FDI and Economic Revival Fortifying Iraq and Dinar

FDI and Economic Revival Fortifying Iraq and Dinar

Welfare effect of the foreign direct investment and economic revival is fortifying Iraqi economy and dinar.

 

The phenomenal decrease in violence in Iraq is leading to raising investment and is providing adequate opportunities for the economy to grow and stabilize. Iraq is gradually moving towards being a stable nation, so far the focus was on security which is now moving towards the economic revival and assimilation into the global economic community. Mutual commercial ties with the other nations is assisting Iraq in bridging the sectarian and the cultural gaps, increasing the employment, producing more wealth, facilitating the technology transfer, and motivating the new businesses to adopt the best practices in the industry. Most importantly, this economic revival is providing that feel good factor and a new hope not only to the Iraqi people and its economy, but also to the United States and to the entire world Iraq has fifth largest oil reserves in the world.

Iraq is going through the most critical period of strengthening its economy and taking the right steps towards increasing the dinar investment 2015. Iraq's ally United States Of America is standing firm by all the commitments that the US has made, be it through the Diplomats of US or in the form of assisting the Iraqi economy and the dinar by bringing in the investment from the private sectors around the globe.

Literacy leads to Economic Growth:

One of the aspects of identifying the economic growth of the nation is its literacy rate as it improves the living standard of an individual, society and the country. Iraq has shown significant growth in its literacy rate, this literate population of Iraq becomes the workforce that will drive the Iraqi economy and the dinar towards a bright future.

Iraq is transforming rapidly into a preferred choice of opportunities because of its vast oil reserves and literacy rate of 80% and the manpower availability. Equipped with ever improving self-governance, adept security forces and developing economy, Iraq can become a center of social and economic stability in the Middle East region. The determining factors in achieving this goal will be trade and economic association with the USA and the global community.

FDI and Economic Revival Fortifying Iraq and Dinar

 Decreasing Violence, Increasing oil revenues:

A remarkable seizure of the Baiji oil refinery by winning the battle against the militants has provided the government of Iraq a sigh of relief. The ground security forces have done a significant job and are getting great support from the air strikes by the allies.

A very positive effect of the change in government and the new policy implementation can be seen on the security. It has been over a decade since the downfall of Saddam Hussein and Iraq is on the way of establishing itself as a major oil exporter globally. Iraq is now producing 3 million barrels per day.

In the past it has been mentioned that the crude oil production might go up to 12 million barrels per day, however Mr. Abdul- Mehdi, Iraq's ex Vice president and finance Minister who is now handling the portfolio of Oil Ministry feels that by 2020 Iraq will be able to double its crude oil production. This will help the Iraqi economy to attract remarkable levels in terms of international investment which will be required for drilling new well and developing required infrastructure.
Recent oil and budget agreement between the Iraqi government and Erbil was a much awaited goal and is seen as a significant achievement for Iraq.

Success in Foreign Direct Investment:

In the initial period of US association with Iraq, the private companies of US entered into the business ventures with Iraq through the projects that were funded by the government of USA. But the scenario has drastically changed, Iraq has new laws for investment and these new laws provide favorable circumstances and the tax laws which is encouraging the Foreign Direct Investment in Iraq. The foreign direct investment in Iraq is gaining strength because of the Ministries decision in allocating a huge budget for procurement. Hence as compared to the initial phase, today many firms from the US are making the most of this opportunity by directly investing in Iraq.

Few years down the line the reconstruction and investment task force of Iraq will lay the right foundation for making Iraq a strong economy and fortify the Dinar. The continuous association of Iraq in trade with the global community and the US along with its huge crude oil reserve and the growing literacy rate that will provide the labor force to do justice with the economic development opportunities that Iraq has successfully created besides the turmoil, will result into a economically strong Iraq and a very valuable Dinar.

Tricks and Traps: Making Your Dinar Investment in Big Money

STRIKE IT RICH BY KNOWING ABOUT DINAR FACTS AND UNDERSTANDING PERFECT ANALYTIC REPORTS.

Making Your Dinar Investment in Big Money

People who have knowledge, do not get into predicting things and people who predict does not have knowledge. Ironically, the investment market is driven mainly by the predictions, but dinar investment is an exception to this. The trick here is to know about the Iraqi Dinar Investment 2015 as a currency and the oil sector that forms the backbone of the dinar. 

Dinar Knowledge:

In order to issue the notes and maintain the reserves for the Iraqi dinar, Iraqi Currency Board was formed in London in the year 1931. After the formation of the Iraqi currency Board the value of the Iraqi Dinar in the year 1932 to the year 1982 is said to be varying in between the range of $ 5 and $ 3 per dinar. Because of its link to the British pound Dinar kept on strengthening. 

 The major reason for the argument about investing in Dinar is certainly because of the abundant oil & natural gas reserves. With 34 trillion Iraqi Dinar out of the banks in Iraq and the exchange rate that is consistently doing good, if Dinar moves up even just one cent, then the percentage return on the Iraqi dinar would be 1,329%. 

A close observation and analysis of the purchasing power parity of Iraq would help us in getting a clearer picture of economically developing Iraq.

GDP of Iraq:

Iraq had a GDP which was worth 222.88 billion USD in the year 2013. This GDP value of Iraq has a representation of 0.36% in the economy of the world. It reached 222.88 billion USD, an all-time high in the year 2013.

 Iraq ranks 53rd in the country comparison of the GDP and if we compare the real growth rate - GDP of Iraq to other countries it ranks 15th in the world.

Industrial Production Growth rate of Iraq:

Iraq ranks 14thas compared to the other countries in the industrial production growth rate.

The percentage increase in the annual production is inclusive of the manufacturing industry, mining industry and the construction industry.

Current account balance:

According to the information from the CIA World Fact book Iraq's current account balance in 2012 was $29.54 billion, which ranks 16th as compared to the other countries.

Making Your Dinar Investment in Big Money

Iraqi economy - Synopsis

An overview of these facts about the Iraqi Dinar and the economy of Iraq drives our attention to the financial facts about Iraq which is very important while making an investment. This analysis will help in making improvement in our investment behavior and also in our motive to invest. A proper understanding of these facts hopefully means making the right decision and making risk free profit by investing in Iraqi Dinar. You can easily assess the risk involved in the dinar investment in a very rational way. Investment dinar gurus often suggest that there is a risk element involved as we don't tend to make decisions that are balanced, we just keep on confirming what we want to believe. The financial planners stresses that if an individual is not in need of money for the next few years he should put his money to work. The future is unpredictable still we forecast. But the dinar investment is a decision that is driven by the facts and perfect analysis of the Iraqi economy.

Iraq's improving environment pertaining to the security and the other nation's initiation in investing in Iraq is encouraging the economic activity, especially in the oil industry, energy, construction and the retail industry. The Iraqi governments passing the important policy reforms are laying down the foundation for the better living standards.  90% of the government revenue comes from crude oil industry. The Geo political tensions have an adverse effect on the oil revenues, but the geopolitical tension are not there only in Iraq, even China has disputes with the neighboring countries adjacent to the south and the seas of the East China, the latest dispute with Vietnam over the Chinese oil rig location. The latest figure of the oil production in Iraq shows that Iraq has reached the level that it had in 1970.

 The leaders of Iraq are pressing hard to transform the gains from macroeconomic into improvised living standards for the people of Iraq. Unemployment ratio is declining and the government of Iraq is deregulated in order to encourage the private enterprises which are making it simpler for the citizens of Iraq and the other nations to start up a new venture and business in Iraq. The important steps that are being taken in the direction of a establishing a growing economy are, banking reforms and the global trade and business tie ups.

Iraq's steady approach towards a growing economy despite the geopolitical disputes will finally result into the revaluation of the dinar and it will help millions of dinar investors to secure their future. 

Investing in Iraqi Dinar a Good Idea For Retirement in 2015

Using Dinars to Grow Your Retirement Nest Egg

Investing in Iraqi Dinar a Good Idea For Retirement in 2015

Most people don’t make saving for retirement one of their priorities. According to research from the Employee Benefit Research Institute, over a third of consumers have less than $1,000 set aside for retirement.

Part of the problem is that many people don’t make saving a priority, but they also tend to invest in low-return investments. They will face serious financial trouble if any of the major markets enters a downturn. In contrast, smart investors often buy the Iraqi Dinar and other solid, potentially high-yielding investments.

A Common retirement planning pitfalls:

It’s critically important to save for retirement. With existing savings so low, most people should allocate more money toward potentially high-yielding investments such as the Iraqi Dinar. Here are some common retirement-planning mistakes.

Overestimating future Social Security income:

Many people believe that saving for retirement is unnecessary because Social Security will cover their expenses after retirement. Unfortunately, the federal government is considering drastic cuts to the Social Security program and will need to completely overhaul it in the near future.

Millennials should set aside even more money for retirement, because they are expected to receive far less than earlier generations. One way to quickly regain lost savings may be to invest in the Dinar and other potentially profitable investments to make up for reduced Social Security income.

Overexposure to stocks

Equities are traditionally one of the most popular investments. However, they are also very risky, especially in the current economy. The stock market has undergone a dozen major crashes since 1987. Stock investors may not recover their investments for several years.

The risk of another major stock market crash seems imminent. Mark Hulbert, a financial columnist for MarketWatch, recently reported that major investors are preparing for a crash in the near future. Investors should be careful not to invest too much of their money in stocks, in order to minimize potential stock losses.

This article Using Dinars to Grow Your Retirement Nest Egg was originally published at DinarInsider

Dinar Investment is an Excellent Approach in 2015

 Diversification By Dinar – How To Build A Stronger Portfolio

Dinar Investment is an Excellent Approach in 2015

Diversification is a risk-management technique, and it’s critical for success with any investment portfolio. The Iraqi Dinar can help you build a stronger, more diverse portfolio. By diversifying your risks properly, you’ll reduce overall investment risk, even for individual investments which are riskier than average.

Diversification maximizes your returns by investing in assets which react differently to the same geopolitical events. This means allocating investments between different asset classes, business sectors and other categories such as foreign currency investments like the Iraqi Dinar.

Although diversification doesn’t guarantee against loss, still, it’s the only practical way to achieve long-term financial goals while effectively managing risk. In fact, a diversified portfolio will generally yield higher returns and bear lower risk than the individual investments alone.

Benefits of the Dinar for diversification

 First, the Dinar is a strong currency play. Holding the Iraqi Dinar (IQD) in your investment portfolio lets you own a foreign currency with outsized potential for gains.

The Dinar can be purchased at a low exchange rate now, before the expected upward revaluation of the currency. Once the revaluation occurs, there is enormous upside potential for Dinar investors.

Second, the Dinar isn’t correlated with mainstream U.S. investments. So, the price of the Dinar doesn’t necessarily move in the same way as ordinary, low-yielding investments do. Dinar investments aren’t correlated with the performance of such investments as U.S. Treasury securities.

As an example, if you own Coca Cola stock already, it usually doesn’t make sense to buy stocks of Pepsi-Co and other bottlers because it creates over-exposure because soft-drink bottlers are correlated businesses – If negative news in the marketplace affects one bottler, it usually affects all bottlers.

So, diversification addresses the problem of potential losses from near-duplicate investments.

By buying and holding Dinars, you’re diversifying into an independent market niche which is affected only by overall economic conditions in Iraq. And, the country’s economy is booming because of the rapid accumulation of rich oil revenues. The country’s financial numbers suggest that its currency is far undervalued right now.

This article Diversification By Dinar – How To Build A Stronger Portfolio was originally published at DinarInsider

An Overview on Iraqi Dinar Historical Exchange Rate

An Overview on Iraqi Dinar Historical Exchange Rate

Iraq’s official currency since 1932 to today is the dinar. Since its creation, the currency has remained significantly stable until in the years towards 1990 and the gulf war, when it began to register substantial losses. Today, the Iraqi dinar is being presented as an attractive investment opportunity, with the country’s economy being in a steady recovery mode.

The Iraqi dinar traces its roots back to 1932 at the end of the British authority when it replaced the Indian currency rupee. The dinar was coupled with the British pound during its first 17 years of use. The exchange rate during that time bordered on 4.86 US dollars for every single dinar. However, the currency’s value was readjusted downwards to 2.80 US dollars in 1949. The Iraqi dinar exchange rate steadied till 1971.

The Iraqi Dinar after Independence

The Iraqi dinar acquired a life of its own when it finally broke free from the British pound in 1959, after the country gained independence. But its value remained pretty much the same as the British pound, until the latter was devalued in 1967. The currency steadied at an exchange rate of $2.80 for every unit until 1971 when the US dollar lost value.

The Iraqi dinar soared and in 1973 the official exchange rate for the currency stood at US$3.93. It maintained some level of stability until 1978, when the official trade rate was down to US$3.22 for every dinar. Yet, as per black market rates, the currency was reported to have depreciated to trade at 1.86 units for every 1 US dollar.

War dynamics at play

Prior to the events that happened in 1991 going forward, the official exchange rate for the currency was around $3 for every Iraqi dinar. But things changed after the US army marched into Iraq in reaction to the country’s aggression in Kuwait. The country’s economy caved in under the weight of the brief war and economic sanctions that ensued. As a result of the war, the Swiss note printing technology and the country resorted to production of low quality notes.

There was also excessive printing of the Iraqi dinar, which resulted in inflation, hurting the currency’s value substantially. The currency’s exchange value was down to 3,000 units for one US dollar following inflation, by 1995.

The second US invasion of Iraq in 2003 also left a mark in the country’s economy, with the ouster of the then Iraqi president Saddam Hussein is bringing about the interruption of the currency’s supply. The Iraqi governing council and other government authorities authorized the printing of more Saddam dinar notes to temporarily check the shortfall as the country awaited the introduction of a new currency.

This article An Overview on IraqiDinar Historical Exchange Rate was originally published at DinarInsider.com

Iraqi Dinar Investment Is A Better Investment Than The Chinese Yuan

Why the Iraq Dinar offers a more reliable long-term opportunity?

Why the Iraq Dinar offers a more reliable long-term opportunity

The Chinese Yuan is becoming an increasingly popular investment. However, the currency may be significantly overrated, while the Iraqi dinar is highly undervalued. Shrewd investors will recognize the benefits of investing in the dinar over the Yuan.

Why the Chinese currency is over-hyped?

The Chinese economy is growing rapidly. Some observers believe the Yuan will be a valuable investment at some point in the future. However, there are a variety of reasons why many other experts feel the currency is significantly overvalued and due for a correction soon.

Unsustainable economic growth

Interest in the Yuan is primarily due to China’s rapidly growing economy. The Chinese GDP has reportedly grown by 9.8% a year over the past 25 years.

However, economists feel China’s current rate of economic growth is unsustainable, even while Iraq’s economy appears to be at the beginning of a rapid growth stage. Yu Yongding, a former member of the policy committee of the People’s Bank of China, said growth rates will stagnate in the near future. He cited pollution, social unrest and a lack of a strong domestic economy as the main problems China faces.

Misleading GDP figures

Many experts assert that China’s official economic data reports are falsified. They say that China’s actual GDP growth is closer to 7.8%. Even many leading Chinese politicians have claimed that the data are being heavily manipulated. Zhu Rongji, the former premier of China, had urged the National Bureau of Statistics to report the figures more accurately going forward.

Increasing inequality

Increasing inequality is also causing serious problems for the Chinese economy. According to the World Bank, China has a GINI coefficient  (a metric used to measure income distribution or economic inequality) of 0.474, which is currently the fourth worst in the world.

These problems are causing growing social unrest and slowing the circulation of money in the economy. The World Bank report clearly shows that inequality is much worse in China than in Iraq. While it is still facing some of its own challenges with inequality, Iraq’s GINI coefficient is only 30.9.

Distrusted by the global economic community
China is also losing trust from the global economic community. The United States Government recently indicted several members of the Chinese government for stealing trade secrets for public and private companies. Many foreign businesses are reluctant to trade with China for fear their trade secrets will be stolen.

Quantitative easing

The Chinese central bank has recently indicated that it may begin a quantitative easing program in the near future. They feel the new program is necessary to reverse a slowing economy, especially as citizen’s demand for real property declines. Quantitative easing may also be needed in order to keep export levels high, which is essential because the country’s economy depends on them.

Expanding the monetary base may improve the long-term outlook for the country’s economy, but it will also lead to a weaker Chinese currency. The central bank has also indicated that the monetary policies may lead to even larger financial problems by increasing the national debt load.

This article Why The Dinar Is A Better Investment Than The Chinese Yuan was originally published at DinarInsider

A Tale Of Two Dinars: Parallels Between The Revaluations In Kuwait And Iraq

A Tale Of Two Dinars: Parallels Between The Revaluations In Kuwait And Iraq

When comparing the Dinar revaluation several years ago in Kuwait with the expected Dinar revaluation in Iraq, the parallels and similarities between the countries are remarkable. Both experienced similar hardships during the Saddam Hussein era and beyond, yet both have also rebounded economically. The revaluation of the Kuwaiti Dinar offers clues about the outcome of the anticipated IQD revaluation.

Although Iraq has lagged a bit behind Kuwait, from reviewing and comparing the two countries’ histories of growth we can see the progression to be expected in the near future. Both countries have been molded by the British influence. Kuwait came under British protection in 1899, and then in 1917 the British likewise took control of Baghdad.

 Kuwaiti Dinar and Iraqi Dinar – Parallel pathways

Kuwait’s currency was originally named the Gulf Rupee, and it was backed by the British Pound. In 1932 the Iraqi Dinar was introduced; it too, was backed by the Pound. So, both countries’ currencies have similar historical origins.

Of course, it was oil that attracted Britain and other countries to come to Kuwait and Iraq. Once the British arrived, oil began to flow freely. Oil was discovered in Iraq in 1908, and then in the 1930s in Kuwait.

Oil continued to flow during World War II. At one point during the 1940s, Kuwait’s production reached an astonishing six million barrels per day.

Under British control, Iraq began exporting oil in 1928. Iraq wasn’t producing as much as Kuwait in those days, but it was still a large amount of oil. Because of the remoteness of Iraq’s oilfields, most of the cost of development was in transporting the oil to market. Most of the revenues went to the oil companies.

 Oil wealth drives currency value

In any event, the economies of both countries became stronger and more stable due to continuing oil development. In 1932 Iraq gained independence from Britain. At that time, the Iraqi Dinar was established and its value was fixed with the British Pound.

Iraq lost its independence during World War II; it finally became a self-governing republic in 1958. Oil production slowed considerably during the war years.

In comparison, Kuwait gained independence in 1961. At that time, the Kuwaiti Dinar was introduced as the country’s new currency. Its value was equal to the British Pound.

During the 1970s, both countries nationalized their oil holdings, thus taking complete control of their respective natural resources. By then oil prices were rising, and Arab nations throughout the region began to cash in on higher oil prices.

This led to higher gasoline prices for oil-buying nations, and the global onset of inflation. Developed countries entered a period of global economic crisis. Costly oil was a leading cause of the U.S. Dollar’s devaluation.

A Tale Of Two Dinars: Parallels Between The Revaluations In Kuwait And Iraq

Saddam temporarily derailed the Iraqi Dinar

In 1990, Iraq under Saddam Hussein invaded Kuwait and took over that country, especially its financial assets. The Kuwaiti Dinar was temporarily replaced by the Iraqi Dinar while Kuwait was robbed of its wealth. Fortunately, the first Gulf War liberated Kuwait from Iraqi control, although Saddam still remained in power in Iraq.

After the war, Iraq struggled even while Kuwait began rebuilding quickly. At the same time, to finance his recovery from the war, Saddam ordered Iraqi banking authorities to print large numbers of nearly-worthless dinars, which caused the value of Iraq’s currency to fall even further.

In contrast, when the Kuwaiti liberation was completed the new Kuwaiti Dinar was established with a value of USD $3.15 per each Kuwaiti Dinar. The country was restored and rebuilt, so that it has become an economic leader in the region. The Kuwaiti Dinar is now one of the world’s strongest currencies.

The Iraqi Dinar is still artificially undervalued

Meanwhile, Iraq has been slower to rebuild. After the Kuwait debacle, Iraq suffered through a civil war and continued under the misery of Saddam for another ten years. Finally, the second Gulf War and the U.S.-led occupation of Iraq brought the country back onto the pathway toward success. Kuwait quickly recovered.

However, in contrast to the fair value accorded to the Kuwaiti Dinar when it was revalued, the new Iraqi Dinar was introduced after the war with a value of only a fraction of a cent per Dinar; in fact, the official exchange rate was set at USD $1 per 2000 Iraqi Dinars.

Although that low exchange rate may have been appropriate immediately after the war, still, the Iraqi economy has been quickly growing ever since. Nowadays, the oil-fueled Iraqi economy is increasingly similar to the Kuwaiti economy. So, there seems to be little reason, other than the stubbornness of the Central Bank of Iraq (CBI), why the Iraqi Dinar shouldn’t be near the value of the Kuwaiti Dinar.

Iraq sits on vast oil reserves, said to be far greater than Kuwait’s reserves, and monthly exports keep rising. Stability is apparent in Kuwait, and increasingly so in Iraq. From comparing the post-war development tracks of each nation, it seems apparent that at some point in the near future Iraq will overcome Kuwait as a center of oil wealth.

A Tale Of Two Dinars: Parallels Between The Revaluations In Kuwait And Iraq

The IQD should be worth at least USD $1 each, or even as much as $3

Many observers believe that Iraq’s natural wealth would support a valuation of between USD $3 to $6 for each Dinar after revaluation. This was considered the “normal” price range for both the Iraqi Dinar and Kuwaiti Dinar before the Saddam Hussein era.

When Kuwait was producing 6 million barrels of oil per day, the Kuwaiti Dinar was worth more than $3. Now that Iraq is pumping more than 6 million barrels per day, it seems logical that the nation’s currency value should be moving upward.

When the revaluation occurred in Kuwait, it was a short-term event in which the older circulating currency was retired, and was replaced by the new Kuwaiti Dinar at a value determined by Kuwait’s oil wealth and economic prospects.

Nowadays, Dinar investors are expecting a revaluation in Iraq that will rival the revaluation in Kuwait several years ago. As mentioned above, most pundits are predicting that the IQD will be revalued upward to at least an exchange rate of one Iraqi Dinar for each U.S. Dollar.

Given the historical similarities and parallel development of these two neighboring countries, it seems likely that both Iraq and Kuwait will continue to thrive as oil exporters. And, it also seems likely that Iraq will quickly “catch up” with progress in Kuwait.

Investors who have purchased Dinars for a fraction of a penny are looking forward to the upcoming Iraqi revaluation, and using the Kuwaiti revaluation as a model of what to expect post-revaluation.

Article Source:

This article A Tale Of Two Dinars: Parallels Between The Revaluations In Kuwait And Iraq was originally published by DinarInsider