June 2006Monthly Archives

The International Advisory and Monitoring Board (IAMB) met in Washington D.C. in May in reference to the Development of Iraq Fund (DFI). The purpose of the meeting was to update their findings and information about the DFI funds.
The IAMB is responsible to ensure the Iraqi government is using the DFI fund in a transparent manner and all benefits from the fund are going to the Iraqi people. And to be sure all export sales of petroleum and products to include gas are made within the world market limits.

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No wonder Iraq is not producing oil in the North they are in Russia.

I have a question for all you in DFW land (that’s dinar forum world) and I am curious to see who is paying attention. I am going to ask this question and I will post some of your answers on The American Contractor blog at a later date.
I am not trying to make fun or belittle anyone just seeing if people are paying attention in this crazy ride as they say in DFW land and to promote good will between my world and DFW as I am a humanitarian.
The question?

In early 2005 the Iraqi government and the Central Bank of Iraq (CBI) had deposited usd 5 billion in the Federal Reserve Bank in New York. The question is how did the CBI and the Iraqi government deposit the money in the Federal Reserve bank in New York. How did Iraq get the 5 billion usd to New York in a interest bearing account?

This is not a trick question and I like to see what you think of how it happened. I’ m sure you smart people in DFW land can answer this. Any takers?
You can send your answer here to American Contractor.

Dinar Forum World is saying this:
With all the security features on the new Iraqi Dinar I don’t believe it…this has to be some left wing nut who hates Iraq to print a story like that.

They will swear that it is not true and go on with their normal selves and go on believing an rv is just around the corner.
Well, I know when the rv is going to happen.
Well, let me bring it home for you DFW it is true (the counterfeiting part) and the question is what is the Iraq Central Bank and the Iraqi government going to do about it.
Update:
I know the article is not specifically talking about bogus Dinar, I am just bringing it to light because it is happening.

Now, do you see how fast this grant of $8 million came into Iraq Ministry of Labor and Social Affairs to help the poor Iraqi people. Now if you can get this done just right after you can get a full government together lets get to work on that constitution and make some changes. Because
BIG OIL is waiting.

I guess since the Shiites are the only ones in southern Iraq, that are producing any oil for the entire country, they are looking for new opportunities. Heading north to visit and look at conducting business in the Kurdistan area of Iraq and in search of other business or maybe get on in some of those oil deals.
These are the companies that have been reported and talked about that have signed oil contracts with the Kurds. The oil contracts are in opposition with the oil ministry in Baghdad as you all know. The Kurds have stated that they are not going to give up their oil rights. I guess their rather stick with the smaller oil companies then have Dutch Shell or ExxonMobil in there area with the best possible technology and know how.
I think if I had my choice of ExxonMobile or one of the smaller oil companies that have already signed oil contracts with the Kurds, I think you know who I would go with. When you make 10 billion in one quarter it’s a no brainer.
1. DNO of Norway
2. Petoil of Turkey
3. Ganel Energi of Turkey
4. Western Oil Sands of Canada
5. Heritage Oil of Canada
6. Woodside of Australia
7. Addax Petroleum of Switzerland
Japan Oil pending

This article in the AME news reminds me of what I had written a few days ago about the reporting of oil production figures. The Iraqi government is still absorbing the oil subsidies and also the black market is getting their illegal share.
Remember a few days ago they reported a 15% increase in oil production I hope the figures are correct.
Do you still think we are close to an RV?

Last December 2005, the IMF granted Iraq a Stand by Arrangement (SBA) for 15 months, starting in December 2005-March 2007 in the amount of usd 685 million. Behind the SBA agreement were stipulations for the new Iraqi government. The Iraqi government agreed to end the petroleum products subsidies in a piece meal fashion over the course of the year.
Upon the completion of the SBA in December Fuel prices were raised over night 5 and 9 fold gasoline, diesel, and kerosene and according to the SBA agreement the Iraqi government were to raise the cost of the petroleum products each quarter in 2006, so that by the end of the year Iraqi fuel cost to the average Iraqi would be inline with other gulf Arab countries.
In March 2006, the Iraqi government delayed the raising of fuel and diesel prices until June 2006. Currently Iraqi’s pay $.26 per gallon of regular gasoline compared to $.91 per gallon in other Gulf Arab countries. It remains to be seen if the Iraqi government will be raising fuel prices in June.
The cost of the oil fuel subsidies to the Iraqi people is estimated anywhere from 2 to 5 billion usd. Complying with the SBA loan, Iraq would be able to place the cost of the subsidies billions of usd into the main general fund of the Iraqi government starting in 2007.
Iraq would be able to use the extra liquid cash to pay for medial care and the welfare for the poorest of Iraqi’s. The IMF continues through out the year to monitor Iraq and measure the progress in the SBA loan. The money is granted to Iraq in quarterly installments when the IMF agrees the Iraqi government is making progress in accordance with the SBA loan.
There are a few tasks at the end of June that the Iraqi government must be in the process or close to completion. According to the SBA there are several ongoing operations and completion dates for each item. I am going to list what I think is important. There are few that I am going to list.
1. Implementation of Payment System Regulations
2. Commencement of operations of real time Gross Settlement system (RTGS) linking headquarters of commercial banks to the CBI.
Both of these are to be completed by June 30. Now let’s look at another benchmark for the Iraqi government to complete.
3. Commencements of payments clearing system between the headquarters of commercial banks and the CBI through the Automatic Clearing House (ACH),
This is supposed to be completed by 30 November 2006. If you don’t know what ACH is in the banking world, it allows banks to be connected electronically and a very cheap way of sending money and clearing checks worldwide as long as the bank is connected to the ACH network.
And finally by the end of the year 2006, fully capitalization of CBI to the stipulated ID 100 billion, based on the 2005 audited financial statements and taking into account the restructuring of outstanding claims on the central government that are on the 31 December 2005 balance sheet of the CBI.
Also in June the IMF will be meeting to evaluate what the Iraqi government has been doing in regards to completing the SBA agreement. Also a payment from the IMF to the Iraqi government is also made if everything goes accordingly and no issues. The next review from the IMF will be September 2006.
I am unsure if the Iraq government will complete all agreements in the SBA especially with all the continue delays and the recent delay of the fuel price hike in March. I am unsure if the Iraqi government will raise the fuel prices in June, we will just have to play a wait and see.
I will quote the recent appointed Planning and development cooperation minister Ali Baban, when he said recently in a Financial Times report that Iraq might not be able to enact economic reform soon, or reduce subsidies as envisioned by the IMF. Baban went on to say “I hope the IMF will take into consideration the situation in Iraq and not pressure us to do what will be hard for our people, especially cancelling subsidies.”
More to follow.

When the Coalition Provisional Authority came to Baghdad it had passed a set of laws in May 2003 known as the CPA laws. The CPA was the temporary government of Iraq and the existing laws in Iraq were still in force unless it was superseded by the CPA laws.
When the New Iraqi Interim government was appointed in June 2004, a new set of laws were in place known as the Transitional Administrative Laws (TAL) which were to govern the affairs of Iraq during the transitional period until a duly elected government, operating under a permanent and legitimate constitution.
The new transitional government embraced the CPA laws because they did not make any new laws. The TAL did not supersede any existing laws to include the CPA Laws.

Article 62
This law shall remain in effect until the permanent constitution is issued and the new Iraqi government is formed in accordance with it.

Iraq abides by the rule of law; the new Iraqi parliament has to enact new legislation to supersede laws (like CPA Laws and the TAL) and any Iraqi laws currently in place.
Although the Iraqi constitution was approved by the voting population it still needs to be ratified by the legislative body.
Today, the new government just completed, no new laws enacted, but Iraq is still trying saddam in a Iraqi Court, how??
The old CPA laws, TAL laws along with Iraqi laws are still in effect until changes are made by the new Iraqi government.

The large oil companies are waiting to get the green light. Let’s not stumble and be held hostage to the Oil Mafia. Change the Iraqi Constitution and lets get rolling.