A few days ago the Shia cleric, Muqtda al-Sadr resigned from Iraq politics. After his resignation the Shia Cleric al-Sadr closed down all of his political office with the exception of a few support offices. Mr. Hassen Basil al-Sader transcribed Muqtda al-Sadr’s speech. Excerpts are given below.
In al-Sadr’s speech he mentions the current leaders of the Iraqi government and how the government is governing the people. In the speech, the Shia cleric mentions there being no life, no farming, no manufacturing, no services, no security, and definitely no peace. Nothing is going as planned in Iraq according to the Shia Cleric. He says wolves, thirsty for blood, rule Iraq. Al-Sadr makes a good point when you look at what is going on in Iraq right now. The cleric’s resignation no doubt benefits Prime Minister Maliki.
Currently, Prime Minister doesn’t have much of an opposition for his bid in getting a third term in the premiership. In my opinion, it looks like a slam dunk for Prime Minister Maliki on 30 April 2014. There is some talk on whether or not the elections will be held on time. We will have to wait and see what unfolds.
In other news, the International Monetary Fund (IMF) stated on Monday that Iraq’s finances were vulnerable when the price of oil starts to drop.
The IMF has predicted that oil prices will start to drop within the next two years. Currently, it is $107 Brent Crude averaging to be about about $100 in 2015. The Iraq government remains in a deficit and still fails to pass a 2014 budget of a proposed amount of 150.1 billion US dollars.
The spending cuts are leaving to projects being cut and investments are suffering. Another contributing factor is the terrorists that have seized Fallujah and Ramadi. In the past, the Iraqi Parliament has discussed the 2014 budget. As of now they have failed to pass the budget.
Recently, the Kurdish ministers walked out of a budget meeting because of a money dispute. Reuters has reported that the inflated budget expenditures would “collapse” if the central Baghdad government continued to pay the Kurds 17% share of the oil revenues.
The Kurdistan Regional Government (KRG) is withholding all oil proceeds and not paying the Central Baghdad government. The current draft budget has a deficit of approximately 21 trillion dinars.
The IMF has recently sent a report criticizing the Iraq government for things such as: Poor budget planning and execution, large off budget spending, low investment execution rates and serious deficiencies in fiscal reporting. Every year the Iraqi government does the same thing without fail. Banks fail to report their books to the Central bank. The government ministries fail to report what they spent for the year and report the numbers to the Ministry of Finance.
The people are concerned that the Central government will eventually use the central bank foreign currency reserves to finance state run projects. This would definitely weaken the Iraqi dinar. Lets hope that the Iraqi government does not take this approach and start spending the Central banks foreign currency reserves.
Prime Minister Maliki has warned the Iraqi Parliament that the Iraqi economy could collapse if the 2014 budget was not approved. The budget deficit stands at 35 billon dollars.
Businessmen in Sulaimaniyah Province have helped the state run banking institutions by depositing funds. The states run banks have no funds to pay contractors and government employees. The businessmen who have deposited money were guaranteed a return from the Iraq Central bank.
The Iraqi government is offering a $17,200 reward for any dead terrorists members of the Islamic State in Iraq and the Levant (ISIL). If you happen to capture a terrorist alive the reward goes up to $25,800.
Investment Advisor mentions Iraq Dinar Revalue watch video.