By Salam Zidane for Al Monitor. Any views expressed here are those of the author, and do not necessarily reflect the views of Iraq Business News

 Iran pushes Iraq to maintain trade without US dollar

Iran is exerting considerable pressure on the Iraqi government to compel it not to abide by the US sanctions that have been imposed on Tehran in order for it to change its policies in the Middle East and abandon its nuclear program.

These pressures include using the Iraqi dinar and Iranian rial in the trade exchange between the two countries.

Click here to read the full story.

GardaWorld, a global leader in comprehensive security and risk management, has made its weekly security report available to Iraq Business News readers.

Prepared by GardaWorld’s Risk Analysis Team in Iraq, this essential report includes short- and medium-term outlooks on the security situation, reports and commentary on recent significant events, and a detailed overview of developments across the country.

Please click here to download the latest report free of charge.

For more information on how GardaWorld’s services can support your business in Iraq, please contact Daniel Matthews, Senior Director Iraq, at daniel.matthews@garda.com

GardaWorld, a global leader in comprehensive security and risk management, has made its weekly security report available to Iraq Business News readers.

Prepared by GardaWorld’s Risk Analysis Team in Iraq, this essential report includes short- and medium-term outlooks on the security situation, reports and commentary on recent significant events, and a detailed overview of developments across the country.

Please click here to download the latest report free of charge.

For more information on how GardaWorld’s services can support your business in Iraq, please contact Daniel Matthews, Senior Director Iraq, at daniel.matthews@garda.com

Advertising Feature

Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 3rd January 2019).

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

Note: ISX will be closed on Sunday (Jan. 6, 2019) due to the official holiday of Iraqi Army Day. The next trading session will be held on Monday (Jan. 7, 2019).

The RSISX index ended the week at IQD658 (-0.2%) / $709 (-0.2%) (weekly change) (-0.2% and -0.2% YTD change, respectively). The number of week traded shares was 1.4 bn and the weekly trading volume was IQD0.8 bn ($0.7 mn).

ISX Company Announcements

  • According to the ISX announcement, the opening price of the IQD5.0 mn class bonds (CB125) was IQD5,303,562 on Jan. 3, 2019. [Table: 2.3]
  • ISX will suspend trading of Bain Al-Nahrain Investment (VMES) starting Jan. 13, 2019 due to the AGM* that will be held on Jan. 16, 2019 to discuss and approve 2017 annual financial results.
  • Al -Hilal Industries (IHLI) will hold a GA on Jan. 9, 2019 to elect 5 board members and other 5 alternative members. The company has been suspended since Jul. 4, 2018 by an ISC decision for not disclosing 2017 annual financial results and 3M18 and 6M18 financial results.
  • Iraqi Agricultural Products and Marketing Meat (AIPM) will resume trading on Jan. 7, 2019 after discussing and approving 2017 annual financial results.
  • ISX will suspend trading of Ready-Made Clothes (IRMC) on Jan. 7, 2019 if the company fails to explain why the prices touched the lower limits on Jan. 2, 2019 and Jan. 3, 2019.
  • Iraqi Agricultural Products (AIRP) resumed trading on Jan. 3, 2019 after discussing and approving 2017 annual financial results and deciding to distribute 40% cash dividend (IQD0.40 dividend per share, 4.5% dividend yield).
  • National Chemical & Plastic Industries (INCP) resumed trading on Jan. 2, 2019 after discussing and approving 2017 annual financial results.
  • Al-Hamraa for Insurance (NHAM) completed its capital increase procedures from IQD5.0 bn to IQD7.0 bn through 40% bonus issue.

The past year has seen many developments in Iraq, including the successful completion of parliamentary elections (admittedly with a low participation of voters), the installation of a new cabinet (with a few posts still to be filled), and a considerably higher oil price than in the previous year (although that has fallen back considerably towards the end of the year).

Protests over the summer have highlighted unemployment, corruption, shortages of electricity, and problems in the delivery of basic services.

In the year to come, the new government of Prime Minister Abdul-Mahdi must focus on tackling these problems as a matter of urgency, while at the same time redoubling its efforts to rebuild the areas previously devastated by the Islamic State group.

There’s a lot of work to be done, but there are several factors at the moment pushing Iraq towards a favourable outcome: Despite the current low oil prices, Iraq’s oil production is at record highs; the new government appears highly motivated and seems to know it has a limited time to effect change; and international companies and institutions are keen to get involved.

If managed properly, this year could be the start of a real boom period for Iraq. The nearly ten-percent increase in the readership of Iraq Business News over the past year is just one indicator that more people are taking an interest in Iraq and the opportunities to be found there.

As we publish our first newsletter of the new year, we’d like to say a special word of thanks to all of our contributors, including our panel of Expert Bloggers, who have given us the benefit of their wisdom and observations over the past twelve months:

We look forward to reading more from them in the coming year.

We’d also like to thank all our readers and well-wishers for making Iraq Business News the must-read publication for everyone with an interest in Iraq, and we ask you to please support our valued advertisers, who make all of this possible.

It is also important to remember two Iraq-focussed charities that are doing amazing and much-needed work in the country:

Any donations made to them will make a big difference to the lives of so many vulnerable people in Iraq.

With another challenging but potentially rewarding year to come, Iraq Business News will be with you every step of the way, wishing all of you a happy, peaceful and prosperous 2019.

By John Lee.

Iraqi Kurdistan poultry industry is reported to have dramatically increased over the last five years.

Haider Farhan, head of Kurdistan Region’s poultry industry high council, told Rudaw that there are now 2,000 chicken farms in the Kurdistan Region, producing nearly 190 tons of meat annually.

More here.

(Source: Rudaw)

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

By Mustafa Habib.

Drama On Iraq’s Councils After Provincial Elections Are Cancelled Again

Conflict at federal level is complicating local politics too. Provincial elections have not been held for five years and council leadership no longer reflects the country’s new political reality.

In the weeks before the end of the year, Iraq’s provincial councillors saw plenty of drama. There were attempted dismissals of various governors, actual dismissals and political coups and in-fighting among state-level politicians.

In mid-December, a new governor was chosen for Baghdad by councillors representing parties at federal level. But then other councillors, representing opposition parties at federal level, chose a completely different new governor.

Members of two groups – the Sairoun alliance led by cleric Muqtada al-Sadr and the National Wisdom party, led by another cleric, Ammar al-Hakim – chose the first new governor. Then, provincial councillors from the parties that oppose those two groups stepped in and selected another candidate from their own ranks instead.

At this stage, the Iraqi president, Barham Saleh, intervened, refusing to ratify either candidate and referring the matter to the courts.

A similar situation arose in Basra where provincial council members who tried to elect a new governor were prevented from doing so by protestors outside the council buildings, who supported the sitting governor. The involvement of security staff meant that a vote could not be held. And in Najaf, the sitting governor there was also dismissed. More firings are expected in other Iraqi provinces too.

Why the drama? Because the country has not held provincial elections since 2013 and in many areas, the current provincial council does not reflect the contemporary political realities brought about by federal elections last year.

By rights, provincial elections to select local councillors should have been held in 2017. However the ongoing security crisis and the fight against the extremist group known as the Islamic State meant this was impossible. The federal government then decided to combine provincial elections with federal ones, to be held in May 2018, but again failed to do this.

The next date for the provincial elections was supposed to be December 22, 2018, but yet again the federal government – this time the new one headed by Prime Minister Adel Abdul Mahdi – decided not to hold them. A new date was not set and election authorities say it will be too difficult to hold provincial elections in 2019.

The Independent High Electoral Commission, or IHEC, has not been working properly for the past few months because, ever since the May 2018 federal elections, there have been all sorts of other concerns, explains Hazem al-Rudaini, a member of IHEC.

“The debate about the integrity of the federal elections, the various appeals and the recounts overseen by a judicial authority,” al-Rudaini listed the reasons. “All of this has impacted on the Commission’s work and makes it impossible to hold the provincial elections anytime in the coming six months at least.”

Amendments to the laws and rules around provincial elections are being discussed by IHEC and relevant federal authorities and politicians, al-Rudaini said, but “all that will take time”.

In fact, senior members of IHEC have been summoned to parliament to discuss this issue because some of the provincial appointments are now unconstitutional – for example, a governor cannot be a sitting MP at the same time yet some are. Additionally, the provincial councils hardly reflect the outcome of the federal elections, which saw the al-Sadr-backed Sairoun alliance win the most votes. In fact, that is part of what has caused the recent problems: The winning political parties are forcing through new alliances at provincial level, that allow them to remove the sitting governors who belong to other now-less-popular parties.

“We refuse to allow the current provincial councils to carry on working,” Rami al-Sukaini, an MP for the Sairoun alliance, told NIQASH. “There are proposals now that allow them to keep working for the next six months, and others to remove them and give parliament the power of supervise provincial councils, until provincial elections can be held.”

By John Lee.

Iraq’s Ministry of Oil has announced interim oil exports for December of 115,517,974 barrels, giving an average for the month of 3.726 million barrels per day (bpd), a increase from the 3.377 bpd exported in November.

These exports from the oilfields in central and southern Iraq amounted to 112,450,367 barrels, while exports by the North Oil Company amounted to 3,067,607 barrels.

Revenues for the month were $6.100 billion at an average price of $52.803 per barrel.

November export figures can be found here.

(Source: Ministry of Oil)

By John Lee.

The United Nations has advertised new positions in Iraqi Kurdistan:

(Source: UN)

(Picture: Success, growth, career, development signpost from 3D_Creation/Shutterstock)

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

By Ibrahim Saleh.

How To Get A Loan In Baghdad – At 30% Interest, Repaid In 3 Months

It’s tough to get a loan from Iraq’s undeveloped banking sector unless you fulfil certain, very specific criteria. But growing consumer desire and outrageous interest rates are forcing a change.

To get a loan from a bank in Iraq is difficult for many, not least because in order to be approved for one, often the borrower must bring along somebody who is employed by the government to guarantee them. In Iraq, a government-paid position is seen as the most stable kind of job you can get. It means you will get paid regularly and that eventually you’re in line for a pension.

The guarantee given by a state employee is needed for a personal loan, no matter how big the sum. And most banks want the state employee’s salary to be twice the monthly repayments for the loan. Additionally a state employee can only guarantee one bank loan at a time.

All of this makes getting a loan from a local bank difficult for anyone who is not a state employee, particularly for low-income Iraqi families. This is why they will often turn to money lenders who work unofficially.

One of these kinds of lending offices advertises on the wall of a kindergarten in the Al Dawoodi neighbourhood in the Mansour area, in Baghdad. The advertising targets shop owners and says the office can provide loans of US$1,000 to US$5,000.

The terms are strict: The loans need to be paid back within around three and a half months, the borrower needs to make daily repayments and the arrangement would end with the lender getting a 33 percent return on the initial sum.

That is a high return for a relatively modest sum, like US$1,000, under especially tough conditions. Although the interest rates are high and conditions tough, many low-income Iraqis don’t have any other option.

“It’s an important service because then you can get a loan without having to bring a government employee to a bank,” says Ali al-Rubaie, a Baghdad local who has loaned money before in this manner. “If I had a guarantor, I would have borrowed far more money though – to buy a car or an apartment,” he adds.

Upon calling the lending office to enquire as to how their procedures were managed, the staff refused to give NIQASH any further information, or deny or confirm if the office was licensed in any way.

However a former borrower divulged conditions they had been able to get a loan under. The applicant must submit a letter asking for a loan and the office then tries to ascertain whether the applicant would be capable of repaying the cash, including looking into guarantors or assessing any property they owned and their business.

In the case of the store owners this lender targets, the office looked at the business which, one imagines, gives them some sort of guarantee to begin with. If the application for a loan was accepted, the borrower had to sign a promissory note to receive the funds.

In another nearby neighbourhood, locals talk about a resident called Haji, who lends money on similar terms. They say Haji has been known to loan as much as US$20,000. And Haji – nobody we spoke with knew his full name – apparently decides whether a loan can be guaranteed by making enquiries with the community leaders, or tribal elders, in the applicant’s neighbourhood. He also requires that those senior community members agree to repay him if the borrower defaults on the loan.

From a legal point of view, there is nothing stopping anybody loaning money to any other Iraqi, says legal expert, Ali al-Tamimi. There are no legal restrictions on individual lenders, as opposed to institutions, unless there is fraud committed or contractual violations. Only at this point, would the courts get involved, al-Tamimi explains. So it’s all perfectly legal, despite the injustice of the high interest and short repayment times.

Iraqi banks know that it is hard for Iraqis to borrow money. In fact a lot of Iraqis still don’t have bank accounts and in general, the banking sector remains undeveloped. This is starting to change though, as local banks begin giving personal loans rather than just working on trade deals and with larger institutions and the government.

Banks are beginning to think about how they could extend credit more easily to ordinary citizens, agrees Faisal al-Haimus, the chairman of the Trade Bank of Iraq, first set up by the US authorities after 2003 to facilitate trade. “The bank is currently considering extending loans to people other than government employees,” he told NIQASH.

Lack of credit makes it difficult to bankroll property development and vehicle sales and also deprives banks of potential interest earned.

“Our company has proposed to the Iraqi central bank and other Iraqi banks that they cancel this condition – where the borrower has to bring a state employee – because it is impacting negatively on Iraqis’ ability to buy our cars,” says  Sabah al-Janabi, the public relations manager for Land Rover and Jaguar cars in Iraq. “They were actually quite open to our suggestions and we expect things to change in the future.”