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Baghdad needs $1 trillion for reconstruction

11 Nov 2012
Sinan al-Shabibi,the ex-chief of Iraq’s central bank has dismissed charges against him as baseless in an interview and said authorities had compromised the bank’s independence to access its reserves. Sinanal-Shabibi also blamed that the government had been “spoiled” by a stable exchange rate for several years, and a warrant for his arrest for suspected mismanagement of the Central Bank of Iraq and currency manipulation had blown relatively minor foreign exchange fluctuations out of proportion. He was fired and replaced as governor while overseas. The warrants had been issued for him and other bank officials. The diplomats and analysts criticise as a power grab by Prime Minister Nuri al-maliki. The premier’s office has insisted it was not behind the moves. “Since 2009, they wanted to fire me, and they wanted money from the reserves,” Shabibi said in a telephone interview from Geneva. “I think the main problem... is basically the reserves, because they thought we have a lot of reserves, and they want to use it for financing.” He added: “The government wanted some money from the central bank... Of course, the law does not allow that, the central bank law. “And of course, they say that there are differences in exchange rate policy. I don’t think these differences require firing the central bank governor.” Asked if the warrants for him and other officials affected the bank’s independence, Shabibi replied: “I’m sure, yes.” Though he did not mention any government official name directly but he said “They always have been talking about the fact that they should supervise the monetary policy, they should actually decide on many, many, many components of that policy, all these things.” With an experience of twenty years in many reputed positions of UN trade and UNCTAD, he held the position of central bank governor in 2003 and he has been a capable technocrat from then and has fought very for maintaining independence of the bank. He has been critically acclaimed by many analysts for his work. But he was replaced by AbdelbassitTurki, the head of Supreme Audit board, when he was parliamentary inquiry board for currency mismanagement. For fighting against the charges, Shabibi always wanted to return in Iraq but he could not able to do so as there was already arrest warrant published against him. He denied all the charges that was raised against him and said, “I told them (the government) the central bank was not the reason for this fluctuation, that it is part of the range Eventually we succeeded in stabilising the exchange rate, only two or three percent difference”. Also: As per the investment chief minister, Iraq is in hunt of one trillion dollar for meeting all its needs in the next ten years. According to Sami al-Araji, Iraq is looking for foreign investment and that is why Government has made the biggest Baghdad International Fair in this year. .“We are talking about the reconstruction of Iraq, a minimum requirement of money ... is about $600-700 billion dollars, and could go all the way to $1 trillion” Araji said in the years to 2022, director of the National Investment Commission. Araji recommended to increase the amount oil export as this is the main source of revenue generation of the Iraq Government but also said, “Some will have to come from foreign and domestic direct investment.” From 2010-2014 Iraq Government has targeted $168 billion foreign investment and out of which $100 billion will come from oil sales and rest will come from direct foreign private investment. Araji mentioned that government officials were also looking to increase investment target in between 2013-2017 periods. At the present scenario it is much less than what was expected by the chief predicts of investment commission. Over the last three years, Government has licensed over 432 billion foreign investors and among them many were from local sources. “That’s what we’re banking on — both oil sales will go up, and hopefully the investment climate will improve a great deal (so) that it (investment) will be more,” he said. Source: [Arab Times]
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