US gives $2.5m for Syrian Refugees in Iraq

The World Health Organization (WHO) extends its gratitude to the U.S. Department of State Bureau of Population, Refugees, and Migration (BPRM) for the generous contribution of US$ 2.5 million to increase the health security and resilience of Syrian refugees living in Iraq.

In 2018, Iraq continued to host Syrian refugees. It is estimated that about 250,000 Syrian refugees are currently residing in the three governorates of the Kurdistan Region of Iraq (KRI) namely Erbil, Dahuk, and Sulaymaniyah, the majority of which (64%) lives with the hosting communities.

“There is an urgent need to support the local health authorities in KRI to ensure that Syrian refugees here have access to proper health services,” said Dr. Adham R. Ismail, Acting WHO Representative in Iraq. “Providing comprehensive primary, secondary, referral, and outbreak prevention and response services in the three refugee governorates is a WHO priority for the coming phase; it will indirectly improve the resilience of the refugees and host communities against potential public health emergencies,” he added.

Syrian refugees in Iraq have been given free access to primary health care services whether through camp-based primary health care centers ((PHCC) for refugees living in camps or public health facilities specified for those living with the host communities.

These services have been provided by the directorates of health of Erbil, Dohuk, and Suleimaniya in collaboration with WHO and health partners. However, the mass internal displacement of over 3.3 million Iraqis in 2014 had stretched the capacity of the national health authorities and humanitarian partners to continue meeting the needs of refugees and respond to the inflated demand for health care intervention.

As of 2018, WHO has been active in filling the gaps in essential medicines and medical supplies and equipment, improving referral services, and supporting surveillance and water quality monitoring activities in the refugee camp and non-camp settings. According to the 2017 national health reports, the said DOHs have provided a total of 264,611 consultations to Syrian refugees residing in KRG of Iraq.

The contribution of US$ 2.5 million from the U.S. BPRM will support the provision of comprehensive primary health care and referral services for around 300,000 Syrian refugees and host communities in KRI. It will also support the healthcare services for the disabled and mentally ill patients in the three mentioned governorates through a comprehensive training program for the national professionals working in the mental health area.

The contribution will also cover the procurement and distribution of essential medicines, and medical supplies and equipment to selected health facilities serving the refugees in target governorates.

(Source: UN)

Merger of Parliamentary Committees sidelines Women

By Sara al-Qaher for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News. 

Merger of parliamentary committees further sidelines Iraqi women

There are no easy options for Iraqi graduates who want to continue their education with post-graduate studies.

If they have good grades, they may try to obtain one of the few free spots at a public university in the country. If their grades are not good enough to take that path, they could try to find a private university in Iraq to attend or opt to study abroad, which could be cheaper.

Given this situation, a growing number of post-graduate students are choosing to leave Iraq, bound for neighboring countries or India, where numerous post-graduate programs are taught in English.

Click here to read the full story.

Market Review: 2018 Review and Outlook 2019

By Ahmed Tabaqchali, CIO of Asia Frontier Capital (AFC) Iraq Fund.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

December 2018 was probably the worst month in a decade for global equities, however the month’s sharp declines are eerily similar to those that drove the markets lower in December 2015 with the similarity extending to almost a replay of the start of 2019 to that of 2016.

The reasons, now and then, are fears of a slowing world economy with the world’s engine, China, showing signs of a meaningful slowdown. But the drivers of the slowdown this time are increasing evidence of the damage from the US-China trade war, echoing the Iraqi saying that “while reasons are many, death is the same”. However, now and then, the slowdowns were months in the making, but the markets ignored them until late in 2018.

The Iraq Stock Exchange (ISX), as measured by the Rabee Securities RSISUSD Index, on the other had quietly eked out a modest gain throughout the month to end up +1.9%. A gain which came despite sharp declines in the price of oil for the month that took Brent crude prices down about –40% from the October multi-year peak.

The ISX’s negative –15.0% return for 2018 marked the fifth year-over-year decline, on the back of declines of –11.8% in 2017, –17.3% in 2016, –22.7% in 2015, and –25.4% in 2014. The ISX further spent most of the last two years trying to break out; only to revisit the major May 2016 lows as each year came a close. This contrasts sharply with most global equities as the December sharp sell-offs took them down to about –20% off recent multi-year highs. This makes the risk-reward profile more attractive for the ISX vs. these markets as portfolio allocations are rebalanced in the light of the changed global environment.

Supporting the risk-reward profile for the ISX is the prospect of a recovery in corporate earnings. Iraqi equities should emerge from a multi-year severe economic contraction with the Telecoms being the first to emerge. Two of the major mobile operators out of three national operators reported Q3/2018 earnings that displayed the markers of recovery in earnings, margins and profits. Of the two, AsiaCell (TASC), listed since 2013, has a reported earnings span of 2012-2018 reflecting the operating environment before, during and after the ISIS conflict.

For TASC, the recovery started in late 2017 with the liberation of Mosul and the gradual return of customers lost since the 2014 ISIS invasion of a third of the country. As reported last month, TASC signalled its confidence in its future outlook with a distribution of a 12% dividend on the back of last year’s dividend yield of 14% –which in absolute terms is about a third higher than last year’s dividend. (See “Telecoms dial up Recovery” for further details on TASC).

The recovery for TASC extended to its stock price, which ended 2018 up +47%, following declines of –17% and –11% for the prior two years. TASC was joined by Baghdad Soft Drinks (IBSD), which was up +34% in 2018 on the back of 2017’s increase of +7%. IBSD is unique among the ISX’s listed companies as it continued to churn out healthy earnings growth through the downturn. Earnings for IBSD grew +13% in the first nine months of 2018, on the back of growth of +11% in 2017, +25% in 2016 and +37% in 2015 (pre-tax earnings).

TASC and IBSD’s performances stand in stark contrast to those of the banks which, as a group, had a dismal performance with the leading bank, the Bank of Baghdad (BBOB) down –52% in 2018 on the back of declines of –33% and –22% for the last two years. Other banks fared just as poorly with declines for a selected group ranging from –63% to –4% for the year. These negative returns don’t include income from dividends –which were quite high for some banks such as Mansour Bank (BMNS) or Commercial Bank Of Iraq (BCOI) that ended the year with dividend yields of 8% and 10% respectively. (See “Of Banks and Budget Surpluses” for more details on the banks).

Looking to 2019, the recovery of the banking sector would hinge on an economic recovery and a return of liquidity to economic activity, which for most of 2018 were held back by political uncertainties surrounding the May parliamentary elections.

Political uncertainty before the May 2018 elections was followed by indecisive election results, which in turn resulted in further uncertainties as the different political parties entered lengthy negotiations for the formation of a coalition government. Adding to these uncertainties was the eruption of massive demonstrations in the south demanding reform and investment into basic services. Things became clearer in early October with the promising appointments of a president and a prime minister in a fashion that broke the failed mould of the past. These were followed with the formation of a working government, which while still incomplete, can begin to act on the needed spending for a post-conflict recovery.

Paradoxically, while the political uncertainties paralyzed the government process, the government’s revenues soared with the recovery in oil prices, which has put the government on course for a two-year accumulated surplus of up to USD 24.5bn by the end of 2018. The oil markets decline from the un-sustainably high levels of the summer however are an un-welcome development but should not alter the country’s improving financial position as long as the government continues with the fiscal discipline brought on by the IMF’s 2016 Stand-By Arrangement (SBA). Moreover, Brent crude prices in a range of USD 50-60/bbl, would ensure that the government maintains this fiscal discipline and focus on reinvestments, a focus and discipline that are normally forgotten during periods of high oil revenues.

The healing effects of higher oil revenues over the last two years should begin the filter down into the broader economy over the next few months. The first evidence of this comes with the recent recovery in broad money, or M2 which acts as a proxy for economic activity, as can be seen in the chart below: –

(Source: Central Bank of Iraq, Iraq’s Ministry of Oil, Asia Frontier Capital)

(Note: M2 as of Sep. with AFC est.’s for Oct., Oil revenues as of Dec.)

While the October M2 figure is an estimate, it is based on actual M0 figures for the month and the recent M2/M0 multiplier figures. As can be seen M2 was moving sideways since oil revenues recovered in January 2016, but it began to accelerate in June 2018-Septemebr 2018 –and estimates for October suggest a continuation of this trend.

As such, this could mean that liquidity has finally begun to filter down into the economy – which should accelerate as the new government begins to act on its investment programme. Ultimately, this should filter down into the stock market, which should bring to an end the market’s divergence from its past close relationship with oil revenues – which currently is at the widest it has been for the last few years (see chart below).

(Source: Iraq’s Ministry of Oil, Rabee Securities, Asia Frontier Capital)

(Note: Oil revenues as of Dec.)

Recovery, in frontier markets, is a mirror image of Mark’s Twain’s phrase on going broke, in that recovery happens gradually and then suddenly. If similar experiences in other frontier markets (declining markets while fundamentals show gradual recovery following a long basing period) then the trend of the last few months could be followed by a sharp reversal.

However, for Iraq significant challenges remain with the huge demands for reconstruction, winning the peace, defeating a likely emerging ISIS insurgency, and controlling violence. In particular, the fragmented politics of the new parliament will continue to be a marker of risk for the government’s future stability, which would in turn pose a risk to economic recovery.

Please click here to download Ahmed Tabaqchali’s full report in pdf format.

Mr Tabaqchali (@AMTabaqchali) is the CIO of the AFC Iraq Fund, and is an experienced capital markets professional with over 25 years’ experience in US and MENA markets. He is a non-resident Fellow at the Institute of Regional and International Studies (IRIS) at the American University of Iraq-Sulaimani (AUIS), and an Adjunct Assistant Professor at AUIS. He is a board member of the Credit Bank of Iraq.

His comments, opinions and analyses are personal views and are intended to be for informational purposes and general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any fund or security or to adopt any investment strategy. It does not constitute legal or tax or investment advice. The information provided in this material is compiled from sources that are believed to be reliable, but no guarantee is made of its correctness, is rendered as at publication date and may change without notice and it is not intended as a complete analysis of every material fact regarding Iraq, the region, market or investment.

Enhancing Access to Psychosocial and Mental Health Services

UNFPA and Spain Join Efforts to Enhance Access to Psychosocial and Mental Health Services in Iraq

The Spanish Agency for International Development Cooperation (AECID) joined efforts with UNFPA to improve access to psychosocial, mental health, and GBV services to women and girls in Iraq through a contribution of €400,000 to the programme.

The conflict in Iraq has had major psychological and emotional consequences on the well-being of women and girls due to the continuous displacement, the traumatic events and the violence experienced.

Dr Oluremi Sogunro (pictured), UNFPA Representative to Iraq, expressed his gratitude for Spain’s support:

The psychological and emotional wounds of war in Iraq have left thousands of women and girls in need of mental health assistance and psychosocial support. The Spanish contribution will enable UNFPA to improve the capacity and access to these much-needed services, including legal support and referrals, to more than 1,800 women and girls in the country.

“This contribution will strengthen UNFPA’s mental health interventions through the improvement of the access to psychologists and counsellors who provide vital care and support for women suffering from post-traumatic stress syndrome (PTSD), depression, and severe anxiety.”

Furthermore, the assistance from Spain will ensure the support of the UNFPA-funded survivor centres, Girls and Women Treatment and Support Centres; and Women Community Centres, in particular in improving legal support in hard-to-reach areas of Iraq.

(Source: UN)

Video: Women in Iraq Reclaiming Roles in Society

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

The role of women in Iraqi society has come under the spotlight as more women assert themselves in all areas of society.

Rights activists have felt those in charge are resisting the change, but 25 percent of Iraq’s parliament are women and activists feel that is crucial as there is still a long way to go before women are treated equally to men.

Al Jazeera’s Imran Khan reports from Baghdad:

Report: Reviving Mediation on Disputed Internal Boundaries

From International Crisis Group.

Reviving UN Mediation on Iraq’s Disputed Internal Boundaries

The conflict over the disputed territories and the unresolved boundary of the Kurdish region has lingered for decades and occasionally spawned violence.

These open issues leave both Iraq’s territorial unity and the governing system that would result from a reconfiguration of borders clouded in uncertainty, and the country’s post-conflict transition in limbo.

In 2017, a new constellation of forces emerged that may enable a negotiated settlement.

Read the full report here.

Iraq Falls in Ease of Doing Business Index

By John Lee.

Iraq has been ranked 171st out of 190 countries in the World Bank‘s recent Doing Business 2019 report, down from 168th place the previous year.

Top of the list were New Zealand, Singapore and Denmark, with last place going to Somalia, just behind Eritrea and Venezuela. Iran ranked 128th, with Libya 186th.

Doing Business measures regulations affecting 11 areas of the life of a business. Ten of these areas are included in this year’s ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures labor market regulation, which is not included in this year’s ranking.

More details here.

(Source: World Bank)

UK announces Iraq Explosive Clearance Funds

More than a million Iraqis whose lives have been devastated by Daesh safely returned home in 2018, made possible in part thanks to a huge UK aid funded mine clearance mission.

The Department for International Development (DFID) has today (Saturday 5 January) announced further support to clear explosives from schools, hospitals and roads in Iraq, eradicating one of the lasting impacts of Daesh’s reign of terror across the country.

Thousands of Improvised Explosive Devices (IEDs) continue to threaten the lives of Iraqi men, women and children trying to rebuild their lives after the conflict and the UK’s vital work will help even more people to return to normality without continued risk to their lives.

With the support of UK aid, approximately 16,500 explosives, 800 suicide belts and a staggering 2,000 deadly explosives traps were cleared in Iraq last year.

International Development Secretary Penny Mordaunt said:

Daesh’s sickening use of explosive traps continue to threaten children in their schools, mothers in hospitals and thousands of innocent people trying to return to a normal life.

“Thanks to this UK aid funded work, people can return to work, children can go back to school and lives are slowly being rebuilt.

“The UK is a world leader in demining. I believe the UK public supports this work and can very clearly see its impact, in changing and saving lives.

This new funding will support projects across the country’s Sinjar Province, an area with a historically large population of Yezidis who have been displaced by Daesh in their thousands, and one of the areas worst impacted by Daesh occupation.

UK aid will support six explosive clearance teams who will be deployed across the region making schools, hospitals and critical infrastructure safe from suspected explosive.

There is more work to do with 1.8 million people still displaced, many living in camps across the country. For many of them deadly explosives, rigged, booby-trapped and hidden on an industrial scale mean that they are unable to return to their homes.

The United Nations Mine Action Service (UNMAS) has called the use of explosive traps a Daesh strategy to ‘win on the cheap’, continuing to devastate Iraq even as the Iraqi people try to rebuild.

UK aid funded explosive clearance teams have found:

  • A hospital used as Daesh’s HQ in Mosul where 3,500 explosive hazards, including hand grenades and missiles, had to be secured;
  • A school in Fallujah rigged with 13 IEDs, which could have seriously injured or killed the 450 children attending the school;
  • The British-built ‘New Bridge’ in Fallujah was rigged with 44 IEDs and 400 kilograms of explosives, blocking the only connection to Baghdad – preventing businesses from operating;
  • A school in West Mosul which was used as a bomb factory, where 1,500 explosives, including 15 suicide belts, were found and secured.

UK aid is funding education experts to teach children and adults on how to keep safe from undiscovered explosives and what to do if they see a suspected device. Last year, DFID’s support educated more than 400,000 people on the risks. This education may save their lives.

With hundreds of thousands of people in Iraq still in need of urgent humanitarian assistance, the UK has supported more than 400,000 people with food and provided life-saving healthcare services to over four million people since 2014.

(Source: UK Department for International Development – DFID)

PM orders Investigation into Appointment at Civil Aviation Authority

By John Lee.

Prime Minister Adel Abdul Mahdi (pictured) has called for an investigation into the appointment of a deputy director general to the Iraqi Civil Aviation Authority (ICAA), citing allegation that the appointment was made under threat.

In a statement the Prime Minister said.

His Excellency Prime Minister Adil Abd Al-Mahdi ordered to conduct an investigation on information indicating the issuance of an administrative order by the Director General of the Civil Aviation Authority to appoint a person in the position of Deputy Director General of the Authority under threat and intimidation, to consider the administrative procedure related to the position of the Deputy of the Chairman of the Authority frozen and inoperable, and the previous contexts shall continue to work until the completion of the investigation and the confirmation.

“His Excellency called for taking the necessary measures and imposing the most severe penalties on anyone who uses the threat or uses his powers to compel citizens or state institutions to carry out actions contrary to law and order.

(Source: Media Office of the Prime Minister)

UN raises Awareness of Bias against African-Iraqis

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

UN seeks to raise awareness of bias against African-Iraqis

A recently convened UN committee addressed discrimination against many minorities in many countries, including Iraqis of African descent. Its conclusions shed light on the marginalization of this almost forgotten minority — forgotten especially years after the 2013 assassination of one of its main leaders, Jalal Diab, in Basra.

Diab had posters of Martin Luther King Jr. and Barack Obama on the walls of his school dedicated to teaching poor African-Iraqis in the slums of the Az Zubayr area of Basra.

The two pictures showed an unexpected awakening of identity in the areas of the oil-rich Basra province where this minority lives. And this same province has witnessed popular protests in recent years.

Click here to read the full story.