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New Report on Investment in Iraq

New Report on Investment in Iraq

Dunia Frontier Consultants have issued a new report entitled Foreign Commercial Activity in Iraq – 2010 Year in Review.

According to their research, the total number of reported investments, service contracts, and other commercial activities by foreign firms more than doubled in 2010.

The report includes a listing of the 30 biggest foreign investment deals in the country over the past year, analysis by region and sector, and details of the main investor countries.

Please click here  to download a copy.

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174 Responses to “New Report on Investment in Iraq”

  1. Stew says:

    Irene… my speculation is based on the dozens upon dozens of redenomination articles that have appeared lately. My speculation is based on what a redenomination really entails for a currency. Every redenomination in history has been done basically the same way. The differences are usually in the number of zeros removed and length of exchange period. All are revenue neutral at best… some have actually taken wealth from people.
    My speculation is based on sound economic principles. My speculation is based on actual money supply numbers reported by the Central Bank of Iraq and the IMF.
    Dinar pumper speculation is based on twisting articles to mean things they don’t. Pumper speculation is based on outright fantasy and lies. Pumpers have to claim the real numbers are fakes because they can’t explain the real facts. Pumpers lie over and over about the meaning of the redenomination articles. They ignore the fact that it has been stated by central bank officials and numerous economist that they will do as Turkey, Russia and other countries have done… which is lop.
    Yes… both currencies will coexist together for the duration of the exchange period. But as has been explained many many times in a number of the articles is that an item costing basically $1, say a can of coke. A consumer will be able to pay with either 1000 dinar of the old currency, or 1 dinar of the new currency. It has been stated clearly that there will be no increase in value of the currency you hold.

  2. IRENE says:

    That’s right speculation…and that’s all it is not factual period.. Just keep on and on.. I have read articles as well..REVALUE..LIFTING OF THE ZEROS.. You told me a lot of things on what you believe and bashing people to boot! I got into this investment 2006 and yes I already have made a profit. You can go ahead, because you are talking to yourself… NO COMMENT!

  3. Stew says:

    The new currency will have a new value. That’s why some of the articles use the word revalue. It sloppy reporting. They shouldn’t use that word. But it’s done all the time. Just do a news search for currency revaluation. There are tons of news articles talking about countries revaluing there currency. Most all are actually redenominations/lops. The ones that are actually revaluations are in 1% range.
    Countries lie and deny 1% increases in their currency. If you think these articles are talking about a true revaluation then you believe they are openly discussing a plan to increase the currency 100,000%.
    That’s simply adsurd.

  4. bruce says:

    Hi Stew. Stew why is the C.B.I. and Shabibi having a battle over the deletion of the three zero is it a chance that this thing could R .V.

  5. Stew says:

    Shabibi is the head of the CBI. He is for the lop. I think it is Maliki that you are referring to.
    Here’s the short story. The central Bank of Iraq has about 50 to 60 billion dollars (combination of dollars and euros) that are used to back the Dinar.
    A few years ago there were rumors that the Government (Maliki) wanted to use that money to fund budgets. Nothing ever came of it.
    Recently there was a story that Maliki (Government) was going to overthrow Shabibi (CBI) so that Maliki could use the CBI currency reserves for the government. Saddam did the same thing back in his days. Very bad thing for the currency. The value of the dinar would plummet if he pulls this off. I imagine the IMF would be very much against this move.
    Since then an article has come out from a government rep denying the previous story and stating they will not take the currency reserve money from the CBI.
    Who knows what the real story there.
    I don’t know that Maliki is against the lop… but there are a few of his advisors that against it. They are the ones that keep harping on the corruption and Mafia involvement in taking advantage of the currency exchange. I don’t know if that’s their real reason for apposing the lop or if it’s just a line of crap to accomplish something else.
    I don’t see any chance at all this thing could RV like talked about on dinar sites. I guess there is always a chance it could go up 5, 10, 20 maybe even get crazy and say 100% over the next 5 or so years. But all this talk of 100,000% sudden RVs is pure scam talk

  6. bruce says:

    Hi Stew. Monetary Deputy Governor of the Central Bank expects continued rising inflation; Monetary reform needed.Stew do you think that once inflation hit 10% or more that RD is off the table and that they could maybe consider some type of RV if is just 1 to 20 cent?

  7. Stew says:

    Bruce… back in 2006 Iraq had an inflation rate in the 60% range. They increased the value of the currency from about 1300 to about 1220 (about 6%) through the year with small incremental changes.
    So I’m not sure why drifting above 10% inflation would warrent an overnight 1,000% to 20,000% increase.
    Plus they don’t have anywhere close to the amount of currency reserves needed to back the currency at such a rate.

  8. bruce says:

    Stew is it possible that Iraq could not be limited to backing their currency such as in the U.S.A. so maybe the currency could be R.V. on the same principle being that they will model our exchange rate

  9. Stew says:

    Bruce… I think that is very very unlikely. First off… there are about 220 currencies in the world. About 180 of those 220 are pegged currencies. None of the countries that rely primarily on oil revenues have a floating currency. They are all pegged.
    Secondly… even if by some remote chance they did let the currency free float. Why would it RV to float? The currency is fairly valued exactly where it is. You could make the case it could up or down 10 or 20 percent, but a huge RV makes no sense. Iraq has a money supply of about 60 Trillion dinar. That’s their M2 number. Of that 60 trillion m2, 30 trillion is physical currency. Those are enormous numbers for a country with a GDP of less than $100 billion a year. Those numbers are why the dinar is valued where it is.
    That’s why they are talking about removing 3 zeros. Everyone with dinar will have to turn in their current dinar and will receive 1 new for every 1000 they turn in. So after the process Iraq will have 60 BILLION m2, with 30 Billion physical. Those numbers coupled with a $100 billion GDP makes perfect sense for a dinar valued at about $1 per dinar.
    Bottom line… there absolutely without doubt will never be a substantial RV without a lop.
    Sorry… but this whole thing is a scam and I suspect the reason it is not being outed as a scam is because the US government itself sanctioned this scam years ago.

  10. Bruce says:

    Hi Stew. Please read this and tell me what you think. ad (news) .. He specializes in economic affairs Dargham Muhammad Ali, that the volume of currency in circulation in the local market is (4) trillion dinars is controlled by the central bank and this prevents inflation for the next year, noting that most of the ministries of the State does not need to the degree of functional and she is suffering from sagging career, which would negatively affect the investment budget and fully reflected in the Iraqi economy.
    The Muhammad Ali in a statement to the correspondent Agency (news) on Monday: “The issue of inflation is unlikely in the coming months due to the control of the central bank to the currency in the domestic market, which amounted to (4) trillion dinars and through his control also on the exchange rate which is a measure of The price of goods imported from abroad, mass cash on the market. ”
    He pointed out: The Central Bank is working to absorb the Iraqi dinar by offering more than the dollar and by the interest rate to use tools that can control this issue, which will make the Iraqi citizen saves money instead of spending this works and to withdraw currency from the market.
    Muhammad Ali and saw that most government ministries do not need degrees and career and she is suffering from sagging career and thus will increase in operational spending at the expense of development and investment, which reflected negatively on the economy of the country.
    Noteworthy that the Iraqi economy has witnessed serious inflation is unprecedented on the basis of the entire press reports and a summary of seminars and economic studies related to this aspect as well as the concrete facts on the ground has decreased the real value of money in the Iraqi market is remarkable, and no longer in large quantities sufficient for the purchase of a commodity or service simple, so are the follow-up to increase prices of goods and services in Iraq to assess the rates REO process difficulties, due to the continuous increase in prices. / End / 12. n. r / ..

  11. jimroberts says:

    if iraq remain on his standing or current status, they will remain like that forever, the only way iraq can recover from what they had right now is to place their money in value, a money without value is like a penny in the bank, still a money but its just serve as a small part of it, iraqi leader should stood for thier country they should not get appraid they only need to think that everything start on the 1st step……

  12. Stew says:

    Bruce.
    I can only imagine all the great dinar pumpers throwing this 4 trillion number all over the place claiming that’s how much dinar is in circulation. It’s amazing because the Central Bank reports the numbers and the IMF also reports the numbers. It is 30 Trillion. There have also been about 30 or 40 articles out where Iraqi officials and or economist have stated that Iraq has 30 Trillion dinar in circulation. But like good scammers they take one article that is vague at best and claim it to be the definitive answer to how much currency is out there… and ignore the CBI, IMF, and 30 or so other articles.
    I don’t know exactly where this guy gets the 4 trillion number… but notice he say that’s how many are in the “local” market. I’m not sure how he or anyone would know what % of their total cash is “local” and what percentage has left the country and is with speculators
    The Central Bank breaks down the Currency in circulation number into two categories.
    First is Currency outside of banks. That is 26 trillion.
    Second is Currency that is in Banks. That number is 4 trillion.
    I wonder if that’s where he’s getting his 4 trillion number from.

  13. bruce says:

    Stew they are saying on other site that there is a possibility that Iraq has not been truthful about reporting the M1 or M2 supply or that there a chance the numbers are so high because they’re not subtracting what they are pulling in. The CBI likely knows that figure, but they don’t let the books show it. So, when an old raddy note comes in, they release a new one… The new one adds to the money supply, but removing the old crappy faded raddy note, they do not subtract it out from their figures. They may simply put it into a vault or storage

  14. Stew says:

    That’s simply not the case Bruce.
    There is a link on the CBI website. It is right above the “Key Financial Indicators” link which shows the numbers. The link is “Key Finacial Indicator Documentation”. It explains what some of the numbers mean. Here is the CBI explanation of the currency in circulation number.

    a – Currency outside banks, i.e., the currency component of the money supply as shown in the Analytical Balance sheet (Item 8) which is derived from the following sources
    (currency put into circulation reported by Issuing Dept. less vault cash(item 8.1 of Analytical Balance Sheet) reported by Research & Statistics Dept.). From December 2003, currency in circulation is the new currency issued by the CBI less redemption of old and damaged new
    currency notes.

    Note… it very clearly states that all currency that is redeamed is accounted for in the figure.
    So this would have to be another case of the CBI lying.
    Again… the pumpers claim everything is a lie until they find some hard to understand translation with a number that they like more in it. The fact is even if they are lying and there really is only 4 trillion in circulation that is still way way to much currency for Iraq RV at a substantial rate. They need to reduce the nummber back into the billions… less than 100 billion.

  15. Jared says:

    I want to buy. Is it a good time to invest? If I invest $500.US.today. And sell in a year, will I make any money? And at what %. I am new to this.

  16. Bruce says:

    Hi Stew. Did you read the article. CBI warns of collapse of IQD and the fall of the Iraqi economy; due to inflation. If I remember correctly Stew when Shabib held his conference on 4-19-2011 he did say that could trigger a possible R.V. What is your take on this.

  17. Shirley says:

    Just watching and wondering what’s going on with the dinar.

  18. pjlm says:

    what is status of the rv. does anybody know.

  19. osman says:

    I am wondering if anyone knows what is happening to/with Warka Bank. I am a returnee to Iraq, and I didn’t believe in keeping cash at one, so I opened a Warka Bank account and deposited part of my life’s saving in the account. It is now well over 18 months since the Bank had seized all their activities inside Iraq, and the fate of millions of dollars of small investors like me is uncertain. Can anyone out there predict what would happen, is there any hope of getting our money (or part of it) back. Many thanks

  20. Ninos says:

    Osman,

    From my information, the Bank was seized and now under the operation/management of the CBI.

    It is still operating as Warka.

  21. Rose Thoreau says:

    I haven’t seen any guesses (predictions) on the IQD,,for Aug 1, do we still hold the 1million dinar will pay at exchange about $50,000 USD.

    I find your insight helpful and very astute.

    Thanks for many good comments.

  22. Stew says:

    Rose.
    Iraq has announced a redenomination of their currency. For every 1000 old dinar you will get 1 new dinar. So if you have 1 million you get 1000 new. The rate will be 86 cents per dinar for the new dinar only. Value of old dinar will not change.
    The only questions remaining are 1. How long will the exchange period be? They are saying two years, but with the concern for corruption and counterfeiting don’t be surprised if it gets shortened up to a year or even less. 6 months or 3 months even is plenty of time. 2. When will they enact the redenomination? The central bank really wants to start it the first of the year, 2013. Some in the Gov want them to hold off till July 2013. The CBI says it should be done at the first of the year to coincide with a new budget. So it might happen on Jan 1 2013, or July 1, 2013, or maybe they delay it a full year and it’s Jan 1 2014.
    Iraqis will exchange at Iraq banks. People holding dinar half way around the world will have to hope a dinar dealer will buy the dinar back. They will charge a huge fee for doing so.
    Anyone telling you the dinar you hold will suddenly increase in value greatly is pulling a scam. That or they are ignorant of how currencies are valued. A lot of the gurus are both. Scammers and ignorant.

  23. Cachet says:

    Stew~ you seem to be the go to for questions about the Dinar excitement. So to be clear the only way to make a profit when investing in this is if you have at least a million dinar and if you are in the states it is going to cost an arm and a leg to convert? Is this accurate or can you make a profit on a smaller amount, is it worth the investment?

  24. Stew says:

    Cachet
    If they do as they say they are going to do, there is no way to make money from dinar. A redenomination is a revenue neutral event. If an Iraqi has 1 million dinar now worth $850 he will exchange them for 1 Thousand new dinar worth the same $850. It will cost the Iraqi nothing to do this exchange. It will be done for free at Iraqi banks.
    For people holding dinar outside of Iraq they will have to hope a currency dealer will buy it back from them. Dealers will only do this if they are sure they can get the dinar back to Iraq to exchange. Dealers will not do this for free. Some of the dealers are offering about $850 per million as of now to buy it back, but that only because they turn around and sell it to the net guy for over $1000. Nice little profit. Once the redenomination is made clear and they can no longer sell dinar that buy back rate of $850 per million will disappear at the snap of a finger. That will probably drop to about $500 per million. All depends on how many dealers get into the buy back after the redenomination is enacted.


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