By T. Keyzom Ngodup, co-founder at Ideas sYnergy.  Ideas sYnergy is Iraq’s first multiple bottom line advisory company committed to inclusive economic and social development through market-based solutions that help build and scale youth-driven innovative ideas for social change.

An Economist report rightly pointed out that when people in the developed countries worry about migration, they tend to think of low paid incomers who compete for jobs as construction workers, dishwashers, or farmhands. When people in developing countries worry about migration, they are usually concerned at the prospect of their best and brightest decamping to Silicon Valley or to hospitals and universities in the developed world. Indeed, of the 22 Iraqis listed in Arabian Business’ 500 most influential Arabs, only nine are based in Iraq, all in Baghdad.

This ‘brain drain’ has long bothered policymakers in poor countries. They fear it hurts their economies, depriving them of much-needed skilled workers who could have taught at their universities, worked in their hospitals and come up with clever new products for their factories to make. Alternatively, several economists reckon that the brain-drain hypothesis fails to account for the effects of remittances (see table for the relatively ‘low’ Iraq remittance volume albiet important to note that ‘traditional’ money transfer services are far and few between in Iraq and can often terminate service, for example the recent termination of Iraq-US transfer), for the beneficial effects of returning migrants, and for the possibility that being able to migrate to greener pastures induces people to get more education. Some argue that once these factors are taken into account, an exodus of highly skilled people could turn out to be a net benefit to the countries they leave.

While most migrants in other countries are unemployed youth, in Iraq, migrants had been generally gainfully employed professionals in the country before seeking global opportunities with a chance to travel hassle-free through a non-Iraqi passport. Speaking to a number of Iraqi professionals who immigrated to the United States after 2003, one finds that most of them are employed in low-paid blue collar jobs, with plans to return to Iraq in the near future, contingent on improvements in security.

Late senator Ted Kennedy said at the time, “America has a fundamental obligation to assist Iraqis whose lives are in danger.” But the special visa programme, called the SIV, under the 2008 Refugee Crisis Act, has stalled, partly due to crippling bureaucratic process, lack of resources and partly due to news such as Iraqi men in Kentucky, USA charged with supporting extremists. Following the withdrawal of American troops in December 2011, the SIV programme is likely to erect new hurdles as the Pentagon closed its last few military bases in Iraq.

However our experience tell us that Iraqis are better off pursuing higher studies abroad and applying themselves in Iraq, where potential opportunities to start new businesses and non-existent services for the population is tremendous. Much will depend upon how the government of Iraq makes Iraq an attractive destination for aspiring Iraqi returnees.

By T. Keyzom Ngodup, co-founder at Ideas sYnergy.  Ideas sYnergy is Iraq’s first multiple bottom line advisory company committed to inclusive economic and social development through market-based solutions that help build and scale youth-driven innovative ideas for social change.

Iraq Business News is delighted to bring you the latest Iraq Market Tracker report from Dunia Frontier Consultants. The market tracker highlights the activities and market performance of a basket of publicly traded firms who derive a significant percentage of their revenues from operations in Iraq, but are traded on foreign exchanges: a proxy Iraq play as much as practicable. It also identifies and analyzes the primary political and security events that occur in country that have market-moving implications.

Click here to access the report.
 

Companies Mentioned:

ExxonMobil, Lukoil, Statoil, Total, Samsung

Action Calls:

• National Reconciliation Conference looks dead, Sadrists ask their price: Nothing likely to come of it, unless it is to be used to announce developments elsewhere.
• Exxon moving into KRG: Exxon has their contractual commitments, so expect this to continue.
• Total close to securing Kurdistan oil rights: Just as we predicted, another major moving towards Kurdistan.

Headlines:

• Increasing attacks along the trigger line: Triggered by increasing political uncertainty, something to watch.
• Samsung wins $1 billion WQ-2 contract: Shows that life goes on in southern Iraq.

Calendar:

• 31 Jan – Parliament to reconvene
• This week – Exxon reports, Basra single point mooring set enter service
• Next month – National Reconciliation Conference

Click here to access the report, or to add your email address to Dunia’s mailing list to receive the Iraq Market Tracker via email.

Central Bank of Iraq announced that it revaluated the Iraqi Dinar by 3.4% relative to the US Dollar, according to a report from Al Sumaria.

“During the daily auction of foreign currencies’ exchange, the Central Bank raised the value of Iraqi dinar against the dollar by 3.4%, or four Dinars,” the deputy governor of the bank told the news agency.

“The nominal rate of the Dinar doesn’t coincide with its purchasing power or with its real exchange rate against the Dollar,” he reportedly added. “The current account of Iraq payments has a surplus of 5 to 8% of GDP.”

(Source: Al Sumaria)

Iraq Business News is delighted to bring you the latest Iraq Market Tracker report from Dunia Frontier Consultants. The market tracker highlights the activities and market performance of a basket of publicly traded firms who derive a significant percentage of their revenues from operations in Iraq, but are traded on foreign exchanges: a proxy Iraq play as much as practicable. It also identifies and analyzes the primary political and security events that occur in country that have market-moving implications.

Click here to access the report.
 

Companies Mentioned:

DNO, ExxonMobil, Genel, Gulf Keystone, Marathon, Oil Search, ShaMaran, WesternZagros

Action Calls:

• Allawi defiant, Kurdish silence is deafening: Allawi boycott helped scuttle parliamentary quorum, but again, Iraqiya is weak; watch the Kurds.
• Hayward, Vallares founders stand to pocket $247 million in Genel shares: Indicator of short-term and long-term plays on Kurdish oil shares.
• ShaMaran relinquishes Pulkhana, Arbat: ShaMaran focuses its exploration efforts, hopes to become acquisition target.

Headlines:

• IRGC statement angers Sadrists: Confirms that Iran will have influence in Iraq, but that Iraq’s Shiites are not puppets.
• Hashemi bodyguards tortured: Reminder of just how powerful Maliki’s intimidation campaign is.

Calendar:

• 28 Jan – Parliament to reconvene (second try)
• Next month – Reconciliation meeting

Click here to access the report, or to add your email address to Dunia’s mailing list to receive the Iraq Market Tracker via email.

The World Bank says it expects Iraq’s gross domestic product (GDP) to grow by 12.6 percent in 2012, and 10.2 percent in 2013, following a growth of 9.6 percent last year.

If achieved, this would give a compound growth of 36 percent in just three years.

This follows a downward revision of growth expectations for the world as a whole, with the global economy expected to expand 2.5 and 3.1 percent in 2012 and 2013 (3.4 and 4 percent when calculated using purchasing power parity weights), versus the 3.6 percent projected in June for both years.

The Central Bank of Iraq expects the average annual income in 2012 will reach almost $6,000 (7 million IQD), up from $5,200 (6 million IQD) in the previous year, according to AKnews.

The deputy governor of the CBI, Mudhar Mohammed Saleh, said the estimate was made based on the governments planned investment in oil and economic projects in the coming year.

According to UN reports there are still seven million people living below the poverty line in Iraq despite the fact that the oil rich country is now exporting 2.5 million barrels of oil per day.

(Source: AKnews)

Al Arabiya reports that the United Arab Emirates will scrap $5.8 billion in debts owed by Iraq.

Emirati foreign minister, Sheikh Abdullah bin Zayed al-Nahayan, said on Monday at a news conference hosted jointly with Iraqi foreign minister Hoshyar Zebari (pictured):

“An agreement will be signed soon to lay out the legal framework for waiving old Iraqi debt of $5.8 billion.”

Zebari thanked the UAE for cancelling the debts, which he said was “a very heavy burden” on Iraq.

“The relations between the two states did not stop [in the past 10 years], but today we started the official framework of co-operation,” Zebari said.

The debt date backs to the 1980s when Iraq had borrowed money from Gulf states for assistance with Iraq’s long-running war with Iran.

The move follows a similar one in 2008, when the UAE wrote off almost $7 billion worth of Iraqi debt left over from the era of Saddam Hussein.

Trade between Iraq and the UAE exceeded $4.5 billion last year.

(Source: Al Arabiya)

Iraq Business News is delighted to bring you the latest Iraq Market Tracker report from Dunia Frontier Consultants. The market tracker highlights the activities and market performance of a basket of publicly traded firms who derive a significant percentage of their revenues from operations in Iraq, but are traded on foreign exchanges: a proxy Iraq play as much as practicable. It also identifies and analyzes the primary political and security events that occur in country that have market-moving implications.
 

Companies Mentioned:

DNO, Exxon, Genel Energy, Gulf Keystone, Longford, WesternZagros

Action Calls:

• As Maliki consolidates power, all eyes turn to Kurds: As we expected, Iraq’s future will be decided along Baghdad-Erbil axis.
• Gulf Keystone shares spike on PSC back-in rights: Not new news, unless someone actually knows specifics of a bid for GKP. But big win won’t occur until Erbil-Baghdad is resolved.
• Genel boosts stake to 80%, becomes operator of Chia Surkh PSC: Genel, in not unexpected move, continues as consolidator in Kurdistan.

Headlines:

• Source: Kurds moving towards state in March: Persistent rumors, but at this point file under “negotiations positioning.”
• Sonangol attacked in Ninewa: Most likely criminal attack, designed to extract money or concessions, not broader activity.

Calendar:

• 19 January – Parliament to reconvene, Iraqi budget on docket
• Next month – Reconciliation meeting

Please click here to access the report, or to add your email address to Dunia’s mailing list.