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Kaperoni says Iraq dropped the ball big time in 2010-2013
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Kaperoni says Iraq dropped the ball big time in 2010-2013
Kaperoni
Iraq dropped the ball big time. They had a window of time from about 2010-2013 in which under Article XIV, they were meeting the guidelines the IMF requested and at the same time, profits were high due to high oil prices, etc.
Unfortunately, Iraq chose to steal as much money as they could during that time, than do what was right.
Now, the conditions have changed, oil prices are 50% or more less than that period, revenue is less, Iraq cannot meet its payroll, or other investment obligations...as a result everyone is complaining that the auctions, the peg, etc. no longer works...which is true,,especially if they ever wanted to get the dinar out convertible/tradable on a global scale.
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Article quote: "The Prime Minister reiterated the financial adviser appearance of Mohammed Saleh, said on Sunday that Iraq is suffering from an estimated $ 50 billion financing gap."
[Why these guys created a budget that was going to have $50 billion dollar hole in it is beyond me. Here's hoping the IMF can get in there and make a difference.]
Well...I think its a catch 22.
If the budget is to small, they cannot pay salaries and that would be an obvious red flag. If the budget covers salaries, they buy time (3-9 months) to come up with financial solutions to the deficit.
Neither good, but at least it gives them a window of opportunity to advance the economy if the conditions change.
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Article: "Five-year plan for the development of the banking sector" As we have said several times, without currency reform first, nothing else moves forward. I wanted to reiterate that because articles that say 5 years can be discouraging.
Article: "The central bank stopped 300 companies transform financial and banking deal" Quote: "...announced the arrival of the Commission of a competent US combat financial intelligence department staff to Baghdad and set up at the US Embassy for the purpose of expansion for the purpose of coordination with the Central Bank of Iraq."
This seems like a real "make or break" step for Iraq. Succeed, and the financial system moves forward. Fail and they are status quo trying to save what’s left of the reserves in a few months along with the dinar exchange rate.
My bet is on this team and the IMF. The situation/cycle they just bailed themselves (bought a few months) will just repeat itself when they have to pay salaries, contractors etc. in a few months.
IMO, now that these recent agreements (loans, SBA etc.) are signed, it is time to push forward.
We can hope anyway.
Ponee- Admin
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Re: Kaperoni says Iraq dropped the ball big time in 2010-2013
IMO you have nothing.
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Kevind53- Super Moderator
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Re: Kaperoni says Iraq dropped the ball big time in 2010-2013
Kap has always linked the currency reform to various articles of the UN charter, thinking that when all of the specifications are met Shabibi would push the happy button and make all the dinarians rich. The fact of the matter is the currency reform plan was a simple redenomination designed to make cash transactions easier, and it has nothing to do with any articles of the UN charter or taking their currency international. The price of oil has nothing to do with it. The budget has nothing to do with it. The only thing holding up the currency reform is the fact that Iraq is a mess. ISIS still controls a large chunk of the country, corruption is still rampant, and sectarianism is alive and well. As long as the country is as unstable as it is they probably won't carry out any currency reform, but even if they do .... it's just a lop folks. Nothing to see here.
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