MIDDLE EAST

How oil-rich Iraq ran out of dollars?

Published

29.01.2023 17:48

Three years ago, Iraq was on the brink of expelling US troops, but now, Prime Minister al-Sudani asserts that his nation needs US and NATO forces. Although he gives ISIS as the reason, the dollar crisis in the country seems to be a more plausible explanation. The political actors backing al-Sudani blame the United States for the crisis but having to handle this crisis shortly, al-Sudani sees the exit in reconciliation with Washington.

The political turmoil in Iraq after the elections in October 2021 resulted in al-Sudani taking the seat of Prime Minister as a candidate of the so-called Iran-backed Shiite alliance in October 2022. in his first US interview since taking office, al-Sudani said, “we need the foreign forces to eliminate ISIS.” “Iraq would like similar relations with Washington to what Saudi Arabia and other Persian Gulf oil-and-gas producers enjoy,” al-Sudani told WSJ, “we strive to “see Iraq have a good relationship with Iran and the US.” Stating, “President Biden is different from other presidents in that he knows the situation in Iraq completely,” al-Sudani thinks it might be the foundation to build an excellent relationship between Baghdad and Washington. al-Sudani’s views regarding keeping the US and NATO forces in Iraq are deemed significant since he has been publicly silent about this issue until now. After the killing of Iranian commander Qassem Soleimani in a US drone strike on Baghdad, the Iraqi parliament voted a resolution to withdraw American troops from the country. Currently, 2,000 American troops in Iraq under the umbrella of NATO are training the Iraqi armed forces.

According to Foreign Policy, al-Sudani’s public support for the presence of US troops originates from the threat of ISIS. al-Sudani’s words, however, are not an unexpected turn; instead, they reflect a steady movement toward the United States in recent years. The article’s title is also noteworthy: “The New Iraqi Leader tilts the scales toward the USA.” Former US officials told Foreign Policy that even amid the tension escalating after the assassination of Soleimani, Iraqi officials had expressed support for the US military mission behind closed doors to ensure to defeat of ISIS and counter Iranian influence. “US presence that was hanging by a thread in pre-pandemic Iraq, at the tenuous invite of the Baghdad government, now appears to be there to stay—indefinitely,” interprets the journal the situation that became concrete upon al-Sudani’s statement. Although al-Sudani created uproar in Iraq, the more significant problem is that Centcom has no planning or vision about the future of the US-Iraq relationship.

“The presence of foreign military forces in this country is a very dangerous issue,” remarked Nouri al-Maliki, the leader of the Shiite alliance that brought al-Sudani to the office and kept him in power. It is remarkable that Maliki’s statement followed al-Sudani’s controversial comment.

Then, why did al-Sudani express his public support for the presence of the US troops in the country “independently” of the coalition behind his power and despite growing anti-American sentiments in Iraqi society over the last several years?

The reason for the crisis: US sanctions

Sudani employs the existence of ISIS to justify his statement, but it seems that the underlying issue is the currency crisis that shook the Iraqi markets. Unlike other oil-rich countries, the second largest oil producer of OPEC after Saudi Arabia, Iraq stands out for its economic problems and the massive social protests these sparked. The current crisis, however, is not the same as the usual mechanism of bribery and corruption that plagues Iraq. It has everything to do with US sanctions. The restrictions put into practice by the US to prevent the illegal allocation of dollars for the interests of other US-sanctioned countries, especially Iran, have triggered a severe dollar crisis in the country.

The USA has implemented a “regulation” to the system that allows the daily foreign exchange auctions of the Iraqi Central Bank, which has been in effect for 20 years since the invasion and permitted banks to sell dollars without any restrictions. In November 2022, the US Federal Reserve (FED) started enforcing strict screening on the operations of Iraqi commercial banks, such as requiring all clients to disclose their identities before a transfer of funds could be made. In fact, these measures were implemented after almost two-year planning by the Central Bank of Iraq, the US Department of the Treasury, and the FED. However, in spite of all the planning, since the strict regulations have been in effect, more than 80% of daily dollar transactions have been blocked. As a result of the slowdown in dollar transactions, the markets have rushed into the dinar, ultimately creating a double-sided “currency crisis.”

Protests in rise

Due to the crisis, the value of the Iraqi dinar has weakened vis-à-vis the dollar, leading to a sharp rise in food prices. Over the currency drop, on January 23, al-Sudani dismissed Central Bank Governor Mustafa Ghaleb Mukheef on his request, and Muhsen al-Allaq replaced him. After a slight decrease in the exchange rate following the replacement of the office at the Central Bank, it has begun to increase again quickly. The official rate for Iraqi citizens set by the Central Bank stands at 1,470 dinars to the dollar. Established by the Central Bank of Iraq is 1470 Iraqi dinars per dollar, while on the black market and free market, it ranges from 1590 to 1620 dinars.

Iraqis slowly started to protest against the devaluation of the dinar. The protesters gathering outside the Central Bank called on the government to halt the depreciation of the dinar. Those demonstrating in Iraq called on al-Sudani’s government to do everything they could to bring down inflation. Mainly, they demanded that staples like eggs be made more affordable. Protesters from south Iraq also participated in the demonstration in Baghdad.

The ruling coalition blames the US

Hadi al-Amiri, the leader of the Fatah Coalition and a partner of the Iraqi government, accused the US of using the dollar as a weapon to starve the people in Iraq. “Since the reserves of this country’s central bank are at the Federal Reserve’s disposal, Iraq lacks economic independence. Everyone now knows how the Americans use the dollar as a weapon to starve people. The Americans are currently putting the most pressure on Iraq to prevent its relations with Europe and other countries of the world,” said al-Amiri.

Maliki, the head of the same coalition, claims that the United States uses the dollar as a global weapon: “They try to destabilize it by using dollar paper.” Maliki, however, sees the United States as the key to solving the issue: “There is no solution to the dollar crisis except by controlling the dollar and understanding with the American side.”

Here, the reason behind al-Sudani’s controversial statement that US soldiers are required in Iraq is nothing but Maliki’s proposed solution. al-Sudani is trying to find a way to ease the effects of the dollar crisis. In this regard, he plans to send the Foreign Minister to Washington at the start of February, followed by his own visit. The Iraqi premier may try to negotiate looser US screening on the movement of dollars or at least a postponement of such controls. As the Prime Minister of a coalition accused of being “pro-Iran” and even a “puppet of Iran,” al-Sudani may have hoped that sending sound signals to the United States would facilitate reconciliation. Against this backdrop, Foreign Affairs’s inference that the “The New Iraqi Leader tilts the scales toward the USA” seems an unrealistic expectation.

The dollar is indeed a powerful winning tool in the hands of the USA. The United States may offer the Iraqi government a short-term solution to the pressing crisis. The country is still nothing but one of the major oil producers, although the post-invasion system in Iraq is plagued by bribery, corruption, and smuggling. The greater challenge is that Iraq lacks the political will to combat the issue and blow the cobwebs away.

Related Topics:al-Sudani dollar İran IRAQ Maliki petrol protests US sanctions

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MIDDLE EAST

ICJ to hold hearings over Israel’s Rafah attacks

Published

2 days ago

14/05/2024

Harici.com.tr

On Thursday and Friday, the International Court of Justice (ICJ) will consider new urgent measures requested by South Africa in response to the Israeli offensive in Rafah.

On 10 May, the Republic of South Africa asked the ICJ to grant new measures on the grounds that the Israeli offensive in Rafah has caused irreparable harm to the rights of the people of Gaza.

The ICJ announced that hearings on 16 and 17 May will consider South Africa’s request to the Court for further urgent measures against Israel for its attacks on Rafah, as part of the ongoing case accusing Israel of genocide against Palestinians.

South Africa’s application stated that new measures should be ordered against Israel on the grounds that the ICJ’s orders of 26 January and 28 March did not reflect the deteriorating conditions and new facts in Gaza and Rafah. The application said Israel had persistently failed to comply with the Court’s orders and continued its “egregious violations” in Gaza.

“Israel’s military operations in Rafah and elsewhere in Gaza are themselves genocidal,” the application said, stressing that the Court should do more than order Israel to comply with the injunctions and its obligations under the Genocide Convention. The application asked the Court to order Israel to cease its military operations.

In January, the Court did not order Israel to stop its attacks as a precautionary measure.

The request stated that Israel had seized the Kerem Abu Salim (Shalom) crossing, the last place of refuge for civilians in Gaza, and had taken de facto control of entry and exit to and from Gaza, and that Israel had prevented humanitarian aid from reaching 1.5 million Gazans.

The new measures demanded were as follows:

1- Israel will cease its military attacks at Rafah and withdraw immediately.

2 – Israel will immediately take all effective measures to ensure and facilitate unhindered access to Gaza for non-governmental organisations, including United Nations agencies, researchers and journalists, to assess the situation in Gaza and to ensure the preservation and collection of evidence, and to ensure that its army does not act in a manner that prevents access.

3- Within one week of the announcement of the new measures, Israel shall provide the Court with an accessible report describing the measures it has taken to implement both the previous measures and the new measures requested.

Israel has previously dismissed South Africa’s genocide case as unfounded, claiming that it is acting in accordance with international law in Gaza, with Tel Aviv accusing Pretoria of acting as the “legal arm of Hamas”.

Will Egypt intervene?

Egypt announced its intention to intervene in the case after Israel seized the Rafah border crossing.

In a statement posted on the Facebook page of the Egyptian Ministry of Foreign Affairs, it was stated that the decision to intervene came as a result of the escalation in the severity and scope of Israeli attacks against Palestinian civilians in the Gaza Strip, the continuation of systematic practices, including direct attacks against the Palestinian people, the destruction of infrastructure, the displacement of Palestinians from their lands, and the unprecedented humanitarian crisis that has made the Gaza Strip uninhabitable.

Egypt urged Israel to fulfil its obligations as an occupying power, to implement the interim measures issued by the ICJ, and to refrain from any violations against the Palestinian people, a protected people under the Convention on the Prevention and Punishment of the Crime of Genocide, the statement said.

The statement also called on the United Nations Security Council and international parties to take immediate action to achieve a ceasefire in Gaza, halt military operations at Rafah and provide the necessary protection to Palestinian civilians.

It was previously announced that Nicaragua, Colombia and Libya had requested intervention under Articles 62 and 63 of the Court’s Charter.

Under Article 83 of its Rules of Procedure, the Court had invited South Africa and Israel to submit written observations on Colombia’s application for intervention.

MIDDLE EAST

Floods in Afghanistan leave over 300 dead and survivors with no home

Published

3 days ago

13/05/2024

Harici.com.tr

At least 315 people have lost their lives, thousands of homes were damaged and livestock wiped out during the recent flash floods caused by heavy rain in northern Afghanistan.

Taliban authorities announced that over 1,600 people were wounded and the villagers buried their dead and aid agencies scrambling to help the survivors. “The death toll has exceeded 300, and sadly, we expect this number to rise. The flood has also destroyed more than 2,000 homes,” the UN’s International Organization for Migration (IOM) said on X.

Most of the casualties were reported in the northern Baghlan province where the floods destroyed 3,000 homes, damaged farmland, and washed away livestock. People are in desperate need as the deadly flood also damaged health centers.

Taliban’s Deputy Prime Minister for Economic Affairs, Abdul Ghani Baradar had visited Baghlan and met with the victims. He called on the aid organizations and the traders to help the affected people and the residents are in a deep shock as they buried dozens of bodies. The most of the victims are from Nahrin district

We have not food and no drinking water

“We have no food, no drinking water and no shelter or blankets,” said Najibullah, who has lost nine members of his family. Three children are among the casualties.

The United Nations Office for the Coordination of Humanitarian Affairs (OCHA) said that heavy rainfall and flash floods affected 21 districts across Badakhshan, Baghlan, and Takhar provinces.

At least 73 people have lost their lives and 76 others were wounded in Baghlani Jadid district where 1,500 houses have been damaged or destroyed. “In Burka district, 70 deaths and 150 injuries have been confirmed, along with damage to 5,000 homes. Elsewhere, 13 deaths were reported across Dahnai Ghori, Guzargah Noor, Jelga, Narin and Puli Khumri districts where 1,612 homes were reportedly destroyed or damaged. A further 603 homes were reported as such in Khost and Tala wa Barfak districts,” it said in a statement.

Afghan relatives offer prayers during a burial ceremony, near the graves of victims who lost their lives following flash floods after heavy rainfall at a village in Baghlan-e-Markazi district of Baghlan province.

At least 24 people were reportedly killed across Chall, Ishkamish, Farkhar and Namak Ab districts in Takhar province, with 14 injured and a further seven missing. More than one hundred homes were also reportedly destroyed or damaged – the vast majority in Chall and Ishkamish districts.

Baghlan, Badakhshan and Takhar provinces are affected the most

In Badakhshan province, Teshkan district has been the most affected with 200 homes, 50 bridges and 30 electricity dams destroyed or damaged and 2,000 animals killed.

“With every beat of our hearts, we feel the deep sorrow that’s befallen Baghlan and all of Afghanistan. In this tragic time, our spirits reach out to embrace the families in mourning,” the International Labour Organization (ILIO) covering Afghanistan said in X.

UN Special Rapporteur Richard Bennett, said that “recent floods in Afghanistan including Baghlan which claimed many lives, are a stark reminder of Afghanistan’s vulnerability to the climate crisis and both immediate aid and long term planning by the Taliban and international actors are needed”.

Recent floods are stark reminder of Afghanistan’s vulnerability to the climate crisis

Indrika Ratwatte, deputy special representative of UNAMA for Afghanistan said that the country has remained amongst the world’s top 10 climate impacted countries while having no significant carbon footprint. “Climate shocks continue to ravage vulnerable communities. Urgent support for climate adaptation and mitigation for the people of Afghanistan is a critical need,” he added.

He furthered that Afghanistan Humanitarian Fund (AHF) will remain the main funding platform for providing life saving humanitarian assistance to millions. The international community needs to step up and support this critical lifeline for the people of Afghanistan, he added.

At the same time the World Health Organization’s Director-General, Tedros Adhanom Ghebreyesus said that WHO and its partners have deployed 17 mobile health teams to assist flood victims in Afghanistan.

In a post on X, Tedros emphasized that the recent floods resulted in more than 300 deaths and caused extensive damage to homes and health facilities.

“We are providing essential medicines and medical supplies to the affected communities,” he added.

MIDDLE EAST

‘Israel sends its diplomats back to Turkey’

Published

3 days ago

13/05/2024

Harici.com.tr

According to a report by Ragıp Soylu of the British news agency Middle East Eye, citing Israeli sources, Israel has started to gradually send its diplomats back to Turkey as of this month.

After 7 October, Israel, which began attacks in Gaza and faced fierce protests in the countries of the region as the intensity of its attacks increased, withdrew all its diplomats in the region, including Turkey, for security reasons.

Israeli sources told Middle East Eye that Israel began returning its diplomats from Turkey earlier this month, six months after withdrawing them. According to the report, a Turkish official confirmed that Israeli diplomats had returned to their posts.

The report noted that Israel’s move to repatriate the diplomats came after Ankara completely cut off trade with Israel.

Turkey and Israel had downgraded their diplomatic relations to the level of charge d’affaires, reducing diplomatic and political contacts to zero, due to tensions that began in 2018 when the US recognised Jerusalem as Israel’s capital and moved its embassy from Tel Aviv to Jerusalem.

However, last year, in line with the main trend in the region, steps were taken to normalise relations and reciprocal ambassadors were appointed. 7 October and the subsequent Israeli attacks on Gaza interrupted this trend.

In the first days after 7 October, Turkey adopted a more balanced discourse, but after Israel’s attack on the Al-Ahli hospital, Turkey began to harden its tone. Erdoğan accused Israel, which he blamed for the attack, of carrying out attacks ‘bordering on genocide’.

Israeli diplomats serving in Turkey, including Israeli Ambassador to Ankara Irit Lillian, decided to leave Turkey for “security reasons” after protests outside the embassy and consulate intensified on 19 October.