By Omar al-Jaffal for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

Iraq’s plans to cut salaries face strong backlash

The government of Iraqi Prime Minister Mustafa al-Kadhimi is seeking to reopen the “social justice” issue regarding state spending on salaries.

This means abolishing double salaries, reducing allocations to political prisoners and martyrs and compensation to those who fled to Rafha in Saudi Arabia during the 1991 Shiite uprising in southern Iraq.

Click here to read the full story.

By John Lee.

Iraq’s national lockdown in response to the coronavirus (COVID-19) pandemic has reportedly given a boost to local businesses.

According to a report from AFP, local businesses no longer have to compete with imports from countries such as Turkey, Iran, China, Saudi Arabia, Jordan and Kuwait.

It quotes the owner of an ice-cream factory in Basra as saying:

“The coronavirus crisis has allowed us to prove ourselves on the Iraqi market.”

More here.

(Source: AFP)

By John Lee.

Iraq’s Minister of Finance, Ali Allawi, on Saturday concluded a visit to Saudi Arabia, during which he delivered a message from Prime Minister, Mustafa Al-Kadhimi to King Salman bin Abdulaziz Al Saud.

During his visit, Mr. Allawi also held meetings with the Minister of Energy, Prince Abdulaziz bin Salman Al Saud, the Minister of Foreign Affairs, Prince Faisal bin Farhan Al-Saud, the Minister of Finance, Mohammed Al-Jadaan, the Minister of  Commerce and Investment, Majid Al Qasabi, and other senior Saudi officials.

In a television interview before leaving Baghdad, Mr. Allawi said that his discussions with Saudi officials will focus on encouraging Saudi companies and institutions, especially in the fields of energy and agriculture, to enter the Iraqi market, invest in Iraq and play a part in the reconstruction of the country.

He underscored that the new Iraqi government is pressing ahead with plans to balance Iraq’s economic relations with neighbouring countries, saying that the Iraqi market is open to all.

Iraq’s Finance Minister acknowledged during the interview that there were several factors that discourage investors from coming to Iraq, and highlighted the legal and administrative frameworks, the banking system and land acquisition rules as some of the key impediments that the new government is determined to address in order to create a welcoming, modern and efficient investment climate in Iraq.

Mr. Allawi’s visit to Saudi Arabia is the first in a series of planned official visits to countries in the region to strengthen economic cooperation and bolster trade.

(Source: Govt of Iraq)

By Ahmed Mousa Jiyad.

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

Oil Market Collapse, Damages the Iraqi Economy and Changes Oil Geopolitics

The collapse of the global oil market is undoubtedly unprecedented in its timing, magnitude, spread and devastating impacts across the globe. A strange and unpredicted association of a few, but major, factors had contributed to the current threat, causing much uncertainty and vulnerability on national and global levels.

The revised “OPEC+” production cut agreed on 12 April prompted initial minor improvement in oil price, but there remains very many serious concerns that such reduction is much below what is needed to bring stability to and balances a saturated global oil market.

This article aims at estimating the collapse in oil market on Iraq first then on both Russia and Saudi Arabia, as they are accused for “OPEC+” failure early last March that ignited the oil price war, and assesses the geopolitical and political economy consideration that contributed to and further complicate the impasse.  The article provides a summary of two articles written and published in Arabic recently and an update on recent deliberation by “OPEC+” and G20 Energy Ministers to rescue the situation and bring some stability to global oil market under  existing threat of Coronavirus to the world biosecurity.

My two articles attempt to provide comparative assessment of the impact of the collapse with particular focus on short-term horizon, i.e., the remaining nine months of this year under different Brent oil price scenarios on Iraq, first article , while the second focuses on Russia and Saudi Arabia.

Click here to download the full report in pdf format.

Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad’s biography here.

ACWA Power, a Saudi-based developer, owner, and operator of power generation and water desalination plants, has signed a Memorandum of Understanding (MoU) with Iraq Energy Institute (IEI), an independent non-profit policy institute, to collaborate on research development projects and enhance capacity building programs that will contribute to the optimum development of Iraq’s energy sector.

The MoU communicates the commitment of ACWA Power and IEI to partake in both parties’ events, workshops and activities and exchange expertise from consultants and senior management at organised events and forums.

The partnership will initiate professional dialogues and knowledge sharing that will bring about solutions which target challenges facing the region and elevate the private-public investor community in Iraq.

Demonstrating its role in nurturing young talent, ACWA Power will also take a leading role in IEI’s future scholarship programmes that will grant Iraqi students the chance to progress and excel in the energy and water fields in cooperation with other governmental and non-governmental partners.

The MoU was signed by Mr. Yesar al-Maleki, Managing Director of IEI, and Mohamed Fata Nahhas Business Development Manager at ACWA Power in the presence of Mohammad Abunayyan, Chairman of ACWA Power and Mr. Adnan Al Janabi, Vice Chairman of IEI.

ACWA Power Chairman, Mohammad Abunayyan said:

We are pleased to commence collaboration with Iraq Energy Institute and bring our expertise to the Iraqi market.

“The signing of the MoU will certainly bridge to further alliances between ACWA Power and Iraqi energy players and is a robust start of a mutually beneficial relationship built on knowledge and exchange of energy proficiency between the Kingdom of Saudi Arabia and Iraq – which we are proud to lead and are keen to further progress.

(Source: ACWA Power)

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

Iraq works to distance itself from US-Iran tension after Saudi Aramco attack

Attacks that occurred Sept. 14 against Aramco oil processing facilities in Saudi Arabia, resulting in huge fires and halting near half of the supply from the largest oil exporter in the world, could have a major effect on Iraq.

Soon after the attacks, Yemen’s Houthi rebels took responsibility, saying they used 10 drones in the strikes.

However, Middle East Eye quoted an unnamed Iraqi intelligence official as saying the strikes were launched by Iranian drones using Iraqi territory.

Middle East Eye added that the attack was in revenge, occurring out of the belief that Riyadh funded Israeli drone attacks that have taken place in recent months on Iraqi Popular Mobilization Units.

Click here to read the full story.

(Picture credit: Tasnim, under Creative Commons licence)

Iraq has signed a landmark deal with the Gulf Cooperation Council (GCC) for a power line to import 500 megawatts of electricity by 2020, local reports said on Sunday.

According to the Iraqi Electricity Ministry, the 300-kilometre line will run from Kuwait to Iraq’s southern port of Faw and be financed by the GCC.

Electricity Minister Lo’ai [Luay] Al-Khatteeb (pictured) signed the agreement with the head of the GCC Interconnection Authority, Ahmad Ibrahim, on the sidelines of an energy conference held in Baghdad.

This is the first deal of its kind with the GCC,” explained Al-Khatteeb. Iraq is also in separate talks with neighbours Saudi Arabia, Jordan and Turkey to import electricity.

This first step will pave the way to discuss further and higher capacity projects,” the minister added, “not only to supply Baghdad and northern Iraq but also as a pathway to other countries.

(Source: Middle East Monitor)

Iraq has signed a landmark deal with the Gulf Cooperation Council (GCC) for a power line to import 500 megawatts of electricity by 2020, local reports said on Sunday.

According to the Iraqi Electricity Ministry, the 300-kilometre line will run from Kuwait to Iraq’s southern port of Faw and be financed by the GCC.

Electricity Minister Lo’ai [Luay] Al-Khatteeb (pictured) signed the agreement with the head of the GCC Interconnection Authority, Ahmad Ibrahim, on the sidelines of an energy conference held in Baghdad.

This is the first deal of its kind with the GCC,” explained Al-Khatteeb. Iraq is also in separate talks with neighbours Saudi Arabia, Jordan and Turkey to import electricity.

This first step will pave the way to discuss further and higher capacity projects,” the minister added, “not only to supply Baghdad and northern Iraq but also as a pathway to other countries.

(Source: Middle East Monitor)

By John Lee.

Commercial operations at the new Saudi-Iraq Arar Crossing will begin on a trial basis on 15th October.

Saudi Arabia’s Ambassador to Iraq, Abdul Aziz Al-Shammari, and Iraqi Ambassador to Riyadh, Qahtan Al-Janabi, made the announcement during a visit to the crossing point.

The Saudi town of Arar is 70 kilometers from the Iraqi border.

(Sources: Xinhua, Arab News)

The Cabinet held its regular weekly meeting in Baghdad on Tuesday under the chairmanship of Prime Minister Mr. Adil Abd Al-Mahdi. It approved:

  • the recommendation of the Ministerial Energy Council on the service contract for Al-Mansuriyah oil field in Diyala province;
  • a draft law on public-private partnership to strengthen cooperation between government agencies and the private sector;
  • the draft agreement between the Republic of Iraq and the Kingdom of Saudi Arabia on the avoidance of double taxation and the prevention of tax evasion’
  • measures to meet the requirements of elections to provincial councils outside the Kurdistan Region of Iraq;
  • recommendations for development of the Safwan border crossing between Iraq and Kuwait in Basra province.

(Source: Govt of Iraq)