May 5, 2007

A number of Iraqi economists on Saturday gave their forecasts about the implications of the resolutions adopted by the Sharm al-Sheikh conferences, held last Thursday and Friday, for
the Iraqi economy. Positive impacts for the Iraqi economy, a boost to Iraq's participation in the World Trade Organization (WTO) and potential benefits for the Iraqi people were predicted by many economic experts.

Some economists indicated that in order for the conferences to yield benefits for the Iraqi people, high-quality governmental performance in banking activities and investment projects has to be ensured first.

Samir Zedan, an economic expert who works for the U.S. Agency for International Development (USAID) in Iraq told the independent news agency Voices of Iraq (VOI) today, "The huge reduction of Iraqi debts will ease the burden on the Iraqi economy. This will consequently return Iraq to its normal position in the international community and
boost its active participation in WTO, considering its economic potential and resources."
According to Zedan, the reduction of debts will also help Iraq import raw material, which he said will help bring deactivated industries back to life and turn Iraq from an oil-producing country to a multi-resource country that has an industrial base. Zahid Jihad, a media and economic expert, said "The reduction of Iraq's debts by many countries, led by Saudi Arabia, will enormously benefit the Iraqi people if it is accompanied by a distinguished technocratic governmental performance."

According to Jihad, the activities of Iraqi banks are currently suspended because of such debts. Creditors have the right to halt all financial transactions by Iraqi state banks t hat have branches outside Iraqi, including the banks of al-Rafideen (The Two Rivers, in reference to the Tigris and Euphrates rivers), al-Rasheed and the central Bank of Iraq.  Citing Malaysia and South Korea as examples, Jihad indicated that the Iraqi government should pursue a wise policy by activating the banking sectors and rebuilding the country.

Jihad explained that the next task will be assigned to the private sector, which he said was compelled to move its capital to neighboring countries to benefit from their openness to the world economy. "After the cancellation of debts and activation of the banking sector,
openness to the world economy will also be attainable from within Iraq," Jihad added.

Economic and industrial expert Abdul Razzaq Al-Abayachi told VOI, "The cancellation or reduction of debts will rid Iraq of bills that were not its fault and which hinder the wheel of sustainable development." The International Compact for Iraq Conference, hosted by the Egyptian Red Sea resort of Sharm al-Sheikh on Thursday, produced a document bearing its name, which specified all forms of assistance to be provided by the international community to help Iraq reconstruct its economic and military institutions. Iraq's Neighboring Countries'
Conference, held on Friday with the participation of Egypt, Bahrain, representatives from the G8, the UN Security Council's five permanent members, the United Nations, the Organization of Islamic Conference (OIC) and the Arab League, also vowed to back the Iraqi government.

During the conference, some of Iraq's debts were canceled by a number of creditor countries, while others were reduced. A $5 billion grant was also awarded to Iraq.