The rumor of the week is the expert claiming tents are set up on the outskirts of Baghdad to conduct a currency exchange of Iraqi dinar to smaller denominations.
This is unequivocally not true in the harshest terms. The thought of having large sums of Iraq currency curbside and unprotected defies all logic. You have the experience of the last most recent currency exchange in October 2003 – January 2004 which occurred at local Iraqi banks under the protection of U.S. Military, private security contractors and Iraq security forces.
If and when in the future the Iraqi government decides to conduct an exchange or reprint new Iraq currency it logically would follow the same pattern as occurred in the last currency exchange.
Just so you know roads in Baghdad were closed off to allow pedestrians to walk freely and celebrate the last few days of Ramadan. There were no tents set up anywhere not inside the city of Baghdad or the outskirts and outlying areas. As far as U.S. military not being inside Baghdad is totally false they are still there and I will not disclose for security reasons exact location.
Currently there is a tremendous amount of crime happening in Baghdad another reason why there is no tents flush with cash in Iraq.
Let’s read a few headlines in the last several weeks about Iraq;
IRAQ CRIME WAVE FOLLOWS YEARS OF WAR
The result has been a wave of thefts and armed robberies, hitting homes, cars, jewelry stores, currency exchanges, pawn shops and banks. 22 SEPT 2009 – CHICAGO SUN-TIMES
BANK HEISTS ARE LATEST CRIME SPREE IN IRAQ
In Iraq, they rob banks. Gunmen killed eight security guards at the state run Rafidain Bank in the upscale Karradah District, blew the vault open with Dynamite and made off with 8 billion Iraqi dinars (About $7 million)
1 August 2009 – New York Daily News
Let’s look at this another way say the rumor of the tents and the currency exchange is true. In the last few days has there been any reporting of any uptick in violence or criminals robbing tents that were set up as currency exchanges?
The trend in Iraq according to the two articles I have listed is robbing banks and currency exchanges, so I guess the criminal gangs decided to take the holidays instead of robbing the currency exchange tents. They like Ramadan so much they decided to take a some time off instead of seizing the opportunity of robbing all those cash tents that are set up curb side for the almost perfect robbery to obtain some quick cash to fund there criminal activities.
All it takes is some common sense and looking at this realistically and almost all rumors that are out there concerning the Iraq currency sometimes have false pretensions. Most rumors not all.
The week of the 15 September in Iraq was significant as the Vice President of the U.S. visited with the Iraqi government and its leaders with a private meeting with Prime Minister Nuri al-Maliki. VP Biden stayed a few days and than left the country.
30 Days to Pass Legislation
The next investment conference will be held in Wash. D.C. on 20-21 October and attending the conference is different sectors representing the Iraqi government and other private companies. PM Maliki would be attending and ready to ask for donations of funds to jumpstart his reconstruction plan for Iraq. It appears that the upcoming conference possibly not be as beneficial as the PM thought it might be if the Iraqi government does not pass certain amendments to the Investment Laws no. 13 – 2004. The conference is less than 30 days and it is possible for the Iraqi Parliament to pass the needed laws to attract foreign investment into Iraq.
Remember what happened last 30 April at the London Conference the biggest complaint was no ability for foreign companies to own the land when they were too set up there offices and companies inside of Iraq. Here we are again six months later with the same issues.
There is a Bloomberg Article published while the VP Biden was in Iraq dated 17 September and in the article it referenced
Excerpt from Bloomberg Article:
Biden also singled out the Overseas Private Investment Corporation in private talks with Iraqis, telling them the independent federal agency would be more able to offer loans and guarantees to businesses were Iraq to refine its investment laws, the administration official said.
Bloomberg 17 Sept 2009
The Overseas Private Investment Corporation (OPIC) U.S. government Agency that have a reserve of over 4 billion dollars. Partnered with U.S. Companies and U.S. Banks.
Wikipedia – OPIC
If the Iraqi government was to pass the amendments to the Investment laws the Iraq government would probably be more successful in obtaining funds from the OPIC. They could still do however, not the amount if the Iraqi government is successful and came to Wash. D.C. with a better environment for foreign investments.
So basically what the American Contractor is getting at is the PM Maliki is going to ask for funds at the conference while the Iraq Parliament still has not ratified the necessary laws to support his offers. This includes the Oil and Gas law.
The web site for OPIC
Again I do not see anything happening until after the National Elections on 16 January 2010.
I am reviewing and also updating my ever so accurate, Iraq Important Dates and be advised that September 30th is the last day for all Iraqi’s to register to vote for the National Elections.
Chapter VII still in effect as Iraq and Kuwait are still trying to work out there issues with each other.
Kuwait is not waiting on Iraq to have an International currency for investments when they already have a foothold and strong one already inside Iraq with the extension of the Kuwaiti NBK bank. All Kuwaiti projects and investments would be funneled and processed through that particular Iraqi bank if they decide to invest the war reparations inside Iraq. The decision still has not been determined or announced by the Kuwaiti government or the UNSC Secretary-General.
You can not say Chapter VII has been removed because nothing so far as been reported as to what percentage Iraq would be paying the Kuwaiti government as to what percentage of Iraq oil sales. Will the percentage continue to remain 5% or lower to 2% or remove it entirely. The U.N. Security Council (UNSC) still has to bring the removal of Chapter VII to a vote and this will be done tentatively the end of the year.
Another issue is what to do with the Development Fund for Iraq (DFI) which expires at the end of the year? How will the Iraqi government continue to protect the funds from all the claims and lawsuits? Remember, what I had written about what the Russian Ambassador to the U.N. said about Iraq and remaining under protection of the DFI funds and lifting the Chapter VII. The Russians said Nyet!!
Why would the Iraqi government need at this moment in time an International currency when they can today, legally, convert the Iraqi dinar into any common International currency they wish with support of the Trade Bank and any other Iraqi Bank? They can purchase anything in any contractual accepted denomination for those goods, products and services and have been doing so since 2004.
If your looking for an Iraqi currency to go international at this point in time your going to have to wait awhile until more stability and better conditions for the Iraqi government to impose those requirements that have been set forth by the IMF. If you want to know what those conditions are read my past American Contractor Newsletters.
More to follow…as always.
Most accurate – Important Iraq Dates
September 30, 2009 – Last Day Voter Registration for National Elections
October 16-17, 2009, Getenergy for Iraq 2009, Istanbul, Turkey
October 2009 – International Compact with Iraq – Baghdad
December 7-9, 2009 Iraq Petroleum Conference London U.K.
December 31, 2009 – Development Fund for Iraq (DFI) expires
December 2009 – Article 140 Vote
January 16, 2010 – Iraq Referendum Vote (SOFA Security Agreement)
January 16, 2010 – National Parliamentary Elections
October 2010 – National Census rescheduled
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