“Tidbits From TNT” Saturday 12-21-2024

EconomicsNews

Dec 21

TNT:

Tishwash: The region .. great efforts to attract investment companies

The Kurdistan Region Investment Board seeks to increase the number of local and foreign investors to work in the provinces and cities of the region, by providing full facilities to motivate and encourage them to increase the volume of investment.

Private sector growth

The head of the Kurdistan Region Investment Board, Mohammed Shukri, said in an interview with “Sabah”: The board, through its eight directorates spread across the provinces and independent administrations in the region, is seriously and diligently seeking to provide full facilities to investors and increase the volume of investments and the number of local, Arab and foreign investors and increase the work of projects by the private sector in the region, indicating that the regional government has invested more than 68 billion dollars, of which Erbil’s share amounted to more than 61 percent.

Statistics and figures

Shukri added that since the establishment of the Investment Board in the region, more than 1,400 investment licenses have been granted, some of which were cancelled due to shortcomings in the work of their investors, while work continued with more than 1,250 investment licenses, noting that during the past five years, approximately 430 new investment licenses have been issued.

He pointed out that significant progress and qualitative steps have been made in the comprehensive investment process in establishing a strong economic infrastructure despite the crises and obstacles that have plagued the country and the region in general, stressing that intensive efforts are continuing to encourage investors according to the needs of the regions and the importance of the projects. Encouraging

investors

Shukri stated that the regional government seeks to facilitate the procedures for attracting investors, as eight branches of the authority have been opened in the governorates and independent administrations of the region and have full powers to grant investment licenses to investors, considering it a basic and primary step to provide facilities according to the city, region, geographical location and sector that needs investment and work in it.

Government privileges

The head of the Kurdistan Investment Board pointed out that the regional government has given great privileges to investors, including a 10-year tax exemption through the investment law, to which additional years are added if the investor is a foreigner or a partner of a local investor, as well as providing privileges and facilities to the less developed areas in the region according to the decision of the regional council of ministers, noting that the challenges facing investors, including local ones, are great, and we consider them a wealth for the region, as they have contributed with the support of the government to many large and pioneering projects, overcoming obstacles and impediments, and moving forward in various sectors, including agriculture, industry, tourism, trade, housing, services, education, health, and others.

The qualifications of the region,

and he pointed out that the Kurdistan Region encourages and provides facilities to investors more than other countries in the region through a package of privileges and incentives included in the Investment Law No. 4 of 2006 in the region, in addition to other facilities provided by the Supreme Investment Council, including the favorable conditions that the Kurdistan Region enjoys for foreign investors, such as political stability, cultural pluralism, democracy and security, stressing that these conditions make the Kurdistan Region more attractive to investors among many countries in the region. link

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Tishwash: Fluctuating Dinar: economic experts urge action as dollar soars in Iraq

Iraq’s dinar continues its erratic trajectory against the US dollar, with no resolution in sight despite years of governmental and central bank efforts, experts attributed the instability to weak policies and unchecked market manipulation.

Root Causes of Volatility

The dollar is surging against the dinar at Baghdad’s main currency exchanges, Al-Kifah and Al-Harithiya, surpassing 1,510 dinars per $1. On the streets, exchange shops are marking up selling prices to more than 1,520 dinars.

“The instability in dollar prices reflects the Iraqi Central Bank and government’s inadequate monetary policies, which fail to address the core of the issue,” said Mustafa Faraj, an economic expert. “Their hesitant measures have left them unable to control the dollar’s value.”

Faraj cited US sanctions on neighboring Syria and Iran as a major factor. “The lack of legitimate trade channels with these countries, combined with restrictions on dollar transfers to them, has led to dollar smuggling, driving up its price,” he told Shafaq News Agency.

“When the dollar rises, it pushes up the cost of basic goods, food, and even commercial activity. This cascade of price hikes stems from a failure to find comprehensive solutions and punish manipulators,” Faraj explained.

Emerging Pressures

New dynamics have exacerbated the crisis. Ahmed Eid, an economic researcher, linked heightened demand for dollars to the fallout from the conflict in Syria. “The shift in Syria has disrupted the interests of militia leaders and influential figures, many of whom are now stockpiling dollars to secure alternative income streams,” he said.

Eid pointed to the closure of Syria’s border with Iraq as a catalyst, forcing traders to seek new suppliers in countries like Turkiye and Egypt. “This transition requires substantial dollar liquidity, which further squeezes the market,” he said.

Currency smuggling and money laundering also continue to erode market stability. “These illicit activities persist unchecked, compounding the dollar’s rise,” Eid warned.

Future Uncertainty Amid Policy Shifts

Concerns are mounting about the impact of Iraq’s planned phase-out of its electronic transfer platform for dollar transactions. Introduced in early 2023, the platform was designed to monitor transfers more effectively. However, the Iraqi Central Bank announced in September that it would be discontinued by year-end.

“The Central Bank’s plan to shift dollar transactions exclusively to foreign banks with correspondent relationships is a blow to local banks,” said economist Ahmed Abdul Rabih. “Four dominant banks will monopolize the sector, sidelining smaller institutions and creating a bottleneck for dollar supply.”

“These banks will dictate the exchange rate, likely driving up prices. The Central Bank must advocate for local banks to establish accounts with international institutions like J.P. Morgan and Citibank,” Abdul Rabih urged.

Reassurances from the Central Bank

In response to public concerns, the Iraqi Central Bank has downplayed fears of major disruptions.

In a statement, it described the transition as part of a phased strategy to align with international standards, emphasizing that 95% of transfers had already shifted from the platform to direct banking relationships.

“The transition will be completed gradually, ensuring continuity,” the bank stated, adding that partnerships with foreign banks in China, India, Turkiye, and the UAE would facilitate trade using non-dollar currencies, such as the yuan and euro.

Thirteen Iraqi banks have already begun operations under the new framework, offering pre-approved transfers and enabling global payment systems for personal and commercial needs, the statement said. These steps aim to “stabilize the currency and curb inflation, reinforcing official exchange rates as the benchmark for legitimate economic activities.”

“The official rate reflects real market dynamics,” the Central Bank stressed, warning against unofficial rates driven by “those engaging in unauthorized practices.”

The bank emphasized that it has structured external transfer operations and the fulfillment of dollar demand along proper channels, aligned with international practices, standards, and the Anti-Money Laundering and Counter-Terrorism Financing Law.

"Providing these channels for all purposes at the official dollar exchange rate makes this rate the true benchmark for economic practices, as evidenced by price stability and inflation control. Any other rate traded outside these channels is considered irregular and utilized by those engaging in non-compliant or illicit practices who avoid official channels in their dealings. These individuals bear the additional costs of purchasing at higher rates than the official price to create the illusion of a disparity between the official and unofficial rates." The statement concluded.

Despite reassurances, skepticism lingers among economic experts, who argue that without stricter enforcement and comprehensive reforms, the dinar’s fluctuations will persist. For many Iraqis, the cost of living remains tightly bound to the fate of the dollar. link

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Tishwash: Three senior US officials arrive in Damascus to meet with leaders of the new administration in Syria

The US State Department announced today, Friday, that US diplomats have arrived in Syria to meet with the new Syrian administration, in the first official US diplomatic mission sent to Damascus since the beginning of the revolution that erupted in 2011.

The United States had closed its embassy in Syria in 2012, and withdrew all its diplomatic staff, against the backdrop of the events that the country witnessed at that time.

According to the US State Department spokesman, the US diplomats will meet with representatives of "Hay'at Tahrir al-Sham" and civil society to discuss "their vision for the future of their country and how the United States can support them."

He pointed out that the delegation includes Assistant Secretary of State for Near Eastern Affairs Barbara Leaf, and a diplomat specializing in the Arab world, Daniel Rubinstein, who is now responsible for communicating with Syria.

Roger Carstens, who is responsible for collecting evidence regarding missing Americans in Syria, such as journalist Austin Tice, who was kidnapped in August 2012, will also be present.

The visit comes at a time when Western governments are gradually opening channels of communication with Hay'at Tahrir al-Sham and its official Ahmed al-Sharaa, and discussing the possibility of removing the organization from the list of terrorist organizations.

Before the United States, France, Germany, the United Kingdom and the United Nations sent envoys to establish relations with the transitional authorities, whose first phase of governance is being watched with caution.

Earlier, US Secretary of State Anthony Blinken stated that Washington is following the positive statements issued by Hayat Tahrir al-Sham and wants to see concrete steps as well.

He said in a statement to the American Bloomberg News that removing the name of the organization from the "terrorist list" could be put on the agenda, based on the constructive steps it will take during the transitional process in Syria.

He added: "We heard positive statements from the leader of the organization, Mr. Abu Muhammad al-Julani, but what everyone is focusing on is the reality on the ground, and whether they are working to build an inclusive Syria." link