Iraq hopes oil to fuel balanced 2004 budget

[Khephra]

BAGHDAD, Oct 13 (Reuters) - Iraq unveiled a bare-bones $13.4 billion budget for 2004 on Monday that hinges on oil revenues and expects donors to provide the extra billions needed for reconstruction.

Iraqi oil exports should generate about $12 billion of expected revenues of about $12.8 billion in 2004, leaving a $600 million fiscal shortfall to be met by unspent money from the United Nations oil for food program that ended in May, Finance Minister Kamelal-Keylani told reporters.

"The estimated needs to rebuild Iraq will exceed resources for the 2004 budget," Keylani said.

The World Bank, the United Nations and the International Monetary Fund have estimated that $35.6 billion would be needed over the next four years to reactivate the economy in addition to $20 billion estimated by the U.S.-led authority in Iraq.

more...........

http://www.forbes.com/markets/newswire/2003/10/13/rtr1107175.html

[Flying_Pig]

1. That's nice. They get a balanced budget, and we get a half trillion

in debt for our grandkids to pay off. I swear, we are living in a Twilight Zone reality warp of some kind. Nothing makes sense anymore, Up is down, and down is up, wrong is right, and right is wrong.....

:wtf: :grr:

[papau]

2. And what is the repayment schedule on the $200 Billion now owed

by Iraq?

Or is the West to forgive the $200 Billion debt PLUS spend $150 Billion to rebuild the country,

All While the no jobs US economy has our schools and infrastructure in the US falling apart as the tax cut for the rich means the $500 billion defict will get "too" large if the "no child left behind gets an extra 10 B so as to fund it at the level Bush agreed to - back when we thought Bush did not lie - at least not all the time..

[Gin]

3. They are throwing these numbers around and it's meant to

confuse us. Each group mentions a different figure.

I personally think the 67 billion for troops is really for Iraq.. and the 20 billion is for the troops.

They would never get the approval if the true numbers were reversed.

[Parche]

4. the bush doctrine

Leave no child behind in Iraq
Iraqi Veterans will receive more benefits
Iraqi roads and bridges will be strengthened and built

Let us send GW Bush to Iraq to be president, since he doesnt
care about the US anymore

[leftchick]

5. first they have to make the oil FLOW...

and it appears it ain't happening anytime soon according to this article posted earlier in GD....

http://www.iol.co.za/index.php?art_id=qw1065949746290O425&set_id=1&click_id=2813&sf=2813


<snip>Thus the only oil revenues the US can get are from the south. In the middle of August, Bremer gave the impression that production stood at about 1,5 million barrels a day. But the real figure at that time was 780 000 barrels and rarely does production reach a million. In the words of an oil analyst visiting Iraq, this is "an inexcusable catastrophe".

When the Americans attacked Iraq in March, the country was producing 2,7 million barrels a day. It now also transpires that in the very first hours after they entered Baghdad on April 9, American troops allowed looters into the oil ministry. By the time senior officers arrived to order them out, they had destroyed billions of dollars of irreplaceable seismic and drilling data.



as usual bremer is lying his ass off ....

[Gloria]

6. Read this piece for a real look at what's going on....debt, etc....

As posted in the current World Media Watch...

3//Arab News Monday,13 , October, 2003 (17, Sha`ban,1424 )

http://www.arabnews.com/?page=6§ion=0&article=33551&d=13&m=10&y=2003



IRAQ: LIBERALIZING A SHATTERED ECONOMY

Henry T. Azzam, Special to Arab News

(Henry T. Azzam is chief executive officer at Jordinvest.)

SNIP---discussion of how the oil pipelines are being sabotaged

Iraq’s oil production level so far this year has averaged 1.088mbpd, while Brent crude has been trading at an average of $28.5 a barrel during the first three quarters of the year. Assuming oil production cost of around $2 a barrel and another $ 3a barrel discount of Iraqi crude to Brent crude, this leaves an average price so far this year for Iraqi crude of $23.5 a barrel. Iraq’s total oil GDP would then come to around $9.3 billion at present levels of oil production and prices.

A series of GDP estimates in current US dollars for all the Arab countries including Iraq are published in the authoritative annual Arab Unified Economic Report prepared and edited by the Arab League, Arab Fund for Economic and Social Development and the Arab Monetary Fund. This report shows Iraq’s GDP for 2001 at $81 billion, the third highest after Saudi Arabia and Egypt. These figures are based on official foreign exchange rate when converting GDP value of non-oil sectors from Iraqi dinars to US dollars. If the market rate of 2,500 dinars to the dollar were used, Iraq’s GDP figure would not exceed $15 billion, and the country’s total GDP this year would be in the range of $25 billion.

Iraq is heavily indebted country. In mid-July, the Paris Club of creditor countries estimated that Iraq owed a total of $42 billion to its member governments ($21 billion in principal and $ 21billion in late interest payments). The largest Paris Club creditors to Iraq are Japan ($4.1 billion), Russia ($3.5 billion), France ($3 billion) and the US ($2.2 billion). Non-Paris Club public creditors and private creditors have yet to publish their own estimates for debt owed to them by Iraq. However, various independent studies have put this debt at around $63 billion (including late interest payments), with the bulk owed to governments of the Gulf countries. Iraq’s total external debt is therefore likely to be close to $105 billion. In addition to its massive external debt, Iraq is also obliged to pay compensation awarded by the UN Compensation Commission to victims of its 1990 invasion of Kuwait. As of end-July 2003 , awarded compensation remaining to be paid by Iraq amounted to $28 billion bringing the country’s total external obligations to $133 billion.

No detailed estimates of the likely costs of reconstructing Iraq’s economy have yet been released by any international institutions. In regards to the oil sector, independent estimates indicate that it could cost up to $10 billion to restore Iraq’s oil production to its pre- 1991 level of 3.5mbpd. In terms of the non-oil sector, the sums are far larger. The Coalition Provisional Authority estimates that it would cost $13 billion to rebuild Iraq’s electricity infrastructure alone, and it would take $16 billion to restore the country’s water supplies.

However, these are just two elements of a vast reconstruction program that could be as high as $100 billion. Iraq’s private sector is still in its infancy and given the country’s underdeveloped financial and capital markets, economic growth will be mainly driven in the coming few years by government expenditures financed by oil revenues.


MORE

Read the whole article to get the full situation. Author feels it is too soon to start selling everything off...and a new government has the right to cancel it all.

[Gin]

7. 100% foreign ownership...WTF?

AMMAN, 13 October 2003 — The recent plans announced by the interim Iraqi Governing Council to fully liberalize the economy and open all sectors except oil to 100 percent foreign ownership have raised alarm among different Iraqi groups


so..they will all be working for foreign owned companies....this
is disgusting.

[papau]

8. Great Article - so why does US Media throw $200 B debt around if

real number is $133 billion?

And why is resconstruction estimated at $39 Billion when Bush throws out $150 billion.

Is all the extra just padding for his billionare friends to add a few billion to their children's truct fund?

[Gin]

9. Bingo for Bonzo!

gin

[legin]

10. Very, very roughly

say average oil price = $25 a barrel
cost to get it out the ground = $5 a barrel
so revenue = $20 a barrel

(12bn/20)/365 = daily output of approx 1.6 million barrels per day.

Ok this is rough, but i would have said this 12bn revenue estimate is at the optomistic end of the scale.

1 million barrels per day output gives 7.3 bn revenue.

[legin]

11. duh. Good post Gloria

read the thread before thinking, not the other way round legin.

:spank:

[Comadreja]

12. Real use of Iraqi crude?

The US war machine needs oceans of fuel to operate. It will need vast amounts right in the Middle East to grow and hold their new oily Empire. Better to pump it and refine it right where it is needed than to ship it over in tankers. Israel will no doubt be fueling its tanks, bulldozers, and planes with Iraqi gas too. We the taxpayers will no doubt pay inflated prices for every drop burned in the Great American Conquest.