By Al-Monitor staff. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraq’s coronavirus cases top 100,000 as Baghdad airport reopens

Iraq is instituting a “total curfew” for the upcoming Eid al-Adha holiday.

The curfew will be in place from July 30 until Aug. 9, according to a statement today from the Iraqi government.

Past total curfew orders in Iraq have mandated a ban on non-essential movement and business, meaning people could only go to local supermarkets and pharmacies.

Click here to read the full story.

Prime Minister Mustafa Al-Kadhimi chaired a meeting of the Higher Committee for Health and National Safety on Saturday.

At the start of the meeting, the Prime Minister paid tribute to Iraq’s health teams and security forces and thanked them for their hard work during the Covid-19 health emergency.

The Prime Minister called on all Iraqis to remain vigilant, abide by the curfew, follow official health advice and physical distancing rules, and avoid gatherings.

Following discussions, the Higher Committee for Health and National Safety decided to:

Extend the nationwide curfew until Saturday 13/06/2020

Impose a partial curfew between 6 PM and 5 AM from Sunday 14/06/2020

Impose a curfew for 24 hours a day every Thursday, Friday and Saturday

Maintain the ban on all gatherings in all their forms

Maintain the ban on travel within provinces

The Committee also decided that:

Parks, cafes, cinemas, malls, sport centres, private teaching institutes, swimming pools and shops to remain closed, except for food stores, bakeries and pharmacies which remain exempt. Restaurants will also stay closed, except for home delivery services.

(Source: Govt of Iraq)

The World Health Organization (WHO) in Iraq is urging Iraqis to follow the instructions of the health authorities to contain the spread of COVID-19 after a rise in infections, stressing that the re-introduction of a complete lockdown in Iraq was a necessary measure in the fight against the virus.

WHO Representative in Iraq, Dr. Adham R. Ismail, reaffirms WHO’s continued support for and cooperation with the health authorities in Baghdad and in the Kurdistan Region to ensure the success of the measures to combat COVID-19.

Dr. Ismail calls upon Iraqis across the country to commit to the highest levels of preventive measures and adhere to the lockdown to help the health authorities contain the spread of the virus. He also calls upon the authorities to strictly apply the lockdown measures coupled with intense testing of suspected cases through contact tracing and active surveillance. “These measures can only achieve the desired results with the collaboration of all.”

As of 31 May 2020, Iraq reported 6,439 cases, reflecting an increase in the average daily reports which is due to intensive active surveillance activities conducted by the health authorities to detect COVID-19 cases and ensure the citizens are following the necessary preventive measures and social distancing.

(Source: UN)

By Al-Monitor staff. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Iraq returns to lockdown after surge in coronavirus cases

Iraq reimposed total lockdowns over the weekend following a surge in COVID-19 cases.

After meeting with his COVID-19 task force on Saturday, Iraqi Prime Minister Mustafa al-Kadhimi’s government decided to institute a nationwide curfew until June 6, 2020.

Click here to read the full story.

Prime Minister Mustafa Al-Kadhimi chaired on Saturday a joint meeting of  the Higher Committee for Health and National Safety and the parliamentary Covid-19 crisis cell.

At the start of the meeting, the Prime Minister paid tribute to Iraq‘s health teams for being on the frontline during the current health emergency, and to Iraqi security forces for supporting Iraq‘s national effort to combat Covid-19.

The Prime Minister thanked Iraqi families for observing the curfew and complying with other restrictions during this very challenging period.

Following discussions, the joint meeting agreed a number of measures, including:

  • Extending the nationwide curfew in Iraq until 06/06/2020. Grocery stores, bakeries and pharmacies are exempt, provided that no more than five customers are allowed into such premises at any one time, and that both staff and customers wear face masks
  • Restaurants to remain closed, but are allowed to offer home delivery service
  • All ministries will remain closed during this period, except for the ministries of Health, Electricity, Agriculture and Water Resources, as well security ministries and municipality services
  • The wearing of face masks in public remains compulsory, with fines for those who fail to comply
  • Domestic flights remain suspended, as are flights to and from Iraq
  • The security forces are directed to strictly enforce these measures in cities and towns, and within neighbourhoods

The joint meeting underscored the importance of all citizens continuing to follow official health advice and physical distancing guidelines, and to comply with the curfew to keep themselves, their families and communities safe.

(Source: Govt of Iraq)

By Ahmed Tabaqchali, CIO of Asia Frontier Capital (AFC) Iraq Fund.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Market Review: “Lockdown Iraq & the month of Sundays”

Iraq, like other countries, went into full lockdown on March 16th that was only partially lifted just before the fasting month of Ramadan – in which activity is normally subdued. Unlike many countries, Iraq went a step further in that its lockdown included its whole financial sector.

In particular, the Central Bank of Iraq (CBI) and the banks that it regulates suspended most activities during the lockdown. In turn, this negatively affected the availability and circulation of the USD in the country’s cash dominated economy – where about 85% of the currency in circulation is outside the banking system.

The CBI conducts five daily USD auctions every week to facilitate foreign trade transactions (transfers or green bars in the chart below) and to satisfy the need for physical USD for Iraqis travelling abroad (cash or red bars in the chart below). The closure of this facility over the lockdown period, and its much-reduced frequency following that, have naturally resulted in an unmet need for USD and hence a rise in its price in the market versus its official price.

Typically, the market price of the USD is at a premium to official prices, but spikes higher during periods of uncertainty or crises – the last of which were the momentous events at the start of the year that raised the feared spectre of a US-Iran proxy war fought in the country. This premium began to spike, and stayed at elevated levels, as the lockdown came into full effect as can be seen from the chart below.

(Source: Central Bank of Iraq (CBI), Asia Frontier Capital. The CBI did not provide market prices on March 16th-April 21st, so the chart assumes gradual increases in prices in this period)

Consequently, this affected the market price of the physical USD which normally trades at a further premium of 2-4% over the premium discussed above (i.e. the gold/brown line in the above chart). This extra premium widened, as it does during spikes, and is now about 8-10% and remained at these elevated levels by the CBI’s ceasing of its offering of physical USD in its currency auctions from mid-March (above chart). In a country in which the dissemination of economic updates is poor and trust in the government is very low, rumours come to the fore and drive perceptions and subsequently fears.

One such rumour that dominated perceptions was that sharply falling oil prices were resulting in major USD shortages at the government level and it was thus conserving its reserves by stopping the flow of physical USD. This line of thinking has some merit as it takes its cue from a similar pattern during 2014-2017’s twin crises of the ISIS conflict and the collapse in oil prices. However, then the CBI restricted the supply of the USD during its auctions but didn’t stop either transfers or cash offerings. As it turned out, the physical USD offerings were halted as no foreign travel was taking place, given that they are meant to satisfy the needs of individuals’ foreign travels.

Rumours of a USD shortage aside, the weakening of demand in the economy is evident as seen from the smaller volumes of transfers in the currency auctions during late April, and from the “Community Mobility Reports” provided by Google. These are based on data from mobile phone users who have opted-in for “Location History” on their Google accounts. These users provide a reasonable population sample given the high levels of mobile penetration in Iraq (chart below) – more so given the high combined Samsung/Huawei market share, a proxy for Google’s Android system, which is about 75% in mobiles – and thus should provide a reasonable picture of economic activity during the lockdown.

(Source: Statista)

While every sector of the economy has felt the effects of the lockdown, the informal sector – dominated by retail trade, transport and hospitality, and which accounts for the bulk of private-sector economic activity in Iraq – has been particularly hard hit as can be seen from the chart below, which shows changes in activities compared to the baseline January 3rd-February 6th.

(Baseline is the median, for the corresponding day of the week, on January 3rd-February 6th,

Source: Google, data as of April 30th)

However, the decline in activities are likely to have been more precipitous than shown in the above chart as activities in the retail, transport and hospitality sectors were subdued during the baseline period given the chilling effects of the dramatic events at beginning of the year. More so, these events came on the back of a slowdown induced by the continued countrywide demonstrations from October 2019.

The Iraq Stock Exchange (ISX) resumed trading on April 26th, after closing on March 16th, and in-line with government guidance of reduced commercial activity, it reduced trading days to three days per week from five. However, the board of governors of the ISX, in a misguided attempt to calm market fears, lowered the daily stock price limit downs to 5% from 10%, but kept the upside limit at 10%. Inevitably it did the exact opposite of its intended purpose, as the same low trust in authorities fuelled rumours that the market authorities were hiding some major negative news. The new limit-down limits served as magnets for sellers during the remaining three trading days of the month with prices obligingly closing down 5% on each of these days. As often happens in frontier markets, buyers disappear for several days as sellers chase down small bids and drive prices to very attractive levels. While prices tend to recover as buyers return to pick up bargains, which seems to be taking place in early May.

For the three days that made the trading month of April, the Rabee Securities RSISX USD Index (RSISUSD) was down 12.7%. The argument made here last month that ” Iraq’s equity market was discounting neither an economic nor a corporate earnings recovery, it’s difficult to see why it should decline as other markets have elsewhere“, is stronger now, especially given that the market by end of April is now down 75% from the 2014 peak.

The closing argument of the Asia Frontier Capital team in the March newsletter, is an appropriate end here.

“The recent stock market correction, though painful, is now providing an excellent entry point to investors as valuations across our universe are at 10-year lows – stock picking has never been easier. Though we believe global markets could remain volatile in the near term as the number of infections rise and poor economic numbers come through, a sustained rally could be seen once there is an indication of infections peaking especially in Europe and the U.S.

“Asian frontier markets have bounced back very strongly after previous episodes of market dislocation such as in 2008-09 with markets like Pakistan and Vietnam generating much higher returns than major indices. Though it is very easy to get distracted with the negative consequences of the pandemic, Asian frontier markets are at present and will over the next few months provide an opportunity to invest in these markets last seen a decade ago.”

Please click here to download Ahmed Tabaqchali’s full report in pdf format.

Mr Tabaqchali (@AMTabaqchali) is the CIO of the AFC Iraq Fund, and is an experienced capital markets professional with over 25 years’ experience in US and MENA markets. He is a non-resident Fellow at the Institute of Regional and International Studies (IRIS) at the American University of Iraq-Sulaimani (AUIS), and an Adjunct Assistant Professor at AUIS. He is a board member of the Credit Bank of Iraq.

His comments, opinions and analyses are personal views and are intended to be for informational purposes and general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any fund or security or to adopt any investment strategy. It does not constitute legal or tax or investment advice. The information provided in this material is compiled from sources that are believed to be reliable, but no guarantee is made of its correctness, is rendered as at publication date and may change without notice and it is not intended as a complete analysis of every material fact regarding Iraq, the region, market or investment.

By Al Monitor staff. Any opinions expressed here are those of the author(s) and do not necessarily reflect the views of Iraq Business News.

Iraq relaxes coronavirus restrictions ahead of Ramadan

Iraq has scaled back some of its anti-coronavirus measures ahead of the fasting month of Ramadan, allowing certain businesses to reopen, the government said.

A statement announced shops and factories can resume work during non-curfew hours, and exemptions for certain businesses, including bakeries and pharmacies, will be maintained. Schools, malls, mosques and restaurants remain closed.

Government offices can resume work, but staffing cannot exceed 25% of the workforce, the statement said.

Click here to read the full article.

By John Lee.

Iraq’s Higher Committee for Health and National Safety held a meeting in Baghdad on Sunday via video conferencing under the chairmanship of Prime Minister Adil Abd Al-Mahdi.

The Committee decided the following:

  • From 21/04 until 22/05, the curfew hours will be between 7 PM and 6 AM Sunday-Thursday, and for 24 hours Friday- Saturday
  • Current exemptions for certain business categories including bakeries and pharmacies, and key workers such as health teams and security forces, will be maintained
  • Restrictions on public gatherings and social distancing rules remain in place
  • Schools, universities, educational institution, sport venues, malls, wedding halls, mosques and places of worship will remain closed
  • Restaurants and  cafes will remain closed, but will be permitted to provide delivery services
  • Shops and factories can resume work but only outside curfew hours
  • Government departments are permitted to resume working, but with minimum staffing which must not exceed 25% of the workforce
  • Taxis can operate, but large public transport vehicles are only permitted to carry four passengers at any one time
  • International travel in and out of Iraq remains suspended as is travel between Iraqi provinces
  • The wearing of face masks outside the home becomes compulsory, and those who do not comply with the rule will face legal action

Supporting Iraq’s health workers

The Committee discussed measures to support Iraqi frontline health workers and agreed to:

  • Make a monthly bonus payment to frontline health teams who are caring for Covid-19 patients
  • Allocate, free of charge, a plot of land to all health workers who are caring for Covid-19 patients
  • Request the General Secretariat of the Council of Ministers to prepare a draft law to double the period of service of frontline health staff during the current emergency for the purpose of calculating future pensions; the law will also seek to extend the retirement age for doctors

The Committee urged all Iraqis to continue to follow health instructions and guidelines, and to only leave home when it is absolutely necessary.

For the latest Covid-19 updates, please visit:   https://www.facebook.com/MOH.GOV.IQ/

(Source: Govt of Iraq)

By John Lee.

Iraq‘s Higher Committee for Health and National Safety met in Baghdad on Tuesday under the chairmanship of Prime Minister Adil Abd Al-Mahdi. The meeting was conducted via video conferencing.

The Committee discussed a number of policy options to support Iraqi nationals abroad who wish to return home, and how to address the logistical and health challenges involved.  It is expected that the Committee will make an announcement on this issue shortly.

Following discussions on COVID-19/coronavirus, the Committee decided to:

  • Extend the curfew throughout Iraq until Saturday 18/04/2020;
  • Allocate 600 billion dinars [$504 million] over the next two months to support nearly ten million citizens. Applying and accessing this support will be via a phone app. Further details will be announced later.

(Source: Govt of Iraq)