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  1. #1
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    IMF Mission Concludes Article IV Discussions with Iraq

    IMF Mission Concludes Article IV Discussions with Iraq
    Press Release No. 13/87
    March 21, 2013
    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
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  2. #2
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    International Monetary Fund (IMF) is expected to increase economic growth in Iraq by about 9% and calls on it to support the non-oil sectors


    Author: HAA
    Editor: NK
    2013/03/22 12:14


    Term Press / Baghdad

    International Monetary Fund predicted to witness economic growth in Iraq during the current year 2013 increased by 9 percent due to the rapid growth of the definitive oil in the country, while calling the Iraqi government to focus private sectors other than oil to secure the balance of economic not be subject to oil production and fluctuations world prices.

    The Fund in a report issued on Thursday following the end of consultations in Amman between a delegation of the Fund and the Iraqi delegation headed by VMware Planning Ali Shukri, and seen (long-Presse) it said that "is expected to grow the Iraqi economy rate of 9% through 2013, especially in light of the increase Rapid oil production significantly, "noting that" economic growth rate of 8% during the year 2012, reinforced by higher oil production. "

    He explained the fund that "We hope the high rate of economic growth in Iraq during 2013, again with expectations increasing the rate of oil production by 10% to 3.3 million barrels a day," he underlined that "Iraq after ten years of U.S. invasion succeeded in maintaining economic stability Despite the political and security environment difficult. "

    The Fund pointed out that according to a field survey conducted by the "inflation has declined over the year 2012 to 6% while the central bank reserves of $ 70 billion," stressing "the need to reduce the size of inflation during the year 2013."

    But the fund said in a statement that "Iraq needs to better ways to control government spending and work to end the spending outside the budget," calling "the Iraqi Central Bank to tighten control and work on the launch of the foreign exchange market is slow."

    The Fund said that "Iraq also needs to address the important challenges to be able to create conditions growth rate high and continuously necessary to improve the standard of living for its people," noting that "the economy is still suffering from weak structural sharp represented sector small non-oil as well as high unemployment and control public sector with less commercial work environment. "

    Fund called "the Iraqi government to do the formulation of a long-term strategy to promote the growth of non-oil sector and open up more opportunities for the private sector and open a wider range of private banks, which says that it constitutes damage to government-owned banks."

    The U.S. Agency for International Development predicted in (3 December 2012) that leads the Iraqi economy, the Arab countries within five years, stressing that Iraq possessed all the qualifications to be an economically strong state.

    Iraq is trying for years to attract foreign capital to develop its economy in the fields of industry especially those related to oil and housing and oil and gas extraction, and to its need of funds for infrastructure development and reconstruction, but Mariqben contend that the lack of interest the state to the private sector and the absence of investment laws which guarantees for investors and the absence of Other laws are still obstacles to the development of the economy in the form required.

    Iraq relies, which has the fourth largest oil reserves in the world, 95 percent of its annual budget on its oil exports and currently produces about two million and 900 thousand barrels per day, while issued up to two million and 200 thousand barrels per day.

    The Iraqi parliament approved in October 2006, the Iraqi investment law which it was said at the time that he would open the doors to foreign investment, for providing a lot of facilities to foreign investors, but many foreign companies still hesitate because of fear of the security reality instability in Iraq, and as a result frequency investors to come has been amended law by the House of Representatives in October 13, 2009, and was the most important amendments to the law to give the right of the investor Iraqi and foreign ownership of land and property belonging to the state allowance determined in accordance special system.
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  3. #3
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    Quote Originally Posted by arh777 View Post
    IMF Mission Concludes Article IV Discussions with Iraq
    Press Release No. 13/87
    March 21, 2013
    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

    If the stand by agreement has expired does this means there funds are unprotected also I thought the DFI funds were nearer 180 billion not 18 billion (might be a typo error) does anyone know what Article IV is and the implications???
    DINAR INDEX.COM London UK - Investments in the New Iraq - Currency Buy/Sell - ISX (Iraqi Stock Exchange) Facilitation - Iraqi Banking Services - Facebook.com/DINARINDEX - IIF Member since 2005

  4. #4
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    Quote Originally Posted by Dinar Index View Post
    If the stand by agreement has expired does this means there funds are unprotected also I thought the DFI funds were nearer 180 billion not 18 billion (might be a typo error) does anyone know what Article IV is and the implications???
    Article IV http://www.imf.org/external/np/sec/pn/2010/pn1034.htm
    DFI funds is simply the account where the oil dollars revenue is deposited. The dollars are then sold to the CBI for dinar which is deposited in state banks to fund the budget. The dollars then become part of the CBI foreign reserve. The $180 billion number is ~from a 2008 audit and spent long ago. The IMF requires that Iraq hold a three month reserve or 10% of its budget revenue in the DFI account in case of a crises such as oil lines being blown up and no revenue being generated. The new budget is $118 billion. The fund is required to hold a escrow of at least $11.8 billion

    Here are the DFI audits. http://www.iamb.info/dfiaudit.htm
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