Iraq’s 2019 Draft Budget Analysis

The Iraq Energy Institute has just published a new report by Robert Tollast, Yesar Al-Maleki and Harry Istepanian on reform of public financial management in Iraq:

Iraq’s first draft budget for 2019 shows an overall increase in spending of 23% compared to 2018. Oil revenues still dominate sources of revenue, projected at 89% of government finances.

The Iraqi government, with help from international creditors, has been aiming to increase non-oil sources of income. In 2019 however, non-oil income reduces by IQD 2.65 tr ($ 2.24 bn), or a decline of 18%.

Spending on energy, security and defense as well as social services remains a priority ahead of other sectors. Notably, the state’s planned spending on capital projects will grow by 32% and liberated provinces are included again in planned financial allocations after years of war, an important progression on 2018.

However, Iraq’s greatest challenge of reducing its operational expenditure is still unresolved as it expands by 21% in 2019 and dominates 75% of total expenditure. This will of course leave the country extremely vulnerable to another fall in oil prices.

Please click here to download the full report.

(Source: IEI)

 


Source: Iraq News

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Iraq’s Foreign Reserves top $60bn

By John Lee.

The Central Bank of Iraq (CBI) has announced that the county has foreign reserves exceding 60 billion dollars.

In a statement on Wednesday, the bank said the reserves are “a result of the fiscal and monetary policies adopted by the Central Bank over the past years to stabilize the general financial situation, especially in 2014 and the years that followed, with financial conditions at their lowest levels“.

(Source: CBI)


Source: Iraq News

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The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions today on Afaq Dubai, an Iraq-based money services business (MSB) that has been moving money for the Islamic State of Iraq and Syria (ISIS).

Today’s designation follows action taken by the Department of Defense—announced on October 11—against a key ISIS financial facilitation group.  This MSB is a part of ISIS’s financial network that includes an array of other MSBs, hawalas, and financial facilitators in the Middle East.

OFAC named Afaq Dubai as a Specially Designated Global Terrorist pursuant to Executive Order 13224, for assisting in, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, ISIS.  Contrary to what the name may imply, this MSB is located in Iraq and does not have any branches in the United Arab Emirates.

“This Iraq-based MSB is a part of ISIS’s complex network of money services businesses, hawalas, and financial facilitators funding terrorism across the Middle East.  We are targeting this network in concert with the Department of Defense as part of this Administration’s ongoing campaign to cut off ISIS’s ability to launder money and move illicit funds,” said Sigal Mandelker, Treasury Under Secretary for Terrorism and Financial Intelligence.  “Even as ISIS’s hold on territory is eliminated, we will continue to search for and shut down the illicit financial networks ISIS utilizes to fund terror attacks and sustain operations.”

Today’s action is a continuation of Treasury’s ongoing efforts to shut down financial facilitators and MSBs worldwide that move money on behalf of ISIS.  It follows the designation of two ISIS financial facilitators in September with ties to the Caribbean and the Middle East.  In December 2016, OFAC designated Selselat al Thahab Money Exchange in Iraq, ISIS financier Fawaz Muhammad Jubayr al-Rawi, and his company, the Hanifa Currency Exchange in Albu Kamal, Syria.  Prior to his death, al-Rawi used the Hanifa Currency Exchange in Albu Kamal, Syria and a global network of financiers to move millions of dollars on behalf of the terrorist group.

OFAC closely coordinated today’s designation with the Combined Joint Task Force-Operation Inherent Resolve (CJTF-OIR), which released details on October 11 regarding its joint action against members of a key ISIS financial facilitation group, who leveraged this MSB as part of its operation.   Coordinated actions such as those conducted by DoD and Treasury this week disrupt and curtail ISIS’s logistical infrastructure, recruiting, and revenue generation.

As a result of today’s action, all property and interests in property of Afaq Dubai subject to U.S. jurisdiction are blocked and U.S. persons are generally prohibited from engaging in transactions with them.

DESIGNATED TARGET

Afaq Dubai

Afaq Dubai was designated for assisting in, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of ISIS.

Afaq Dubai — which is located in Iraq — is part of a network of ISIS-associated money services businesses and financial facilitators in the Middle East.  It is run by two ISIS financiers, and, as of early 2018, laundered money for ISIS and provided money to ISIS families.

In May 2018, a Jordan-based ISIS financial facilitator deposited $3 million from Iraqi dinar into three exchanges, including Afaq Dubai.

Identifying information on the entity designated today.

(Source: OFAC)


Source: Iraq News

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Iran “ready to establish Joint Bank with Iraq”

By John Lee.

Iran’s private banks have reportedly laid the groundwork for setting up a joint bank with their counterparts in Iraq.

Yahya Al-e Es’haq [Yahya Ale-Ishaq] (pictured), head of Iran-Iraq Chamber of Commerce, is quoted as saying that the bank would operate under the regulations of central banks of the two countries to facilitate money transfer.

(Source: Xinhua)

(Picture Credit: Tasnim, under Creative Commons licence)


Source: Iraq News

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Iraq issues new Banknote Designs

By John Lee.

The Central Bank of Iraq (CBI) has released a series of new banknote designs, which will enter circulation next week.

According to a report from Rudaw, the notes are intended to modernise the currency and better reflect the nation’s heritage and diversity.

It adds that the CBI does not plan to recall old banknotes.

(Sources: CBI, Rudaw, Xinhua)


Source: Iraq News

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Towards Women’s Economic Empowerment in Iraq

The World Bank Group, the Government of Iraq, and the Government of Canada launched today a US$1.95 million grant to support Iraq’s efforts to strengthen systems and deliver programs to empower women economically and politically.

The “Gender and Social Protection in Iraq: Towards Economic Empowerment” program consists of two complementary components: the first component will set in place long-term legislative and institutional capacity for gender mainstreaming, while the second will introduce programs that will support the economic and political empowerment of women in Iraq, including entrepreneurial programs for poor and vulnerable women.

Saroj Kumar Jha (pictured), World Bank Mashreq Regional Director, said:

We are excited to partner with the Government of Canada to support women’s empowerment in Iraq. We are committed to supporting women in Iraq and we’ll work tirelessly to ensure that Iraqi women have the opportunity to participate fully in all facets of life and to contribute to Iraq’s socio-economic development.

This project contributes to the wider World Bank’s socio-economic intervention in Iraq and is consistent with the Iraq’s Second Poverty Reduction Strategy and the Social Protection Strategic Framework.

H.E. Dr. Mehdi Al-Alak, Secretary General of the Council of Ministers, said

The program will support the ongoing gender empowerment efforts led by the government. It will help us achieve women’s empowerment by reducing legal, institutional, and social constraints and unleash their talent and energy to make our economy and society stronger.

Ambassador Paul Gibbard, Canada’s first resident Ambassador to Iraq since 1991

Canada recognizes that supporting gender equality and the empowerment of women is the best way to build a more peaceful, more inclusive and more prosperous Iraq. With our partners from the World Bank and the Government of Iraq, we will work to empower women so that they are able to play a vital role in establishing and maintaining peace in their communities—a necessary precondition for stronger economic growth in Iraq.”

The “Gender and Social Protection in Iraq: Towards Economic Empowerment” program will entail a review of existing women’s empowerment programs and provide technical support through workshops and working sessions to government officials on enhancing the design and implementation of these programs, as well as on strengthening monitoring and evaluation schemes.

(Source: World Bank Group)


Source: Iraq News

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Iraq launches Social Fund to Fight Poverty

By Adnan Abu Zeed for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

The Iraqi Ministry of Planning announced the launch of the Social Fund for Development on Sept. 23, with initial capital of $300 million, in cooperation with the World Bank.

The project aims to improve the living conditions of Iraq’s poor. High poverty rates in Iraq have led to repeated protests for 15 years calling for improving the standard of living and for more employment opportunities. These protests have resulted in dozens of deaths and injuries.

A May 2018 World Bank report noted that Iraq’s population of 38.5 million sits at the poverty line with a poverty rate of 22.5%. The spokesman for the Iraqi Ministry of Labor and Social Affairs, Ammar Menem, told Al-Monitor that this high rate is due to “exceptional security conditions ensuing from the war and its costs, as well as to the slump in oil prices. This resulted in the cessation of funding of projects for the rehabilitation of unemployed persons, a lack of investment projects and faltering economic growth.”

Click here to read the full story.


Source: Iraq News

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Trade Bank in talks to Buy a Gulf Lender

By John Lee.

The state-owned Trade Bank of Iraq (TBI) is reported to be in talks to buy a Gulf bank with branches in the United Arab Emirates (UAE) and Qatar.

Chairman Faisal al-Haimus told Reuters that talks are underway and the purchase is expected to be completed in six to eight months. The name of the bank was not disclosed.

According to the report, Haimus was in Abu Dhabi to sign a 100 million euros ($115.5 million) loan agreement with Germany’s Commerzbank to enable it to support small and medium sized projects in Iraq.

More here.

(Source: Reuters)


Source: Iraq News

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