Video: Iraq needs $90bn to Rebuild

From Al Jazeera. Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

Entire cities, including western Mosul and Ramadi, have been destroyed in the war against the Islamic State of Iraq and the Levant (ISIL, also known as ISIS) group in Iraq.

The Iraqi government says large-scale reconstruction across the country hasn’t started yet because it doesn’t have the money.

About $90 billion is needed to rebuild the country after 15 years of war since the fall of Saddam Hussein in 2003, but Iraq’s allies pledged only $30bn At a donor conference in February.

Al Jazeera‘s Charles Stratford reports from Iraq’s capital Baghdad:

Sadr welcomes Return of Iraqi Jews

By Saad Salloum for Al Monitor. Any opinions here are those of the author, and do not necessarily reflect the views of Iraq Business News. 

In a bold move, Iraq’s Shiite cleric Muqtada al-Sadr spoke in favor of the return of the Jews who were evicted from the country half a century ago. Sadr responded to a question posed by one of his followers June 2 on whether Iraqi Jews have a right to return after having been forcibly displaced due to previous Iraqi policies, noting that they used to own properties and were part of the Iraqi community.

He said, “If their loyalty was to Iraq, they are welcome.” His answer was taken as tantamount to a religious edict, or fatwa.

The response has won him even more popularity and admiration for his policies and unexpected moves. His bloc, the Sairoon Alliance, won the largest number of parliament seats after allying with the Communist Party in an unprecedented move. This opening to ethnic and religious diversity reflects a shift in the personality of a Shiite religious and political figure known for being rebellious and defiant over the past 15 years.

However, an overview of Sadr’s previous positions reveals that this positive attitude toward Iraq’s Jews is not really new. In an interview with journalist Sarmad al-Tai in 2013, Sadr said he “welcomes any Jew who prefers Iraq to Israel and there is no difference between Jews, Muslims or Christians when it comes to the sense of nationalism. Those who do not carry out their national duties are not Iraqis even if they were Shiite Muslims.”

Diyaa al-Asadi, a leader in the Sadrist movement, told Al-Monitor that while his movement criticizes the founding of the State of Israel for usurping the historical lands of Palestine, it distinguishes between Zionism as a secular political movement and Iraqi Jews as a religious minority rooted in Iraq.

Sadr, whose policy of openness to religious diversity is part of his comprehensive program to ease the sectarian and religious polarization of Iraqi politics, calls for the protection of Iraqi Jews and for granting them all their citizenship rights.

Tai, the reporter who interviewed Sadr in 2013, told Al-Monitor that by touching on the return of Iraqi Jews, Sadr has broken the silence on a sensitive issue that no other political or religious Iraqi leader has dared raise since the exodus of Jews in 1950-1951.

Sadr’s stance has sent a sigh of relief to the Jewish community outside of Iraq. Edwin Shukr [Shuker], a leader in the British Jewish community and personal envoy of the president of the European Jewish Congress, considers Sadr’s initiative a milestone and expressed his willingness to meet with Sadr and thank him on behalf of the Jewish community.

Sadr’s positivity toward a sect that has been neglected for more than half a century represents a real revolution that could change the perspective of large segments of Iraqi society.

Professor Ronen Zaidel, a specialist on Iraqi affairs at the University of Haifa, takes particular interest in Sadr’s policies. He believes that the fact that Sadr linked the return of Jews to their loyalty to Iraq as a conditional openness extended only to those holding non-Israeli passports.

However, he expressed cautious optimism that this could be just a first step to start a dialogue with the representatives of Iraq’s expatriate Jews. He does not expect that Sadr’s position will upend the Iraqi policy on all issues related to the future of the Jewish community in Iraq.

“The Iraqi authorities may permit members of the Jewish community to visit Jewish holy sites and shrines without granting them further rights or restoring their Iraqi citizenship,” he said.

Iraq is home to several Jewish holy shrines, including that of the Prophet Ezekiel (Al-Kifil in Babylon), Ezra HaSofer (Al-Azir in Maysan), the Prophet Daniel (near the castle of Kirkuk), the Prophet Jonah (in Mosul, destroyed by the Islamic State) and the Prophet Nahum (in the village of Alqosh).

Shukr hopes that “the openness of Sadr will be the start of public interest in preserving the holy Jewish places, which are common symbols of the Abrahamic religious heritage within Iraq and would pave the way for the rebuilding of ties between the new generations that are freed from the chains of hatred and fears of conflict.”

Iraq’s 2005 constitution did not recognize Judaism as one of the officially recognized religions such as Islam, Christianity, Mandean and Yazidi (Article 2.2).

A 1982 law that defined the officially recognized religious communities in Iraq included the Jewish community among the official religions but under the name “Mossawi,” or “follower of Moses.” The term “Israeli community” had been used in previous legislation and was changed to avoid mention of Israel for fear it could be interpreted as official recognition of the state.

The new Iraqi Nationality Law of 2006 also reinstated Iraqi citizenship for those who had lost it as a result of political, sectarian or racial decisions. A few minorities among Saddam Hussein’s opponents, including the Feyli (Lurs), benefited from the law, but Jews were excluded.

National Bank of Iraq joins IBBC

The National Bank of Iraq (NBI) has become the latest member of the Iraq Britain Business Council (IBBC).

In a statement, the IBBC said it is delighted to welcome one of Iraq’s preeminent private sector banking organisations to join its growing financial and professional services sector table.

NBI was founded in 1995 as a publicly traded, private sector company offering comprehensive banking services to individuals and businesses. NBI’s paid up capital was increased to IQD 250 Billion (USD 215 million) in December 2013.

NBI has been consistently growing in size and capabilities to serve Iraqi citizens with the highest quality financial services. NBI’s strategy revolves around offering a unique value proposition to multinationals and large corporates looking for professional commercial banking services in Iraq, as well as a solid platform for individuals to interact with. As a Jordan based Group, they are able to offer global access to funds and a comprehensive set of banking services to facilitate banking needs on the ground.

NBI is constantly expanding and modernizing its branch and ATM network in Iraq and are currently the only bank that has a branch in North Rumaila (Basra) and are in the process of opening new branches in Kathimiyya and Jameela in Baghdad and a new technologically advanced branch in Basra. NBI is also heavily investing in advancing its electronic channels and overall technological capabilities in order further modernize the banking process and offer a seamless banking experience to their clients.

NBI offers full-fledged investment banking, wealth management and brokerage services through its sister companies in Jordan, UAE and Iraq. The UAE subsidiary acts as the main gateway for multinationals and GCC based clients looking to raise growth capital or connect with local partners and enter into joint ventures for business expansion or new projects across Iraq. NBI’s investment offering also includes a wide range of advisory services in M&A, investment structuring and debt raising or restructuring.

NBI is regulated by the Central Bank of Iraq and publicly traded on the Iraq Stock Exchange It implements stringent international anti-money laundering and compliance regulations, and is also one of the few banks in Iraq to implement International Financial Reporting Standards (IFRS), with PWC as its external auditor.

(Source: IBBC)

Sadr, Amiri announce Political Alliance

By John Lee.

Nationalist cleric Moqtada al-Sadr and Hadi al-Amiri have reportedly announced an alliance between their political blocs.

The groups who won first and second places respectively in last month’s parliamentary election.

While Sadr’s Sairoon Alliance is opposed to Iranian involvement in Iraq, Amiri’s Fatah (Conquest) Coalition is head of an Iranian-backed militia.

At a joint press conference in Najaf, Sadr said “our meeting was a very positive one, we met to end the suffering of this nation and of the people. Our new alliance is a nationalist one.

(Sources: Reuters, Al Jazeera, Moqtada al-Sadr website)

Disputes over Election Results flare after Baghdad Ballot Fire

By Ali Mamouri for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The fate of Iraq’s latest elections has become fraught following a deliberate arson attack on the ballot boxes storage center in the Rusafa district of Baghdad on June 10.

The facility exposed to the fire contained some 1.1 million of the overall 1.8 million votes from the Baghdad constituency. Baghdad is crucial to forming power in Iraq’s parliament as the district holds 71 of the total 329 seats. Votes from the Rusafa district alone account for around 40 seats and could alter the course of the future government.

The extent of the ballot losses remains unknown, but the head of the Independent High Electoral Commission, Riyadh al-Badran, claimed June 11 that 95% of the boxes had escaped the flames. The commission also announced in a statement that it “possesses backup copies of the results in the national office in Baghdad.”

Meanwhile, Iraq’s interior minister stated, “We have taken control of the situation.” He added that there was “no burning of any ballots,” and that only electronic counting and sorting devices were affected by the fire, not the ballots themselves. However, political forces have cast doubt on the credibility of these disparate claims, demanding that a full re-election be staged and warning that the country faces the risk of igniting civil war.

Following the fire, the speaker of the outgoing parliament, Salim al-Jabouri, called for “a redo of the elections that have been proved rigged, distorting the results and the will of the Iraqi people in a deliberate and dangerous manner. Those who contributed to this act of fraud and vandalism must be prosecuted.” Jabouri claimed that the incident was “planned [and] deliberately intended to conceal cases of fraud and falsification of votes and to deceive the Iraqi people, manipulating their choices and their will.”

However, Shiite leader Muqtada al-Sadr, whose Sairoon Alliance won the first tier in the election, expressed his opposition to restaging elections in a June 11 article, “Iraq in danger,” calling on all political parties to unite and advance toward forming a government.

“Is it time we stand together for reconstruction or for us to burn the ballot boxes and restage elections for the sake of a seat or two?” he asked. Warning of attempts by some parties to ignite a civil war, he said that Iraq would not fall into what some who “sold two-thirds of Iraq want, which is a civil war” — a clear reference to a prior statement by former Prime Minister Nouri al-Maliki, who is accused of failing to prevent the country from falling into the hands of the Islamic State in 2014, that “civil wars usually occur after elections if results are challenged.”

Sadr’s top aide also accused both winning and losing parties in the elections of participating in the arson attack, claiming, “The ballot boxes storage center fire was either aimed at forcing the restaging of elections or covering up fraud.”

The beneficiary of redoing the election would be the losing parties, which would attempt to recoup their losses in another opportunity to win votes, while any who won votes through rigging would benefit from a cover-up of electoral fraud.

In this complex situation, the Iraqi government faces no easy choices and only four options. It can completely cancel the election and restage it in conjunction with municipal elections in December. It can restage the vote only in the Rusafa district, where votes were affected by the fire, or nullify results from this district and count only the results from the rest of Iraq. Or it can proceed with the declared results, incorporating any slight changes that may occur after manual sorting and counting.

The first option appears unfeasible in light of official statements from the supervisory authority responsible for conducting the elections and overseeing the integrity of results.

Saad al-Hadithi, a spokesman for the prime minister, stated June 11 that the decision to rerun the election “is vested in the Federal Court, not the executive branch or any other party” — a clear comment on Jabouri’s call for a redo. Similarly, Board of Commissioners member Saad Kakaee said, “The decision to cancel the election results following the fire does not lie in the hands of the Board of Commissioners but with those in the Judicial Council and the Federal Court.”

The Judicial Council previously announced that there is no straightforward legal provision that allows the restaging of elections. Meanwhile, the winning blocs are opposed to any rerun, as indicated by previous statements from Sadr and Sairoon Alliance leaders, as well as from the Fatah Alliance that ranked second. Fatah Alliance spokesman Karim Nuri said, “We do not support a restaging … the compromise is a recount.”

Nullifying the results from the Rusafa district — whether accompanied by another election in the area or not — would open the path for opposition from other blocs that claim fraud has occurred in their constituencies. Among them are Al-Wataniya of Ayad Allawi, who has called for a referendum on the fate of the elections, and Kurdish opposition blocs including the Movement for Change (Gorran), which has accused the Patriotic Union of Kurdistan and the Kurdistan Democratic Party of widespread electoral fraud.

The only remaining option is to proceed with the manual counting of outstanding votes by the judiciary, which has already appointed nine judges to supervise the process. Yet such a solution is not expected to yield results that differ markedly from those previously announced.

In the past, such electoral differences had been resolved through political settlements that sought to satisfy losing parties that contest the election results, while avoiding provoking opposition from the winners who endorse them. After a settlement is secured, the outcome will be announced through a decision by the judiciary, and will not be easily contested by the disputing parties.

Operation Roundup Targets ISIS Remnants in Iraq, Syria

Combined Joint Task Force Operation Inherent Resolve and its partners have increased offensive activity against Islamic State of Iraq and Syria targets in designated parts of Iraq and Syria throughout the month of May.

Since the May 1 start of Operation Roundup, Syrian Democratic Forces resumed major offensive operations in the middle Euphrates River Valley. Since then, the SDF has continued to gain ground through offensive operations, coupled with precision coalition strike support.

During the month of May, the coalition has conducted 225 strikes with 280 engagements. This demonstrates a 304 percent increase over the 74 strikes conducted in March, and a 123 percent increase over the 183 strikes recorded in April 2018.

Combined Joint Task Force Operation Inherent Resolve and its partner forces continue to exert pressure on ISIS senior leaders and associates in order to degrade, disrupt and dismantle ISIS structures and remove terrorists throughout Iraq and Syria. ISIS morale is sinking on the frontlines as privileged ISIS leaders increasingly abandon their own fighters on the battlefield, taking resources with them as they flee.

Over the coming weeks, Operation Roundup will continue to build momentum against ISIS remnants remaining in the Iraq-Syria border region and the middle Euphrates River Valley. The coalition remains committed to the lasting defeat of ISIS, increasing peace and stability in the region and protecting all from the ISIS threat.

Coalition military forces conducted 134 strikes June 1-10, consisting of 161 engagements in Iraq and Syria:

Strikes in Syria

On June 10, coalition military forces conducted six strikes consisting of six engagements against ISIS targets. Near Abu Kamal, four strikes destroyed four ISIS supply routes. Near Shadaddi, two strikes engaged an ISIS tactical unit and destroyed an ISIS logistics hub.

On June 9, coalition military forces conducted 14 strikes consisting of 16 engagements against ISIS targets. Near Abu Kamal, six strikes engaged an ISIS tactical unit and destroyed an ISIS vehicle, an ISIS fighting position, an ISIS supply route and two ISIS-held buildings. Eight strikes conducted near Shadaddi engaged an ISIS tactical unit, destroying an ISIS fighting position, an ISIS logistics hub, an ISIS tactical vehicle and an ISIS weapon.

On June 8, coalition military forces conducted nine strikes consisting of 11 engagements against ISIS targets. Near Abu Kamal, six strikes engaged an ISIS tactical unit and destroyed an ISIS watercraft. Near Shadaddi, three strikes engaged an ISIS tactical unit and destroyed two ISIS command-and-control centers, an ISIS supply cache and an ISIS supply route.

On June 7, coalition military forces conducted 12 strikes consisting of 12 engagements against ISIS targets. Near Abu Kamal, nine strikes engaged an ISIS tactical unit and destroyed an ISIS supply route, two ISIS-held buildings and an ISIS watercraft. Three strikes near Shadaddi destroyed two ISIS supply routes and an ISIS communication line.

On June 6, coalition military forces conducted 17 strikes consisting of 19 engagements against ISIS targets. Eleven strikes near Abu Kamal engaged an ISIS tactical unit and destroyed two ISIS vehicles. Near Shadaddi, six strikes engaged an ISIS tactical unit and destroyed an ISIS vehicle, an ISIS fighting position, two ISIS logistics hubs and an ISIS supply route.

On June 5, coalition military forces conducted 12 strikes consisting of 13 engagements against ISIS targets. Near Abu Kamal, seven strikes engaged an ISIS tactical unit. Near Shadaddi, five strikes engaged an ISIS tactical unit and destroyed an ISIS vehicle-borne improvised explosive device, three ISIS fighting positions and two ISIS vehicles.

On June 4, coalition military forces conducted 17 strikes consisting of 20 engagements against ISIS targets. Near Abu Kamal, 15 strikes engaged an ISIS tactical unit and destroyed two ISIS fighting positions, an ISIS tactical vehicle, six ISIS vehicles and an ISIS command-and-control center. Near Shadaddi, two strikes engaged an ISIS tactical unit and destroyed an ISIS logistics hub and an ISIS heavy machine gun.

On June 3, coalition military forces conducted 28 strikes consisting of 42 engagements against ISIS targets. Near Abu Kamal, 22 strikes engaged an ISIS tactical unit and destroyed an ISIS fighting position, an ISIS logistics hub, four ISIS vehicles and an ISIS communication line. Near Shadaddi, six strikes engaged an ISIS tactical unit and destroyed an ISIS vehicle-borne IED, an ISIS vehicle, an ISIS command-and-control center and 11 ISIS fighting positions.

On June 2, coalition military forces conducted eight strikes consisting of 11 engagements against ISIS targets. Near Abu Kamal, six strikes engaged an ISIS tactical unit and destroyed two ISIS fighting positions and two ISIS command-and-control centers. Near Shadaddi, two strikes destroyed 15 ISIS-held buildings.

On June 1, coalition military forces conducted nine strikes consisting of nine engagements against ISIS targets. Near Abu Kamal, four strikes destroyed an ISIS tunnel and an ISIS held-building. Near Shadaddi, five strikes engaged an ISIS tactical unit and destroyed three ISIS command-and-control centers and five ISIS-held buildings.

Strikes in Iraq

There were no reported strikes conducted in Iraq on June 10.

On June 9 near Mosul, coalition military forces conducted a strike consisting of an engagement against ISIS targets, destroying five ISIS tunnels.

There were no reported strikes conducted in Iraq on June 3-8.

On June 2 near Tal Afar, coalition military forces conducted a strike consisting of an engagement against ISIS targets, destroying an ISIS-held building, an ISIS bunker and an ISIS supply cache.

There were no reported strikes conducted in Iraq on June 1.

Definition of Strikes

The coalition’s strike report contains all strikes conducted by fighter, attack, bomber, rotary-wing or remotely piloted aircraft, rocket propelled artillery and ground-based tactical artillery.

A strike, as defined by coalition officials, refers to one or more kinetic engagements that occur in roughly the same geographic location to produce a single, sometimes cumulative effect in that location. For example, a single aircraft delivering a single weapon against a lone ISIS vehicle is one strike, but so is multiple aircraft delivering dozens of weapons against a group of ISIS-held buildings and weapon systems in a compound, having the cumulative effect of making that facility harder or impossible to use. Strike assessments are based on initial reports and may be refined.

Task force officials do not report the number or type of aircraft employed in a strike, the number of munitions dropped in each strike or the number of individual munition impact points against a target.

(Source: US Dept of Defense)

Aqaba offers “New Gateway” to Iraq

New pre-arrival clearance protocols and reduced terminal handling charges for containers in transit, mean that Jordan’s deep-water Aqaba Container Terminal (ACT), located on the Red Sea, is now a realistic alternative maritime gateway for Iraq-bound cargo, APM Terminals said in its press release.

Containers imported into Iraq will no longer have to be trans-loaded onto new trucks as they cross the Jordanian/Iraqi border.

“The Aqaba Container Terminal has been working hard over the years to develop a competitive gateway to Iraq,” says ACT Managing Director Steven Yoogalingam. “This will enhance the already strong Iraqi port system and gives the business communities of both countries a fantastic transportation system to better support economic development in the region.”

Ideally located, the ACT is 550km – or 36 hours by road – from the Iraqi border town of Traibil and 48 hours from Baghdad. This development comes as the volume of Iraqi imports experience rapid growth – 86% last year alone.

The ACT is a joint venture between ADC, the Jordanian Government’s development arm for the Aqaba Special Economic Zone, and APM Terminals, which manages the facility. It is the second–busiest container facility on the Red Sea after Jeddah (Saudi Arabia).

A terminal expansion project completed in 2013 added 460 meters to the existing quay to create a total length of 1 km and increased the annual container throughput capacity to 1.3 million TEUs.

Iraqi imports grew by 86% in 2017 to $36.5 billion – the leading sources being China, Turkey, Iran, South Korea and the United States, with food, medicine and manufactured goods the primary products.

(Source: APM Terminals)

We are Committed to Reforms – KRG’s Barzani

Prime Minister Nechirvan Barzani has said the Kurdistan Regional Government is “firmly insistent to implement administrative reforms”.

These remarks were part of a speech he made at the ceremony of presention of the ISO certificate to the KRG Ministry of Interior.

He said the aim the KRG wants to attain is “to eliminate bureaucracy, red tape and conduct government’s jobs in a timely and simple manner; also following up citizens’ matters in a more efficient way with better quality.

Below is the transcript of Prime Minister Barzani’s speech:

Ladies and Gentlemen,

I would like to welcome you to this event of presenting the ISO certificate to the Ministry of Interior of the Kurdistan Regional Government. This certificate is awarded to governmental and non-governmental organizations that adopt Quality Management System for their operation in which the citizens will be the first beneficiaries as their paperwork would be dealt with and followed up much quicker.

The KRG is pleased that the Ministry of Interior obtained such certificate. This shows that despite all the crisis and the hardship, the KRG has kept its strong will and stayed determined and continued carrying out its reform program. The KRG is very firmly insistent to implement administrative and management reforms; thus, provisioning more quality services to the citizens in a more efficient way.

I applaud the Ministry of Interior for successfully implementing this system in the Directorate of Traffic in Duhok as they already obtained the ISO certificate and now they repeated the same process in the Diwan of the Ministry of Interior and soon we anticipate the same system to be implemented in both Directorates of Traffic in Erbil and Suleimaniya.

This achievement by the Ministry of Interior, which is a first and exemplary step, could be used as model and encouragement for other governmental and non-govermental institutions to follow.

The KRG is making every endeavor to establish a modern IT infrastructure through utilizing the state-of-the-art technologies for better provisioning services to its citizens.

Our aim is to eliminate bureaucracy, red tape and conduct government’s jobs in a timely and simple manner; also following up citizens’ matters in a more efficient way with better quality. We want such high-quality services to be provisioned at every ministry, departments or organizations, be it on the border, in the towns or in the cities. We strive and continue until we fully achieve that.

We are seriously committed to implement reforms in all sectors and especially in administration system. This project which adopted first by Toursim Board in 2014, followed by the Directorate of Traffic in Duhok in 2015. The fact that the Kurdistan Region was in the middle of a full-scale war with Da’esh and facing a severe financial crisis. This showed the commitment of the KRG in establishing a modern system for provisioning deservedly high quality and most efficient services to its citizens.

Citizens come first! Yes, they come first. Our citizens’ satisfaction is important for us. When a citizens visit a government department, their work should be dealt with in a seamless way with utmost respect. They should feel like they are in a modern and forward-looking department. They should be welcomed and received in a highly respectful and ethical way. Government employees should make sure that the citizens leave happy and satisfied with the services provided for them.

We truly empathize with what the citizens go through when they apply for their paperwork to be processed through such complex system. We understand that citizens need to go through much for getting necessary approvals for their paperwork. We know that there are onerous routines that are totally unnecessary. We know that the citizens have to carry many documents and proofs and visit numerous rooms and places to get their job done and it could take them days or even weeks. This style of dealing with citizens’ paperwork needs to stop once and for all.

Ladies and Gentlemen,

We know that all the bureaucracy and red-tape routines in the government services are not only attributed to the administration system, or to the way how employees treat citizens but sometimes laws and regulations could cause the routine and red-tape to occur! This also should be looked into. The KRG is looking to review the laws, bylaws and the responsibilities of the governmental organizations and departments. We collaborate with the Kurdistan Parliament to review the outdated laws and regulations so that technological and electronic innovations are incorporated in the laws to better serve citizens.

Technology’s role is to serve the humanity and make it easy to get the jobs done. It can play a pivotal role in the world of administration for getting the jobs done in a quality and more efficient way. The KRG continues working on its e-government project; its goal is to provide an online administration system just like the ones used by the developed countries, where much of the services can be accessed on a mere laptop from home, hence the need of all paperwork and documentation will be redundant.

The e-government must have a robust technological infrastructure so that it would be able to earn the ‘ISO’ certificate from the International Organization for Standardization and gain satisfaction from citizens when their paperwork are dealt with in no delay just like the way it’s done in the Directorate of Traffic in Duhok where, in few minutes, the citizen can renew their relevant documents.

The KRG will strive to make all its departments and offices ready to adopt the Quality Management System and obtain the ‘ISO’ certificate. This work is part of the multifaceted reform program endorsed by the KRG in all sectors. Just like in the energy sector where the Deloitte Company has been contracted to carry out audits. And, working with the World Bank in carrying out reforms in the banking sector. Similarly, we have been carrying out reforms in all sectors.

I applaud the Minister and his staff for their efforts and I wish them all the success in their endeavor.

Thank you again

(Source: KRG)

Iraqi Depositors ‘Trapped’ In Iranian Banking System

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

By Abbas Sarhan.

The Iranian banking system was seen as an attractive alternative to Iraq’s shaky financial institutions. But a recent, drastic devaluation in the Iranian rial means Iraqi money is stuck over the border.

Depositing money in Iranian banks has been popular in Iraq since around 2012, and even more so since 2014, and the security crisis caused by the extremist group known as the Islamic State.

In the southern city of Karbala, it was a popular move for people who had sold property, especially after the decline of prices in the Iraqi real estate market since June 2014 and the beginning of the security crisis.

But in fact, small and mid-sized Iraqi investors have been putting money into Iranian banks since 2012, when the Iranian authorities significantly increased the interest rate on savings in a bid to get more currency flowing into their sanctioned nation.

Iraqi investors were encouraged to deposit cash in Iran. Iraqis could change their money into Iranian rials, then deposit them with bank officers based in Karbala or Najaf, without ever having to leave home.

Tens of thousands of Iraqis took up the offer, says Mohammed Abbas, one of the locals who also did so: He put US$500,000 in Iranian banks.

“It was too tempting for anyone with a small or medium sized deposit,” he explains. “Iraqis were afraid to invest their money in Iraq and there are really not many other opportunities for investment.” Abbas says that in the first three years he made good money off his deposits and he used the rials on his frequent trips to Iran.

However the situation has since deteriorated badly. The Iranian rial has recently lost a lot of value and even those Iraqis who had done well with the interest rates on their money, saw that extra cash wiped out. Now, Abbas says, Iraqi money is trapped in Iran. Depositors cannot withdraw their deposits for fear of wiping out half the value so they leave it there in the hope that the Iranian authorities may be able to revalue their own currency.

However the Iranian authorities appear to only have been able to take limited steps. In April this year, Iranians arrested as many as 90 foreign exchange traders, accusing them of raising the price of foreign currencies against the rial, and suspended activities in ten foreign exchange bureaus. They also tried to set the exchange rate more favourably.

However these measures have not worked and thousands of Iraqis who deposited savings over the border remain frustrated. Anybody who does want to withdraw their cash needs to change the rial for dollars first. Iraqis must change their money on the black market.

Iranian banks only exchange dollars in specific situations and then only to Iranians. Even though the Iranian authorities have tried to set the exchange rate against the US dollar there, the black market exchange rate puts the dollar at significantly higher rates. Which still leaves Iraqi depositors in a bad way.

Iraqi economist Abdul-Hussein al-Rumi says there’s not much anyone can really do. That is the risk that Iraqi investors were taking and Iran’s economy and currency is unlikely to be able to withstand the new round of US sanctions.

Instead of taking their money out of Iran, al-Rumi suggests withdrawing the deposits, buying Iranian goods over the border and then selling them on the Iraqi market to try and reduce their losses and to get out of the Iranian banking system.

Chevron signs Contracts with Iraqi Oil Companies

By John Lee.

The US oil company Chevron has signed an agreement with Iraq’s Basra Oil Company (BOC) and Dhi Qar Oil Company (DQOC) to provide expertise and services, including seismic surveys, to the Iraqi companies.

Assim Jihad, Spokesman for the Ministry of Oil, said the Ministry aims to sign more memorandums of understanding with international companies to exchange experience and develop local capabilities in the oil and gas sector.

(Source: Ministry of Oil)