3/27/2013 3:33 PM
A conference on Iraqi energy in UAE disclosed that Iraq will cover 40% of world oil needs during the coming two decades.
The conference, ended yesterday, Tuesday, and attended by Iraqi senior oil officials, pointed out the difficulties facing working companies in Iraq.
More than $36 billion oil, energy, water and petrochemical contracts were given since 2008, “thus the country will have better chances for development to be the fastest in the region”, it was confirmed.
It is expected that Iraq will invest about $200 billion in oil exploration and production during the coming six years, including $20 billion shall be allocated for refining and distribution purposes.
Iraqi budget depends on oil revenues by more than 90%.
This year Iraqi budget reached to 138 trillion Iraqi Dinars.
JUAN MABROMATA/AFP/Getty Images
Argentine President Cristina Fernandez de Kirchner (L) and Vice President Amado Boudou in Buenos Aires on March 1
A sharp divergence between the official and black market rates of the Argentine peso this week worsened the country’s ongoing economic turmoil. This gap and the peso’s sharply declining value have undermined confidence in the currency.
The government now must figure out how to balance the competing needs of multiple sectors that all require some portion of the country’s limited foreign currency reserves. New taxes, in addition to a range of moves undertaken since President Cristina Fernandez de Kirchner’s re-election in October 2011, are meant to maintain high levels of government spending and bridge the gap until the country can return to being a major exporter of more than just agricultural goods.
The sharp fall in the value of the currency prompted Fernandez to call an emergency Cabinet meeting the evening of March 20. Confidence in the peso fell as a result of a March 18 tax bump on Internet transactions involving purchases of foreign products, from 15 percent to 20 percent. The parallel market, which hovered around 7.5 pesos to the dollar in January, reached 8.75 pesos to the dollar on March 20. The official exchange rate is around 5.1 pesos to the dollar, a 70 percent difference. Argentines’ limited faith in the value of the peso is not a new phenomenon, but the diverging official and unofficial rates are putting new pressure on Argentina’s currency regime.
The government is likely considering a devaluation of the currency. On a crawling peg, the Argentine peso has been slowly devaluing against the dollar since July 2008 — and since January 2010, the currency has gradually devalued by 24 percent. A sharper devaluation could enable the Argentine Central Bank to better control demands on the institution’s foreign exchange reserves.
But devaluation would also worsen the country’s already high inflation, which could rise above 30 percent in 2013. Efforts to control inflation have included widespread price controls that may now be extended until legislative elections in late 2013. Argentina’s inflation is driven foremost by monetary expansion that grows on average by about 34 percent annually. Increasing the money supply helps to fund policies that keep a range of consumables relatively cheap, including transportation, utilities and food. Devaluation, however, would raise the cost of imported goods and could worsen the overall inflation problem.
The ultimate goal of the government is to secure control over foreign exchange resources within the country while maintaining policies that cater to consumers. With only limited access to foreign capital markets, the trick for Argentina is to keep a tight grip on the country’s balance of payments. This is the reason for the host of capital and trade controls that have been enacted over the past two years.
But these policies have significant negative effects. Inflation drives up costs to Argentine producers and the slow crawl of the pegged currency means that the effective profit margin for exporters shrinks every year. This is especially important in the agriculture sector. Agricultural products constitute more than half of Argentina’s total exports — of which soybeans are half, by value — and agriculture export taxes account for 5 percent of government revenue.
As a result of narrowing profit margins, high government export taxes and strict controls on the quantity of wheat and corn that can be exported, the agriculture sector is gearing up for a political fight with the Argentine government. Having become highly organized during the 2008 confrontation with the government over soybean export taxes, the farmers are looking once again to effect change.
The threat of holding back soy exports has been aired, and protests that resemble those seen during the 2008 crisis could begin as early as April. If the government does not significantly change its policies, these protests will likely be even more organized and galvanized in 2014.
While Argentina’s agriculture sector benefits abundantly from the fertility of the Pampas region, it has not always been the most important source of income. At the beginning of the 21st century, Argentina was a significant exporter of hydrocarbons. But the price controls and regulatory environment of Fernandez and her now deceased husband and predecessor Nestor Kirchner led to a decline in exploration and production alongside a rise in consumption.
The country is now a net importer, and energy imports represent the single biggest threat to the country’s balance of payments. It was this danger that prompted the nationalization of energy company Repsol YPF in 2012, and the government is counting on a resulting increase in oil and natural gas production from YPF now that it is under new management. But the challenge is that in the process of nationalizing YPF, the Argentine government proved itself an unreliable business partner. Moreover, drawing real investment into the sector is proving difficult. Without a significant increase in energy production, Argentina’s options will dwindle. In all likelihood, the prospects of a political and economic crisis are growing.
Completion of border maintenance work will be “major milestone” in normalizing Iraq-Kuwait relations — Kobler
21/03/2013 | 9:13 pm | Kuwait News
UNITED NATIONS, March 21 (KUNA) — The UN special Envoy for Iraq Martin Kobler on Thursday said that the “major milestone” for normalizing relations between Iraq and Kuwait will be the “completion of boundary maintenance work,” which “must be done” before the end of this month.
“I have mentioned the progress achieved towards the normalization of relations between Iraq and Kuwait, including through Iraq’s positive steps towards fulfilling its remaining obligations under Chapter VII of the UN Charter. A major milestone in this process will be the completion of boundary maintenance work,” Kobler told the Security Council in an open meeting to discuss the work of the UN Assistance Mission in Iraq (UNAMI) which he heads.
He said the finalization of the removal of obstacles along the border, in particular the three houses in Umm Qasr, is a “necessary step”.
“Understandably, this step is sensitive and politically difficult for Iraq, ” he explained. “However, this must be done by 31 March”.
Iraqi Ambassador Hamid Al-Bayati expressed “hope” that the work will be done by that date.
“The joint technical team is working on the border pillars maintenance project, hoping that they could finish by the end of this month and close one of the most important issues between the two countries,” Al-Bayati told the Council.
“This would pave the way,” he argued, “to bilateral relations based on mutual respect and common interest and paving the way for the exit of Iraq from chapter seven”.
Kobler also urged Baghdad to accept the Kuwaiti funds set aside with the UN to compensate Iraqi farmer pursuant to Council resolution 899.
He expressed hope that this progress will lead to consensus on further “outstanding issues, including the file of missing Kuwaiti national and property”.
He said he sensed during his visit to Kuwait earlier this month “a spirit of optimism with the Kuwaiti leadership”.
“Therefore, it is with much anticipation that I welcome the upcoming visit of the Prime Minister, Sheikh Jaber Al-Sabah, to Baghdad in the near future,” Kobler said.
Al-Bayati said his government is “steadfast continuing the development of its relations with all countries of the region especially with the State of Kuwait”.
He urged the Council to assist Iraq in order to exit chapter seven that was imposed due to the “crime of Kuwait invasion by Saddam Hussein which made Iraq a threat to international peace and security”.
“Iraq today is not the Iraq before 2003… Iraq must regain the status it enjoyed before 1990,” the year Iraq invaded and annexed Kuwait, he said.
He complained, however, that Iraq is witnessing a political stalemate and an exchange of accusations among some of the political blocs, and that protests are continuing in a number of cities that are calling for a number of demands.
He indicated that the preliminary objectives of the demonstrations “deviated from the path of popular demands and they were infiltrated by terrorist groups aiming at stirring sectarian tensions and civil war”.
“The foreign and regional players that kidnapped the legitimate demands of citizens were exposed when the flags of the Free Syrian Army and portraits of foreign leaders were displayed during the demonstrations,” Al-Bayati said.
He noted that although Iraqi Security Forces are combating “terrorist activities, many of the rebel groups, including AI Qaeda are still active in parts of Iraq”.
He indicated that foreign companies have invested more than 55 Billion in investment projects and service contracts and other activities in all of Iraq, and that direct foreign investment reached about 2 Billion after being almost zero from a decade ago, pointing out that these amounts don’t include tens of Billions of Dollars of investments in the energy sector.
Nonetheless, he added, Iraq is working to attract investments to the country in order to contribute in reconstruction after years of suffering from neglect due to years of wars and sanctions.
Kobler also painted a bleak picture of the political situation in Iraq, warning that the political conditions are “weakening. In essence, the political fabric is fraying.” “The deep-seated lack of trust threatens the political fabric and the social bonds that should bring Iraqis together in one united, federal country on the basis of the constitution,” he said.
He agreed with Al-Bayati that “terrorists seek to ignite sectarian conflict and turn the clock back on Iraq’s nascent stability,” indicating that between November 2012 to February 2013, 1,300 innocent Iraqis were killed and 3,090 injured.
Kobler urged the parliament and the political blocs in Iraq to reach consensus on the oil-sharing revenue.
“The sharing of immense natural resources of Iraq in a fair and equitable way is a must and a prerequisite to rebuilding the trust. We will continue to build trust no matter how difficult it is,” he vowed. (end) sj.gb KUNA 212113 Mar 13NNNN
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“The exclusion process after the elections of 2010 led to dividing Iraq and forming sectarian blocs,” he mentioned.
He expressed his readiness to meet Maliki, calling him to respect the agreements concluded among Maliki, Allawi, and Barzani.
Over the partnership, he assured “The IS ministers do not have authorities,” confirming “All the authorities are granted to Maliki and his advisors.”
“We are not partners in the Government but we are participants as we participate to achieve political partnership in the country,” he remarked.
The Iraqi dinar is currently one of the most sought after currencies in the world. Investors are buying in the hope that its value will rocket over the coming years, while others are purchasing the beautiful currency in order to expand on their collection.
If you’re interested in buying dinar, you need to know how to keep your notes safe and preserved.
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The dinars you buy, like any other currency, will be fairly fragile. If you want them to remain in top condition, handling the notes as little as possible is a good starting point.
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