IMF: Iraq's third-largest oil exporter in the world
Said the International Monetary Fund (IMF), said on Wednesday that Iraq has become one of the leading countries oil production, it ranks second largest oil producer in OPEC and the world's third largest exporter and fifth at the level of reserves at 143 billion barrels.
While expected to continue to expand production of Iraqi oil in the medium term to be the main contributors processing of the international market oil despite the suffering of the challenges, showed that the country was facing financial challenges large after three decades of siege and war, as you need to convert its oil wealth into assets based upon re- reconstruction and development continuously.
This came in the annual report of the International Monetary Fund for Iraq in 2013.
The report in the field of development achieved the oil sector, that "Iraq has become over the past decade and one of the leading countries oil production in the world," noting that Iraq "boasts the equivalent of 143 billion barrels of oil, the reserves of the installer is the fifth largest reserves in the the world after Saudi Arabia and Venezuela, Canada and Iran. " Finished / 3
IMF recommends accelerating the pace of reform Alheiklay in Iraq
BAGHDAD / follow the obelisk: recommended report issued by the International Monetary Fund for Iraq pace of structural reform to boost growth and job creation in the private sector, and the need to continue the good governance of foreign reserves at the Central Bank of Iraq and the Development Fund for Iraq.
The report recommended that display the Resident Representative of the International Monetary Fund for Iraq Ghazi الشبيكات during a press conference held at the Iraqi Business Council in Amman to "accelerate the pace of structural reform to boost growth and job creation in the private sector and the intensification of work for the Liberation of the foreign exchange market and the creation of a stable exchange rate and simplify the instructions of foreign currency . "
He stressed "the need to ensure the continuation of fiscal consolidation and building margins and preventive financial face of fluctuations in oil revenues," stressing "the need to continue the governance of reserves of foreign Central Bank of Iraq and the Development Fund for Iraq and deepen the reform of the financial sector and the establishment of equal treatment for private banks."
He advised the report "Iraq by creating a system of anti-money laundering and counter-terrorism and there should be management prudent reserve the Iraqi Central Bank's foreign currency and the Development Fund for Iraq," calling for "a law on the Gaza hydrocarbons and investment in electricity production and the abolition of fuel subsidies granted to producers and restructuring of state-owned enterprises Iraqi and governance reform and capitalization of institutions that can be fixed and the closure of non-viable. "
The report emphasized "the need to improve the business environment and attention to the agricultural sector through the reform of the public distribution system, which contributed to the decline of domestic production and to reconsider support mechanisms provided by the Iraqi government to its citizens," noting that "the cost of supporting the fuel up to $ 10 billion or so."
The Resident Representative said "the most prominent risks facing Iraq is the implementation of weak political reform and the decline in the level of political and security situation and the delay in increasing the volume of oil production and declining global oil prices," pointing to the necessity that "Iraq has the private sector is able to produce and direct investment sectors, non-oil especially electricity and agriculture that Iraq has a significant competitive advantage, "stressing that" Iraq needs to long years of work to rebuild the fortune of mankind. "
He added, "Despite the political and security conditions difficult through which Iraq but were positive economic developments in general has witnessed accelerated economic growth reached 8.4% last year and is expected to reach 9% during the current year."
He explained that "macro-economic prospects over the medium term will remain driven by developments in the oil sector, where output is expected to rise gradually from Iraq's oil by 500 thousand barrels per day in the year to up to 5.7 million barrels per day by the year 2018 compared to 3.3 million barrels now."
IMF ASKS IRAQ TO PROMOTE THE VALUE OF THE IRAQI DINAR ...
IMF Provides Silver Lining to Iraq Debate
Bank of Baghdad begins initiative to reduce the exchange rate of the dollar and confirms: Prices have dropped by thirty dinars in just two hours
Baghdad - The Department of the Bank of Baghdad, on Tuesday, the association of private banks in Iraq "launched an initiative to reduce the dollar exchange rate" to "(1183) to sell cash and (1178)" for the adoption of a documentary, and showed that the initiative began, "three banks" under the auspices of the Central Bank of Iraq , and stressed that "the (25) banks" would seek to reduce the price of the dollar, as revealed on "dollar decline by thirty dinars within two hours only" the start of the official working hours for the day, has indicated it will include every day, "(400) citizen" distribution and by " five thousand dollars per citizen.
The head of the Association of private banks in Iraq, and the Managing Director of the Bank of Baghdad, Adnan al-Chalabi, in an interview to a number of media, including (range Press), on the sidelines of the Bank of Baghdad organized a conference to announce the reduction of the dollar exchange rate, at its headquarters, the center of the capital Baghdad, that "the initiative of the Association of private banks in Iraq, under the auspices of the Central Bank of Iraq NARI onset three banks are all from Assyria, Baghdad and guidance to reduce the exchange rate of the dollar.
He said Chalabi that "have been identified dollar exchange rate (1183) in cash sales instead of (1189) and (1178) for the adoption of a documentary rather than (1184)," and pointed out that "as soon as the announcement of the move before starting implementation dropped the dollar in the markets Iraqi and arrived degrees low ", and expressed the hope that the" fall more after starting to sell at reduced prices.
According to Chalabi that "has been planning for this operation after numerous interviews with the central bank views supreme in Parliament was launched the idea by banks that operate all the banks to reduce the dollar exchange rate," and went onto say that "the dollar has fallen from Price (1250) to (1220) until the time ten this morning.
The Managing Director of the Bank of Baghdad that "will reduce the price of the dollar by the twenty-five banks from banks registered in the Association," explaining that he "will begin next week selling price reduced," pointing out that "this will support the exchange rate of the Iraqi dinar against the dollar and will make its price strong toward the dollar.
He pointed out that "the number of banks registered in the Association is thirty Iraqi banks and six branches of Arab banks," and expressed his belief that "thirty-six banks will agree and next week will be selling reduction," مردفا "We will not stand at this step as a link banks, but will be followed by steps another for the purpose of reducing the price of the dollar, "vowing to" work together in all the banks to reduce the price of the dollar.
He Janabi that "the central bank promised to double the share of private banks of four millions of dollars to eight millions of dollars a week," returned the move as "a step support for the banks," calling on all banks to "commitment smoothly sale and delivery of the dollar to the citizens smoothly good style good".
For his part, expert said Bank of Baghdad Abbas Sudan, in an interview (range Press) that "the reduction and distribution of the dollar exchange rate systems in accordance with rules and terms and conditions issued by the Central Bank of Iraq," noting that "our conditions are a legal process must take into account all the controls that in."
He added that "the mechanism of action in the distribution process, guided announce the names of customers on the wall and are distributed twenty list of all the pool list (20) customer to become a distribution on a daily basis at least (400) customer," hoping "that the process in the coming period on a broader level.
The Sudanese saying, "We distribute them to the amounts added by us to the central bank to increase the supply of the dollar," pointing out that "increasing the supply of the dollar will reduce the dollar exchange rate," stressing that "this will contribute to support the Iraqi dinar exchange rate and improve the economic situation in the markets local communities.
And that "customers attend under the terms of which bring passport and dictate form and photographing the menu (42) in the passport," مردفا that "after the completion of these actions gets citizen five thousand dollars and the amount of (1183)," stressing that "the listed They are specific only to sell the dollar. "
He pointed out that "Iqbal citizens to buy the dollar is good," adding that they "were present since an early hours of the morning," he said, adding, "We doubled the number of staff in order to accommodate the arrivals to buy the dollar."
The Central Bank of Iraq announced, on Monday, received a formal letter from the Association of Banks confirms its commitment to the initiative of three banks as a first stage to sell the dollar at a rate lower than the price the advertiser, as pointed out that this initiative represents a "natural behavior", which show him Iraqi banks, stressed that it in line with its monetary policy to support the Iraqi economy.
The Central Bank of Iraq announced, earlier, the cancellation of banking companies is registered has regardless of obtaining clearance from the Ministry of Commerce or not, and stressed that the banking companies registered and certified before 2003 were 300 companies only, as pointed out that companies exceeded Thousand It a mixture of companies that operate in accordance with the conditions and regulations of the bank and the other got the approval from the Ministry of Trade, while other companies operate without getting any vacation.
Referred to as the central bank announced, earlier this year, 2013, it closed 190 banking offices in Baghdad and the provinces for violating the legal requirements imposed by the Bank.
The fact-finding committee in matches Development Fund of Iraq revealed, April 8, 2013, that the central bank sold during the past six years in the auctions process conducted by about 207 billion dollars, equivalent to 56% of the revenues of Iraq's oil in those years, and while confirming that these sales were more doubles than you need the local market, they revealed that more than half of those sales went to the banks specific poured their purchases from the bank in the Gulf and Jordan. accused deputies, politicians and economists Central Bank of Iraq over the past months, burn "an average of four billion dollars a month in an auction hard currency for the benefit of ten banks, mostly with Gulf capital, buy a day most of the claims of the Central Bank of hard currency and overcharge make a profit of up to 6% as it controls the Iraqi economy. "
Accused the General Authority for the North Bank for Finance and Investment, on the seventh of April 2013, the CBI not to meet the needs of the Iraqi market of hard currency over the past five months and refer it the responsibility of the private banks, while confirming that Iraq needs to pump nearly $ 300 million in the market daily to meet needs of the currency in the currency the central bank when he criticized the remarks they promised to attack him and "stems from ignorance and lack of knowledge of monetary policy."
IMF Executive Board Concludes 2013 Article IV Consultation with Iraq Public Information Notice (PIN) No. 13/58
May 21, 2013
Public Information Notices (PINs) form part of the IMF's efforts to promote transparency of the IMF's views and analysis of economic developments and policies. With the consent of the country (or countries) concerned, PINs are issued after Executive Board discussions of Article IV consultations with member countries, of its surveillance of developments at the regional level, of post-program monitoring, and of ex post assessments of member countries with longer-term program engagements. PINs are also issued after Executive Board discussions of general policy matters, unless otherwise decided by the Executive Board in a particular case.
On May 13, 2013, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Iraq.1
Iraq is exceptionally rich in oil, but its economy suffers from severe structural weaknesses, such as a small non-oil sector, a dominating role of the government in all areas of the economy, and a poor business environment. Nevertheless, partly thanks to the increase in oil production since 2003, Iraq has achieved a rise in GDP per capita from $1,300 in 2004 to $6,300 in 2012 in a very difficult security and political context. During this period, Fund program engagement with Iraq was instrumental in maintaining macroeconomic stability—even though progress on structural reforms and job creation was mixed.
Recent macroeconomic developments have been broadly positive. Economic growth has reached 8.4 percent in 2012 and is expected to rise to 9 percent in 2013 as oil production increases to 3.3 million barrels per day (mbpd). Inflation has declined from about 6 percent at end-2011 to 3.6 percent at the end of last year, and should increase only slightly in 2013. International reserves of the Central Bank of Iraq (CBI) rose from $61 billion at end-2011 to $70 billion at end-2012, and fiscal reserves held at the Development Fund for Iraq (DFI) have increased from $16.5 billion to $18 billion.
Thanks to higher-than-expected oil revenues and the under-execution of the investment budget, fiscal surpluses reached almost 5 percent of GDP in 2011 and 4 percent in 2012. However, with a break-even oil price of about $100, fiscal performance is very vulnerable to oil revenue shocks—either from oil price declines or export shortfalls. Furthermore, fiscal discipline weakened over the past two years, with poor budget planning and execution, large off-budget spending, and low investment execution rates. The 2013 budget includes large unfunded commitments, increasing fiscal risks, including the possible depletion of fiscal reserves, if the budget were to be fully executed.
The policy of a de facto peg to the U.S. dollar provides a key nominal anchor to the economy, and the nominal exchange rate in the official market has remained stable since 2010. However, since late 2011, the authorities enforced existing exchange restrictions and introduced new restrictions in response to concerns about money laundering and illegal foreign exchange outflows related to the increased demand for foreign exchange. As a result, the spread between the official rate and the parallel market rate—which had been up to that point below 2 percent—started to climb, passing 9 percent in May 2013.
Over the medium term, Iraq’s macroeconomic outlook will continue to be driven by developments in the oil sector. Staff projects that oil production will rise gradually by about 400-500 thousand barrels per day per year, reaching 5.7 mbpd by 2018. Overall, growth is projected to remain above 8 percent and inflation at 5–6 percent over the medium term.
Risks to the macroeconomic outlook remain high. They include (a) weak policy implementation, particularly in the fiscal area; (b) further deterioration of the political and security situation; (c) a larger-than-projected decline in global oil prices; and (d) delays in developing Iraq’s oil fields and oil export capacity, possibly due to security issues but also insufficient investment in oil infrastructure. These risks can translate into lower oil revenues, deterioration in the fiscal position, pressures to use CBI reserves for fiscal purposes, and higher inflation.
Executive Board Assessment
Executive Directors commended the authorities for maintaining macroeconomic stability in a difficult security and political environment. With risks remaining high, including from oil price volatility, they stressed the need to build fiscal buffers and further strengthen the institutional framework. They urged the authorities to step up reforms to develop the private non oil sector to help generate employment and inclusive growth.
Directors emphasized the need to implement sustainable fiscal policies and address risks from oil revenue volatility. Rationalizing current spending—including public employment, energy subsidies, the Public Distribution System, and transfers to state owned enterprises—is needed to create space for priority social spending and public investment and to accumulate buffers. Enhancing public financial management and avoiding quasi fiscal operations by the state owned banks are also crucial. Directors noted that fiscal rules could provide a framework for fiscal policy over the medium term.
Directors supported the objective of the Central Bank of Iraq (CBI) to liberalize the foreign exchange market and the recent steps to simplify market regulations. Further measures are needed to liberalize fully the supply of foreign currency, with the objective of lowering the exchange rate spread, removing distortions, and complying with Article VIII of the Fund’s Articles of Agreement. Directors considered that strengthening the Anti Money Laundering/Combating the Financing of Terrorism (AML/CFT) framework, in line with the Middle East and North Africa Financial Action Task Force (MENA FATF) recommendations and FATF standards, would be more effective than restricting foreign exchange in curbing money laundering and terrorist financing.
Directors agreed that a stable exchange rate, supported by a high level of international reserves, provides a valuable anchor in an uncertain environment. They agreed that the two tier architecture of prudent management of CBI reserves and use of the Development Fund for Iraq (DFI) as a de facto oil stabilization fund is appropriate. They urged the authorities to continue to rely on the DFI to help stabilize government spending and ensure oil revenue transparency.
Directors highlighted the importance of a stable financial sector in developing the private sector and diversifying the economy, and were encouraged by recent progress in strengthening banking supervision and restructuring the Rasheed and Rafidain banks. They encouraged the authorities to ensure a level playing field for public and private banks by opening to private banks access to government business.
More broadly, Directors emphasized that fostering growth in the private non oil sector requires improving the business environment, investing in infrastructure and social capital, reforming state owned enterprises, and enhancing public service delivery. Judicious use of the country’s oil wealth can help address these pressing challenges. Improving the authorities’ capacity to implement reforms will also be critical.
Just learned that Iraq is under what's called Article XIV and that with it, it carries the following limitations.
ARTICLE VIII AND ARTICLE XIV
ARTICLES VIII AND XIV
There has been in recent years a substantial improvement in the balance of payments and the reserve positions of a number of Fund members which has led to important and widespread moves to the external convertibility of many currencies. Most international transactions are now carried on with convertible currencies, and many countries have progressed far with the removal of restrictions on payments. In consequence of these developments, it seems likely that a number of members of the Fund either have reached or are nearing a position in which they can consider the feasibility of formally accepting the obligations of Article VIII, Sections 2, 3, and 4. Previous decisions taken by the Fund, such as those on multiple currency practices, bilateral arrangements, discriminatory restrictions maintained for balance of payments purposes, and payments restrictions for security reasons, indicate the Fund’s attitude on these matters. The present decision has been adopted as an additional guide to members in pursuance of the purposes of the Fund as set forth in Article I of the Articles of Agreement.
1. Article VIII provides in Sections 2 and 3 that members shall not impose or engage in certain measures, namely restrictions on the making of payments and transfers for current international transactions, discriminatory currency arrangements, or multiple currency practices, without the approval of the Fund. The guiding principle in ascertaining whether a measure is a restriction on payments and transfers for current transactions under Article VIII, Section 2, is whether it involves a direct governmental limitation on the availability or use of exchange as such. Members in doubt as to whether any of their measures do or do not fall under Article VIII may wish to consult the Fund thereon.
2. In accordance with Article XIV, Section 3,1 members may at any time notify the Fund that they accept the obligations of Article VIII, Sections 2, 3, and 4, and no longer avail themselves of the transitional provisions of Article XIV. Before members give notice that they are accepting the obligations of Article VIII, Sections 2, 3, and 4, it would be desirable that, as far as possible, they eliminate measures which would require the approval of the Fund, and that they satisfy themselves that they are not likely to need recourse to such measures in the foreseeable future. If members, for balance of payments reasons, propose to maintain or introduce measures which require approval under Article VIII, the Fund will grant approval only where it is satisfied that the measures are necessary and that their use will be temporary while the member is seeking to eliminate the need for them. As regards measures requiring approval under Article VIII and maintained or introduced for nonbalance of payments reasons, the Fund believes that the use of exchange systems for nonbalance of payments reasons should be avoided to the greatest possible extent, and is prepared to consider with members the ways and means of achieving the elimination of such measures as soon as possible. Members having measures needing approval under Article VIII should find it useful to consult with the Fund before accepting the obligations of Article VIII, Sections 2, 3, and 4.
3. If members at any time maintain measures which are subject to Sections 2 and 3 of Article VIII, they shall consult with the Fund with respect to the further maintenance of such measures. Consultations with the Fund under Article VIII are not otherwise required or mandatory. However, the Fund is able to provide technical facilities and advice, and to this end, or as a means of exchanging views on monetary and financial developments, there is great merit in periodic discussions between the Fund and its members even though no questions arise involving action under Article VIII. Such discussions would be planned between the Fund and the member, including agreement on place and timing, and would ordinarily take place at intervals of about one year.
4. Fund members which are contracting parties to the GATT and which impose import restrictions for balance of payments reasons will facilitate the work of the Fund by continuing to send information concerning such restrictions to the Fund. This will enable the Fund and the member to join in an examination of the balance of payments situation in order to assist the Fund in its collaboration with the GATT. The Fund, by agreement with members which are not contracting parties to the GATT and which impose import restrictions for balance of payments reasons, will seek to obtain information relating to such restrictions.
Decision No. 1034-(60/27),
June 1, 1960
1 Ed. Note: Corresponds to Article XIV, Section 1 of the Articles of Agreement after the Second Amendment.
IMF Mission Concludes Article IV Discussions with Iraq
Press Release No. 13/87
March 21, 2013
****THIS HAS TO DO WITH ARTICLE IV****
An International Monetary Fund (IMF) mission, led by Mr. Carlo Sdralevich, met with an official Iraqi delegation headed by the Acting Minister of Finance, Dr. Ali Al Shukri, in Amman, Jordan, during March 2-12, 2013 to conduct the Article IV Consultation discussion. The IMF mission met with the Acting Minister of Finance, the Acting Governor of the Central Bank of Iraq (CBI), head of the Board of Supreme Audit, AbdulBasit Al Turki Said, and other Iraqi officials from the ministries of finance, planning, and oil, and representatives from the Central Bank and the Board of Supreme Audit. The team also met with representatives from the Iraqi banking and business community.
At the conclusion of the mission, Mr. Sdralevich made the following statement:
“Following the recent expiration of the Stand-By Arrangement with Iraq approved in 2010, the IMF is committed to continue close collaboration with Iraq to support its development and help the government improve the social conditions and employment opportunities of Iraqi citizens.
“Despite a difficult security and political environment, Iraq managed to maintain macroeconomic stability over the past two years. On the back of rising oil production and robust non-oil activity, economic growth has remained strong at about 8 percent in 2012. We expect activity to accelerate further to 9 percent in 2013, as oil production increases from just under 3 million barrels per day (mbpd) in 2012 to 3.3 mbpd in 2013. In 2012, inflation was contained at 6 percent, and we project it to decline slightly next year. On account of strong oil proceeds, CBI reserves reached US$70 billion at the end of 2012, while the Development Fund for Iraq (DFI) rose to US$18 billion.
“While we welcome the achievement of a budget surplus of about 4 percent of GDP in 2012, largely due higher-than expected oil revenues, the execution of the 2013 budget should be aligned with available financing and provide for the accumulation of adequate fiscal buffers in the DFI, which suggests to target a budget surplus in 2013. Public financial management should be strengthened, notably by phasing out off-budgetary spending practices and reliance on state-owned bank financing to support public enterprises. Approval of additional spending commitments during the fiscal year should also be avoided.
“Financial sector policies are improving, but more remains to be done. The CBI’s ongoing efforts to refine monetary policy instruments, strengthen banking supervision, and accelerate the restructuring of the banking system are crucial. In this respect, the recent steps to clean up the balance sheets of Rasheed and Rafidain in preparation for their restructuring and recapitalization are key. The CBI should also take measures to gradually liberalize the provision of foreign exchange through its auctions, with the objective of avoiding in future the turbulence experienced by the market in the past year.
“Iraq will need to address serious medium-term challenges in order to be able to create the conditions for high and sustainable growth that is necessary to improve the living standards of its people. The economy continues to suffer from severe structural weaknesses such as a small nonoil sector, high unemployment, public sector dominance, and a weak business environment. In this context, we discussed the role of economic policies in leveraging Iraq’s potential and creating an enabling environment.
“With regard to the fiscal sector, the budget must be managed carefully to maintain macroeconomic stability, meet Iraq’s large social and investment needs while continuing to accumulate buffers to address oil market volatility, and ensure medium-term fiscal sustainability. At the same time, Iraq needs to strengthen fiscal institutions and public financial management to make sure that the large oil revenues are used effectively and transparently.
“Developing a stronger financial sector development will require moving away from the current model in which weak state-owned banks dominate the financial sector and enjoy favorable treatment vis-a-vis private banks. A solid banking system that can support growth and employment will require the full financial and operational restructuring of state-owned banks and creating a level playing field for both private and public banks.
“Finally, while oil-growth is projected to remain high over the coming years, boosting non-oil private sector growth will need a long-term government strategy centered on improving the business environment and opening up opportunities for the private sector.” http://www.imf.org/external/np/sec/pr/2013/pr1387.htm
IMF ARTICLES OF AGREEMENT ARE IN PDF FORM AT THE BOTTOM OF THIS PAGE
IMF Approves Seven-Month Extension of Stand-By Arrangement for Iraq Press Release No. 12/286
August 3, 2012
The Executive Board of the International Monetary Fund (IMF) approved on July 20, 2012—on a lapse-of-time basis1—a seven-month extension of Iraq’s Stand-By Arrangement (SBA), to February 23, 2013.
The SBA had been scheduled to expire on July 23, 2012. The extension, which had been requested by the Iraqi authorities, will provide them with time to implement the policy measures needed to complete the combined third and fourth reviews under the SBA. The extension will, in particular, provide time for discussions on fiscal policies for the remainder of 2012 and on measures to improve the functioning of the exchange regime.
The two-year Stand-By Arrangement (SBA) in the amount of SDR 2.38 billion (about US$3.58 billion), was approved by the IMF's Executive Board on February 24, 2010 (see press release 10/60). (see note #1 below) The IMF's Executive Board completed the first program review on October 1, 2010 (see press release 10/373), (see note #2 below) and the second review on March 18, 2011 (see press release 11/90). (see note #3 below) At the time of the second review, the program duration was extended by five months to July 2012, along with a rephasing of program disbursements based on a shift in financing needs. Total resources currently available to Iraq under the arrangement amount to the equivalent of SDR 1307.24 million (about $1.96 billion).
(note 1) - IMF Executive Board Approves US$3.6 Billion Stand-By Arrangement for Iraq Press Release No. 10/60
February 24, 2010
The Executive Board of the International Monetary Fund (IMF) today approved a two-year Stand-By Arrangement for Iraq for an amount equivalent to SDR 2.38 billion (about US$3.64 billion) to cover the country’s balance of payments needs. The Board’s approval makes an amount equivalent to SDR 297.1 million (about US$455 million) immediately available to the Iraqi authorities.
The new arrangement follows a 15-month program supported by a Stand-By Arrangement, which was approved by the executive Board on December 20, 2007 and expired on March 18, 2009 (Press Release No 07/301). (see note #4 below) The successor arrangement is designed to support Iraq's economic program over the next 24 months through February 23, 2012.
Following the Executive Board's discussion of Iraq, Mr. Takatoshi Kato, Deputy Managing Director and Acting Chair, said:
“Iraq has made substantial progress in rebuilding its economy and consolidating macroeconomic stability under difficult security and political conditions. The economy was severely affected in 2009 by the drop in international oil prices. The current account and the overall balance of payments are expected to remain in deficit in 2010 and 2011. Similarly, the fiscal position is projected to record large, albeit declining, deficits in both years, before returning to a surplus position in 2012.
“Against this background, the economic program for 2010 and 2011 aims at providing a sound macroeconomic framework during a period of economic and political uncertainties. Consistent with this program, the 2010 budget adopted by parliament seeks to contain current spending while increasing investment to address Iraq’s large rehabilitation needs and improve public service delivery. Monetary and exchange rate policies will continue to aim at keeping inflation low.
“The economic program will also help the authorities move forward with their structural reform agenda. Strengthening the public financial management system is critical to improving the allocation and execution of public resources, as well as enhancing transparency and accountability in the management of the country’s natural resources. The program also incorporates banking sector reforms, including a restructuring of state-owned banks, with a view to improving the financial services required by a growing economy.
“The authorities intend to treat the new Stand-by Arrangement as precautionary should oil prices turn out to be significantly higher than envisaged, or investment execution be lower than budgeted.
“The authorities have made significant progress in their external debt negotiations with official and private creditors. They remain committed to completing the restructuring of remaining non-Paris Club claims,” Mr. Kato stated.
The main objectives of the program are to maintain macroeconomic stability during a period of high economic and political uncertainties (parliamentary elections are scheduled for March 7, 2010), and to provide a framework for deepening structural reforms.
While Iraq’s medium-term economic outlook remains favorable because oil prices and production are projected to increase in the coming years, based on conservative oil price assumptions the current account and overall balance of payments are expected to remain in deficit in 2010 and 2011. Similarly, Iraq’s fiscal position is projected to record large, albeit declining deficits in both years, before returning to a surplus position in 2012.
Against this background, the authorities have designed an economic program for the period through end-2011 and have requested the Fund to support it with a new two-year Stand-By Arrangement. The authorities view the new program primarily as a way to provide a sound macroeconomic framework during a period of high economic and political uncertainties. The authorities’ fiscal program seeks to contain current government spending while catching up on much-needed investment spending. The budget deficit is targeted to decline to 19 percent of GDP in 2010 and further to 6 percent in 2011, before shifting back into surplus in 2012. Monetary and exchange rate policies will continue to aim at keeping inflation low.
The new program will also aim to advance key reforms in the areas of public financial management (PFM) and financial sector development, in close coordination with a Development Policy Loan (DPL) provided by the World Bank. Both operations focus on advancing PFM and bank restructuring action plans prepared by the authorities during 2008 and 2009 with the assistance of Fund and World Bank staff.
(note 2) - IMF Executive Board Completes First Review Under Stand-By Arrangement with Iraq, Grants Waivers and Approves US$741 Million Disbursement Press Release No. 10/373
October 1, 2010
The Executive Board of the International Monetary Fund (IMF) today completed the first review of Iraq’s economic performance under a program supported by a 24-month Stand-By Arrangement (SBA). Completion of the first review makes an additional SDR 475.36 million (about US$ 741 million) available for disbursement, bringing the total resources that are currently available to Iraq under the arrangement to SDR 772.46 million (about US$ 1,204 billion).
The Executive Board also approved a waiver for nonobservance for the end-June performance criterion on the net international reserves and a waiver of applicability for the end-June performance criterion on the central government current spending bill for which data is not yet available. A rephasing of the remaining disbursements was also approved by the Board.
The SBA was approved on February 24, 2010 (see Press Release No. 10/60) for SDR 2.38 billion (about US$3.7 billion). In addition to providing temporary budget support, the SBA supported program aims to ensure macroeconomic stability and provide a framework for advancing structural reforms in Iraq.
Following the Executive Board’s discussion on Iraq, Mr. Naoyuki Shinohara, Deputy Managing Director and Acting Chair, stated:
“Iraq has continued to make good progress in rebuilding key economic institutions and maintaining macroeconomic stability, under very difficult circumstances. The Fund-supported program has provided a valuable anchor for economic policy during a period of high vulnerability. In the first half of 2010, oil revenues remained strong, inflation continued to be subdued, and the budget recorded a surplus. For 2010 as a whole and 2011, based on conservative assumptions for oil prices and export volumes, Iraq’s external and fiscal positions are expected to remain in deficit but return to a surplus in 2012.
“The 2011 budget will need to be consistent with the goal of achieving medium-term fiscal sustainability and be based on conservative assumptions for oil prices and volumes. Containing current spending would allow further increases in investment, and a stronger emphasis on improving the quality of spending and rebuilding public infrastructure will help achieve higher economic growth.
“Success in reconstructing the economy will depend on accelerating the pace of implementation of the government’s fiscal and financial sector structural reform agendas. The modernization of Iraq’s public financial management system encompasses further improvements in fiscal reporting and the budgetary process, and the adoption of a single treasury account. Further progress in strengthening the Central Bank of Iraq’s supervisory role and moving ahead with the financial and operational restructuring of the two largest state-owned banks will help in increasing financial intermediation. As a candidate member of the EITI, the Iraqi authorities intend to continue making progress in strengthening governance and transparency in the hydrocarbon sector.
“The authorities have made commendable efforts to conclude debt agreements. Further progress in resolving outstanding claims under terms comparable to the 2004 Paris Club Agreement will be important.”
(note 3) - IMF Executive Board Completes Second Review Under Stand-By Arrangement with Iraq, Grants Waivers and Approves US$471.1 Million Disbursement Press Release No. 11/90
March 18, 2011
The Executive Board of the International Monetary Fund (IMF) today completed the second review of Iraq’s economic performance under a program supported by a Stand-By Arrangement (SBA). Completion of the second review makes an additional SDR 297.1 million (about US$471.1 million) available for disbursement, bringing the total resources currently purchased by Iraq under the SBA to SDR 1.069 billion (about US$1.7 billion).
The Executive Board also approved a waiver of applicability of the end-December 2010 performance criteria on the central government fiscal deficit and on the central government spending bill, for which data is not yet available. The Executive Board furthermore approved an extension of the SBA by five months to July 2012, and a rephasing of access under the SBA to match disbursements with Iraq’s balance of payments financing needs.
The SBA was approved on February 24, 2010 (see Press Release No. 10/60) for SDR 2.38 billion (about US$3.77 billion). The SBA supported program aims to ensure macroeconomic stability and provide a framework for advancing structural reforms in Iraq.
Following the Executive Board’s discussion on Iraq, Mr. Naoyuki Shinohara, Deputy Managing Director and Acting Chair, stated:
“Iraq has maintained macroeconomic stability under difficult external and internal circumstances, while making efforts to rebuild key economic institutions. Inflation has remained subdued, and the exchange rate has remained stable. The 2011 budget aims to accelerate investment in public services and infrastructure, and accommodates higher social safety net provisions to support those in need. Iraq’s rehabilitation needs remain large and the higher investment spending is essential to help create a vibrant private sector that provides employment opportunities for Iraq’s large labor force, thus helping to reduce poverty. At the same time, a strong emphasis on ensuring the quality of public spending will be important.
“Decisive efforts to rebuild key economic institutions and improve governance will be critical for private sector development. The formation of the new government and the expected increase in oil production in the coming years offer an opportunity to do so while maintaining macroeconomic stability. Further strengthening public financial management encompasses the introduction of an automated financial management and information system and improvements in cash management which would eventually culminate in the establishment of a single treasury account. Establishing a framework for oil revenues to succeed the Development Fund for Iraq should help ensure continued accountability and transparency. In the financial sector, moving ahead with the financial and operational restructuring of the two largest state-owned banks and enhancing the central bank’s supervision capacity will contribute to creating a financial sector that can provide essential services to the private sector.
“Iraq continues to make progress to conclude debt agreements and resolve outstanding claims under terms comparable to the 2004 Paris Club Agreement.”
(note 4) - IMF Executive Board Approves US$744 Million Stand-By Arrangement for Iraq Press Release No. 07/301
December 20, 2007
The Executive Board of the International Monetary Fund (IMF) has approved a successor Stand-By Arrangement for Iraq for an amount equivalent to SDR 475.36 million (about US$744 million). Prior to the Board's approval, Iraq cancelled the current Stand-By Arrangement, which had been approved by the IMF's Executive Board on December 23, 2005 (see Press Release No. 05/307) and extended on March 12, 2007 (see Press Release No. 07/48) and on August 1, 2007 (see Press Release No. 07/175). The successor arrangement is designed to support Iraq's economic program over the next 15 months through March 2009. The Iraqi authorities intend to treat the arrangement as precautionary.
Following the Executive Board's discussion of Iraq, Mr. Takatoshi Kato, Deputy Managing Director and Acting Chair, stated:
"The Iraqi authorities have succeeded in keeping their economic program on track in 2006-07, despite the difficult security and political situation. The tightening of monetary policy and the appreciation of the dinar—along with the maintenance of fiscal discipline and the measures to reduce fuel shortages—have led to a sharp reduction in inflation. Direct budgetary fuel subsidies have been eliminated, except on kerosene, and private fuel imports have been liberalized. The recently enacted amendments to the pension law have made the pension system fiscally sustainable. A new chart of accounts and budget classification have been adopted and the payments system has been modernized.
"Although the security situation has showed signs of improvement in recent months, it remains a major obstacle for investment and reconstruction, hampering oil production and economic growth. Also, much remains to be done to modernize financial management of the government and the central bank, and to reform the banking system.
"The authorities' program for 2008 aims to allocate resources towards investment, including in the oil sector, and to improve the provision of public services, while containing current government spending, notably on the wage and pension bill. The program—which envisages an increase in economic growth, a further reduction in inflation, and an increase in net international reserves—will also encompass priority structural reforms, including actions to strengthen administrative capacity and governance.
"The authorities intend to press ahead with structural reforms, including measures to modernize public financial management, complete the census of public service employees, and restructure the two largest public banks. They are determined to avoid the re-emergence of direct fuel subsidies, and plan to develop a rule-based mechanism of adjusting domestic fuel prices. To strengthen governance in the oil sector, the implementation of a comprehensive oil metering system should be finalized as soon as possible. In addition, a new hydrocarbon law needs to be put in place to facilitate investments in the oil sector.
"The Central Bank of Iraq (CBI) will continue to strengthen its accounting and reporting framework by implementing the recommendations of the Fund's Interim Safeguards Assessment Report and the Ernst & Young audit of its 2006 financial statements. The central bank also aims to expand the coverage of the payments system, strengthen the supervisory framework for commercial banks, and adopt reserves management guidelines.
"The authorities' efforts to settle arrears and conclude debt agreements with private and official creditors are commendable. However, further progress is needed to resolve the remaining non-Paris Club claims," Mr. Kato said.
The main objectives of the new program are to maintain macroeconomic stability, facilitate higher investment and output in the oil sector, and move forward with key reforms that were initiated under the previous arrangement. The 2008 program envisages an increase of oil output to 2.2 mbpd, and overall GDP growth to reach 7 percent. Annual consumer price inflation is targeted to decline to 12 percent in 2008. The net international reserves of the CBI are expected to increase to about US$34 billion by the end of 2008.
The 2008 government budget makes room for sizable investment while maintaining fiscal sustainability and continuing to avoid direct fuel subsidies, except on kerosene. External debt sustainability would be achieved when the third tranche of the Paris Club debt rescheduling (20% in Net Present Value terms) is triggered upon completion of the final review of the proposed SBA by end-2008 and further progress is made in rescheduling the remaining debt from non-Paris Club official creditors on comparable terms.
Key structural reforms under the program include the strengthening of public financial management and the accounting framework of the CBI; the restructuring of the two largest public banks; and strengthening governance in the oil sector.
Iraq joined the IMF on December 27, 1945. Its quota is SDR 1.188 billion (about US$1.860 billion).
The International Monetary Fund to extend a loan of Iraq until February 2013
JD/Baghdad/...The International Monetary Fund said on arrival at an agreement with Iraq in which their loan was extended seven months until 23 February 2013 to allow the Iraqi Government to implement a series of measures in the country's exchange rate system.
The IMF's statement that "changes the agreement which expired on 23 July last was at the request of the Iraqi Government."
"The total funding available to Iraq is about 1.96 billion dollars.
The Executive Board of the International Monetary Fund had agreed on 24 February 2010 at the standby credit agreement for a period of two years worth of 38, 2 billion special drawing rights "about 58, 3 billion dollars and approved the extended for five months until June 2012 with the exchange adjustment at switch in funding needs. The total resources currently available to Iraq under the agreement to the equivalent of 24, 1307 million special drawing rights "about 96, 1 billion dollars". /Finished/22
CBI: IMF Iraq Program Note
Last updated on October 5, 2011
Current Program Status:
The two-year Stand-By Arrangement (SBA) in the amount of SDR 2.38 billion (about US$3.7 billion) was approved by the IMF’s Executive Board on February 24, 2010.
The Board completed the first program review on October 1, 2010 and the second review on March 18, 2011, bringing the total resources currently available to Iraq under the arrangement to SDR 1069.56 million (about $1.7 billion).
In July 2012, the IMF’sExecutive Board extended the SBA until February 2013 to allow more time for the authorities to implement structural measures envisaged in the program and address distortions in the foreign exchange market that have led to the widening of the spread between the official and market exchange rates.
The IMF commitment to Iraq relies on two main pillars. First, the IMF is helping the authorities in their efforts to maintain macroeconomic stability as a key condition for economic growth and the generation of sustainable employment opportunities for Iraq’s large labor force. Second, the IMF assists the Iraqi authorities in rebuilding essential economic institutions with its policy advice and technical expertise.
Macroeconomic stability is at the heart of the IMF programs. With the support of four IMF programs, the macroeconomic situation of Iraq has improved substantially since 2003, despite extremely difficult security circumstances and periods of political uncertainty. After experiencing inflation rates of 70 percent in 2007, the Central Bank of Iraq was successful in reducing inflation to the single digits, where it has remained since. The economy is growing with the revival of the oil sector and the improvement in the security situation. And with the support of the international community, debt levels have been brought down to sustainable levels.
Policy advice focuses on the fiscal, monetary and financial policy areas. In the fiscal area, major emphasis has been put on the adoption of policies that support the reconstruction of Iraq and preserve social spending, while maintaining medium-term fiscal sustainability. In the monetary and financial areas, IMF advice has centered on keeping inflation under control, maintaining a broadly stable and liberal exchange rate regime, and modernizing the financial sector to enable the private sector to develop. IMF technical assistance has proven essential in helping the Iraqi authorities develop their institutional capacity and governance infrastructure.
The current program aims to continue to support the reconstruction of Iraq. Following the successful conclusion of Iraq’s second SBA program, the IMF’s Executive Board approved a new two-year SBA program on February 24, 2010 with an access of US$3.7 billion (SDR 2,376.8 million, or 200 percent of quota). The program provided a macroeconomic framework supporting the reconstruction efforts during the political transition following the March 2010 parliamentary elections.
In line with past programs, the key objectives of the current SBA are the preservation of macroeconomic stability and the adoption of policies and measures to promote sustainable growth and poverty reduction. The financial resources envisaged in the context of the program were meant to be made available to respond to the drop in oil prices from their peak levels in mid-2008, which translated into a substantial deterioration of Iraq’s external position in 2009 and to a financing gap in the government finances.
Besides preserving macro-stability and providing budgetary support, the program also supports the authorities’ medium-term structural reform agenda. This agenda relies on three key pillars: Modernizing Iraq’s public financial management system. This encompasses improvements in the allocation, execution, transparency, and accountability of the mobilization and use of public resources. Priority areas include improving budget preparation, reporting and cash management, public procurement, internal audit and control systems, and the accounting framework.
Developing the financial sector. This pillar relies on enhancing Central Bank of Iraq (CBI) operations and promoting a banking sector that can provide basic financial services, including, crucially, to the private sector. Reinforcing central banking operations includes rebuilding the capacity of the central bank to conduct monetary and exchange rate policies, supervise banks, and manage the country’s foreign exchange reserves. The financial restructuring of the two main state-owned banks is an important step to help establish the conditions for the banking system to extend credit to the private sector.
Strengthening governance in the oil sector. As part of the authorities’ efforts to increase transparency and accountability in the oil sector, Iraq became a candidate member to the Extractive Industries Transparency Initiative (EITI) in February 2010, and produced its first EITI report in December 2011. Efforts in this area are also directed at completing the installation of oil metering systems, which will help reconcile oil production and export data with budget revenues from the oil sector, and at maintaining a single account for all oil export proceeds.
During 2012, the authorities succeeded in maintaining macroeconomic stability, but progress on the program has slowed down. The combined third and fourth reviews have been delayed owing to limited progress in restructuring the state-owned banks and the emergence of distortions in the foreign currency markets that have led to the widening of the spread between the official and market exchange rates. IMF staff is working closely with the Iraqi authorities to address these issues and push forward the program agenda.
IMF forecasts escalating rates of economic growth for Iraq Posted: June 26, 2012
International Monetary Fund forecast that the growth rate in the Iraqi economy will reach 11.1 percent this year. According to a poll conducted by the U S any claim that the Iraqi economy shows signs of life remained brisk increase achieved in its oil industry and the decline in violence, as Iraq was able help of international oil companies raise its oil production to 3 million barrels per day.
reported in the newspaper surveyed, that the foreign investment, encouraging signs that attest to the recovery of the Iraqi economy, as valued in the last year, 55.67 billion dollars, indicating that investors have to look over that was considered Iraq barrier of violence as evidenced foreign investment that the country is moving in the right way.
and suggested the newspaper that the company established the were reluctant to enter into Iraq initially unlike Chinese companies that did not show such a frequency, but U.S. companies are emerging more attention recently in Iraq.
According to Senior Analyst on the Middle East working for a company the minimum, that the world is convinced that Iraq will not testify today, after only a steady increase in oil imports year after year and most of them no longer thought of the possibility of a setback.
CBI between the hammer of the International Monetary Fund and the anvil of legalized corruption
Posted: May 7, 2012
of the Iraqi Central Bank between the hammer of the International Monetary Fund and the anvil of legalized corruption when it was re-activity of the central bank decision of the civil administrator Paul Bremer in 2004 and was printed banknotes of the new Iraqi dinar rate Exchange 1500 dinars to the Dolaraluahd with raising the purchasing power of the Iraqi people, rejoiced involved in economic affairs better than during the analysis predictive of future of the reality of the Iraqi economy and how to promote it, which requires control of the executive power by keeping the heads of the arms of economic activity and not to leave the speculators (makers of financial and economic crises that go the lives of middle and lower classes) control mechanisms of the market.
what I said earlier, I do not mean him to return to the economy totalitarian (not socialist!) and absolute control of the state on all aspects of the Iraqi economy and stripping the central bank of its independence, but requires Asdariqrarat and legislation by the executive and legislative branches of the Bank’s assistance Central to stop the smuggling and the diversion of hard currency on the one hand and adjust the rates of economic movement that will benefit and accelerate the overall development process.
that one demands of the International Monetary Fund is to eliminate corruption and waste of public money that spread Kalkhlaya cancer in the administrative structure, economic and social. of the factors that helped to corruption and theft of financial resources in the midst of chaos after the fall of the Baathist regime, was the late Central Bank for a period of four years for consolidation of a network of information between it and all Iraqi banks through which the central bank can control the movement of cash at home and abroad, and even after the practice financial activity through the network, continued smuggling of hard currency through the legal cover of the decisions made by the civil governor at the time.
I helped those decisions on the backs of the merchant class parasites (the scourge of the national economy), who found in the decisions of primer open space for the exercise of their activity destructive against the Iraqi economy, and now the Central Bank shall announce some members of the Finance Committee in the House of Representatives of the existence of an international conspiracy to drain and destroy the financial capacity of Iraq.
question arises here – Why Atghei decisions primer and proceeds to new laws in favor of the Central Bank, aimed at the elimination of brokers and speculators, manipulators purchasing power of the Iraqi dinar? The answer is clearly evident is that those parasites of traders and brokers linked to membership of the relationship with the parties in power!! And eliminate them means cutting the financial resources for these parties, this will not be, even Preparations are under way and as rapidly as possible for the purpose of joining the WTO in the current circumstances, in order to complete the process of strangling the Iraqi economy and keep a consumer economy and Rieia unilaterally.
So no need to blame the central bank about the fluctuation of the value of Aldenarabraghi, because the problem is positioned in the dominant political forces to power!
CBI: IMF satisfied with our financial reforms; Supportive of dropping zeros from IQD
Posted: March 10, 2012
Baghdad, March 10 / March (Rn) – The Central Bank of Iraq on Saturday that the International Monetary Fund is satisfied with the financial reforms carried out by as part of his dealings banking.
Iraq had decided since the beginning of 2006 to restructure State-owned banks. Deputy Governor of the Central Bank of the appearance of Mohammed Saleh told the Kurdistan News (Rn) that “the International Monetary Fund expressed his conviction fiscal reforms carried out by Iraq at the level of financial dealings and banking and development.”
and added that “Iraq see with the IMF bilateral agreement was signed between the two sides to strengthen the political banking and the development of cash transactions.” The benefit of that “this agreement the purpose of assessment is good for conditions in Iraq and the areas of financial reform of the accounting system and mechanisms of exchange in the budget.”
and still the Iraqi government is limited in its financial transactions on the government banks by 85%.
He International Monetary Fund’s recent support of the Iraqi economy in the event carrying out a number of economic measures, including raising three zeros from the local currency.
IMF calls for Iraq not to enact laws that shackle the economy
Posted: January 16, 2012
Revealed the parliamentary finance committee on Monday that the International Monetary Fund called for in his recent visit to Iraq, the House of Representatives not to enact laws that contribute to undermine the growth of the Iraqi economy, indicating that the legislation of laws increase the operational budget at the expense of investment irritated the International Monetary Fund.
A member of the parliamentary Finance Committee Najiba Najib’s “Twilight News” that “representatives of the International Monetary Fund in their recent visit to Iraq, met with the Chairman of the House of Representatives (Osama Najafi) and members of the Finance Committee and asked Council not to enact laws that hinder the growth of Iraqi economy.”
The Finance Committee of the House of Representatives unveiled in early December of last year, from the threat of the International Monetary Fund raised its support for Iraq in the next year in the event of non-compliance with its terms and the last observation, particularly the reduction of the operating budget.
Najib explained that “the IMF said that the increase in the investment budget will lead to many job opportunities, leading to reduce the size of unemployment in Iraq.”
It showed that “What irritated the International Monetary Fund is the continuing increase in the operating budget at the expense of investment and this is what was noted also in the budget in 2012.”
The Iraqi government has approved the federal budget for 2012, worth U.S. $ 100 billion, an increase of 22 percent from the previous year.
The government has allocated the largest proportion of its budget for the energy sector, accounting for 17.48 percent of the budget group, followed by security and defense by 14.6 percent, and social services 13.28 percent.
Financial Committee, IMF reach agreement on 2012 budget
Posted: January 4, 2012
The Financial; Committee in the Iraqi Parliament, and the International Monterey Fund (IMF), reached an agreement regarding controversial items in the draft law of 2012 budget.
Haitham al- Jobori member of the committee from the State of Law Coalition , in a press statement said that Parliament’s session today, January 03, will witness the first reading of the aforementioned draft law.
The committee reached a settlement over most objections by the International Monetary Fund about the budget., al- Jobori said
International Monetary Fund show his conviction for the financial policy for Iraq
Posted: October 8, 2011
Baghdad, October 8 (Rn) – The Central Bank of Iraq, on Saturday, there is acceptance of the International Monetary Fund on the Iraq political cash.
The deputy governor of Central Bank of Iraq the appearance of Mohammed Saleh told the Kurdish news agency (Rn) that “the IMF is convinced that monetary policy in the direction the country is heading a true fit with the reality of the Iraqi economy.”
He added that “the central bank follows the monetary policy to reduce inflation and provide cover for the local currency and economic controls commensurate with the fiscal policy pursued in Iraq.”
He noted that “the central bank constantly reviews the Ssayasth cash and mechanisms for the dependents of annual inflation and gaps facing the use of foreign currency and local communities in the country.”
And the Iraqi Central Bank announced last Thursday a rise in financial reserves of $ 8 billion since the beginning of this year, indicating that the reserve was 50 billion last year and is now to 58 billion.
Officials in the Iraqi Central Bank to increase reserves is a sign of maturity and development of monetary policy and consistency with fiscal policy in the country.
And is keen to address the economic gaps in the circulation of local and foreign currency.
Indicates that the central bank reserve bank is not stagnant or stock is used in the open market in order to achieve a balance between liquidity and demand in the local currency traded.
This document is one of the first ones I looked at when investigating the investment opportunity that was presented to me. In it you find IMF requirements for Iraq, and Iraq's compliance of these requirements. It is also attached at the bottom of this page for your viewing or downloading.
2010 International Monetary Fund October 2010
IMF Country Report No. 10/316
January 8, 2009 January 28, 2009 29, 2001
, 2001 January 28, 2009
Iraq: First Review Under the Stand-By Arrangement, Request for Waiver of Nonobservance of a Performance Criterion, Waiver of Applicability, and Rephasing of
Access The following documents have been released and are included in this package:
The staff report, prepared by a staff team of the IMF, following discussions that ended on September 18, 2010, with the officials of Iraq on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on September 20, 2010. The views expressed in the staff report are those of the staff team and do not necessarily reflect the views of the Executive Board of the IMF.
Copies of this report are available to the public from
International Monetary Fund Publication Services
700 19th Street, N.W. Washington, D.C. 20431
Telephone: (202) 623-7430 Telefax: (202) 623-7201
E-mail: email@example.com Internet: http://www.imf.org
International Monetary Fund
14. The CBI will continue to aim at keeping inflation low, predominantly through the continuation of its exchange rate policy. The exchange rate remains the CBI’s main policy instrument, given the very low level of financial intermediation.
23. Iraq became a candidate member of the Extractive Industries Transparency Initiative (EITI) in February 2010. The authorities already publish information on all revenues from export sales from its oil sector. Equally, international companies buying oil from Iraq will publish what they have paid to the government. Overseen by a multi-stakeholder group with representatives from national government, companies and civil society, these figures will then be reconciled and published in an EITI Report. Iraq plans to publish its first EITI report in late 2011. Iraq has until February 2012 to implement all EITI standards and undergo an EITI validation in order to become an EITI Compliant country.
26. No progress had been made in the restructuring of the balance sheets of the two largest state-owned banks, Rafidain and Rasheed. This largely reflected a lack of institutional capacity and weak coordination between the various parties involved. During the review mission, a detailed action plan was prepared with the assistance of a bank restructuring expert and with the participation of all parties involved to move this process forward. Under the new plan, a Bank Reconciliation Unit (BRU) will be established, chaired by the CBI, with the participation at a technical level of staff from the CBI, the Ministry of Finance, the BSA, Rafidain and Rasheed, and experts of Ernst & Young (who were the agents of the Ministry of Finance in the external debt restructuring process) to deal with the legacy assets and liabilities of the previous regime. The BRU will work under the supervision of the Restructuring Oversight Committee (ROC), consisting of the Minister of Finance, the Governor of the CBI, and the Chairman of the BSA to ensure that the restructuring of these banks’ balance sheet has the necessary support and authorization. Under the new plan, the deadline for cleaning up these banks’ balance sheets of Saddam-era assets and liabilities is extended until end-June 2011.
ATTACHMENT I. IRAQ: LETTER OF INTENT
September 18, 2010
Mr. Dominique Strauss-Kahn
International Monetary Fund
700 19th Street, N.W.
Washington, D.C. 20431
In the remainder of 2010 and in 2011, we plan to continue with our fiscal and monetary policies as set forth in our letter of February 8, 2010. We hope to be able to fully execute the 2010 government budget, in particular the investment budget, and we are working hard to improve administrative capacity. The 2011 government budget will again be based on conservative assumptions with regard to oil prices and export volumes, and will aim for a substantial reduction in the budget deficit with a view to returning to a sustainable fiscal position, while addressing the large rehabilitation needs of the country. Monetary policy will continue to aim at keeping inflation low, predominantly through a continuation of our exchange rate policy.
At the end of 2010, the United Nations gave Iraq a briefing book making suggestions as to their future behavior. I have attached it at the bottom of the page to view or download.