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Minister of Finance Calls for Higher Oil Production

Saad Salloum
Niqash speaks to Iraq’s Minister of Finance, Bayan Jabr Solagh, on the issue of the new American president, the threat of Iraqi funds in the U.S. being seized by the American government, as well as domestic…
21.11.2008  |  Baghdad

Niqash: Will the election of Barack Obama result in a change in U.S policy towards Iraq?

Solagh: I believe that U.S. policy in general will not change as a result of the new president, neither will it change because of the change in the ruling party. No quick decisions are expected regarding economic, political or security related issues. I think that U.S. policy will remain unchanged, at least in the first six months of next year, because it is difficult to change the core basis of U.S. policy.

Niqash: Are you concerned that Iraqi funds in the U.S. may be seized? [The prospect has been raised if Iraq does not sign a security pact with the U.S.]

Solagh: We are concerned about trade revenues - that is, oil revenues. We have two kinds of assets in the U.S.: [Firstly,] oil revenues which are deposited in a UN protected fund [which may become vulnerable to judicial attachment when the UN Iraq mandate ends on 31 December 2008]. We are now seeking to have the mandate renewed by a new Security Council resolution to protect these funds. There are other funds of the Iraqi central bank amounting to US $40 billion. These funds are not a source of concern because they are not trade revenues. They are reserves which could be protected in Europe or the U.S. The governor of the central bank is now looking into how these funds can best be protected.

We are concerned about these unjustified claims threatening Iraqi funds in U.S. banks. Iraq under the former regime was regarded as a state sponsor of terrorism, but the new Iraq is undoubtedly a country suffering from terrorism.

There are also claims by American citizens affected by the September 11 attacks… There were no Iraqis among the names of those the involved in September 11 attacks. Despite this, some U.S. citizens have filed lawsuits against Iraq… These lawsuits can be easily handled and the Ministry of Justice is now working day and night with a team of lawyers from the United States to respond to these claims. We hope that we will be able to settle these lawsuits very soon.

These are the risks, and we are planning as much as possible to protect Iraqi assets in the U.S.

Niqash: Government employees are worried that promised salary increases will not be paid [as a result of the fall in oil prices]. Is this true?

Solagh: Last week I gave orders to initiate the increase in salaries as of January 2009. We have decided to pay the salary increase and only need to transfer the funds. There are rumors [saying that the salary increases will not be paid] spread by enemies from within and I do not wish to respond to these rumors. I will let these enemies say whatever they want. The coming few days will prove that they are wrong.

Niqash: Do you have the courage to take difficult economic decisions required by the economy, such as reducing salaries, which will cause a negative social impact?

Solagh: In fact I am against reductions in salaries and I will insist that Iraqi employees receive the highest possible salaries as long as I stay in the ministry of finance. Many economic consultants have advised us not to pay the increase in salaries but I insist on paying this increase and I will continue to do so. Employees will receive the increase in salaries for the years 2009 and 2010.

Niqash: What is behind your position?

Solagh: Iraq is a country rich in oil and resources. We should develop industry and agriculture instead of putting pressures on people and reducing their salaries. On the other hand, we should develop and increase oil production. I support the idea of exporting three million barrels a day to enable Iraqis to enjoy this wealth.

Niqash: How do you assess the performance of your ministry in 2008?

Solagh: 2008 saw the use of smart cards for pensioners and social welfare for the first time ever in Iraq. This has ended the suffering of elderly people and reduced administrative corruption. This was one of my dreams a year ago. In 2009, I hope that we can introduce credit cards along with other initiatives. It is another dream that I will attempt to materialize as of now and I hope to accomplish it by next year.
The other issue which took six months of my time is customs because we need to reintroduce them. Some say that this is not the task of the minister of finance but I insisted on protecting Iraqi farmers by introducing customs and fees on imported fruits and vegetables during the harvest season. We are planning to undertake similar initiatives to develop the industrial sector. My dream is to prepare a budget of US $150 billion that will allow Iraqis to enjoy the wealth of their country and to ensure Iraqi employees receive the highest salaries in the Middle East.

Niqash: How are you going to make this dream come true?

Solagh: It will come true when the ministry of oil increases its production to 3.5 million barrels a day. We need to increase production and our exports. Production should be higher than exports so that we are not obliged to import oil products. I don’t mean that we should exclusively rely on oil as the industrial and agricultural sectors should also contribute to this process.