Monday, April 27, 2009

Aid To Iraq Revisited


The New York Times reports:

BAGHDAD — Secretary of State Hillary Rodham Clinton arrived here unannounced on Saturday to reassure Iraqis that the United States will support them, even as it withdraws combat troops. But with Iraq reeling from a week of suicide bombings, she got a jittery reception from a country that still plainly relies on the United States for security, stability and economic survival.

In an encounter with Iraqi students, journalists and activists, Mrs. Clinton was peppered with questions about how the United States could help Iraq in ways large and small — from building confidence in the Iraqi armed forces to supplying farmers with more up-to-date machinery.
What is the U.S. doing in Iraq? The USAID site has some information:

Cover of USAID/Iraq Newsletter: Volume 2, Issue 1
USAID/Iraq Newsletter: Volume I, Issue 2
[PDF, 1 mb]

USAID provides a focused approach to essential issues, addressing the root causes of instability and building the foundation for a prosperous Iraq. It bridges the transition from the short-term provision of essential services to long-term, integrated, and Iraqi-led development. USAID's overarching goal is to contribute to stability and security as part of the U.S. government National Strategy for Victory in Iraq.

USAID is a key element of the United States plan for victory in Iraq. Emphasizing responsiveness and sustainability, USAID/Iraq's new strategy calls for an expanded role in supporting focused stabilization, establishing the foundation for economic growth, and building national capacity. These efforts, in the short-term, will help stabilize areas impacted by the insurgency and mitigate the appeal of insurgent recruitment efforts. Over the longer term, the establishment of democratic institutions and sustainable economic development will form the foundations of a stable, democratic, and prosperous Iraq.

Latest Iraq Success Stories

USAID Partnership with Iraqis Helps Revitalize Orchards, Vineyards - March 9, 2009
The U.S. Agency for International Development (USAID) Mission Director Christopher D. Crowley and Future Agriculture Development Organization (FADO) Chairman Hyder Mohan participated in a ribbon-cutting ceremony to begin a program that will help invigorate Iraq's horticultural industry.

USAID Conference Advances Ideas on Farm Water Management in Iraq - March 4, 2009
Iraqi Minister of Water Resources Dr. Abdul Latif Jamal Rashid and U.S. Agency for International Development (USAID) Deputy Mission Director Thomas R. Delaney today inaugurated an irrigation symposium focused on improving farm productivity through effective water management and crop selection.

USAID Opens Shawakeh Fish Market to Attract Businesses, Restore Stability - February 20, 2009
The U.S. Agency for International Development (USAID), in partnership with the Karkh District Council, neighborhood councils, and the U.S. military, opened the Al Shawakeh Fish Market today to stimulate employment and business opportunities in the community.

What are the Iraqis doing to help themselves?
Saturday, 25 April 2009, 10:18 EDT
Oil export ban costs Iraq dearly, Kurds say

Ashti Hawrami, Iraqi Kurdistan's natural resources minister, gestures during an interview with Reuters in the city of Arbil April 16, 2009. REUTERS/Thaier al-Sudani

The Kurdish Globe
Iraqi oil ministry still seen as a major barrier for export of oil.

Iraq, hungry for investment after six long years of war, is losing millions of dollars a day due to Baghdad's refusal to permit the Kurdish north to export oil, a top official in the largely autonomous region told Reuters.

«Iraq is losing millions and millions of dollars a day. We lost several billion dollars last year by not exporting from Kurdistan,» Ashti Hawrami, Iraqi Kurdistan's natural resources minister, said in an interview.

«Who is responsible for that? Not us. We are ready for that oil to be exported,» he said.

Iraq, where insurgent attacks persist even as U.S. and Iraqi officials hail a falling sectarian bloodshed from the dark days of 2006-07, is struggling to boost oil output and clinch deals with major global firms to develop its massive reserves.

But a dispute over where Kurdistan's boundaries lie is at the heart of ominous strains between Arbil and the government of Shi'te Arab Prime Minister Nuri al-Maliki in Baghdad.

As Kurds complain of what they see as Maliki's increasingly authoritarian ways, some fear the rift could undermine Iraq's growing security. Especially sensitive is a Kurdish quest for control of disputed areas like the strategic oil city of Kirkuk.

The Iraqi Oil Ministry has repeatedly condemned oil contracts Kurdistan has signed with foreign companies as illegal, pitting Iraqi Oil Minister Hussain al-Shahristani against Hawrami in a public war of wills.

'World class reserves'

Hawrami, from his residence in the town of Masif Salahuddin, perched on a hilltop outside the Kurdish capital Arbil, spoke of mismanagement and flawed strategy in Shahristani's steps to reinvent an underperfoming oil sector and make new deals.

Iraqi output is 2.3-2.4 million barrels per day, below what it was before the 2003 U.S.-led invasion to oust Saddam Hussein.

On principle, Baghdad has spurned production-sharing deals investors prefer as it seeks long-term oil and gas deals. Hawrami called that impractical and inefficient-a «failed model.»

«It is a dogma-driven process, this nationalistic approach ? It's done for political reasons. Once you politicize the contracts you're asking for trouble. You're asking for reduction of state revenue and you frighten the contractors,» he said.

Hawrami had an indignant response to Shahristani's suggestion in a recent interview that partners in Kurdish deals, like DNO International of Norway, were

«They are professionals with excellent track records, but even if they are fourth rate or fifth rate companies as the ministry of oil may wish to label them, they have discovered world class reserves, first class operations, at the minimum cost possible.» There are few signs Baghdad is poised to end a long-running spat and let Kurdistan export oil through a national pipeline.

Hawrami said Shahristani reneged on promises last year to do so. Shahristani has said Kurdistan is holding back its own oil.

Such rancor bodes poorly for hopes for a swift end to Kurds' and Arabs' long impasse over a national oil law, needed to ease investors' concerns about hunkering down billions of dollars in an unproven democracy still mired in violence.

It may be even harder to render tough concessions as politicians of all stripes look to December's national polls.

«I'm not very optimistic at the moment,» Hawrami said.

The need to leverage Iraq's oil resources becomes all the more urgent as the government, which relies on oil for more than 95 percent of its revenue, grapples with low oil prices.

The drop from a record of $147 a barrel last year to near $50 threatens plans to buy weapons, build schools, pave roads and much more.

«We need to rebuild the country now-this year, not next year ... We wasted all that time and should not waste any more.»
It looks as if the new democracy in Iraq has achieved one thing: Iraq has perfectly mimicked the U.S. political self-interest system.


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There is always an easy solution to every human problem—neat, plausible, and wrong.
Henry Louis Mencken (1880–1956)
“The Divine Afflatus,” A Mencken Chrestomathy, chapter 25, p. 443 (1949)
... and one could add "not all human problems really are."
It was beautiful and simple, as truly great swindles are.
- O. Henry
... The Government is on course for an embarrassing showdown with the European Union, business groups and environmental charities after refusing to guarantee that billions of pounds of revenue it stands to earn from carbon-permit trading will be spent on combating climate change.
The Independent (UK)

Tracking Interest Rates

Tracking Interest Rates


SEARCH BLOG: FEDERAL RESERVE for full versions... or use the Blog Archive pulldown menu.

February 3, 2006
Go back to 1999-2000 and see what the Fed did. They are following the same pattern for 2005-06. If it ain't broke, the Fed will fix it... and good!
August 29, 2006 The Federal Reserve always acts on old information... and is the only cause of U.S. recessions.
December 5, 2006 Last spring I wrote about what I saw to be a sharp downturn in the economy in the "rustbelt" states, particularly Michigan.
March 28, 2007
The Federal Reserve sees no need to cut interest rates in the light of adverse recent economic data, Ben Bernanke said on Wednesday.
The Fed chairman said ”to date, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing in core inflation”.

July 21, 2007 My guess is that if there is an interest rate change, a cut is more likely than an increase. The key variables to be watching at this point are real estate prices and the inventory of unsold homes.
August 11, 2007 I suspect that within 6 months the Federal Reserve will be forced to lower interest rates before housing becomes a black hole.
September 11, 2007 It only means that the overall process has flaws guaranteeing it will be slow in responding to changes in the economy... and tend to over-react as a result.
September 18, 2007 I think a 4% rate is really what is needed to turn the economy back on the right course. The rate may not get there, but more cuts will be needed with employment rates down and foreclosure rates up.
October 25, 2007 How long will it be before I will be able to write: "The Federal Reserve lowered its lending rate to 4% in response to the collapse of the U.S. housing market and massive numbers of foreclosures that threaten the banking and mortgage sectors."
"Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses," he said.

"Uncertainties about the economic outlook are unusually high right now," he said. "These uncertainties require flexible and pragmatic policymaking -- nimble is the adjective I used a few weeks ago."

December 11, 2007 Somehow the Fed misses the obvious.
[Image from:]
December 13, 2007 [from The Christian Science Monitor]
"The odds of a recession are now above 50 percent," says Mark Zandi, chief economist at Moody's "We are right on the edge of a recession in part because of the Fed's reluctance to reduce interest rates more aggressively." [see my comments of September 11]
January 7, 2008 The real problem now is that consumers can't rescue the economy and manufacturing, which is already weakening, will continue to weaken. We've gutted the forces that could avoid a downturn. The question is not whether there will be a recession, but can it be dampened sufficiently so that it is very short.
January 11, 2008 This is death by a thousand cuts.
January 13, 2008 [N.Y. Times]
“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.
January 17, 2008 A few days ago, Anna Schwartz, nonagenarian economist, implicated the Federal Reserve as the cause of the present lending crisis [from the Telegraph - UK]:
The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says, daring to utter a thought that fellow critics mostly utter sotto voce.
January 22, 2008 The cut has become infected and a limb is in danger. Ben Bernanke is panicking and the Fed has its emergency triage team cutting rates... this time by 3/4%. ...

What should the Federal Reserve do now? Step back... and don't be so anxious to raise rates at the first sign of economic improvement.
Individuals and businesses need stability in their financial cost structures so that they can plan effectively and keep their ships afloat. Wildly fluctuating rates... regardless of what the absolute levels are... create problems. Either too much spending or too much fear. It's just not that difficult to comprehend. Why has it been so difficult for the Fed?

About Me

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Michigan, United States
Air Force (SAC) captain 1968-72. Retired after 35 years of business and logistical planning, including running a small business. Two sons with advanced degrees; one with a business and pre-law degree. Beautiful wife who has put up with me for 4 decades. Education: B.A. (Sociology major; minors in philosopy, English literature, and German) M.S. Operations Management (like a mixture of an MBA with logistical planning)