Posted on 15 March 2015.
By John Lee.
Basra governorate has reportedly approved 60 new power projects valued at a total of $218 million (255 billion Iraqi dinars) within its 2015 budget.
The projects were given the green light at an emergency meeting of the governing council on Monday, and were fewer than desired because of budget constraints.
Emirates 24|7 quotes a Basra official as saying that the governorate, Iraq’s wealthiest province, approved a budget of about 4.3 trillion dinars (3.6 billion dollars) for 2015, but was allocated only 1.3 trillion dinars (1.11 billion dollars) by Baghdad due to lower oil prices and soaring military spending.
(Source: Emirates 24|7)
(Electricity image via Shutterstock)
Posted in Construction & Engineering, Public Works
Posted on 25 February 2015.
By John Lee.
Turkey has agreed to provide a $500-million [600 billion Iraqi dinar] loan to the Kurdistan Regional Government (KRG) to help pay the wages of state officials.
According to a report from Daily Sabah, the loan will be repaid by either being set off from Turkey’s crude oil debts or being repaid directly by the KRG.
KRG Minister of Finance and Economy Rebaz Muhammed Hamlan (pictured) said that the loan had reached Erbil, but added that it is not suffient to cover the wages of public workers and state officials; the government will have to export more crude oil to obtain the cash it needs.
(Source: Daily Sabah)
Posted in Banking & Finance, Oil & Gas, Politics
Posted on 13 February 2015.
The Kurdistan Region of Iraq Needs an Estimated US$1.4 billion this Year to Stabilize the Economy
The Kurdistan Regional Government (KRG) is facing an economic and humanitarian crisis as a result of the influx of Syrian refugees (starting in early 2012) and more recently the Internally Displaced Persons (IDP) in 2014.
According to a newly completed KRG – World Bank report, economic growth contracted 5 percentage points in the Kurdistan Region of Iraq (KRI), and poverty rate more than double increasing from 3.5 percent to 8.1 percent.
The report, Economic and Social Impact Assessment of the Syrian Conflict and ISIS Crisis, provides national and regional policy makers with a technical assessment of the impact and stabilization costs needed for 2015, associated with the influx of refugees and IDPs.
The stabilization cost for 2015 is estimated at US$1.4 billion [1.6 trillion Iraqi dinars] in additional spending above and beyond the KRG budget. This estimate could get much higher depending on how long the crisis persists. While the KRG has been responsive to addressing the needs of the displaced population up till now, more resources are needed to avert this humanitarian crisis and address the needs of the displaced population in the medium and long-term.
Impact refers to the immediate economic and fiscal effects on the KRG economy and budget, while stabilization cost refers to the additional spending that would be needed to restore the welfare of residents of the KRI.
“The international community remains deeply concerned by the circumstances facing the refugees and Internally Displaced Persons in the Kurdistan Region of Iraq,” said Robert Bou Jaoude, World Bank Special Representative for Iraq. “We hope that this assessment will support the KRG’s dialogue with its national and international counterparts and that a swift resolution to this problem will be identified.”
The study highlights how prices and unemployment have increased, and refugees and IDPs entering the labor market are pushing wages down. A surge in violence led to supply side shocks. The ISIS crisis has had a significant effect on trade of goods and services.
Posted in Banking & Finance, Industry & Trade, Public Works, Security
Posted on 05 February 2015.
By John Lee.
Kuwait will host the 23rd soccer Gulf Cup in early 2016, after Iraq declined to host the tournament due to a deficit in the State budget.
According to Arab News, Iraq will instead bid to host the 24th edition of the Cup.
Iraq had been due to host the event in Basra.
(Source: Arab News)
(Football image via Shutterstock)
Posted in Leisure and Tourism
Posted on 30 January 2015.
By John Lee.
Iraq’s parliament approved the country’s 2015 budget on Thursday, based on a crude oil price of $56 a barrel.
According to a report from the Wall Street Journal, the budget projects a deficit of $20 billion, compared with $40 billion in an earlier version.
Iraq didn’t pass a budget for 2014.
The budget (Arabic) can be downloaded here.
Posted in Banking & Finance, Oil & Gas, Politics
Posted on 10 January 2015.
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.
The Kurdish Plan To Take Out International Loans: Financial Folly?
The past year has done much damage to the economy of Iraqi Kurdistan. And late in 2014 the government of the semi-autonomous region decided it might be a good idea to borrow money from international lenders in order to make some repairs. However, as local economists and financiers point out, there are still a lot of unanswered questions to address before any such plan can go ahead.
Despite the fact that the government of the semi-autonomous northern region of Iraqi Kurdistan and Iraq’s federal government in Baghdad recently came to something of an agreement on their outstanding financial arguments about oil and money, the Iraqi Kurdish still want to try and borrow money from outside of the country.
Toward the end of last year, the Iraqi Kurdish government approved a draft law that would allow the region to bring more money through lending. Even if the dispute between Iraqi Kurdistan and Baghdad was resolved, the region would still need extra money in order to catch up with all the damage done by what was described as a months-long “financial blockade” of Iraqi Kurdistan.
However the draft of this law was never forwarded to the Iraqi Kurdish Parliament and there is plenty of controversy still around it. Some of these are legislative, other issues are political and still further issues have been brought up by the private lenders that the Iraqi Kurdish have approached.
Iraqi Kurdistan’s Deputy Prime Minister, Qubad Talabani, has said that after lengthy discussions and legal consultations the region’s Cabinet had agreed that Iraqi Kurdistan could apply for international loans. However, he also noted, that getting permission from the region’s Parliament would take some time.
Posted in Banking & Finance
Posted on 03 January 2015.
By Mustafa al Kadhimi for Al Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the opinions of Iraq Business News.
On Dec. 23, Iraq’s Cabinet approved and submitted the 2015 federal budget to parliament. This development occurred following months of study to review and reduce the initial budget’s large deficit, which Finance Minister Hoshyar Zebari estimated at $40 billion.
Iraq’s government has certainly tried to address the deficit in the version that was approved on Dec. 23, in which the budget reached 123 trillion Iraqi dinars (nearly $100 billion). Yet, in the end, all of these attempts cannot address Iraq’s budget crisis for 2015 or the following years, given the nature of the Iraqi economy, which mainly depends on oil production, as well as the ongoing failure to achieve alternative economic mechanisms.
The sharp decline in oil prices, which reached $70 per barrel in December and are expected to continue falling, was enough to plunge Iraq into a real financial crisis, according to deficit rate estimations, which in 2013-14 were based on an estimation of nearly $80-$90 per barrel.
Posted in Politics
Posted on 30 December 2014.
Iraqi State Budget 2015- It Deserves Careful Reading But Needs Serious Revision
By Ahmed Mousa Jiyad.
The first reading of the draft law for budget 2015 by the Federal Parliament was done on 25 December at a presence of only 229 members of the Parliament. According to the parliamentary procedure the first reading entail reading the full text of the draft law without discussing or debating its contents.
The draft law was referred to the Finance and Legal Committees of the Parliament for examination and prepare opinion that would be delivered during the second reading.
The parliament adjourned and will reconvene on 7 January 2015.
Until the commencement of the second reading the above two Committees, other parliamentarians, experts and interested public have to examine thoroughly the draft budget and express opinion before tabling the draft law for voting and adoption.
Please click here to download Ahmed Mousa Jiyad’s full report.
Posted in Ahmed Mousa Jiyad, Blog, Oil & Gas