands from an 9 year old.
It wont go easy.
Whatever Iraq will have to decide upon, they have to start moving again, as long as the Dollar is showing weakness, and the Dinar is pegged to the Dollar, the Dinar will go down with the Dollar, and have to be re-adjusted. The value of the neighbouring states money are rising, and that puts another pressure on the Dinar to rise.
The value of the Iraqi reserve is rising and that put another pressure on the value of Iraq,
The amount of the Iraqi debt is sinking, and that puts another pressure on the Iraq Dinar to go up.
The amount of violence is shrinking, and stability is rising, thus business, that put another pressure on the Iraqi Dinar to rise.
The amount of investment, ( not only private, but also another record big state budget, to be sink'ed into the society) is rising, and that also put a pressure on the Iraqi Dinar to be raised.
The amount of money in circulation in the business system (most money in existence is not physical money), is increasing, putting a pressure on the Iraqi Dinar to rise.
Some may object to the last statement, but please notice that I said the amount in the business system, not the amount printed, quite a difference, you print up a bunch of money but can't make it work in the system, you will of course have inflation.
I need to expand a little bit on the last issue here.
A very small system, an island with three persons, with their own money, have in all essence no impact on any trading partner outside of their own system. Their own system will not permit for much value, and their own currency almost by necessity have to be a controlled currency in order for it to have any exchange value at all, while a big system, Europe, the US, Japan or something similar, will just by it's presence have value.
Thus, in order for a big system to work, it needs a big amount of currency to float around in it's veins, thus the bigger the system, the more need for more currency in order to make it continue to work.
If you print exactly what you need in order for the veins in the beast to operate optimally, and the beast is growing, you will of course have to print more money, and even by doing so, the money will be more valued, as the value of the hardware in that system, harbors, land, bridges, machinery, work force, profitability, and so on, will have an inherited higher value, than three houses on an island where the three inhabitants have their own money.
That is one of the reasons why richer and higher producing countries, or economical systems have higher valued money compared with (on the other extreme) 3'rd world countries.
A currency can go up in value over other currencies, and still have inflation.
In a free trading economic system there is an inherent annual inflation of a few %.
Most money in this world doesn't exist.
Depending on the laws in each country, that will permit banks to hold liquidity in comparison with their lending volume, you will in general find that about 10% of existing money exists only in paper, as Dollar bills, Stirling or Euros (or whatever).(Don't panic now, but banks don't have much money, most of their assets are in loans, same with the feds, where the values are in securities, and the industry, where they have obtained or are giving credits)
Ok lets leave that subject now, so Iraq have all the ingredients, plus one of the obvious one, oil, in itself worthless, until pumped and sold, but it acts as a guarantee for future debit and credit.
Question is, if they will do the dreaded, zero lop or an RV, or a slow recovery.
Either way, this year will probably show the intentions of the Iraqis in what way they want to go. The Iraqi industry and oil are in negotiating phase, and contracts are signed to the point that they have an ink shortage right now.
The effects on the industry when a period like that is experienced, is less of a boom, but more of an optimistic look on the future, and a willingness to invest, develop and in general have a more entrepreneurial attitude.
The real economic effects, will most probably be seen this year, as the first big investment projects are moving in. People are getting jobs, and the trickle down effect will go far, but it will only happen when the Iraqi man can come home with a paycheck.
The Dinar can not stay where it is, in a boom economy.
Probably by the middle or in the late part of this year we will see the first substantial moves in the Iraq economy, the first invested wheels will start to pay out. THAT will by definition be the start of the economic boom....we have had enough of the poitical stuff....
The value of the Iraqi industry is right now pretty low, but what they have is a hope for the future, they can see solutions, they can wheel and deal, like they have never been able to do before.
So, the Dinar will not stay, it can not stay. It will be an impossibility.
The hard part is to yank the controlling fingers from the Dinar, and let it prove itself.
There is always someone along the control line that knows best.
Published: Feb. 28, 2008 at 10:45 AM
Print story Email to a friend Font size:By BEN LANDO
UPI Energy Editor
WASHINGTON, Feb. 28 (UPI) -- Iraq's draft oil law is stalled in Parliament, the national government and Kurdistan Regional Government are moving forward with their own deals -- unconstitutional, the each says of the other -- and Iraq's oil production is stalled at just more than 2 million barrels per day.
Perhaps it's a good time to take a step back and recap the debate over Iraq's oil sector and its possibilities. To do so, United Press International has reviewed three recently published documents providing contrasting and varying insight. It's not exhaustive, but a good addition to an important discussion.
The first is "An Opinion Opposing the Existing Draft Iraqi Oil & Gas Law," by Fouad al-Amir, a 70-year-old Iraqi resident with "40 years in the Iraqi Ministry of Oil," according to an ex-Iraqi oil official.
"The importance of Iraq comes from its high oil reserves, and the very good possibility of increasing it," al-Amir wrote. He called it suspect that U.S. officials and Big Oil companies have had their eye on Iraq's oil since before the war, citing Vice President Cheney's energy task force documents, State Department study groups and an oil company-funded think tank calling for a certain type of contract.
Iraq's oil sector has been nationalized since the 1970s, though Saddam Hussein gradually displaced many technocrats with political allies, and oil production decreased.
A proposed oil law that receives heavy backing from Washington is being touted as a way to direct investment to the oil sector, through at least partial denationalization. The fear by opponents, such as al-Amir, is that through production-sharing contracts private companies will be allowed too much access and even control over Iraq's oil. PSCs, which the KRG has signed in frustration with Baghdad, give companies a guaranteed minimum cut of the oil, after recouping their costs, deals looked upon as favorable by Wall Street.
"The existing laws in Iraq allow all kind of oil development, except foreign sharing in Iraqi oil," al-Amir wrote. "There would be a need for (an) oil law later when safe and stable, political and social, matured conditions are prevailing. … It should be reorganized to emphasize central planning and decentralized application of the plans."
The Iraq National Accord, a political party led by former Iraq Prime Minister Iyad Allawi, who is angling to replace current Prime Minister Nouri al-Maliki's governing coalition, has issued a critique of the current process of the oil and gas law, as well as of the national Oil Ministry.
The INA calls for an immediate passage of the Revenue Sharing Law to "create trust on all sides." It's set to be included in a package of laws along with the oil law, the Ministry of Oil law and the Iraqi National Oil Co. law.
INA calls for the INOC to be re-established and given the task of operating currently producing fields "and double their current production," while international and Iraqi private oil companies should bring into production the discovered but not developed fields.
"The government's role should be regulation and oversight, while having capable companies Iraqi and international, investing and working in all areas of Iraq," the paper said.
And it repeated the claims of the KRG in its dispute with the national government. It said Baghdad made "unauthorized changes" to the draft oil law agreed to in February 2007. That law is now stuck in Iraq's Parliament. The KRG decided to move forward on its own, passing a regional oil law and signing dozens of contracts with international oil companies.
The INA said any contracts will increase oil production, thus revenues, and should be considered "positive." It said the Supreme Court of Iraq should determine which side is correct in the dispute, which is based on either sides interpretation of the 2005 Constitution, and criticized national Oil Minister Hussain al-Shahristani for, among other things, calling the KRG deals "illegal," blacklisting companies that signed with the KRG and cutting those firms from Iraq oil purchases.
While the timeline for finding agreement on the oil law is unknown, a new report from the Center for Global Energy Studies says there is much than can, and should, be done to enhance Iraq's hydrocarbons sector in the meantime.
"The fact that the nation is composed of different sects and races has contributed less to the problem than politics, the security vacuum post April 2003, and the very slow process of building up and equipping the national army and security forces. The conditions in Kurdistan have been safe enough for business. In the southern governorates of Basra and Missan, security conditions have been relatively satisfactory for field activity to continue," according to the Executive Summary of the report -- which is offered by the London-based consultancy for more than $26,000.
"Field activity in the short term can, however, go ahead in Anbar, Basra, Missan, South Thi Qar (Nasiriyah), parts of Wasit, in addition to Dohuk, Erbil and part of Sulaimaniya" provinces, the report added. Large-scale exploration is the biggest holdout until the government decides who controls the oil strategy.
Other issues include the flaring of 70 percent of gas produced during oil production, instead of utilizing it in power generation.
Plans in the early 1980s to boost production to 6 million bpd were cut short by successive wars, U.N. sanctions and Saddam's mismanagement of the sector. Security issues keep out contractors and political stalling keeps Iraqis from doing any major projects. Production increases will come after wells, pipelines and other infrastructure are fixed, upgraded and protected, the report said.
And although Iraq's export facilities have a 3.5 million bpd capacity, according to the report, increasing production to the 6 million bpd target -- or higher -- "would definitely require expansion of the production centers, trunk lines, main lines and export facilities."
The northern pipeline from Kirkuk to a Turkish port has only recently been regularly protected from insurgent attacks, and is now flowing at about 350,000 bpd -- less than a quarter of its capacity. Meanwhile exports from the southern ports are heading toward the 1.9 million bpd mark. Other pipelines have been bombed and remain out of operation.
The report predicts average daily production will reach 2.692 million bpd by 2010, with exports at 2.217 million bpd. Such oil sales would continue to bring in the tens of billions of dollars -- especially at today's oil prices -- which fund nearly the entire Iraqi federal budget.
ANALYSIS: Iraq welcomes Ahmadinejad, Sunni Arabs object
Mar 2, 2008
Cairo/Baghdad - The Iraqi government lavished hospitality and praise on Iranian President Mahmoud Ahmadinejad Sunday during the first visit by an Iranian head of state to a country that was for decades considered a bitter foe.
Yet, the visit was met with a mix of reservation and outright protest from Iraq's Sunni Arabs, who watch nervously Iran's growing political and economic clout in their country.
Iraqi President Jalal Talabani played the good host by avoiding any public mention of what could perturb the visit.
The border treaty was not discussed Sunday, Talabani said. His Sunni Arab Vice-President, Tariq al-Hashimi, however, did not hide his nationalist position towards Iran.
'We hope we can put an end to troubled relations between both countries. As for normalizing ties, this should be on the basis of respect of sovereignty and non-interference,' al-Hashimi said in a statement published on the website of his Iraqi Islamic Party.
Both countries should start simultaneous negotiations over a number of unsettled, complex issues, al-Hashimi said.
Anti-Tehran sentiment ran high in Sunni-dominated Fallujah in western Iraq where protestors burnt Iran's flag and announced a boycott of its goods, the Voices of Iraq news agency (VOI) reported Sunday.
'The protest is a message to Iran from the Iraqi people, expressing our indignation towards Iran's conduct. It is backing and training militias that killed hundreds of Iraqis,' Sabah al-Ilwany, a senior member of the Fallujah Assembly Party, told VOI.
A rally bringing together Sunni Arab tribal and political leaders in the multi-ethnic city of Kirkuk voiced strong opposition to the visit.
'We have seen today a visit by [a president] of a state with hands tarnished by the blood of innocent people in Iraq, Lebanon, Syria and Palestine,' Ahmed al-Ubaydi, the leader of the Iraqi Kirkuk Front, told the congregation.
Al-Ubaydi was referring to Iran's growing influence in the region, which causes unease in many Sunni-dominated Arab countries.
Tribes in Shiite-dominated southern Iraq joined those criticizing Ahmadinejad's visit.
A member of the association of southern Iraqi clans, Hasan al- Lami, called for the border with Iran to be redrawn and an end to its 'oil theft.'
Iran has denied allegations recently made by Iraqi oil officials that it has seized oil wells on its border with the southern Iraqi provinces of Basra and Missan.
It continues to be unwise for insurgents to kill US/coalition soldiers (or others who oppose them in Iraq).
Major al-Qaeda figure in Iraq killed, says US
Ap, Baghdad
Monday, March 3, 2008
A US military helicopter fired a guided missile to kill a wanted Saudi Arabian al-Qaeda in Iraq leader who was believed responsible for the bombing deaths of five American soldiers, a spokesman said Monday.
US Navy Rear Adm. Gregory Smith said Jar Allah, also known as Abu Yasir al-Saudi, and another Saudi known only as Hamdan, were both killed Wednesday in Mosul. Al-Saudi headed up the al-Qaeda network in southeast Mosul, an insurgent hotbed where US forces wage daily battles against the group.
Whoever got that info sure had a lot of things connected to the date 3/18.
Most is purely coincidental, but hey, who knows.
The bank that have to pay back their creditors with the rate that they were payed is not necessarily bound by a current exchange rate, that is most probably stipulated in the contract.
If party A recieved from party B, a credit, at the sum of X, with a certain value of party A and B's countrys currency at the time...lets say a 1:1 (just for the discussion) , then party A have receive a value that is determined by that exchange rate, and party B have given something with that same value.
Lets say party A's countrys currency goes down the drain, and at the time of repayment, 20 years later, it is worth only 10.000 to : 1, then the party that gave the loan (Party B) will of course not be happy to get something back that is 10.000 times smaller than they originally borrowed to party A.
Usually the stronger currency is used in the whole transaction, you borrow in Klondykian Nuggets, and you pay back in Klondykian Nuggets, but not all the time.
Some times, in credit contracts between two different parties using two different currency systems, this is adjusted to the value that was given and recieved at the time of the transaction, so if a credit is announced to be adjusted on a lets say 20 year old credit, and numbers from that time is used, please don't jump into the conclusion that this is a precursor or a leak about an RV.
But...hey, we'll keep our eyes open for something the 18th of Mars.
We can of course hope, soooooome day they're going to just have to do something about it, so why not that date.
US Treasury sees 'window of opportunity' for Iraq economic reform
02/29/08
WASHINGTON (Thomson Financial) - Iraq's government has made real progress on economic reform over the last year, and with better security now has a chance to make much more progress improving the standard of living of its people, a senior US Treasury official said today.
"There is a window of opportunity on the economic reform side that has been created by the security improvement," Undersecretary of Treasury for International Affairs David McCormick told reporters in a briefing after returning from two days of meetings with Iraqi economic officials in Baghdad. Now, it is "critical that they seize the opportunity on the economic side," he said.
Over the past year, for example, headline inflation has fallen below 2 pct from more than 65 pct at the end of 2006. The government has also signed a new economic program and stand-by lending agreement with the International Monetary Fund. It sets out economic benchmarks but does not provide immediate loans.
The IMF said "despite difficult conditions, Iraq has made progress toward stabilizing the economy," but that the economic outlook "hinges on improved security." The 2008 program includes maintaining lower inflation and expanding infrastructure projects in electricity, water, sanitation, education and health care.
McCormick emphasized that US Treasury technical assistance will focus on what officials call "budget execution" as the key reform goal ahead. That is a somewhat euphemistic way of referring to the fact that Iraq has lacked even the basic administrative ability to spend the oil revenue or aid accumulating in the government accounts, and lacked any reasonable accounting system to prevent massive portions of what it did spend from being diverted by corruption.
But McCormick said Iraq has made enough progress that there is a shift from reconstruction to development and toward building governing and banking capacity. Treasury also plans on doubling its assistance staff in Iraq to 24.
McCormick would not accept the wording, but he did seem to be describing a situation in which, despite ongoing stalemate at the political level, there are bureaucrats in the government who still manage to make progress on some basic economic issues.
One particular political stalemate, the inability to pass an oil revenue distribution law, does remain a significant barrier to economic reform and progress in the average Iraqi's standard of living, McCormick said.
Prime Minister Announces a 90% Increase in Governorate Budgets
Prime Minister Nouri al-Maliki revealed on Sunday a 90% increase in Iraq's 2008 federal budget, as Vice President Adil Abdul-Mahdi disclosed an amended draft for the election law of governorate councils that will soon be submitted to the parliament.
(www.noozz.com)
Baghdad, 03 March 2008 (Voices of Iraq)
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Iraqi Prime Minister Nouri al-Maliki termed as "positive" Sunday's talks with visiting Iranian President Mahmoud Ahmadinejad, calling on the once-bitter enemy country to help in reconstruction efforts.
Speaking at a joint press conference with Ahmadinejad in Baghdad, Maliki said, "We had very good talks that were friendly and brotherly...We have mutual understandings and identical views in all fields."
Maliki said Ahmadinejad's visit "would encourage the leaders of neighboring countries to do similar trips and bolster the bilateral ties with Iraq."
Citing Iranian help in stabilizing security conditions in Iraq, the Iraqi premier called on Iran to "help in Iraq's reconstruction."
Though much of the public talk focused on the warming relations between the two countries, Ahmadinejad denounced U.S. accusations that Iran was training and supplying Shiite militia fighters in Iraq with weapons designed to kill U.S. troops.
"Such accusations worsen the problems of the Americans in the region and are not going to solve their problems," Ahmadinejad said in a press conference with Maliki.
The Iranian leader lauded the Iraqi people's culture, describing it as "lasting and self-reviving."
Earlier on Sunday Iraqi President Jalal Talabani said many agreements were reached with the visiting Iranian president.
"We have reached many agreements with Iran in various fields, particularly in economic and political domains," Talabani told reporters in a news conference jointly held with Ahmadinejad.
Replying to a question on the amendment of the Iranian-Iraqi accord of 1975 in Algiers, Talabani said, "We have never touched on this issue in our meeting today."
On March 6, 1975, with the mediation of the former Algerian President Houari Boumedienne, Iraq – represented by the then-vice president Saddam Hussein – and Iran – represented by the Shah Mohammed Reza Pahlavi, signed in Algeria the Algiers Accord to demark the borders between the two countries.
By virtue of the agreement, Iran officially agreed with Iraq to have part of Shatt al-Arab under Iranian sovereignty, according to the Thalweg Line (meaning the median course of the Shatt Al-Arab waterway).
"The negotiations were positive and we are resolved to enhance cooperation in all fields," Talabani remarked.
Ahmadinejad who expressed happiness to visit Saddam-post Iraq, said "I am here to consolidate the friendly ties between the two countries."
The Iranian president arrived in Baghdad on a two-day-visit.
(www.iraqupdates.com)
28 February 2008 (Iraq Directory)
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Experts confirmed that Iraq has an oil stockpile of more than 100 billion barrels which is a massive amount, enough, if used, to satisfy the growing international demand for energy and reduce the high oil prices, but they say that the current situation will not allow any development in this sector, especially with the security situation and the lack of regulating laws.
The Government in Baghdad hopes to raise oil production to six million barrels over the past five or six years ahead, which prompted major oil companies, such as "Shell" and "Chevron" to race to invest in Iraq; however, investments are linked to several other factors, mainly the need to stabilize the security situation, making the appropriate legislations and developing the infrastructure. Therefore, Robert Powell, an expert at the Research Unit "Economist", expects the Iraqi oil sector will not be improved unless foreign investments and expertise return, and even then, the development will be slow and gradual. Powell added that the legal issue is of utmost importance because major oil companies will not spend their money in contracts that may be revoked in future causing them heavy losses.
It is noteworthy that the Iraqi parliament has been trying for years to pass an Oil Law in vain, and tumultuous debates have been going on for years around this issue, which leaves the organization of the oil sector a matter of disagreement among the political, ethnic and sectarian parties because each one of the wants to ensure its respective share and determine the revenues distribution.
Iraqi Oil Minister, Hussein Al-Shahrastani, says that Iraq had already begun increasing production capacity, after the Government has adopted security strategies helped to protect the installations, through the adaptation of gunmen who used to attack oil pipelines in units to protect them, an experience similar to the "awakening" councils. But Iraq's Deputy Prime Minister, Barham Salih, highlighted another aspect of the problem, saying: "We want to obtain financial returns quickly; we must complete the reconstruction efforts and provide jobs for people, because this is very important and will be reflected on the security environment."
(www.iraqupdates.com)
OF NOTE: SADDAM HAD SLEEPER GROUPS IN THE US...
a truly "SUBSTANTIAL OPERATION"..
Saddam had 'substantial operation' in U.S.
Published: March 3, 2008 at 12:15 PM
WASHINGTON, March 3 (UPI) -- U.S. prosecutors filed more charges against alleged Iraqi spies operating in the United States than against any other nation since the Cold War, officials say.
Patrick Rowan with the Justice Department's national security division said Iraq under Saddam Hussein "had a substantial operation" in the United States, USA Today reported Monday. He said since 2003 they have filed charges against 12 alleged spies, using documents and information seized from Iraq government offices after the invasion.
The "sleeper" groups intended to influence U.S. foreign policy in Saddam's favor and spy on Iraqi opposition groups, Rowan said.
One of the alleged spies, Najib Shemami, stands accused of giving Saddam's regime details on Iraqi expatriates slated to work with the U.S. government on its planned military operations there.
Shemami and several others were charged by federal prosecutors with spying inside the United States since 2003, when the U.S. launched operations in Iraq.
Draft Law oil and gas up to the House of Representatives and will be discussed after the end of parliamentarians from their holiday
2008-03-03 2008-03-03
مسودة قانون النفط والغاز تصل الى مجلس النواب وستناقش بعد أنتهاء البرلمانيين من عطلتهم Draft Law oil and gas up to the House of Representatives and will be discussed after the end of parliamentarians from their holiday
كA member of the Committee of oil, gas and natural wealth in the Iraqi Parliament, Adnan Nation on the arrival of the final and official version of the draft law of oil and gas to the House of Representatives
هبل For the reading and discussion and approval during the first meeting, which will resume after the leave, which expires in 18 months in March next
وأت The Nation told Agence (Lucky) Italian News that "the draft law had been lifted from the Cabinet, in its final version, to Parliament in February of last year, but the discussion did not take place after the government asked to re-draft the law for the settlement of some controversial points contained therein with the Kurdistan Regional Government, in July last bill was submitted to parliament again in the amended version, but the Cabinet asked the House to slow down in the second discussion and deferred the failure to reach a compromise formula on the draft law "and pointed to the Nation "Directive of the Council of Ministers in 31 months in January last official memo to the House of Representatives requesting the adoption of the amended version of the law in reading, discussion and approval, as the final version of the law which has been agreed between the Central Government and the Kurdistan Regional Government", as he put it
ورحياوله He favored the Nation that "there are differences in viewpoints and objections among parliamentarians about the Iraqis draft during the discussion because some deputies felt no need for a new law for the oil, they said Law National Oil Company (SOMO) integrated law and appropriate for all variables, and granted wider powers to the Ministry of Oil in relation to the signing of oil contracts, except contracts participate, along with prospecting and exploration of oil fields, while others saw him as parliamentarians need legislation for a new law defines responsibility and oil rights between the central government and the Kurdistan Regional Government on oil contracts, and international companies which undertake prospecting The exploration and how the distribution of income and the share of mineral wealth which the territorial ", as he put it
ظ The Kurdish government has concluded contracts with 20 2005, which irritated Baghdad's government promised its oil minister Hussein Shahrastani encroachment on the powers of the Government Center, with the Kurds confirms that the signing of contracts to decorate a constitutional violation, and came under a law enacted by Parliament Territory leave him constitution in the light of Article 115 which provides for (Everything that is not provided for in the exclusive competencies of the federal authorities is the power to the regions and governorates irregular in the territory, and other powers shared between the federal government and regions have priority for the Law of the regions and governorates irregular in the territory in the event of disagreement between them.
I believe the dinar is being held low due to a decision by banking interest and the government to help in buying goods at low costs. Since oil is based in US dollars, and construction is going to be bought in Iraqi dinars, what I am thinking is that the dinar will be controlled for many years yet to come---while construction of the infrastructure is taking place. I am not looking for an RV soon, due to this factor. If the currency does RV, I will be pleasantly surprized.
I have been thinking on the posts given.. thanks again to you, Rob N, for the excellent and intriguing articles.. thanks to cornishboy too for the summary of what is happening in Iraq (a truly excellent post, thank you!) and his post about the oil debate, thanks to ahire for the post about another "maybe" date, and thanks to you for for your thoughtful insights Roger. :)
My thoughts below.. please read and comment:
Playing "The Shell Game" and then Blaming us
In the article I posted earlier today it says, "Iraq has lacked even the basic administrative ability to spend the oil revenue or aid accumulating in the government accounts, and lacked any reasonable accounting system to prevent massive portions of what it did spend from being diverted by corruption."
In this I see a great deal of the real money coming into the Iraqi government, but merely accumulating there or being siphoned off into "corruption".. this is what I feared was happening. Instead of the money going to Iraqis and creating jobs, it is being hoarded in limbo or siphoned off to greedy politicians. The Iraqi people have the right to have a piece of their own resources, perhaps as Kuwait has for its citizens, and this will not happen without the RV. The disparity between the real money's value and the Dinar value is so great that the Iraqi government can give huge amounts of Dinar to their pet projects and it isn't a drop in the bucket or a dent in the accumulated wealth which they are keeping for themselves. I do not believe that they "lack the basic administrative abilities" to oversee these areas of cashflow. They are intentionally keeping the money from reconstruction in order to siphon it off for their own greed.
It appears to me from this that the real wealth stays unused in the revenue column.. while they find ways to siphon it off into their own accounts, instead of going directly into the budget and creating jobs and opportunities for the Iraqi people. I think this will continue without a RV of the currency. They are playing "The Shell Game".. you remember it? That is the game where they put one pea under a shell and shuffle the three shells and you have to pick which one the pea is under. Even so, there are a great many Iraqis who just don't see which shell they put the "pea" under when they shuffle it. In comes the "pea" of, say, 20 million oil revenue DOLLARS, and these officials shuffle around the three shells and when they pick up the shell, there is either nothing under it, or an identical "pea" with the number 20 on it, but it is now 20 million DINARS. They took the "pea" for themselves entirely, or they only gave a tiny bit of it in the exchanged Dinar form to the people. This is a very real barrier to progress because they are robbing their own resources from the Iraqi people.
How long can this continue on? As long as they wish it to, unless the Iraqi people demand that the government gives it ALL to them (all 20 million DOLLARS worth, not 20 million DINARS worth). But do the Iraqi people SEE that this is what it happening? I don't think they do, and until they do and there is a change, these corrupt politicians can live on in their paradises, siphoning off more and more revenues as it comes in.. making themselves very rich.. while the people become poorer and poorer and more desperate. All the while the people hear nothing but blame going to the Americans and the "oil giants" - saying it is the US who is "stealing" the oil, and that is why the Iraqi people are not getting the revenues. What lies.. and hypocrisy!
Who will stand up for what is right? Well, if they were talking the same value of money the average Iraqi could easily SEE the difference, but the exchange rate hides the shell game in plain sight. These officials can say they took in 20 million and gave 20 million.. and that seems good enough. Remember that the level of education there is abysmally low.. how many really understand the financial situation well? We know that 20 million Dinar is nothing in value in relation to 20 million DOLLARS.. certainly not enough to do a reconstruction project.. but it sure sounds like a lot of money.. and the rest of what used to be 20 million DOLLARS gets siphoned off into an offshore account for the greedy politicians. How convienient for the corrupt officials that the Dinar remains unrevalued... hiding their antics in plain sight.
The oil majors are setting a fair deal, but they cannot control what happens to the Iraqi side of the revenues once the Iraqis receive it. They cannot run their government for them. They can do a fair business deal and get the profit made for both sides, so both sides are satisfied and win. But they cannot make the Iraqi side take the money and use it for the benefit and good of the people of Iraq. I believe without a fair value for the Dinar the ordinary Iraqi (who is more concerned with survival and day-to-day living) will miss what they are doing and may end up believing the conspiracy theorists that it is the "wicked oil guys" who are "stealing" the oil.. even though they know the Iraqi government is the one putting out the tenders for oil development and calling the shots about who gets what. Remember that it is the Iraqi government which decides who will get what.. and when the deal is struck.. if the Iraqi people get nothing from it.. who will get the blame? (We will, the "wicked" and "stealing" West.. NOT the corrupt Iraqi officials who are siphoning it off into their own coffers.)
I see the blame as squarely on the shoulders of the newly rich Iraqi government.. who is not managing the small amount of oil revenues they have at this point correctly but are "losing" it to corruption and greed. Read that quote again, "Iraq has lacked even the basic administrative ability to spend the oil revenue or aid accumulating in the government accounts, and lacked any reasonable accounting system to prevent massive portions of what it did spend from being diverted by corruption." MASSIVE portions were diverted by corruption.. what safeguards do they have in place to prevent a similar phenomenon from disenfranchising the Iraqi people in the future? The Iraqis are squabbling over who gets a piece of the pie at the table with the Sunni, Shiite and Kurds.. but once they finish their "political reconciliation" will the hard-won process only have enriched the politicians themselves? Will the average Iraqi ever see it.. or will the Iraqis end up like Nigeria as Investor's article guy said.. with no money going to the people but it all being wasted at the administrative level by corrupt officials? Remember the Iraqi people cannot force their government to do what they need, they rely on them to do the right deals and get them the reconstruction, jobs and revenue they and their families need.
Iraq has been given a chance at democracy. But it may be that their officials are too corrupt to have it work. If there is one measure which MAY have a shot at making honest men out of corrupt ones, and keeping the honest ones toeing that straight and narrow line without dipping into the cookie jar - it is making the accounting figures equal.. in other words, RV. If the Iraqi people can see one dollar coming in and then get one dollar in their bank account (1 to 1 RV), they will see real spending power and follow the money trails more easily themselves. They can then purchase with their money any goods they wish from abroad on equal footing, and also see how the government is buying and spending their hard earned resource money - which will keep the Iraqi politicians honest (even those who are corrupt). It removes "The Shell Game" from existence. Without the RV, what is going on financially gets lost on the Iraqi people.. they don't see "The Shell Game" going on and who is doing what.. and they will not know enough to hold these corrupt officials accountable for what they do not understand or see.
Personally, I don't see how Iraq will work properly without the RV at a decent rate. The RV is an anti-corruption and accountability necessity. Without it, the oil majors will end up continuing to deal with the corrupt officials in the government of Iraq, as they do other despots in the world.. with the oil majors making their legitimate profit while the corrupt dictators (or parliamentarians in this case) rake in the cash and go on their spending sprees and buy great goodies and large plots of Iraqi land, while the people live in squalor and real need. Did we really remove Saddam only to develop the oil fields for a bunch of henchmen? In my view, if they were honest men they would RV at a decent rate for the good of the Iraqi people.. instead, they play monopoly money kingdom and shell games with the revenues they get in - all the while blaming the "evil" west for making a legitimate business profit. But as for their falsified blame game to divert from the real Iraqi corruption, I believe - "Wisdom is justified of her children." (Matthew 11:19)
Laura, you said, "I believe the dinar is being held low due to a decision by banking interest and the government to help in buying goods at low costs."
IF that were the case then buying goods at low cost would mean that there was a LOT of progress.. is that happening? Is there only TINY amounts of revenue going into the Iraqi coffers at this point? I don't think so.. hence my post that it must be "MASSIVE" corruption keeping the reconstruction from happening. There just isn't enough progress to account for the amount of revenue going IN being put to proper use, in my view.
I see what you say here as a red herring to divert from where "The Shell Game" is being played. An excuse to say to the Iraqi people that they stay impoverished for many MANY years to come (even with increased revenue!!) due to trying to build a better building project. That doesn't cut it with me. Buying goods at low cost has to mean better living for the Iraqi people... do we see that widespread now? Is the full picture given in the merely unreported as cornishboy posted.. or is it also not happening because of MASSIVE and ongoing corruption and greed? I think time will tell in full.. but I think we can see a bit of the truth now. I think the West is being set up here to take the fall for the corruption with the conspiracy nuts pre-programming the Iraqi people to say the West is "stealing" the revenues from oil while the corrupt officials siphon it off for themselves. Remember, it is IRAQ calling the shots about who gets the oil contracts and how much money they get to make.. not those winning the oil contracts.
No, I do not see the US as "ultimately responsible" for the Iraqi greed and corruption. There is only so far the US can go in "oversight" of an independently sovereign nation. The US would be responsible if they held the keys to this process, but they do not. They took over Iraq but then put the IRAQIS in charge of their own economy (and likely rue the day they did so because it means they cannot correct the corruption as they would wish to). Because the Iraqis are calling the shots, the US cannot FORCE them to use the Iraqi revenues in an uncorrupt way. If the corruption extends into the upper levels of government (as it does with despots), then you have to negotiate with the corrupt government as it stands. The only other choice is to overthrow the corrupt government and put in a new one.. but what guarantee is there that the next set of Iraqis will be any less vulnerable to corruption and greed? And the idea of putting in a puppet government - I hardly think the world will condone the US taking over and running the government of Iraq themselves. This leaves the US negotiating with Iraqi officials.. corrupt and greedy OR true and responsible.. whichever they happen to be. Which do you think they are.. corrupt or true? greedy or responsible?
I am not implying that Iraq's government official may or may not be corrupt in their deeds. There certainly is a great deal of corruptions!. I agree with these observations. Part of this is the responsiblity of the USA in our ability to oversee and account for the money we give them. Instead, we hand these government and politicians money, when we know they are suspected in corruption-- simply because they have the right words. Doing the right deeds have not been what Iraqi's have learned in their dealing with the former regime.
Having said this, it is still my belief that there are still officials in the government that want to do right by the people. I believe that not all people in government or the banking industry are corrupt.
I believe there is a plan to rebuild Iraq and that Iraq,s government and banking institutions are working with the USA government to hold the dinar low. I think this is true due to all wages, building materials etc are going to be paid in Iraqi dinars.
The higher the dinar value, the more expensive the rebuilding process will be. This is the reality despite widespread corruption.
I also believe that corruption will have to be dealt with and as the USA gets more accountability in place, corrupt people will be caught. This past week, I read the USA Secretary of Treasury is sending more people to do accountablity studies of the money we have given to the Iraqi government because of corruption. While I admit your observation on corruption is correct Sara, I still stand by my observations of the decisions I believe that the Iraq government, bank officials and USA government are working towards.
Look at what has happened since year 2003. The currency has moved from over 3000 dinars to the rate of 1210 thereabouts. This move has been systematic and while it has not moved as quick as some of us might have wanted, the slow re-valuing has taken place. We also know that tons of equipment has been delivered to Iraq for the rebuilding process (Information we got through Panhandler).
In addition,the USA government has spent a great deal of money in Iraq and for this reason alone, I do not believe dispite what the politicians are saying that the USA is going to leave Iraq to fail. I believe, our troops are there for the long haul. If you listen to Hillary, our combat troops will come home (noting that there will be troops in Iraq).
It may just be that USA pulls out and goes to distant bases like we have talked in out blogs of the past. This would leave the Iraqi's to sort out there own affairs. Sometimes, it if very difficult to allow people to be sortly dependent on USA and this may take distance on our parts to get the people to stand up to their politicians. After all, they (the people of Iraq) are electing these folks.
The process of reconstruction maybe very slow, and eventually, someone in Iraq has got to take the lead for the people. How long can the suffering continue. I am like Roger, in his last post, the RV will have to happen to allow the people a descent living. There are many indicators that says it needs to happen. However, like Roger stated, the people are used to a controlled economy. It's hard to get away from this culturally. They have not lived in a free floating economy for their currency.
However, I am still convince that someone (Iraq Government, Banking Institutions, IAF, and USA government are controlling the rate of the re-value of the dinar currency and there has to be some reasoning behind the process of revaluing of the dinar currency. I think it is related to reconstruction from USA side of it. The USA has made many promises to the Sunni population that joined forces with USA instead of the insurgency.
Maybe, I am naive Sara, I still believe that dispite the corruption that there are still some good people in Iraq that want to do the right deeds. It is just a hunch.
I wanted to address your reference to a revaluation of the Iraqi currency. If we all agree the managed rate is not good for Iraq or its people, how is a managed revaluation any better?
I do not think we should be looking for a revaluation of the currency by the CBI. A revaluation fails to reach the "real rate" of the Dinar. For sometime I have been advocating a limited free float of the Dinar. This limited free float of the exchange rate is limited by the GoI cash reserves, gold on hand, and petro dinars.
A limted free float within these parameters will achieve what a managed rate cannot the "real rate". Once the Hydro Carbon Law is passed and Iraq is released from Article VII (returning Iraq's national soverignty) could lead to full de-dollarization that could pave the way for a limited free float of the Dinar on the foreign exchange market.
The beginning of oil majors in Iraq has begun.
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Oil firms line up for contracts in Iraq
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115 registered to offer extraction and services
Mar 01, 2008 04:30 AM
Mariam Karouny
reuters news agency
BAGHDAD–More than 100 companies including foreign majors are vying for deals to tap Iraq's vast oilfields, but a vital oil law is stalled by tension involving the Kurdish region, Baghdad's oil minister said yesterday.
Hussain al-Shahristani said 115 companies had registered to compete for oil extraction and service contracts to help develop Iraq's oil reserves, the world's third-largest.
Of these, 10 are American, with companies also from Japan, Russia, Britain, Canada and South Korea.
Shahristani said Iraq was close to finishing negotiations with several oil majors for two-year technical support contracts that hopefully would be signed in March.
Those majors include Royal Dutch Shell, BP, Exxon Mobil Corp, Total and Chevron Corp., he said.
Iraq currently exploits only a fraction of its reserves, among the cheapest to produce in the world, and international oil companies have been positioning for years to gain access.
Shahristani said the fields up for grabs under the contracts included Iraq's giant fields in the south along with Kirkuk in the north. He said the qualified companies would be announced in March.
"From announcing the qualified companies to the signing of the contracts will take a minimum one and a half or two years, but we will try to make it within a year," he said.
Shahristani said he hoped the technical support contracts would add 500,000 barrels per day of oil to Iraq's output in a year.
"We are negotiating with these five companies. We are at the end of the negotiations," Shahristani said, referring to the five majors.
"They will study the fields with us, we will put together a plan to boost production, they will help us to select the equipment and deliver this equipment to us."
Iraq produces about 2.5 million barrels of oil a day, dwarfed by its 115 billion barrels of proven crude oil reserves. Only those of Saudi Arabia and Iran are larger.
One oil official said last year that Iraq's oil sector could need as much as $75 billion (U.S.) in investment.
The extraction and service contracts should add 1.5 million bpd to output once they were in place, Shahristani added.
Combined with the additional flows from the technical support contracts, Iraq's output would hopefully rise to 4.5 million bpd in five years, he said. Of this total, 3.5 million bpd would be exported and the rest kept for domestic use.
Shahristani said technical support contracts did not entitle companies to any share in production.
"The benefit is that they will show interest in co-operating with Iraq and supporting us technically. They will have knowledge of the parameters of the fields and then they can ... make us an offer which is better than others," he said.
The service and extraction contracts are also seen as a stop-gap until a crucial oil law is passed, and will not provide the long-term involvement big oil companies crave.
But the draft law remains stalled in parliament.
Yesterday, Addax Petroleum Corp. of Calgary said it had signed a deal with the Kurdistan regional government in Iraq that amends a production-sharing contract with Genel Enerji to bring the Taq Taq project into line with the region's oil and gas law, including royalties, cost recovery and profit sharing.
Shahristani said he believed a major obstacle to Iraq's oil law passing would be the signing of oil deals between the government in the largely autonomous Kurdistan region and smaller foreign energy firms. Those firms, he said, would be prohibited from competing in central government deals.
(www.thestar.com)
Iraq Needs Strides in Economy and Governance to Cut Attacks, a Top General Says
The former No. 2 American commander in Iraq says that, without economic and political progress, it will not be possible to reduce substantially the current level of violence there.
(www.noozz.com)
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