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[casi-analysis] Fw: 15 Jan, Baghdad News

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Moments after sending the previous message I received the latest from our
correspondent, which basically answers my question: the dollar is falling
sharply against the dinar and Iraqis who are paid in dollars are suffering.
Important article, please read...

--------- Original Message --------
From: Dahr Jamail <>
To: <>
Subject: 15 Jan, Baghdad News
Date: 15/01/04 05:54

> 15 January 2004
> Economic Crisis, Threats of Jihad, and more Violence
> in Iraq
> The big news today is the plummeting value of the US
> dollar in Iraq. Here are some figures to give you an
> idea of the current financial crisis in Iraq:
> 2 months ago:
> 1$ = 1950 Iraqi Dinars (ID)
> The value continued to drop, and 2 days ago the value
> was:
> 1$ = 1410 ID
> Yesterday:
> 1$ = 1100 ID
> Keep in mind that all Iraqis working for the CPA are
> paid in US dollars. In addition, all of the severance
> pay for Iraqi ex-Army personnel, unemployment
> payments, and a large percentage of Iraqis are paid in
> US dollars.
> When an Iraqi ex-Army man was being paid 60$ per month
> by the CPA, this translated to 120,000 IDís 2 months
> ago. Now he makes 60,000 IDís. At the same time the
> cost of basic food products has been rising, and
> continues to rise. How is this man going to make ends
> meet?
> Imagine if your pay scale remained the same at your
> job, yet in two months time the value of the US dollar
> dropped by 50%, so it now took you twice as much money
> to buy food and pay your mortgage? Getting a second
> job would be impossible, because unemployment is 60%
> in your country and rising.
> Khalil Abrahim works as a carpenter. He had a business
> agreement with a man to repair his home and make him
> some furniture. They agreed on an amount to be paid
> for the work at 1,100,00 Iraqi Dinars ($550 US), made
> a little over two months ago when the exchange rate
> was 2000 IDís per US dollar. Khalil was advanced
> 400,000 ID ($200), and used this money to buy his
> supplies.
> He finished the job the day before yesterday, and went
> to collect his money. The man told Khalil he would pay
> him the remaining amount, ($350), at the rate of
> exchange that day, which was 1410 ID per US dollar. So
> both men lose money. If Khalil is paid at the rate of
> 1410 ID, he will lose $103.25 (205,500ID). If the man
> who hired him pays him at the original exchange rate
> of 2000 IDís per dollar, he will lose the same amount.
> Unable to reach a compromise thus far, Khalil remains
> unpaid, and doesnít know how to resolve the situation.
> This is but one example of a problem plaguing
> businesses, big and small, in Iraq on the day,
> ironically, that Iraqi currency with the face of
> Saddam Hussein on it is no longer valid.
> Where will this lead? How will this be resolved?
> Mr. Shuker is a Jordanian business man who does much
> work with the Iraqi government. He bought several
> containers of televisions to import to Iraq to sell,
> at $20,000 per container of TVís. If he sells these in
> Iraq, he will lose money on his merchandise now. He
> told me he cannot do any business now with the dollar
> so low. Any transaction he makes will lose him large
> amounts of money.
> When the ID was over 2000 per US dollar, businesses
> and the government of Kuwait bought heaps of them and
> took them out of the country. Now, because of the
> physical lack of IDís in Iraq, their value has risen
> strongly against the US dollar. Think about the
> disparity now caused that businesses in Iraq have to
> deal with.
> If the CPA does not step in to resolve this economic
> crisis, the likelihood of crime increasing in an
> already abysmal security situation is very high.
> Meanwhile, food costs continue to rise and there is no
> solution to the rampant unemployment problem.
> All of this with the backdrop of tens of thousands of
> people (mostly Shia) demonstrating in Basra today,
> demanding democratic elections within the next 2 or 3
> months. At the demonstrations Ali al-Hakim al-Safi, a
> senior Basra cleric, told the crowd that the Shia
> people would seek their goals by peaceful means at
> first, but were prepared for other measures if
> necessary. He stated,
> ďWe do not need to use violence to get our rights
> while there are still peaceful ways we can work
> together, but if we find peaceful means are no longer
> available to us we will have to seek other methods.Ē
> Thus the specter of Jihad looms over Iraq.
> At the same time, violence continues to the north of
> Baghdad. 14 people died in various attacks on US
> troops. 8 Iraqis were killed during an attack on US
> troops near Samarra. On a road between Samarra and
> Tikrit guerrillas attacked vehicles carrying KBR
> employees, killing three men as well as wounding a US
> soldier and US civilian.
> Also last night, a soldier with the 101st Airborne
> Division died in a Ďnon-hostile incidentí in Mosul.
> __________________________________
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