24,001,816 (July 2002 est.)
Iraqi dinar (IQD)
Formerly part of the Ottoman Empire, Iraq became an independent kingdom in 1932. A "republic" was proclaimed in 1958, but in actuality a series of military strongmen have ruled the country since then, the latest being SADDAM Hussein. Territorial disputes with Iran led to an inconclusive and costly eight-year war (1980-88). In August 1990 Iraq seized Kuwait, but was expelled by US-led, UN coalition forces during the Gulf War of January-February 1991. Following Kuwait's liberation, the UN Security Council (UNSC) required Iraq to scrap all weapons of mass destruction and long-range missiles and to allow UN verification inspections. Continued Iraqi non-compliance with UNSC resolutions during the past 12 years resulted in the US-led invasion of Iraq in March 2003 and the ouster of the SADDAM Hussein regime. Coalition forces remain in Iraq, helping to restore degraded infrastructure and facilitating the establishment of a freely elected government.
During the first three months of military occupation, despite the appointment of General Jay Garner at the head of the Office of Reconstruction and Humanitarian Affairs and then of Paul Bremer to supervise the political transition and reconstruction efforts, little has been achieved in terms of either maintaining security for the civilian population or re-establishing vital supplies. As Iraqi households were rapidly running out of food, the second half of May proved especially critical in this regard. Nonetheless, behind the curtain an intense debate is taking place with regard to the issue of reconstruction and on the exploitation of Iraqi oil reserves. The expectation is that US companies will take the lion's share of both reconstruction contracts and exploitation rights, but both the Russians and the French claim the validity of existing contracts and the payment of outstanding debts. How this will be settled is unclear yet. Some officials in the Bush administration invited the creditors to waive Iraq's debts to help the reconstruction, but given the huge windfall expected once Iraqi oil production restarts in earnest, such position never had many chances of being accepted. Russia, France and Germany have indicated that will not forgive the debts, but only reschedule the repayments, which could also be capped at a certain percentage of Iraq's oil revenues. Overall, Iraq's debts, including war reparations, are estimated to amount to US$350-US$400 billion.
With the approval of the US-sponsored resolution at the Security Council, during June international bickering around Iraq subsided, without disappearing altogether. There were unconfirmed reports that the Bush Administration has issued instructions to keep French companies out of the reconstruction business. However, most of the attention was focused in June on Russia, whose government officials repeatedly stated that they have been assured that there would be no discrimination against Russian companies in the reconstruction. Despite that, acting Iraqi oil minister Ghadbhan cancelled a maxi-contract with Lukoil, which threatened retaliation. Moreover, the fate of Iraqi foreign debt, owed mainly to Russia, France and Germany, is still not clear. At the beginning of June Paul Bremer called for more generosity by creditors, saying that the moratorium on service repayments, which they have offered, is not enough.
The Iraqi economy has been steadily declining since at least 1991 and by 1999 was estimated to have fallen by 75%. Of course the latest war and the current virtual paralysis of economic activities have made the situation worsen further. The fact that the state used to control so much of the economy makes the political chaos all the more important in terms of negative impact. About 45% of the Iraqi workforce is directly employed by the state. Such schemes as the distribution of dollars to state employees by the occupation authorities are not much more than palliatives. The production of oil almost stopped during the war and is not expected to restart for at least another month and probably longer. The oil fields have been subjected to extensive looting and it will take time and money to repair them. Efforts to repair oil extraction and transport facilities began to produce results only during June, causing acute shortages of oil to hit the Iraqi internal market, to the point that officials in the oil industry stated the need to start importing oil from abroad. There were fears that petrol shortages would cause unrest and contribute to complicate the political situation. However, the oil industry has been paid much greater attention than the rest of the economy and by June the US administration and the Iraqi officials working for it could claim at least some relative successes. The main achievement was the restart of oil exports through Turkey on 22 June. By the end of June production had reached 800,000 barrels a day, up from 310,000 barrels a month earlier. In the first half of August exports averaged 545,000 bpd, up from the 385,000 bpd of July but still well below the 800,000 target. The hopes that the northern oil fields would have given their contribution were quashed after they were sabotaged just a couple of days after their reopening. More guards are being recruited to help guarding the pipelines, but they might not be enough. Some experts say that to bring production to the 3.5 million bpd which was the original target will take as much as US$30 billion, which might not be easy to gather. Western oil companies are reported to have told the Bush administration that they are not going to make large investments in Iraq for the foreseeable future. Production is mostly concentrated in the North, where the disruption and looting caused by the war has been less severe. By mid-July, the Iraqi oil industry was still struggling to reach the targets set for June, as sabotage of the pipelines and administrative confusion prevent the full exploitation of this potential. Iraq has only been able to export oil stored in Turkey and in Iraq itself, while freshly pumped oil is being absorbed by internal consumption and smuggling. Even according to the most optimistic estimates, oil exports will not be able to contribute to Iraq's recovery before the end of 2004.
Earlier expectations that oil revenue would have been enough to fund the reconstruction are now giving way to concern that American taxpayers might have to pay at least part of the bill. Paul Bremer, the boss of the CPA, for the first time in August hinted that reconstruction could cost as much as US$100 billion. US$13 billion should be needed for the electrical grid and another US$16 billion for the water system. For the next year, the UN estimates a need for US$20 billion as a bare minimum and Iraqi revenues are not expected to exceed US$15 billion at best. The US$5 billion gap should be covered by donors. Inevitably, the US will have to contribute more money than it expected. The oil industry rehabilitation plan approved by the CPA and oil ministry already calls for the US to contribute US$1 billion, which had not been budgeted before the war. The Bush administration budgeted just US$2.4 billion, which moreover it is unable to spend because of the widespread insecurity. Only about US$250 million have been spent so far.
The Iraqi power supply system appears to be a major problem for the American occupiers. Damaged by previous wars and lack of maintenance, the CPA has not been able to restore it in such a way to bring energy supply back to pre-war levels. Worse still, it seems resigned to not being able to do so. The building of new power stations is likely to take years and in the meanwhile the insufficient power supply will greatly hamper the economic recovery. Most of the telephone network is also in need of repair, while banks remain closed. Although trade businesses are reopening, many of them are reported to be on the verge of bankruptcy. The dinar, however, recovered from its low of 4,000 to a dollar during the war, to stabilise in June at 1,400. At least something has been done to help the moribund Iraqi agriculture. Production of grain is expected to be half that of 1990 this year and the distribution network has collapsed. The UN are launching the largest food aid program in the world to help the Iraqis, with a budget of US$1.3 billion. More importantly, the World Food Program will buy this year's harvest from Iraqi farmers, helping them to earn enough to sow the land for the coming year.
One issue which is being raised is currency reform. At present there are three currencies in circulation, the dollar, the Iraqi dinar and the Northern Iraqi dinar. With inflation running at an estimated 70% a year, the need is felt for creating a single currency which would make it easier to stabilise money supply and fight inflation.
The CPA claims that imports of medicines have increased sevenfold, that 1,000 schools have been rebuilt and that the irrigation ditches in southern Iraq are being cleaned up, but Iraqis are more concerned by the continuing lack of electricity and sometimes water. At present the CPA estimates that there is a 30% shortfall in electricity production. Just to meet demand investments of about US$2 billion will be needed.
Although the Baath state has been thoroughly defeated, the US-British military occupation is spread rather thinly throughout the territory, mainly because of security concerns. The CPA is becoming somewhat more efficient now, but the start was quite disastrous. The decision to privilege military personnel over civilian reconstruction specialists has proved particularly ill advised. Although a decrease in the looting activity was reported as the end of June approached, patrolling by American troops remained limited, both due to the insufficient number of troops available and to the unwillingness to risk even modest casualties. The about 30,000 Iraqi policemen taken back into service were not enough. Even the announced formation of a small Iraqi army to guard the country's borders will have no short-term impact, as will the formation of a 6,500-strong militia. Washington sources increasingly acknowledge that the Iraqi post-war plans were based on expectations which completely failed to materialise. It is reckoned that it will not be possible to reduce the level of troops committed to Iraq for several months to come at least, a fact that is pushing Pentagon expenditure in Iraq to around US$4 billion a month, roughly twice as much as it had been forecast. Some sources even claim that Bremer already asked for 50,000 more troops, to help secure the country. It is generally accepted that with current troop levels and given American wariness to risk losses, maintaining security throughout Iraq will not be possible. This left much room of action for several militias that have sprung up, mainly composed of Shiite Islamist militants, but also of neighbourhood associations which are trying to maintain security locally. Northern Iraq, of course, remains under the control of the Kurdish militias, as it has been for many years now. Following the attacks to the UN compound and the Jordanian embassy and a number of US civilians killed, plus the attacks to the pipelines and the US military, security became more than ever the primary concern of the US occupation administration during August. Unable to increase the level of US troops for reasons of internal policy and also because of objective overstretching of available resources, the Bush administration tried hard to convince more countries to send additional contingents, with little success.
There are several factors that are feeding the political instability. First of all is the fact that most parties and factions based in Iraq oppose to various degrees the military occupation. Also, there is tension between exile groups which are coming back to Iraq with the support of the US, and indigenous groups, which feel they are being overtaken by newcomers who know little of the reality of Iraq. Last, but no less important, is the fact that the internal opposition is by no means united. The centre stage in the first few weeks after the fall of Saddam's regime has been taken by Shiite religious groups, which moved quickly to occupy as much ground as possible. However, there are strong currents of secularism in Iraqi society and tensions might arise soon, especially if the Shiite parties tried to monopolise the political scene. At present, however, the competition is mainly among Islamic groups which claim to represent the Shiite community, a situation which has already led to clashes and even the killing of Abd al-Majid al-Khoi, a moderate Shiite leader.
After more than two months of occupation, the political situation actually appeared to be worsening by the end of June. The US managed to alienate virtually all Iraqi Arab political forces, including the exiles whom they brought back to the country, by postponing the establishment of a proper Iraqi interim administration until after the political elections, which in turn are not expected before a year.
In the areas inhabited by Sunni Arabs, there appears to be starting a guerrilla insurgency, which could develop in a serious annoyance for the US occupiers.
The political groups rooted among the Shiite majority have so far adopted a cautious approach. Despite not hiding their distaste of the Americans, they have refrained from armed opposition and are focusing on consolidating their hold on the population. In the short term, Shiite parties and their Iranian patrons have no interest in an open confrontation, but the potential threat to American interests will remain. Disappointed by the bickering and ineffective exile parties, the Americans appear to be turning to others in order to find some interlocutors. In particular there is a clear effort to establish links with the tribal chieftains, hoping that this could allow the maintenance of order without committing troops. The tribal chieftains are building up their militias, in a situation that could soon resemble the power-sharing deal with the warlords in Afghanistan. On the other hand, plans to rely on selected former Baathist officials are proving more difficult to implement that initially foreseen. Not only the majority of the population rejects these officials, but few have accepted to serve under the conditions imposed by the US, which include a clear and unequivocal rejection of the Baathist ideology. The presence of an armed opposition to the American occupation and the fact that several Baath leaders are still at large clearly represent a powerful disincentive for former Baathists to join the Americans, not least because of fears of assassination.
By July the CPA had decided to take another path and it established the Interim Governing Council (IGC), made up of 25 Iraqis of different backgrounds. The establishment of the council itself can be seen as a concession from Paul Bremer, the head of the CPA. The potential contributors to the planned international fund to rebuild Iraq stated clearly that they would not even agree to meet until an interim government composed of Iraqis was in place. The IGC has the power to nominate ministry heads and form commissions to recommend policies concerning the reform of the Iraqi state. Even the composition of the IGC shows that Americans are moderating their earlier ambitions to reshape Iraq in their own image. Although pro-US Iraqi returnees from exile are still over-represented in the IGC, compared to what seems to be their actual following among the population, anti-US factions are fairly well represented too, including seven Islamists and a Communist. During August the Iraqi Governing Council (IGC) that they have established is slowly winning some support. The UN recognised it and although the Arab countries mostly refused do so, most Arab neighbours are accepting to deal with it on an provisory basis.
It appears likely that US military presence in Iraq will continue for the foreseeable period, as the Pentagon is reported to be planning the establishment of permanent military bases in the country. This will inevitably not please the Syrians and the Iranians, who however will mostly try to maintain a low profile in order not to attract the wrath of the Bush administration on them. In the case of Iran, however, the situation is made more complex by the intricacies of factional conflict within its ruling elite and Islamic hardliners within it might want to push their Iraqi allies towards a more confrontational path against the US, hoping to keep the Americans busy for some time. The US will also continue lobbying a number of countries to convince them to send troops to maintain order in Iraq, a task on which few are keen.
Any government that invested large resources in paying those debts, rather than rebuilding Iraq, would find it difficult to consolidate its legitimacy. Once the most immediate task of restarting the economy will have been addressed, there is little doubt that wide-ranging economic and structural reforms will be attempted. The banking sector in particular is considered to be completely unsuitable for a "liberal" economy, which is what most people expect Iraq to become over the next few years. It is likely that the dollar will substitute the dinar as the Iraqi currency. The transition from a state-controlled economy to a relatively free-market one will be characterised by all the problems that have been met in (for example) Eastern Europe, with the additional drawback of a post-war situation and (possibly) continuing political turmoil, but with the advantage of a rapidly growing oil revenue. The Iraqi agriculture, on the other hand, might recover quickly, as much of its decline was due to the sanctions and the difficulty to maintain the level of inputs such as fertilizer and seeds. As far as the oil sector is concerned, there was talk to expand production to as much as 6.5 millions in the near future, although this will be subject to which level of investment will be achieved and how quickly. In any case, despite the limited damage caused by the war to the oil production facilities, the acting oil minister, Ghamir Ghadhban did not expect production to reach pre-war levels (2.5-3 million barrels a day) for at least a year, while the 2 million barrels target could be reached by the end of 2003. Production was officially expected to reach about half that level by the end of June, although many were more pessimistic and did not expect this target to be reached before mid-July. Since domestic needs stand at about 550,000 barrels, there was supposed to be soon a modest surplus for export. Oil refineries restarted production at the beginning of June, contributing to reduce the long queues for fuel. However, continuing looting and sabotage activity are hampering the efforts to bring the oil industry back on its feet. The original expectation, that oil revenues would have contributed almost all of the US$41 billion required for the reconstruction within the first two years of occupation, now look wildly optimistic. Apart from claims that the reconstruction will cost much more than US$41 billion, over the next year oil revenues are not likely to exceed by much the US$13 billion of 2002. According to a study, bringing oil production back to the pre-1991 level will take at least 18 months and require US$5 billion of investment. Moreover, due to damage to the oil fields, the price of Iraqi oil is now going to be lower than it used to be, because of higher sulphur content. On this basis, it is estimated that oil revenue will probably not exceed US$5 billion in 2003 and US$15 billion in 2004 and not necessarily will it be possible to spend this whole amount on reconstruction.
The political future of Iraq is very difficult to predict at the time of writing. The occupying coalition forces do not seem to have confronted yet the issue of how to secure the country for the civilian population. As a result, warlords and militias are likely to continue to rapidly expand their hold over vast regions of the country, offering at least some semblance of security to the local population. Because most of these militias are politically aligned, conflicts are likely to arise in the medium and long-term if this situation persists. At the same time, complex political negotiations will be required to determine the future of the Iraqi state, both in terms of coalition governments and in terms of institutional reconstruction. The role to be played by the Kurdish parties and exile politicians on one side and the relationship with occupation forces on the other will likely prove the most contentious issues. The IGC will have to struggle to maintain the confidence of the majority of Iraqis, while many forces do not recognise its authority.
Update No: 005 - (03/10/03)
During September the efforts of the US Department of State to involve more countries in its Iraq campaign yielded very little results, despite the support of a growing number of top brass. The Pentagon and vice-president Cheney are known to be contrary to the involvement of other countries and will not be too displeased by this lack of developments, but President Bush appears increasingly worried that Iraq might still be a bleeding wound by the time the campaign for next year's US presidential elections gets under way. For this reason, he requested in September US$66 billion for Iraq, significantly more than expected. The key countries targeted by the Department of State, namely India, Pakistan, Turkey, Germany and Russia, are all asking for rewards that have so far been judged excessive by the Bush administration. France is the most demanding, as it asks the US to relinquish their leadership role and for the enforcement of a strict monitoring of how money is spent, but it is not France that the US want to coopt into the Iraqi adventure. Among the other countries, India for example appears to be interested in purchasing sophisticated military technology from the US, while Russia wants to be guaranteed lucrative contracts. Turkey, the most likely new recruit, will apparently be granted loans for US$8.5 billion, but it is not clear whether its request that the US liquidate Turkish Kurd militants in northern Iraq will be accepted.
The positive development in September was that after much vocal protest, the Arab countries started cooperating openly with the Iraqi Governing Council and the newly appointed government. Not only did the Arab League let Iraq take part in its meetings, but Iraq got back its seat within OPEC. Now that an Iraqi interim government is in place, the IMF and the World Bank will be keener to start lending money.
A central governments starts being rebuilt. slowly
Within Iraq, however, the Council and the government face significant opposition among the Sunni population of central and northern Iraq and among part of the Shiite population. As the first efforts at rebuilding Iraqi state institutions begin, there is a potential of alienating even those sections of the population that so far have welcomed both the American occupation and the interim government. The Kurds, for example, are becoming nervous as they are asked to replace their flags with Iraqi ones. At the same time, pressure is mounting for schools in Iraqi Kurdistan to start teaching Arabic to children again and for the Kurdish militias to be dismantled.
There are now plans to double the size of the Iraqi police force within 12 months, to 75,000. In the meanwhile the security situation is hardly improving. The continuing insecurity in Iraq will prevent the measures approved by the government from having much impact.
Economic reforms announced, but oil industry is still lagging
Towards the end of September a set of economic reforms was announced, including the freedom for foreign investors to buy Iraqi companies, except in the oil industry, but including banks. Foreign investors will be free to transfer their earnings abroad. The central bank will become independent, while a new, modest tax rate of 15% will be imposed on both individuals and companies. The custom rate will be just 5%, except for food and medicine which will be exempt. In the short term, however, priorities are going to be different. The first budget was presented in August and covers the remainder of 2003. By far the single largest sector will be social expenditure, at US$1.35 billion. The budget is based on assumed oil rents of US$3.45 billion, which are expected to contribute 88% of all revenues. This in turn, is based on the expectation that oil production will reach 2.8 million barrels per day by March 2004, which is not unrealistic.
Oil production continued to grow slowly in September, despite unresolved problems with the northern pipeline to Turkey, which is not expected to return to becoming operational before the second half of October. About two-thirds of the northern production are being pumped back into the ground because the pipeline does not work and there are no storage facilities. In September overall production reached 1.6 million bpd, up from 1.35 million bpd in August, or about 70-75% of pre-war levels, with exports reaching 900,000 bpd, which is short of the original expectations. Some analysts, however, expect more rapid improvements from now on. Because developing the southern fields should be rather quick, given the presence of infrastructures in place and the low-level technology required, the increase in production is expected to continue even beyond the capacity levels of before the war. Saudi Arabia has already declared its intention to reopen the Iraqi pipeline that runs through its territory. On the other hand, in the present political conditions, maintaining some semblance of a state in Iraq will be much more expensive to the US than it was to Saddam Hussein and even if the US$150 million that Iraq was earning every week from oil at the end of September were multiplied by three or four, it would still be far from enough. As a result, the budget for 2004, which is expected to range between US$13-14 billion, will still largely be funded through foreign aid.
It has now been accepted that sufficient electricity production is not going to be reestablished in the short term and efforts are being made to start importing electricity from neighboring countries. Iran has already signed a contract, while Turkey seems to be about to sign a second one and Syria is negotiating another.
Russian economist to use post-Soviet experience in rebuilding Iraq
Yegor Gaydar, director of the Transition Period Economy Institute and a member of the Union of Right Forces (SPS), will leave for Iraq on 19th September to develop his programme for the country's rebuilding, SPS leader Boris Nemtsov told a party congress on 8th September, Interfax News Agency has reported.
Gaydar specified at a news conference later on Monday that he had received an official invitation from Iraq's provisional administration.
"I will be travelling together with former Bulgarian President Petur Stoyanov and former Estonian Prime Minister Mart Laar. Most of the problems currently facing Iraq stem from the collapse of the totalitarian regime and the high level of the state's involvement in the economy. These problems have parallel histories in post-Soviet countries. They want to find ways to minimize the risks and start issuing shares of Iraq's companies as soon as possible," Gaydar said.
He said that he will receive documents on the Iraqi economy and study them before his departure. "We will present our proposals only after we study the situation on the
ground," Gaydar said.
Turkish minister says some mobile power plants to be moved to Iraq
Energy and Natural Resources Minister, Hilmi Gule, said on 29th August that some mobile power plants in Turkey would be moved to Iraq aiming to meet energy needs of Iraq in some places, Anatolia News Agency has reported.
Guler issued a written statement and said a preliminary agreement was reached aiming to meet the energy needs of Iraq in the rebuilding process; he said a 500megawatt package was prepared.
Guler said his ministry and Iraqi officials are continuing studies on new projects.
Turkey, Iraq reach agreement on power exports
An agreement has been reached at the talks being held on the sale of electricity to Iraq, TRT 2 television has reported. A protocol will be signed in September.
The Energy and Natural Resources Ministry issued a written statement saying that an agreement on principle has been reached on Turkey selling electricity to Iraq. The amount of electricity to be sold will begin at 50 megawatts and will gradually increase up to 200 megawatts.
A protocol on the issue will be signed at a ceremony to be held with the participation of the sides in Ankara at the beginning of September. Energy Minister Hilmi Guler said that the ministry was continuing its work on projects that Turkey might undertake in Iraq, adding that new projects would be launched in the coming days.
Russian company considers development of major Iraqi oilfield
The Soyuzneftegaz company has drawn up a feasibility study of the development of the Rafidayn oil field, one of the biggest in Iraq, Yuriy Shafranik, chairman of the board of Soyuzneftegaz, told ITAR-TASS News Agency on 4th September. According to his information, "all the documents on it will be forwarded to Iraqi officials in September or October".
At the same time, he stressed that concrete time limits for the implementation of the project "depend on the election and the beginning of work of legitimate authorities in Iraq". In his opinion, Russian companies willing to work in Iraq should form consortiums with foreign firms. He believes such a consortium could be created in Rafidayn too, "because in the current situation this is the most effective way to work".
Shafranik said Soyuzneftegaz was one of the first in Russia to resume contacts with the Iraqi authorities after the end of hostilities. According to his information, its representatives visited Baghdad several times during the past few months and achieved impressive results at talks with the Iraqi oil ministry.
Soyuzneftegaz was given the right to develop the Rafidayn oil field late in 2002.
Russian oil giant upbeat about restoring control over Iraq oilfield
Russia's oil major, LUKoil, estimates its chances of restoring control over Iraq's West Qurna oil project "at over 50 per cent", Andrey Kuzyayev, the president of LUKoil Overseas Ltd, said on 28th August at a presentation of the Karachaganak project in Kazakstan, Prime-TASS News Agency has reported
LUKoil Overseas Ltd is responsible for LUKoil 's foreign projects. All the necessary legal measures have already been taken and LUKoil expects the issue to be resolved within two years, Kuzyayev said.
"We are waiting for a legitimate government to be established in Iraq in order to start talks," Kuzyayev said.
He also said that LUKoil expects its output at the field to reach 10m barrels annually five years after the development begins.
Last December, the former Iraqi government terminated its contract on the development of the West Qurna oilfield with LUKoil, accusing LUKoil of not meeting the contract commitments. Since then LUKoil officials have repeatedly said that they believe the contract to be valid.
In 1997, Baghdad awarded LUKoil a contract to develop the West Qurna field, which contains in excess of 1bn tonnes of crude. Prior to the termination of the contract LUKoil 's stake in the project amounted to 68.5 per cent, while Iraq held 25 per cent.
Two other Russian companies, state-owned Zarubezhneft oil company and Mashinoimport, owned 3.25 per cent each.
Iraqi banknotes boost UK firm - plan is to replace the Iraqi currency
Banknote maker, De La Rue, has reported a boost in profits - thanks to an order for Iraqi banknotes. The Essex-based firm, which is the official printer of UK banknotes, said it had delivered the order for Iraqi dinars ahead of schedule, the BBC has reported.
Its shares surged more than 6% on the news, which it said would help it deliver better-than-expected first half profits.
The interim US authority placed an order for new banknotes after it was forced to take the embarrassing step of printing currency bearing the image of Saddam Hussein.
A spokesman for De La Rue refused to say what image would be on the notes, but said it would not be the former dictator.
New banknotes are urgently needed to plug the shortage of local currency on the streets of Iraq, where the exchange rate with the US dollar is about 0.0016.
The BBC's Shelley Thakral, in Baghdad, said the removal of Saddam Hussein's image would have great symbolic value for Iraqis.
"If you travel around Iraq, you just don't see his face any more, so not to have his face on currency is a big deal," she said.
She said speculation in Baghdad was that the new notes would feature "cultural and architectural" scenes.
De La Rue announced in July it would lead a consortium of global currency specialists to make new banknotes for Iraq. De La Rue is one of the first British firms to benefit from the multi-billion dollar drive to rebuild the shattered country after the US-led invasion.
Paul Jones, an analyst at Numis Securities, said early delivery of the Iraqi banknotes did not change the value of the contract, which analysts have estimated at up to £8m.
But he said it proved the firm was operating efficiently and was on track to meet his full-year profit forecast £39m.
FOREIGN ECONOMIC RELATIONS
Lower transit fees will boost Turkey's exports to Syria, Iraq
Turkish State Minister Kursad Tuzmen said on 9th September that the negotiations which had been carried on with Syrian officials for more than one year were completed positively and added, "Syria decreased the passage fee which was taken from Turkish vehicles by 50 to 1,200 per cent," Anatolia News Agency has reported.
Issuing a written statement, Tuzmen said that the high passage fees of Syria caused difficulty for businessmen, who made export both to Syria and to regional countries via Syria, and for this reason they brought the issue onto the agenda with Syrian Prime Minister Mustafa Miro, the Foreign Trade and Economy Ministry and the Transport Ministry and they requested the passage fees to be decreased.
Noting that after long negotiations, Syrian government decreased the passage fees and conveyed this decision to him, Tuzmen said: "This reduction will increase Turkey's exports to Syria and other regional countries. Transit transportation which is made via Syria will develop. Both Turkey and Syria will gain from this. The reduction of the fee from US$340 to US$45, which is taken for passages to Iraq via Syria, will significantly drop down the cost of export that we make to Iraq. This is an important advantage for our exports. The decision of Syria will affect trade relations between Turkey and Syria positively."
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