Iraqi Review and Update
The IMF met with the Gov of the CBI, Allak and the Finance Committee to assess Iraq's progress to date in meeting their requirements.
To review, the IMF required that Iraq did a number of things, including determining their 2016 and 2017 Budget, passing laws, banking reforms, and monetary reforms.
The IMF stepped in last December with a LOI that covered the first half of 2016, then in May/June, the UST, WB, IMF, US and other nations combined in a coordinated plan for an umbrella plan for Iraq in which Iraq would get loans. The meeting last Friday was a review of progress of Iraq meeting the requirements.
The IMF is completely taking control of the structure and conditions they expect their plan for Iraq to be implemented. The IMF does not want to lend money without Iraq doing what they need to do. That's they message that came out of Friday's meeting.
So, how is Iraq doing implementing the IMF's plan?
The Finance Committee has been working with the CBI and the IMF to draft their 2017 Budget. The Finance Committee is saying that they want to submit the 2017 Budget to Parliament this month.
The biggest issue with the Budget is setting the expected average price of oil per barrel. On Friday, the IMF set the price per barrel at $45.00 for 2017. There is progress being made in this area, namely that the 2017 Budget does cut spending, does reduce its reliance on oil, is being reviewed and set by the IMF, and is being drafted on time. That's a lot of progress.
Also of importance, is that IMF audit of the CBI's foreign reserves found that they had an additionally $10 billion. So the IMF is pleased with the Budget and the foreign reserve level of the CBI. (Also the passing of the Amnesty Law and a few new technocrat Ministers was real progress the last couple of months.)
The IMF will hold their next review meeting in October.
The obvious biggest question is when is the IMF requiring the CBI to RV?
Unfortunately, they don't directly state that. They stated in their December 2015 LOI that they wanted Iraq to join the international community "by mid-year." Their June LOI states that the IMF wants the CBI to cut out their Multiple Currency Practices and move to Article VIII compliance - which requires the RV - "by the end of the year."
The IMF is on top of exactly what Iraq is and is not getting done on time. That comes out through these articles on Friday's meeting.
Today, Abadi again comes out pushing to get things done.
It's another ( Eid)Holiday through next week.
The GOI is in the middle of questioning Zebari, the Finance Minister. He's a Kurd. The IMF and US has liked him. But, he's corrupt and not a "techonocrat." Zebari pointed the finger at Maliki (Shiite) during his questioning in Parliament. Barzani doesn't want any investigation nor replacement of a Kurds.
Meanwhile, the citizens and Sadre and even Allawi just want reforms and want to get rid of all of these top level guys because they stole Iraq's money.
Articles are coming out pointing the finger at Maliki for stealing hundreds of billions of dollars and letting ISIS in, backing Iran and intentionally disenfranchised the Sunnis.
The battle of Mosul articles are stating that it will take place October-December. Progress is being made daily. Over the past couple of days, 100 ISIS were killed, some oil tankers of ISIS destroyed, and the Russian-US Syrian agreement was signed.
It's so discouraging that Obama pulled out the troops and put Maliki in charge. Maliki immediately turned against the U.S., began stealing and completely undermined the nation building unified democracy plan.
Maliki not only allowed ISIS to take Mosul, he ordered his generals to arm them. Maliki stole from the CBI, exiled Shabibi who was RVing, completely reversing the monetary reform. Now, the U.S. and IMF has to go back to Iraq and fight yet again a third war there, and again try to get the monetary reform back on track.
Without an international,y tradable currency, Iraq remains in economic isolation and can't rebuild, which further leads to unemployment.
Yet, ISIS is expected to be defeated in Mosul within the next few months. Abadi may be able to slowly but surely finally get his technocrats in and the corrupt out. The UN oversight on corruption maybe able to make the arrest and return some of the stolen money.
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Tuesday, September 13, 2016
Iraqi Review and Update
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