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By John Lee.

Iraq and Saudi Arabia agreed to work together to help streamline the flow of goods between the two countries.

Meeting at the recently-reopened border post of Arar, officials from both sides agreed to implement more efficient electronic clearance systems to reduce delays.

They will also upgrade the road connections leading to Arar.

(Sources: Iraqi Ministry of Transport, Saudi Gazette)

Saudi Minister of Transport and Logistic Services and Chairman of the Transport General Authority Eng. Saleh bin Nasser Al-Jasser and Iraqi Minister of Transport Nasser Al-Shibli signed a cooperation agreement in the maritime transport field on behalf of their respective governments.

The agreement is part of a series of actions that the Saudi-Iraqi Coordination Council implements to enhance relations between the Kingdom of Saudi Arabia and the Republic of Iraq at the strategic level and to open new aspects for cooperation in various fields.

The agreement aims at supporting the maritime transport field, which is considered one of the pillars of the economic development in the world, which requires developing the commercial maritime navigation, increasing the movement of commercial ships to transport passengers and goods, encouraging commercial exchange, facilitating the access requirements and procedures to the ports of both countries with their ships, and enhancing the exchange of expertise and technologies between marine companies, institutions and institutes in this field.

The agreement also included treatment methods for ships of both countries regarding access to their ports, their stay and departure, and in cases of emergency and marine accidents in the territorial water, where the deal also aims at offering facilitation for maritime transport companies, ships and personnel, in addition to mutual recognition of documents of ships and sailors for both countries, and coordinating positions of both countries in international maritime conferences.

(Source: SPA)

By John Lee.

On Monday, Prime Minister Mustafa Al-Kadhimi received the Saudi Minister of Commerce, Majid bin Abdullah Al Qasabi, and his accompanying delegation.

During the meeting, they discussed the development of bilateral relations between Baghdad and Riyadh, and ways to enhance cooperation in the fields of economy and investment, and to work to enhance and develop the inter-trade movement.

(Source: Govt of Iraq)

By Katherine Harvey and Bruce Riedel, for The Brookings Institution. The opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Egypt, Iraq, and Jordan: A new partnership 30 years in the making?

In April, the news that Iraq was mediating between longtime rivals Saudi Arabia and Iran captivated Middle East watchers.

Iraq's new role as a Saudi-Iran intermediary comes as the Saudis have taken concrete steps in recent years to build a meaningful relationship with their northern neighbor, such as reopening their border last November for the first time since 1990.

Yet while the new Saudi-Iraq relationship is indeed noteworthy, Iraq has simultaneously been forging a regional partnership with two other Arab states: Egypt and Jordan. Indeed, Baghdad hosted a summit in late June attended by Egyptian President Abdel-Fattah el-Sissi and King Abdullah II of Jordan.

It was the fourth time leaders of the three countries have met together since March 2019, and the first time on Iraqi soil. It was also the first visit by an Egyptian president to Iraq in more than 30 years.

The full report can be read here.

From Amwaj Media. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

When will Iraq's envisioned industrial cities fire up?

The previous Iraqi government headed by Adil Abdul Mahdi (Oct. 2018-May 2020) concluded a number of ambitious agreements to establish joint industrial cities with neighboring Jordan, Iran, and Saudi Arabia.

The Council of Representatives in 2019 also passed a law to facilitate the construction and operation of such endeavors.

However, it seems that work on these cities has not seen significant progress since.

The full report can be viewed here (registration required).

Advertising Feature

Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 3rd June 2021).

Please click here to view a table of listed companies and their associated ticker codes.

The RSISX index ended the week at IQD896 (-2.3%) / $775 (-1.7%) (weekly change) (+23.5% and +16.9% YTD change, respectively). The number of week traded shares was 54.8 bn and the weekly trading volume was IQD57.6 bn ($38.4 mn).

ISX Company Announcements

• Cross transactions: 39.6 bn shares of Kurdistan International Islamic Bank (BKUI) on Jun. 2, which represents 9.9% of BKUI's capital. 12.4 bn shares of National Bank of Iraq (BNOI) on May 31, which represents 4.96% of BNOI's capital.
• ISX will suspend trading of Al-Ameen Estate Investment (SAEI) starting Jun. 23 due to the AGM that will be held on Jun. 28, to discuss and approve 2020 annual financial statements and elect new director of the board members.
• ISX will suspend trading of Al Mansour Bank (BMNS) starting Jun. 21 due to the AGM that will be held on Jun. 24 to discuss and approve 2020 annual financial statements.
• The Saudi Fund for Development (SFD) has signed an export financing agreement with the National Bank of Iraq (BNOI), a subsidiary of the Capital Bank Group, to provide credit facilities worth $10 mn to Iraqi importers who seek to import Saudi products and services. The step will help strengthen trade relations between the two nations. The agreement was signed in Amman, Jordan, in the presence of Saudi Fund for Development CEO Sultan Abdulrahman Al-Marshad, and Basem Khalil Al-Salem, Chairman of the Board of Directors, Capital Bank, along with senior officials from both sides. (Zawya)
• The period for submitting annual financial statements for the year 2020 and the statements for the first quarter of the year 2021 has been extended to Jun. 10 without penalty.
• The trading of Asia Al Iraq Islamic Bank (BAIB) was transferred from the non-regular market to the normal system starting Jun. 1.

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SFD signs a $10 million export financing agreement with the National Bank of Iraq

The Saudi Fund for Development (SFD) has signed an export financing agreement with the National Bank of Iraq (NBI), a subsidiary of the Capital Bank Group, to provide credit facilities worth $10 million to Iraqi importers who seek to import Saudi products and services. The step will help strengthen trade relations between the two nations.

The agreement was signed in Amman, Jordan, in the presence of Saudi Fund for Development CEO Sultan Abdulrahman Al-Marshad, and Basem Khalil Al-Salem, Chairman of the Board of Directors, Capital Bank, along with senior officials from both sides.

Under the agreement, SFD will provide a $10 million revolving line facility to the National Bank of Iraq to finance 100% of Saudi exports to Iraq with a repayment period of up to 36 months, depending on the type of imports and the nature of the trade transactions.

SFD CEO Sultan Abdulrahman Al-Marshad said:

"This agreement reflects the strong ties between the Kingdom and Iraq, and our mutual desire to increase cooperation across several sectors. It is part of an ongoing $1.5 billion that the Saudi government allocated to support reconstruction and development projects in Iraq.

"Supporting stability in countries seeking to achieve sustainable economic and social development is one of the main priorities of the SFD, and through this agreement, we seek to achieve prosperity for both nations.

"The agreement with the National Bank of Iraq is consistent with the Kingdom's aim to diversify its national economy and increase its non-oil exports, will open new markets for Saudi producers, and it will stimulate the Iraqi commercial and financial sector."

Chairman of the Board of Directors of Capital Bank Basem Khalil Al-Salem welcomed the new trade relations. Said Al-Salem:

"The role of SFD in supporting and financing development projects in Iraq reflects the historical relationship between our two nations and Saudi Arabia's ongoing commitment to Arab economic integration throughout the region.

"This line of financing will expand trade between Iraq and Saudi Arabia by providing credit facilities for Iraqi investors to import Saudi products and services at competitive prices. It will also increase transport links between our two nations and stimulate the financial and commercial sectors."

The agreement is the first in an ongoing program of economic regeneration between SFD and the National Bank of Iraq.

(Source: SFD)

By John Lee.

The Saudi embassy has announced that King Salman bin Abdulaziz will fund the rehabilitation of Ibn Al-Khatib Hospital in Baghdad, as a gift to the Iraqi people.

A fire at the hospital last month killed at least 82 people, and left more than 100 injured.

Saudi Arabia will also take critically ill victims of the fire and provide them with medical care in the Kingdom's hospitals at King Salman's expense.

(Source: SPA)

By Katherine Harvey and Bruce Riedel, for The Brookings Institution. The opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Can Iraq play the role of a bridge in the Gulf?

There has been a gradual thaw in the relationship between Saudi Arabia and Iraq since 2015, and a number of notable developments have taken place in recent months.

Last November, the Arar border crossing - the principle crossing between the two countries - was opened for the first time in 30 years.

In late March, during a trip to Riyadh by Iraqi Prime Minister Mustafa al-Kadhimi, the two countries signed a number of agreements covering economic and cultural relations.

Most importantly, the kingdom committed to a substantial increase in investment in Iraq: up to $3 billion, from a current total of about $500 million.

Then, less than 10 days after Kadhimi's trip, according to reports, his government hosted direct talks between the Saudis and their regional rival, Iran. The talks reportedly focused on Yemen.

The full report can be read here.

By Ahmed Mousa Jiyad.

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

Iraq and the China-Iran Comprehensive Cooperation Program

The China-Iran Comprehensive Cooperation Program (CICCP) was signed on 27 March 2021; two days later the CICCP's direct impacts on Iraq began emerging and one of such impacts seems to benefits both Iraq and Iran!!

A few days ago I completed a detailed preliminary assessment of CICCP document. The assessment was written in Arabic entitled "China-Iran Comprehensive Cooperation Program: Tactically Important Strategically Impacting if Implemented", it was circulated widely and posted on many websites.

The assessment uses composite methodology of three researches approaches (Text analysis, SCOR (Strength, Challenges; Opportunities and Requirements) and facts/evidence based) and comprises an introduction, three parts and concluding remarks. Part one provide brief review of CICCP document structure: preamble, articles, annexes, effective date and term of the deal, coordinating and supervising authorities. Part two, provides detailed assessment of eight fundamental topics/ areas of cooperation, from the perspectives of the political economy of bilateral relations and geopolitical considerations. Part three provides the direct official reactions to CICCP from Iraq, USA, Arab Gulf States/Saudi Arabia and Russia.

The political economy perspectives are related to the following basic issues: The first relates to the nature of bilateral relations in terms of sovereign independence or dependency and hegemony; the second is whether the principle of "mutually beneficial" is also equitable; the third concerns the structuring of the Iranian economy on whether the deal will eventually deepens the dependence on the export of raw materials, oil and gas, or introduces the required and desirable structural changes horizontal, vertical and knowledge-based levels; and the fourth is about the financial and banking independence, monetary and currency issues pertaining to funding investments and trade exchange.

The geopolitical considerations were addressed at four levels, starting from the domestic (national for both countries), continental (Asian from China to Syria), regional (West Asia / Middle East) and international levels.

The assessment argues that the timing of signing and announcing CICCP is tactically motivated and important, while its proper and timely implementation could be a game-changer and thus strategically impacting; but, as usual, reality seldom coincides with expectations.

This brief intervention focuses on the direct current evidenced impacts on Iraq. Interested readers are kindly invited to read the Arabic version of my detailed initial assessment through the web-links mentioned at the end of this article.

In a remarkable speed and substance CICCP has already prompted both Iraq and the US to react!

First; after the current prime minister, Mustafa al-Kadhimi, denied, rather harshly, in a press conference on November 18, 2020, the existence of an Iraq-China agreement by saying, 'You know there is no China agreement, why are you promoting these lies?', he returned to authorize, on March 30 - that is, only three days after the signing of CICCP, "to start implementing the Chinese agreement"!!

While I do not find it necessary, now, to discuss what has happened between Iraq and China since the government of Haider al-Abadi, I find it useful to remember the statement by the Prime Minister's Financial Affairs Adviser, Dr. Modhir Muhammad Saleh, on March 29, 2021, that the "Iraq-China agreement" became effective on October 18, 2020, and then he affirmed the "cooperation framework agreement ... and the final accounting and oil annexes were signed on September 23, 2019." So why has not been published to this day any official document on this agreement / cooperation framework agreement, nor any of its annexes or memoranda of cooperation/ understanding related to it!!??

But there is a document at the Ministry of Finance entitled "Export Credit Insurance Cooperation Framework" between the China Export & Credit  Insurance Corporation and the Iraqi Ministry of Finance) dating back to May 11, 2018 (that is, before the date of the agreement signed by former Prime Minister Adel Abdul Mahdi) !!!!

It is worth mentioning that 2021 State Budget Law includes a few infrastructure projects worth 1.803 trillion Iraq Dinnar to be funded, presumably by the above mentioned 2018 framework; since there is no new framework agreement officially published by the Ministry of Finance, nor approved by the Council of Ministers, nor legislated by the House of Representatives/ the Parliament. Moreover, even if such agreement is ratified and activated it utilization will be differed to future state budget for 2022 or even 2023 because of the national election scheduled for October this year.

Apparently, CICCP was a wakeup call for the Iraqi government but it is in reality too late for 2021 budget funding.

But on the other hand, the Iraqi Premier rushed for quick visits to Saudi Arabia and the UAE, immediately after signing CICCP; is there a relationship between the two events? Time will only tell!!!!

Second, among direct reactions by the US administration and as far as Iraq is concerned relates to Iraq-Iran interests. Just two days after signing the CICCP the U.S. renewed and extended the Iraqi exemption from the practices of maximum US pressure on Iran from 45 to 120 days; a waiver to avoid penalties for buying natural gas and electricity from Iran. This exception entails two positive consequences for both Iraq and Iran: the first is to ensure the continued supply of Iranian gas to generates electricity; this what the Iraqis suffer from its shortages especially the heated summer is on the doorstep, and the second is that Iraq pays Iran's accumulated dues for importing gas and electric power (which constitutes about a third Iraq's production of electricity) as the total of those receivables were mentioned in the 2021 budget, about 1688 billion Iraqi dinars.

Third, another important reaction by the US administration was its quick decision to hold a new round of strategic dialogue with Iraq; the discussions began on April 7, and mainly relate to the issue of US forces remaining in Iraq and the Strategic Framework Agreement signed in December 2008. (This agreement and related matters face strong opposition and many important, influential, legal and judicial challenges, especially after the Trump administration assassinated two leading heavy weight individuals, Abu Mahdi Al-Muhandis (Iraq) and General Qassem Soleimani (Iran), on January 3, 2021 near Baghdad airport).

It is worth noting that energy cooperation is one of the eight topics included in the said strategic framework agreement. Evidence suggests that the previous round of the Iraqi-American Committee for the Coordination of Cooperation in the Field of Energy, which was held, virtually remotely, on January 18 of this year was brief and did not include any important issues or noticeable impacts or new achievements. Hence, it did not attract attention from domestic or external media. Even the two ministries, i.e, Oil and Electricity, that should be directly involved, hardly mentioned anything on their websites on that latest meeting. Will CICCP invigorate Iraqi-American cooperation for the benefit of the energy sector in Iraq?? Who knows, will see!!!

Click here to download the full report in pdf format.

Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq's Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad's biography here.