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D. Ali Mirza *: economic implications for the development of a geopolitical variable in Iraq **
First, put a geopolitical variable
Since the protests began in Anbar province and other areas in central Iraq in late 2012 and gradually transition to a military escalation, the expansion of the theater of armed groups and private Daash against the central forces. And out of Fallujah and then other parts of Anbar since early 2014 for the government's control to reach a serious turning point in the June 10, 2014 occupation of the armed groups to the city of Mosul, after it had been under the influence for a long time. Then occupied the cities and areas of the provinces of Salaheddin, Anbar and parts of Diyala and Kirkuk (ISW, 2014). And "opened" east of the border with Syria, on June 29. As a result, identified in Iraq, in military terms, the three areas, and change the borders of extensions and control sites, two of them with / in the central region by the course of military operations:
(1) Kurdistan and parts of the provinces of Kirkuk and Nineveh after Peshmerga forces entered the area "disputed" and other areas, including the oil fields of Kirkuk.
(2) the central region north of Baghdad (Nineveh, Salahuddin, Diyala, Anbar). It is the foundation of the theater of military operations. Are still important parts of them under the control of government forces and volunteers and / or loyal tribes and the Peshmerga.It has escalated its efforts to gather and coordinate covered since late August to regain control of the other parts. But on the other hand, the armed groups are still in control of strategic locations and logistical and where extensions to Syria. It is located within its oil export pipeline from Kirkuk to Ceyhan / Turkey. As the extraction of oil in some fields Hamrin area as a field Ajil, (Iraq Oil Report, 9 July, 2014).
(3) Baghdad and the southern region. It is under the control of the central government, with repeated terrorist attacks on the "belt" of Baghdad and within, (ISW, 2014).
We have raised the practices of armed groups in displacement, persecution and murder against minorities and opponents in the central region and globally widespread condemnation followed procedures for humanitarian aid. As a result of these groups to attack the surrounding areas in Kurdistan, including the Mosul Dam, as well as the threat of Irbil in early August, accompanied attribution international political intensify aerial bombardment of the American (and other countries, later) for the locations of these groups in Iraq. And decided to countries of the European Union and even Iran supplying weapons to Kurdistan. In his speech on September 10, President Obama announced "a strategy for the NATO international" anti-terrorism is based on the expansion of air strikes in Iraq (and the possibility of extending it to Syria, which has already begun at the end of the month) in addition to the training and assignment of Iraqi forces and stop the flow of volunteers and drying up funding Daash, and finally provide humanitarian aid.
Second: the effects of economic
In addition to the geographical division of the ongoing military operations to divide Iraq actually economically isolated areas. Depending on the progress of these processes and their results will increase or decrease the degree of isolation, the impact of two factors, the first real-time, raised as a result of the split geographically and second vessels / long-term, and stems from the relative strength of the different groups in the political system and outside it, shape it will take the administrative system.
I've had to instability in the central region and especially in the past two boundaries before the June 10 geopolitical consequences impacted negatively on the economic activity of the public and private sectors in this region and the rest of the regions. Since June 10 resulted in the ongoing destruction, which exposed him and institutional infrastructure, productivity and population, in this region to the negative economic impacts of additional them and the rest of the regions. On the other hand, could have been exposed to the effects of other economic avoided if possible so that did not seriously affect the rest of the areas, so far. And we will address these two types of effects, respectively. Note that with the presentation and analysis in this paper is based on preliminary data, or partial / Impressionism may result in the emergence of more data accuracy and comprehensiveness to change the results and conclusions.
(2-1) The most important negative economic impacts
Perhaps the most important effects of the continuing military operations, at the macroeconomic level, in addition to the isolation of areas, is the uncertainty of the outcome of the economic process. This is reflected on the economic decisions concerning the future, especially to postpone or cancel or reduce spending on investment projects and durable goods consumption. This applies to both activities of public and private (domestic and foreign). It focused this matter for public activity not to adopt the draft budget for 2014, rather than limiting it to the rules associated with the budget spending in 2013 plus other necessary expenses related to private military side.At the level of your activity indicators show a partial Impressionism and the general decline in investment demand and consumer durable (particularly on housing and land).And this uncertainty will continue, and then blurring the foreseeable future economic, until the end of the military operations and blows picture of the future.
And at other levels is the most important adverse effects, including the following:
(1) the displacement and migration of the population and then the concentration of geographical isolation and sectarian / religious / ethnic. In the wake of the occupation of Mosul migrated many of them, of various denominations, to areas of Kurdistan. After the escalation of religious extremism to the armed groups and the increasing practice in the killing and ethnic cleansing / religious / ethnic in Mosul and Tal Afar, Sinjar, Diyala, Salahuddin increased population migration towards Kurdistan, Kirkuk and parts of the provinces of the central region beyond the control of these groups and even towards the south. It is difficult to specify the number of migration and displacement of populations internally as the estimates vary according to the authorities as prepared by the displacement and migration is an ongoing process and affected the course of military operations. Shows an estimate of the Agency of the United Nations was released in September 2014 that the number of displaced people reached 1.8 million (Table 1). But in light of the text, in a document of this estimate, that these numbers planned " Planning Figures as at 6 September in 2014 "it is not clear whether this figure represents the number of displaced active until early September, or is it dropping the agency for a number to the end of 2014.
And lead to migration and displacement, loss of property and livelihood, which ranks the economic and social burden on the displaced families and migratory birds, as well as on the state and society. This is in addition to the consequences of the reduction in aggregate demand for goods and services. In terms of supply, the labor shortage is leading to a decline in the production of these goods and services. The resulting interaction demand and supply sides (through the multiplier) to an overall decrease in incomes and production exceeds the initial drop caused by migration and displacement.It also arranges displaced and migrants, especially low-income groups, a majority, the requirements of economic and humanitarian on the central government and the Kurdistan region and civil society organizations, international organizations and the population, infrastructure and services in areas generally received. On the other hand, the killings and ethnic cleansing / religious / ethnic resentment than the general conditions and among different sects and division of society and the isolation of regions, which constantly threatens to conflict in the future.
(2) stop the export of lower oil production from Kirkuk and the central region north of Baghdad. Have been subjected to export oil through the export pipeline to the Turkish-Iraqi cut continuously over the past years, as a result of vandalism and theft of parts of the tube. In light of the inability to convert export to the south, on the one hand, and repeat vandalism and theft, on the other hand, decreased exports gradually from 470 thousand barrels / day, a-b-j, in 2009 (of the total production of Kirkuk and the central region north of Baghdad, about 672 A. b-j) until it reached 264 A-to-Z in 2013 (the production of 520 A-b-j) [1] to depend on 2 March 2014, and despite the suspension of export, the production has continued to supply crude oil to the Baiji refinery and refineries other power plants . But stop the Baiji refinery, after June 10, leading to reduced production of a 289-b-j in May to about a 171-b-j in June and July. With the possibility of the continuation of production at this level or even rise to satisfy the need of the Kurdistan internal or exported through the export pipeline Kurdistan to Turkey by truck, but the uncertainty of the orientations of the armed groups to attack the edge of the region, which has escalated in early August, and maybe even the Kirkuk oil fields, may leads to a decline in production to less than the level in June / July.
(3) stop the oil refineries in Baiji. refineries and refinery are concerned Saladin (two units equal) card a 140-b-j and North refinery card a 170-b-j (a total of 310-b-j). And compose the total production capacities of the two Almsfian 37% of the refining capacity in Iraq, which amounted to about a 830-b-j in 2013 (OPEC, 2014, P. 36). Equipped with this refinery Baiji power plant fuel and detergent plant (and many industries) chemical and about 60% of the gasoline produced in Iraq (Olive Group, 2011). It is clear that such a stop adversely affect fuel users such as energy, transportation and electrical production and service units and appliances, etc..
(4) as a result of military operations and destruction suffered by the infrastructure, institutional and displacement, migration and control of some dams, affected agricultural and industrial production and service negatively in the central region significantly, causing a shortage in the supply of commodity and service (as indicators media partial).It can be inferred on what could be the size of this shortage and its consequences from the available data on the contribution of local production (which contributes to the central and northern regions by the concrete) to satisfy the local need for the year 2011 (the latest data in this regard). It turns out, for example, that local production of barley sate 100% of the local need and wheat (wheat) 51% and 48% of red meat. And contributed to the local production of cement and stainless normal by about 35% and 100% white cement and soft drinks 89%. Referring to the previous point, contributed to oil refineries saturates between 63% of the local need for gasoline and 88% for gas oil and about 100% for the rest of the products (except liquid gas). [2] These figures indicate to what can be caused by a lack of agricultural and industrial production, or interruptions in central and northern regions on the domestic supply in the rest of the two areas, and then a reflection of the increase in prices and / or increase imports, if you can not be compensated from other local sources.
(5) additional costs for arming including compensation he had lost after the army June 10 and the costs of the volunteers and the popular crowd and then the costs of reconstruction in the affected areas, rehabilitation and compensation to those affected after the end of military operations. There is no doubt that these additional costs Stzahm basic expenses consumer and investment increasingly in the public budget offset by limited financial resources, which is reflected in the sum planned deficit escalated in recent years and achieved an actual deficit in 2013 (IMF, 2014) and expected for the year 2014.
(6) affected international air traffic to Iraq and the high costs of transport and insurance.Driving the tense situation in Iraq to avoid airlines from landing and take-off of Iraq. No, but that many of these companies avoid taking flight in Iraqi airspace in his trips to other countries, Iraq is located on the way (driven by the escalation of military operations, as well as the Malaysian plane crash over Ukraine in late July). Even companies that continue to land and take off, the insurance fee could rise to more than the cost of travel and transportation of goods and increase the isolation of the historical situation in Iraq by himself over the past five decades.
(7) The occurrence of government departments under the control of armed groups in the occupied cities, counties and tampering with its records and documents may lead to the loss of economic and statistical data and other demographic including lead to serious gaps in the chain of this data.
(2-2) are not affected seriously by military operations
(1) was not affected by oil and gas production in the southern region (SOC and Missan fields humpback and Badra) military operations, but rose from 2.73 m-b-j in the first five months of 2014 to about 2.89 m-b-j in June-August. But due to the increased supply of crude oil to refineries other (to increase production in order to compensate for the shortfall from the cessation of the Baiji refinery), the amount of crude oil exports from the south gradually decreased from 2.58 m-b-j in May to 2.37 m-b-j in August (and to 2.25 m-b-j in September). Therefore, oil export revenues fell gradually from 8.1 billion dollars in May to 7.2 billion dollars in August. It is unlikely to return for the amount of export increased in response to the continued production expected to rise as a result of the implementation of the ongoing development projects for the fields and infrastructure for storage, transportation and export in the southern region. [3]
(2) flexibility in converting import outlets. The semi-locked country of Iraq nautical except sole perpetrator of the Arabian Gulf. Therefore, the transmittance wild contribute an important contribution to the delivery of imports and thus perpetuate domestic supply. I was impressed with most of the land ports to military operations in the center and north.It has separated outlets across Kurdistan from the rest of Iraq and hindered the movement of military operations in Mosul Rabia outlets and based Newborn (on the Syrian border) and Trebil (on the Jordanian border). Although most of Iraq's imports (72%) passes through the ports and ports south, but the remaining is sized place, which could affect disconnection significant influence in the supply of commodity in the price.[4] However, the indicators partial available show that the supply of commodity, outside the area of military operations ( especially Kirkuk, Nineveh, Salahaddin, Anbar), was not affected significantly. Because instead of turning towards the south, the ports of imports from Jordan and to some extent from Syria continued through Nukhayb and Iran through Mundhiriyah and Saudi Arabia through the Arar. As a result, it was characterized the general level of prices generally stable. It turns out that the rise in the index of consumer prices during the three-month period from June to August was less than 1% per month in each of the Kurdistan and Baghdad / Diyala and south, with the exception of a rise of 3% in July in Kurdistan to fall to just 0.4% in August. [5] However, the possibility of their land ports of interruption, as a result of the ongoing military operations, could lead to a shortage in supply tangible commodity.
(3) the foreign exchange market. Did not witness the foreign exchange market substantial changes during the June-September 2014 rate gap between the official exchange rate and the market price continued the same level almost during June-August (4.0%) to fall to 3.2% in September, which is less than the level in May (4.8% ).And refers to the fact that the average demand for foreign currency is often no more than offered by the Central Bank in its daily auction. Thus it can be concluded that in spite of the military operations did not happen considerable disruptions in the foreign exchange market, until now. He has contributed so essential factors in the supply and demand sides. On the supply side helped the continuation of the export of oil from the south to continue supplying the Central Bank foreign currency. On the demand side, the decline in investment demand and consumption goods Permanent (referred to in paragraph 2.1, above) may have helped to limit the high demand for foreign currency, which usually occurs during periods of mounting uncertainty. And finds that it is also a reflection of the demand for foreign currency in cash cash (which shows, beside him, the desire to store foreign currency in anticipation of uncertain circumstances). In spite of the increase in demand in the auction, for cash, from an average of 55 million dollars a day (during the June 1 to 9, 2014) to 58 million dollars a day during the remainder of June and to 72 million dollars a day during the July / August it returned to 66 million dollars a day in September, which applies to almost the level in May. [6] but changed conditions of supply of foreign currency and demand and change the course of military operations may alter expectations.
Third: conclusions
Was the lack of stability in the region of Central and boundaries, especially during the two preceding June 10 geopolitical consequences impacted negatively on the economic performance of the two activities and public sectors in this region and the rest of the regions.
· Since June 10 resulted in the destruction, which exposed him and institutional infrastructure, productivity and population, and the continuation of military operations in this region to the negative economic impact on the rest of additional areas. The most negative effects on the macroeconomic level Oddly Iraq into three regions (Kurdistan, Central Region, Baghdad / south) and mounting uncertainty of the outcome of the economic process and the reflection that, in the two activities of public and private, to postpone or reduce or eliminate spending on investment projects and consumer goods Permanent . The most important other effects in increasing numbers of displaced and sectarian cleansing / ethnic and low agricultural and industrial production, employment and incomes and continuing stopped exporting oil through the Turkish line and stop the Baiji refinery in the central region. This is in addition to the cost of armaments, volunteers and the popular crowd and then in the future costs of reconstruction in the affected areas, rehabilitation and compensation to those affected after the end of military operations.
· On the other hand, was not affected oil production in the southern region.The possible conversion of imports of wild outlets has not been affected so seriously commodity supply and the general level of prices in the rest of Iraq outside the scope of military operations (in the central region) did not happen imbalance in the foreign currency market.
As a result of the increased supply of crude oil to refineries other (to compensate for the lack of stop-winning products Baiji refinery), the amount of crude oil exports from the south took to fall in spite of increased production. But it is unlikely to return in response to the increase of production is expected to continue to rise.
However, the continuation of military operations for a long time will lead to additional negative effects on the rest of the areas probably can not avoid all the consequences.
Sources
International Monetary Fund, IMF (2014) Statement by the IMF Mission at the Conclusion of a Staff Visit for Iraq , Press Release No. 14/124, March 25.
Institute for the Study of War, ISW (two thousand and fourteen) and Terrain Control Situation Reports on Iraq: Since January 2 014, [You must be registered and logged in to see this link.] .
Lewis, J. (in 2014) The Islamic State: a Counter-Strategy for a Counter-State , Middle East Security Report 21, Institute for the Study of War (ISW) , Washington DC, July.
Olive Group (2011): 'A Look into the Security of Iraq's Oil Industry',Http://www.olivegroup.com/cst_details.php?cstid=6 .
OPEC (two thousand and fourteen) Annual Statistical Bulletin 2 014 .
United Nations Office for the Coordination of Humanitarian Affairs, UNOCHA (2 014)IRAQ: 3W Operational Presence as of September 7 2 014 , United Nations, September 7. [You must be registered and logged in to see this link.] .
(*) Economic researcher and writer,, October 2, 2014 [You must be registered and logged in to see this link.] .
(**) Gentlemen, thank Hassan Mahmoud, a conciliator and full Almhedy value their feedback on the initial draft of this paper wider
Copyright Network economists Iraqis. Allows re-publishing site, provided that the network Iraqi economists.
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Margins
[1] is equal to the production fields of the North Oil Company and Central Oil Company, less production and Badra fields humpback and east of Baghdad. Figures in this paragraph from the website of the Ministry of Oil, [You must be registered and logged in to see this link.] .
[2] The contribution of domestic production to satisfy local demand for the year 2011 (the latest year for which data are available) for the products listed in the Metn calculated based on the figures contained in: Central Bureau of Statistics (2013) balances the commodity in 2011 , [You must be registered and logged in to see this link.] / en / national-accounts / balances . The numbers seem to import liquid gas in these balances (volume and value) unreasonably high. This is excluded from the calculation.
[3] For example, as a result of increased production in the field Hlvaip in September increased production in Maysan of 233 A-to-Z in July to 330 A-to-Z in early September (200 A-to-Z of the field Hlvaip and 133 A. b-j fields set-Nissan). The Oil Ministry announced, in mid-August / August, the start of the flow of oil from fields in Maysan and group-Hlvaip, via a new pipeline to the FAO card export of one million barrels per day. And accommodate new energy tube production capacity target group-Missan fields and Hlvaip who totaling a 985-b-j, by licensing contracts oil (production plateau). The ministry also announced the start of the flow of oil for the first time via a tube of oil exports from the new field of Badra (which aims to reach production by the license contract to a 170-b-j) in the province of Wasit to Altoba warehouses in Basra. Site of the Ministry of Oil,[You must be registered and logged in to see this link.] , 19 August 2014, and the channel free / Iraq, September 6, 2014.
[4] calculated the ratio of the memorandum of BSA for a sample of reports of central bank auction that relate to import private in the first eight months of 2012 has reached the value of import documentation in this sample, about two billion dollars and included the border crossings: Abraham and Dohuk / Mersin and Erbil Sulaymaniyah and Rabia, newborn and Trebil and Safwan and the ports of Umm Qasr and Abu Flus.
[5] Central Bureau of Statistics: bulletins indices of consumer prices in 2014 for the months of May, June, July, August. The bulletins are divided Iraq into three regions: Kurdistan, middle (Nineveh, Salahuddin, Diyala, Kirkuk, Anbar, Baghdad), the south.During the June-August stopped collecting price data, and the inclusion of Kirkuk, Nineveh and Salahuddin and Anbar in the central region. Therefore, in these months This area includes Baghdad and Diyala only.
[6] divided sales of foreign currency at the central bank auction to criticism cashtransfers and transfers . And has increased the total sales (cash transfers) the rate of 166 million dollars a day (during the June 1 to 9, 2014) to 212 million dollars a day during the remainder of June and to 232 million dollars a day during the July / August but returned to 224 million dollars a day in September, It is about 10% more than in May.Knowing that the average daily sales amounted to 202 million dollars during the first nine months of 2014 compared with $ 188 million during the comparative period of 2013, the figures in the Metn and margin Mstlh from: Data currency auction daily ("exchange"), the website of the Central Bank of Iraq . It is worth mentioning that the numbers market exchange rate (in Baghdad) issued by the Central Bureau of Statistics figures very close to the market exchange rate issued by the Central Bank. As a result, they show the same level and pattern of change in the rate gap between the auction price and the market price.
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First, put a geopolitical variable
Since the protests began in Anbar province and other areas in central Iraq in late 2012 and gradually transition to a military escalation, the expansion of the theater of armed groups and private Daash against the central forces. And out of Fallujah and then other parts of Anbar since early 2014 for the government's control to reach a serious turning point in the June 10, 2014 occupation of the armed groups to the city of Mosul, after it had been under the influence for a long time. Then occupied the cities and areas of the provinces of Salaheddin, Anbar and parts of Diyala and Kirkuk (ISW, 2014). And "opened" east of the border with Syria, on June 29. As a result, identified in Iraq, in military terms, the three areas, and change the borders of extensions and control sites, two of them with / in the central region by the course of military operations:
(1) Kurdistan and parts of the provinces of Kirkuk and Nineveh after Peshmerga forces entered the area "disputed" and other areas, including the oil fields of Kirkuk.
(2) the central region north of Baghdad (Nineveh, Salahuddin, Diyala, Anbar). It is the foundation of the theater of military operations. Are still important parts of them under the control of government forces and volunteers and / or loyal tribes and the Peshmerga.It has escalated its efforts to gather and coordinate covered since late August to regain control of the other parts. But on the other hand, the armed groups are still in control of strategic locations and logistical and where extensions to Syria. It is located within its oil export pipeline from Kirkuk to Ceyhan / Turkey. As the extraction of oil in some fields Hamrin area as a field Ajil, (Iraq Oil Report, 9 July, 2014).
(3) Baghdad and the southern region. It is under the control of the central government, with repeated terrorist attacks on the "belt" of Baghdad and within, (ISW, 2014).
We have raised the practices of armed groups in displacement, persecution and murder against minorities and opponents in the central region and globally widespread condemnation followed procedures for humanitarian aid. As a result of these groups to attack the surrounding areas in Kurdistan, including the Mosul Dam, as well as the threat of Irbil in early August, accompanied attribution international political intensify aerial bombardment of the American (and other countries, later) for the locations of these groups in Iraq. And decided to countries of the European Union and even Iran supplying weapons to Kurdistan. In his speech on September 10, President Obama announced "a strategy for the NATO international" anti-terrorism is based on the expansion of air strikes in Iraq (and the possibility of extending it to Syria, which has already begun at the end of the month) in addition to the training and assignment of Iraqi forces and stop the flow of volunteers and drying up funding Daash, and finally provide humanitarian aid.
Second: the effects of economic
In addition to the geographical division of the ongoing military operations to divide Iraq actually economically isolated areas. Depending on the progress of these processes and their results will increase or decrease the degree of isolation, the impact of two factors, the first real-time, raised as a result of the split geographically and second vessels / long-term, and stems from the relative strength of the different groups in the political system and outside it, shape it will take the administrative system.
I've had to instability in the central region and especially in the past two boundaries before the June 10 geopolitical consequences impacted negatively on the economic activity of the public and private sectors in this region and the rest of the regions. Since June 10 resulted in the ongoing destruction, which exposed him and institutional infrastructure, productivity and population, in this region to the negative economic impacts of additional them and the rest of the regions. On the other hand, could have been exposed to the effects of other economic avoided if possible so that did not seriously affect the rest of the areas, so far. And we will address these two types of effects, respectively. Note that with the presentation and analysis in this paper is based on preliminary data, or partial / Impressionism may result in the emergence of more data accuracy and comprehensiveness to change the results and conclusions.
(2-1) The most important negative economic impacts
Perhaps the most important effects of the continuing military operations, at the macroeconomic level, in addition to the isolation of areas, is the uncertainty of the outcome of the economic process. This is reflected on the economic decisions concerning the future, especially to postpone or cancel or reduce spending on investment projects and durable goods consumption. This applies to both activities of public and private (domestic and foreign). It focused this matter for public activity not to adopt the draft budget for 2014, rather than limiting it to the rules associated with the budget spending in 2013 plus other necessary expenses related to private military side.At the level of your activity indicators show a partial Impressionism and the general decline in investment demand and consumer durable (particularly on housing and land).And this uncertainty will continue, and then blurring the foreseeable future economic, until the end of the military operations and blows picture of the future.
And at other levels is the most important adverse effects, including the following:
(1) the displacement and migration of the population and then the concentration of geographical isolation and sectarian / religious / ethnic. In the wake of the occupation of Mosul migrated many of them, of various denominations, to areas of Kurdistan. After the escalation of religious extremism to the armed groups and the increasing practice in the killing and ethnic cleansing / religious / ethnic in Mosul and Tal Afar, Sinjar, Diyala, Salahuddin increased population migration towards Kurdistan, Kirkuk and parts of the provinces of the central region beyond the control of these groups and even towards the south. It is difficult to specify the number of migration and displacement of populations internally as the estimates vary according to the authorities as prepared by the displacement and migration is an ongoing process and affected the course of military operations. Shows an estimate of the Agency of the United Nations was released in September 2014 that the number of displaced people reached 1.8 million (Table 1). But in light of the text, in a document of this estimate, that these numbers planned " Planning Figures as at 6 September in 2014 "it is not clear whether this figure represents the number of displaced active until early September, or is it dropping the agency for a number to the end of 2014.
And lead to migration and displacement, loss of property and livelihood, which ranks the economic and social burden on the displaced families and migratory birds, as well as on the state and society. This is in addition to the consequences of the reduction in aggregate demand for goods and services. In terms of supply, the labor shortage is leading to a decline in the production of these goods and services. The resulting interaction demand and supply sides (through the multiplier) to an overall decrease in incomes and production exceeds the initial drop caused by migration and displacement.It also arranges displaced and migrants, especially low-income groups, a majority, the requirements of economic and humanitarian on the central government and the Kurdistan region and civil society organizations, international organizations and the population, infrastructure and services in areas generally received. On the other hand, the killings and ethnic cleansing / religious / ethnic resentment than the general conditions and among different sects and division of society and the isolation of regions, which constantly threatens to conflict in the future.
(2) stop the export of lower oil production from Kirkuk and the central region north of Baghdad. Have been subjected to export oil through the export pipeline to the Turkish-Iraqi cut continuously over the past years, as a result of vandalism and theft of parts of the tube. In light of the inability to convert export to the south, on the one hand, and repeat vandalism and theft, on the other hand, decreased exports gradually from 470 thousand barrels / day, a-b-j, in 2009 (of the total production of Kirkuk and the central region north of Baghdad, about 672 A. b-j) until it reached 264 A-to-Z in 2013 (the production of 520 A-b-j) [1] to depend on 2 March 2014, and despite the suspension of export, the production has continued to supply crude oil to the Baiji refinery and refineries other power plants . But stop the Baiji refinery, after June 10, leading to reduced production of a 289-b-j in May to about a 171-b-j in June and July. With the possibility of the continuation of production at this level or even rise to satisfy the need of the Kurdistan internal or exported through the export pipeline Kurdistan to Turkey by truck, but the uncertainty of the orientations of the armed groups to attack the edge of the region, which has escalated in early August, and maybe even the Kirkuk oil fields, may leads to a decline in production to less than the level in June / July.
(3) stop the oil refineries in Baiji. refineries and refinery are concerned Saladin (two units equal) card a 140-b-j and North refinery card a 170-b-j (a total of 310-b-j). And compose the total production capacities of the two Almsfian 37% of the refining capacity in Iraq, which amounted to about a 830-b-j in 2013 (OPEC, 2014, P. 36). Equipped with this refinery Baiji power plant fuel and detergent plant (and many industries) chemical and about 60% of the gasoline produced in Iraq (Olive Group, 2011). It is clear that such a stop adversely affect fuel users such as energy, transportation and electrical production and service units and appliances, etc..
(4) as a result of military operations and destruction suffered by the infrastructure, institutional and displacement, migration and control of some dams, affected agricultural and industrial production and service negatively in the central region significantly, causing a shortage in the supply of commodity and service (as indicators media partial).It can be inferred on what could be the size of this shortage and its consequences from the available data on the contribution of local production (which contributes to the central and northern regions by the concrete) to satisfy the local need for the year 2011 (the latest data in this regard). It turns out, for example, that local production of barley sate 100% of the local need and wheat (wheat) 51% and 48% of red meat. And contributed to the local production of cement and stainless normal by about 35% and 100% white cement and soft drinks 89%. Referring to the previous point, contributed to oil refineries saturates between 63% of the local need for gasoline and 88% for gas oil and about 100% for the rest of the products (except liquid gas). [2] These figures indicate to what can be caused by a lack of agricultural and industrial production, or interruptions in central and northern regions on the domestic supply in the rest of the two areas, and then a reflection of the increase in prices and / or increase imports, if you can not be compensated from other local sources.
(5) additional costs for arming including compensation he had lost after the army June 10 and the costs of the volunteers and the popular crowd and then the costs of reconstruction in the affected areas, rehabilitation and compensation to those affected after the end of military operations. There is no doubt that these additional costs Stzahm basic expenses consumer and investment increasingly in the public budget offset by limited financial resources, which is reflected in the sum planned deficit escalated in recent years and achieved an actual deficit in 2013 (IMF, 2014) and expected for the year 2014.
(6) affected international air traffic to Iraq and the high costs of transport and insurance.Driving the tense situation in Iraq to avoid airlines from landing and take-off of Iraq. No, but that many of these companies avoid taking flight in Iraqi airspace in his trips to other countries, Iraq is located on the way (driven by the escalation of military operations, as well as the Malaysian plane crash over Ukraine in late July). Even companies that continue to land and take off, the insurance fee could rise to more than the cost of travel and transportation of goods and increase the isolation of the historical situation in Iraq by himself over the past five decades.
(7) The occurrence of government departments under the control of armed groups in the occupied cities, counties and tampering with its records and documents may lead to the loss of economic and statistical data and other demographic including lead to serious gaps in the chain of this data.
(2-2) are not affected seriously by military operations
(1) was not affected by oil and gas production in the southern region (SOC and Missan fields humpback and Badra) military operations, but rose from 2.73 m-b-j in the first five months of 2014 to about 2.89 m-b-j in June-August. But due to the increased supply of crude oil to refineries other (to increase production in order to compensate for the shortfall from the cessation of the Baiji refinery), the amount of crude oil exports from the south gradually decreased from 2.58 m-b-j in May to 2.37 m-b-j in August (and to 2.25 m-b-j in September). Therefore, oil export revenues fell gradually from 8.1 billion dollars in May to 7.2 billion dollars in August. It is unlikely to return for the amount of export increased in response to the continued production expected to rise as a result of the implementation of the ongoing development projects for the fields and infrastructure for storage, transportation and export in the southern region. [3]
(2) flexibility in converting import outlets. The semi-locked country of Iraq nautical except sole perpetrator of the Arabian Gulf. Therefore, the transmittance wild contribute an important contribution to the delivery of imports and thus perpetuate domestic supply. I was impressed with most of the land ports to military operations in the center and north.It has separated outlets across Kurdistan from the rest of Iraq and hindered the movement of military operations in Mosul Rabia outlets and based Newborn (on the Syrian border) and Trebil (on the Jordanian border). Although most of Iraq's imports (72%) passes through the ports and ports south, but the remaining is sized place, which could affect disconnection significant influence in the supply of commodity in the price.[4] However, the indicators partial available show that the supply of commodity, outside the area of military operations ( especially Kirkuk, Nineveh, Salahaddin, Anbar), was not affected significantly. Because instead of turning towards the south, the ports of imports from Jordan and to some extent from Syria continued through Nukhayb and Iran through Mundhiriyah and Saudi Arabia through the Arar. As a result, it was characterized the general level of prices generally stable. It turns out that the rise in the index of consumer prices during the three-month period from June to August was less than 1% per month in each of the Kurdistan and Baghdad / Diyala and south, with the exception of a rise of 3% in July in Kurdistan to fall to just 0.4% in August. [5] However, the possibility of their land ports of interruption, as a result of the ongoing military operations, could lead to a shortage in supply tangible commodity.
(3) the foreign exchange market. Did not witness the foreign exchange market substantial changes during the June-September 2014 rate gap between the official exchange rate and the market price continued the same level almost during June-August (4.0%) to fall to 3.2% in September, which is less than the level in May (4.8% ).And refers to the fact that the average demand for foreign currency is often no more than offered by the Central Bank in its daily auction. Thus it can be concluded that in spite of the military operations did not happen considerable disruptions in the foreign exchange market, until now. He has contributed so essential factors in the supply and demand sides. On the supply side helped the continuation of the export of oil from the south to continue supplying the Central Bank foreign currency. On the demand side, the decline in investment demand and consumption goods Permanent (referred to in paragraph 2.1, above) may have helped to limit the high demand for foreign currency, which usually occurs during periods of mounting uncertainty. And finds that it is also a reflection of the demand for foreign currency in cash cash (which shows, beside him, the desire to store foreign currency in anticipation of uncertain circumstances). In spite of the increase in demand in the auction, for cash, from an average of 55 million dollars a day (during the June 1 to 9, 2014) to 58 million dollars a day during the remainder of June and to 72 million dollars a day during the July / August it returned to 66 million dollars a day in September, which applies to almost the level in May. [6] but changed conditions of supply of foreign currency and demand and change the course of military operations may alter expectations.
Third: conclusions
Was the lack of stability in the region of Central and boundaries, especially during the two preceding June 10 geopolitical consequences impacted negatively on the economic performance of the two activities and public sectors in this region and the rest of the regions.
· Since June 10 resulted in the destruction, which exposed him and institutional infrastructure, productivity and population, and the continuation of military operations in this region to the negative economic impact on the rest of additional areas. The most negative effects on the macroeconomic level Oddly Iraq into three regions (Kurdistan, Central Region, Baghdad / south) and mounting uncertainty of the outcome of the economic process and the reflection that, in the two activities of public and private, to postpone or reduce or eliminate spending on investment projects and consumer goods Permanent . The most important other effects in increasing numbers of displaced and sectarian cleansing / ethnic and low agricultural and industrial production, employment and incomes and continuing stopped exporting oil through the Turkish line and stop the Baiji refinery in the central region. This is in addition to the cost of armaments, volunteers and the popular crowd and then in the future costs of reconstruction in the affected areas, rehabilitation and compensation to those affected after the end of military operations.
· On the other hand, was not affected oil production in the southern region.The possible conversion of imports of wild outlets has not been affected so seriously commodity supply and the general level of prices in the rest of Iraq outside the scope of military operations (in the central region) did not happen imbalance in the foreign currency market.
As a result of the increased supply of crude oil to refineries other (to compensate for the lack of stop-winning products Baiji refinery), the amount of crude oil exports from the south took to fall in spite of increased production. But it is unlikely to return in response to the increase of production is expected to continue to rise.
However, the continuation of military operations for a long time will lead to additional negative effects on the rest of the areas probably can not avoid all the consequences.
Sources
International Monetary Fund, IMF (2014) Statement by the IMF Mission at the Conclusion of a Staff Visit for Iraq , Press Release No. 14/124, March 25.
Institute for the Study of War, ISW (two thousand and fourteen) and Terrain Control Situation Reports on Iraq: Since January 2 014, [You must be registered and logged in to see this link.] .
Lewis, J. (in 2014) The Islamic State: a Counter-Strategy for a Counter-State , Middle East Security Report 21, Institute for the Study of War (ISW) , Washington DC, July.
Olive Group (2011): 'A Look into the Security of Iraq's Oil Industry',Http://www.olivegroup.com/cst_details.php?cstid=6 .
OPEC (two thousand and fourteen) Annual Statistical Bulletin 2 014 .
United Nations Office for the Coordination of Humanitarian Affairs, UNOCHA (2 014)IRAQ: 3W Operational Presence as of September 7 2 014 , United Nations, September 7. [You must be registered and logged in to see this link.] .
(*) Economic researcher and writer,, October 2, 2014 [You must be registered and logged in to see this link.] .
(**) Gentlemen, thank Hassan Mahmoud, a conciliator and full Almhedy value their feedback on the initial draft of this paper wider
Copyright Network economists Iraqis. Allows re-publishing site, provided that the network Iraqi economists.
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Margins
[1] is equal to the production fields of the North Oil Company and Central Oil Company, less production and Badra fields humpback and east of Baghdad. Figures in this paragraph from the website of the Ministry of Oil, [You must be registered and logged in to see this link.] .
[2] The contribution of domestic production to satisfy local demand for the year 2011 (the latest year for which data are available) for the products listed in the Metn calculated based on the figures contained in: Central Bureau of Statistics (2013) balances the commodity in 2011 , [You must be registered and logged in to see this link.] / en / national-accounts / balances . The numbers seem to import liquid gas in these balances (volume and value) unreasonably high. This is excluded from the calculation.
[3] For example, as a result of increased production in the field Hlvaip in September increased production in Maysan of 233 A-to-Z in July to 330 A-to-Z in early September (200 A-to-Z of the field Hlvaip and 133 A. b-j fields set-Nissan). The Oil Ministry announced, in mid-August / August, the start of the flow of oil from fields in Maysan and group-Hlvaip, via a new pipeline to the FAO card export of one million barrels per day. And accommodate new energy tube production capacity target group-Missan fields and Hlvaip who totaling a 985-b-j, by licensing contracts oil (production plateau). The ministry also announced the start of the flow of oil for the first time via a tube of oil exports from the new field of Badra (which aims to reach production by the license contract to a 170-b-j) in the province of Wasit to Altoba warehouses in Basra. Site of the Ministry of Oil,[You must be registered and logged in to see this link.] , 19 August 2014, and the channel free / Iraq, September 6, 2014.
[4] calculated the ratio of the memorandum of BSA for a sample of reports of central bank auction that relate to import private in the first eight months of 2012 has reached the value of import documentation in this sample, about two billion dollars and included the border crossings: Abraham and Dohuk / Mersin and Erbil Sulaymaniyah and Rabia, newborn and Trebil and Safwan and the ports of Umm Qasr and Abu Flus.
[5] Central Bureau of Statistics: bulletins indices of consumer prices in 2014 for the months of May, June, July, August. The bulletins are divided Iraq into three regions: Kurdistan, middle (Nineveh, Salahuddin, Diyala, Kirkuk, Anbar, Baghdad), the south.During the June-August stopped collecting price data, and the inclusion of Kirkuk, Nineveh and Salahuddin and Anbar in the central region. Therefore, in these months This area includes Baghdad and Diyala only.
[6] divided sales of foreign currency at the central bank auction to criticism cashtransfers and transfers . And has increased the total sales (cash transfers) the rate of 166 million dollars a day (during the June 1 to 9, 2014) to 212 million dollars a day during the remainder of June and to 232 million dollars a day during the July / August but returned to 224 million dollars a day in September, It is about 10% more than in May.Knowing that the average daily sales amounted to 202 million dollars during the first nine months of 2014 compared with $ 188 million during the comparative period of 2013, the figures in the Metn and margin Mstlh from: Data currency auction daily ("exchange"), the website of the Central Bank of Iraq . It is worth mentioning that the numbers market exchange rate (in Baghdad) issued by the Central Bureau of Statistics figures very close to the market exchange rate issued by the Central Bank. As a result, they show the same level and pattern of change in the rate gap between the auction price and the market price.
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