This week has been a good week. The Iraqi Parliament has begun
collecting their 100 million Iraqi dinar loans, this also comes at
the same time Parliament employees protest the reduction of
The Ministry of Defense position still remains vacant. A total of
six names have been sent to Prime Minister Maliki with the hopes of
having and selecting one qualified candidate. We can only hope
that this will be accomplished very soon.
The Iraqi Parliament recently held its 50th session. The Deputy
Prime Minister for energy affairs and the minister of electricity
were in attendance. Both faced with many questions, mostly in
regards to why many tasks have yet to be accomplished as well as
where the funding is going. Good questions! The recent final report
from the Parliaments Integrity Committee has been released and it
described quote: “The Oil Ministry as the most corrupt”. Of
course, the Oil Ministry denies the report. Who wants to have that
title?! But all too true.
The Central Bank of Iraq recently held a meeting at the Baghdad
University in regards to the dropping of the three zero’s from the
Iraqi dinar currency. I was an attendee at this meeting and can
say that the meeting went fairly well. It appeared to me that some
progress was being made as various economists discussed the
different aspects of removing those zero’s off the notes. More of
that discussion will be disclosed at a later date as as they get
closer to having definite decisions being made. I don’t want to
throw out all those options discussed just yet as nothing was set
in stone. The Central Bank of Iraq stated that they will soon be
opening up more currency exchange markets.
I recently noticed that a circulating Al-Warka Bank article caused
quite a stir. Made a lot of people wonder what was going on with
the Al-Warka Bank. The headline in the Iraq Business News web site
stated AsiaCell mobile company filing a lawsuit against Al-Warka
Bank. Here’s the facts; AsiaCell deposited 25 million dollars
inside Al-Warka Bank and now wants the money returned and the bank
is refusing to do so. The reason the law suit was brought forth
begins like this; a few months back, Asiacell advised its customers
that it would not be able to connect to anyone outside the Asiacell
network and would need to piggyback with other networks. But,
here’s the deal, when a mobile company is using each other’s
networks there are usage fee’s involved and Asiacell has not paying
their fee’s to the company Zain (whom’s network they were using)
when Asiacell customers were calling Zain customers. The reason
they were unable to provide payment to Zain and others is due to
Al-Warka Bank refusing to return the funds they hold rightfully
belonging to AsiaCell. No money, can’t pay bills. Currently,
Al-Warka Bank cannot leverage anything and is unable to make any
loans. It is possible they are in bankruptcy like many other
private Iraqi banks. The bank is having a difficult time of
returning customers deposits even in the smallest amounts.
Iraq’s private banking remains fragile, as I’ve previously
mentioned. Unfortunately, they are not as strong as they government
would like them to be. The Iraqi government is aware of the
problems & downfalls of the private banks however, can not engage
them because it would create havoc on the local economy. In the
future, the GOI plans to take corrective actions against those
banks that have fallen outside the Central Bank of Iraq banking
regulations. Several private banks have over extended themselves
by as much as 20-25% and are basically real estate bank brokers.
Interesting fact, more loans are being underwritten by banks from
Lebanon than any other bank in Iraq. There is an important reason
for this that I’ll explain in an upcoming newsletter.
The ration card, ah yes, an ongoing topic. The items associated
still have yet to be distributed and it doesn’t look like it will
not be anytime soon. The problem here is, the government
warehouses are empty. I see nothing to be distributed! When that’s
not the case it’s that rotten and expired food fill the warehouses.
The result being that the GOI does not have the best logistics
when it comes to a timely distribution and re-supply of those
items. The GOI just recently announced they bought one shipload of
wheat to feed approximately 4 million people. For those that
weren’t aware, the ration card is not to be brought to a market, it
is to be brought to the GOI approved distribution centers located
in around Iraq.
The Development Fund for Iraq is on track for the new mechanism,
will still have that name change and continue to remain in the New
York Federal Reserve. The GOI has made the decision to continue to
protect the funds against all liens and creditors.
On a different note. Yes, it has been well over a month since my
last email newsletter. I have had several dozens of emails asking
me for various updates on many topics. Unfortunately, I have been
busier than usual with the daily happenings and meetings here in
Baghdad and the surrounding areas. The latest dealings being the
protests, which I might add were uneventful and were surprisingly
contained. In the upcoming weeks I’m hoping to have some free time
that will allow me to pick up the publication a little more
frequently. American Contractor brings you a different prospective
on the issues/happenings of Iraq and doesn’t charge you to be apart
of his special club/association. My information is free to the
public and has been for well over six years.
As always, thank you for being a loyal reader and joining the
American Contractor mailing list.