2-26-11 Recap of the day's event/postings

Facts:

1.     GOI Spokesman: Parliament to hold emergency meeting tomorrow

2.     Talabani meets with former British Prime Minister John Major in Kuwait

3.     Sistani hails Friday’s demonstrations; Warns GOI of the repercussions if they don’t continue efforts

4.     UN prepares comprehensive Briefing Book on Iraq

5.     Osman: Kurdistan will approve the nomination of Mr. Chalabi of the Ministry of the Interior if the offer for the position officially

6.     Arab League council holds session next Monday

7.     Baghdad and Beijing agree to develop economic cooperation

8.     Parliament decided to postpone Monday’s council meeting; To be held March 6, 2011

Rumors:

Of Interest (rumors that I find of particular interest either because of who said it or because of how I think it relates to what is happening right now):

1.     Peoples Dinar Post: US Treasury’s Out-n-Out Opinion on the RV

The Rest (doesn’t mean these are not happening):

1.     Frank26 Post: KTF Missions 2/25/11

2.     Skype chat - Okie Oil Man on MTT

Where Are We At?

1.     Another day of fragmented news.  The Council of Ministers plan to hold an emergency meeting tomorrow to activate the work of the ministries, governors, and to develop urgent operational plans.  In related news

2.     Talabani was reported to have met with the former British Minister John Major.  Talabani said Iraq has made considerable achievements after the liberation from dictatorship in the areas of politics, economy, development and social progress

3.     Sistani hailed the demonstrations and warned the government on the current approach in the management of the state.  He invited them to take critical decisions regarding canceling privileges of members of the House, provincial councils, senior officials, and he told them to refrain from the development of new government positions

4.     The UN prepared a comprehensive briefing book on Iraq.  In the Economic Development Recommendations section, the reports states they recommend Iraq implement an appropriate monetary and exchange rate policy framework to preserve hard-won gains in disinflation and de-dolarization

5.     In government formation news, a member of the Kurdistan coalition said Chalabi was never formally nominated for the Interior Minister.  Othman said he learned of Chalabi’s nomination through the media.  He also said that the ministries will be agreed upon during the close of the period, if not, the blocs would settle the matter

6.     In other news, the permanent representative to the Arab League Al-Harithi said the matter of whether the Arab summit in Baghdad will take place will be decided on during the upcoming meeting of the Arab foreign Ministers

7.     Regarding China, the Deputy of Foreign Affairs from China said that they seek to promote the work of Chinese companies in projects within the oil, electricity, construction and reconstruction underway in Iraq

8.     Parliament decided to postpone Monday’s meeting until 3/6.  The delay is to allow them to fully communicate with citizens and identify their needs, demands, and to provide feedback to the House

9.     On the rumor front, one person pretended to be part of media in an effort to talk with Neil Wollen regarding an article he wrote.  He didn’t get Neil, but he reported he spoke with the best friend of his assistant.  The lady told him that Iraq is seeking the highest rate and they will RV when they are read despite the outside pressures.  Okie says that the budget is now official and that the base rate is $3.22.  He said that since the budget is official, they can now spend the budget at the RV rate

What’s left?

1.    Ratification of budget – Done!

2.    Closure on Security positions (3 in total)

3.    Formal announcement of government

5.    Lifting of remaining Chapter 7 sanctions (Kuwait related)

6.    RV/RI

7.    HCL

Important Dates

1.     February 17 – GCC Meeting (no news of this yet)

2.     February 20 – Vote on budget : Done!

3.     February (sometime after the budget is voted on) – Parliament votes on the National Council of Supreme policies 

4.     February 25  -- Large demonstration online

5.     February 28 – Constitutional deadline to form government

6.     March 29-30 – Arab Summit

7.     May 1 – CBI must be ready to transfer DFI monies

8.     May 22 – Presidential order 13303 expires

9.     June 30 – DFI expires

What’s It All Mean?

1.     Whether Iraq is sincere or not, they are making it very clear their priorities are addressing the demands of the citizens; hence their desire to postpone Parliament’s meeting until 3/6 in order to spend time with the citizens listening to their demands.

2.     The most interesting news today was related to the UN briefing report.  To me, they made it clear that they want Iraq to implement the exchange rate mechanism (RV).  The next most interesting information from today was the rumor about the person impersonating media personnel.  Apart from this, it appears we may have a wait, unless Parliament works behind the scenes to finish the government.  That said, if the person who pretended to be associated with media is right, the government formation and announcement may not necessarily bring the RV given that Iraq must appear to be stable, self-sufficient, and sovereign.  Even if they passed these three tests, can they get the highest rate possible in today’s environment?  If they don’t think they will, and they will hold out until they can get the highest rate, then we will wait more

2-26-11 Peoples Dinar Post: US Treasury’s Out-n-Out Opinion on the RV

Highlights/Thoughts
PLEASE DO NOT READ THIS IF YOU DO NOT WANT TO READ RUMORS

Click on the title of this posting to get the details of this posting on DD

1. Person impersonated a member of the public media and tried to get in touch with Neil Wolin, the Deputy Secretary of the Treasury, regarding an article that Neil posted
2. He didn't get Neil, but talked with a close friend of Neil's personal assistant
3. She said she talked with Neil's assistant all the time about the dinar
4. She said it will RV when it's good and ready and that the outside world can put as much pressure as they want, but they are trying to come out at the highest possible end of the rate as they can
5. The budget in place helps
6. The uprisings have made this a tough sale to foreign investors
7. The RV will be based on how sovereign, solvent, stable, and self-sufficient Iraq will appear to the world
8. Their goal is to come out at the highest end possible without disrupting the balance of the economic situation in the Middle East and world
9. She said our government feels that Iraq is testing the road of democracy and feel they are playing with fire and are pushing the envelope too far
10. They concluded that "this thing" is a walking time bomb waiting to explode...good or bad, and some think the GOI is getting greedy with the rate
11. The GOI doesn't want to have to go back and redo an RV....it can't be redone and they have just one shot at this
12. The world's governing bodies (WTO, IMF, UN, Kuwait, CBI) have to sign off on this and Iraq has to be able to sustain whatever rate they come out at

2-26-11 Parliament decided to postpone Monday’s council meeting; To be held March 6, 2011

Highlights/Thoughts
Click on the title of this posting to get the details of this article

1. Parliament decided to postpone the Council meeting to be held on Monday to Sunday of next week to allow more deputies for County services
2. The House issued a statement disseminated on the web saying the delay is to allow them to fully communicate with citizens and identify their needs, demands, and provide feedback to the House on Sunday the 6th
3. The remainder of the article discussed the demonstrations held on Friday

2-26-11 Baghdad and Beijing agree to develop economic cooperation

Highlights/Thoughts
Click on the title of this posting to get the details of this posting on DD

1. Baghdad and Beijing agreed to develop economic and trade cooperation during the next term
2. Talabani expressed his thanks for China's support for Iraq in the international forums, especially with regard to lifting of international sanctions
3. The Deputy of Foreign Affairs of China said China seeks to promote the work of Chinese companies in projects within the oil, electricity, construction and reconstruction underway in Iraq
4. Maliki and the Chinese Foreign Minister discussed bilateral relations and expanding cooperation between the two countries in all areas

2-26-11Arab League council holds session next Monday

Highlights/Thoughts
Click on the title of this posting to get the details of this article

1. The important part of this article is related to the topic of the summit in Baghdad
2. The permanent representative to the Arab Leage Sheikh Khalfa bin Ali Al-Harithi said the matter of whether the summit will take place will be deicided on during the upcoming meeting of the Arab Foreign Ministers

This article makes it sound as if it is not yet a foregone conclusion that the summit will be held in Baghdad during March 28-29.

2-26-11 Osman: Kurdistan will approve the nomination of Mr. Chalabi of the Ministry of the Interior if the offer for the position officially

Highlights/Thoughts
Click on the title of this posting to get the details of this article

1. A member of the House for the Kurdish coalition blocs said there is no formal offer for the nomination of Chalabi for the Interior Minister
2. Othman said he learned of Chalabi's nomination through the media noting that if he was nominated by the National Alliance, they will accept it to resolve the question of the security ministries
3. He said that Maliki announced the security ministries will be agreed upon during the close of the period, and if not, the blocs will settle the matter as he will offer several candidates for the positions
4. Maliki hasn't yet presented any candidates for the ministries
5. Othman said the political blocs must find a solution to the security ministries and said it is not reasonable to allow a full year to go by without forming a government

2-26-11 Skype chat - Okie Oil Man on MTT

Highlights/Thoughts
PLEASE DO NOT READ THIS IF YOU DO NOT WANT TO READ RUMORS

1. Okie has been on the phone with Iraq for the last 2 hours
2. Base rate is $3.22
3. GOI is seated and budget is now official as of 2am
4. Next week is our week
5. Over 3,000 contractors paid
6. 30% of the budget was released today; they are spending money now
7. Okie is saying on the call that the UST is there to help them RV since they do not know how to do it
8. Since the budget is "official", they can now spend the budget at the RV rate

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2:33 PM  Okie is saying this live on MTT [****] He has been on the phone with Iraq for 2 hours [****] Base rate 3.22 he says [****] The Gov is seated and Budget is passed and NOW official as of 2 am [****] He said Gov is seated and next week is our week and He prays it is true - because it is coming strate from Iraq with a translator for the last several hours [****] okie has been on phone with iraq - budget was only officially settled this morning at 2 am their time - base rate is approx $3.22 - parliament meeting this afternoon - smoke screens have been there - government is seated - budget is passed and made official at 2 am this morning - now paying in dinar to employees - loading smart cards tuesday - [****] [****] The official GOV has now been formed! Over 3000 contractors paid - Budget in effect NOW officially! It is an absolute that we will have an RV with in the next few days OKIE says! [****] Today they launched 30% of the Budget today - they are spending MONEY NOW!! [****] Okie says he is just the messenger - He has NO agenda but to deliver the NEWEST information given to all of us! [****] blueice114 does okie think we are good for next week [*****]  - Yes [****] Timeline tonight - Wed. 

 

2-26-11 Frank26 Post: KTF Missions 2/25/11

Highlights/Thoughts
Click on the title of this posting to get the details of this posting on DD

The most important or interesting items from Frank's post are below

1. What happened with the demonstrations is good for our investments
2. TV said citizens in general were well behaved
3. TV interviewed Iraqis on the streets and 2 things were consistent.  They want their economy and currency to be strong
4. Iraqi's told TV they will do one demonstration per month until their demands are met by Maliki
5. Frank believes the violence will escalate with each demonstration
6. Frank is suggesting that Maliki's request for some leaders to resign is related to the idea that "sewers had to be cleaned"
7. Maliki told people on TV their ration cards would not be ready, but that he would give them 15,000 IQDs this coming Sunday
8. Maliki hints that the GOI spots are still being fought for and that he will give the 3 remaining ministries this Sunday
9. Delta says that the articles are exaggerating right now
10. The demonstrations asked 2 important questions during the noise...#3 above
11. On the 1st of March, the budget goes into effect.  It would be tragic if it were left at 1170

2-26-11 UN prepares comprehensive Briefing Book on Iraq

Highlights/Thoughts
Click on the title of this posting to get the details of this article

1. The UN prepared a briefing book, which was created by international partners for the purpose of informing forthcoming discussions between Iraqi authorities and international partners on key areas of mutual interest
2. There are 2 parts:

• Part I addresses key policy issues, including: macroeconomic challenges; development planning and prioritization; governance and public sector reform; anti-corruption; private sector development; social protection; and the challenges of regional cooperation and internal disputed territories.
• Part II focuses on sectoral and cross-cutting issues, including: human rights protection, civil society and the media; gender mainstreaming; basic social services; water resources management; agriculture; environment; energy; transport and telecommunications; and cultural heritage.

3. An except from the Economic Development Challenges Recommendation section is below.

RECOMMENDATIONS
Continue to adhere to a sound monetary and exchange-rate policy framework. To preserve
hard-won gains in disinflation and de-dollarization, an appropriate monetary and exchange-rate
policy framework needs to be set in place. In that regard, maintaining a healthy level of
international reserves is crucial in preserving the stability of the Iraqi dinar, and in avoiding the
resurgence of currency substitution and inflation with accompanying socioeconomic effects,
particularly on the poor. To address this, monetary authorities should continue to carefully
monitor the emergence of possible inflationary pressures in the economy.

Isn't that interesting?  "To preserve had-won gains in disinflation and de-dollarization, an appropriate monetary and exchange rate framework needs to be set in place".  Please note there are many tools that can be used to support a country's monetary policy.   One such tool is exchange rates.  So, this recommendation is for Iraq to use exchange rates to support their monetary policy in order to preserve the gains in disinflation and de-dollarization (removal of US dollars).   The words "to be set in place" are also important because they tell us they obviously haven't yet put this exchange rate framework in place.  Now what could this all mean?  RV?

2-26-11 Sistani hails Friday’s demonstrations; Warns GOI of the repercussions if they don’t continue efforts

Highlights/Thoughts
Click on the title of this posting to get the details of this article

1. The religious authority, al-Sistani, hailed the demonstrations witnessed by the country on Friday
2. He warned the Iraqi government on the current approach in the management of the state and invited them to take critical decisions regarding canceling privileges of members of the House, past and present provincial councils, senior officials, and told them to refrain from the development of new government positions because of the large sums of money it will take to fund them
3. He called for the House and the GOI to take serious and concrete steps to improve public services and noted that these measures should improve the power and the ration card items, provide jobs, and fight against rampant corruption in various government departments

Sounds like he's referring to Allawi's National Council group?

2-26-11 Talabani meets with former British Prime Minister John Major in Kuwait

Highlights/Thoughts
Click on the title of this posting to get the details of this article

1. In Kuwait, Talabani met with 26 heads and former British Prime Minister John Major
2. Talabani said during his meeting that Iraq has made considerable achievements after the liberation from dictatorship in the areas of politics, economy, development and social progress in the country
3. In the same context, he also shed light on the political process and democracy emerging in Iraq, as well as the most important political and security challenges and other outstanding issues

2-26-11 GOI Spokesman: Parliament to hold emergency meeting tomorrow

Highlights/Thoughts
Click on the title of this posting to get the details of this posting on TCN

1. The Council of Ministers will hold an emergency meeting tomorrow to activate the work of the ministries, governors, and the development of urgent operational plans