Administrator’s Weekly Report
Economy
May l -May 7, 2004
HIGHLIGHTS

As of May 4, 2004, estimated crude oil export revenue reached $5.7 billion for 2004 (crude
oil export revenue for 2003 [June - December] was $5.1 billion).
I. BUILD FINANCIAL MARKET STRUCTURES
Modernize the Central Bank; Commercial Banking System; Re-establish Baghdad Stock
Exchange; Restructure National Debt

On May 5 the members of the Private Bankers of Iraq (PBI) conducted a special meeting to
unanimously adopt a charter and elect a board of directors. The board of directors met after
the special meeting and elected their chairman, deputy chairman and treasurer. The PBI is the
first banking organization exclusively devoted to the interest of Iraq’s private banks.

At the New Iraqi Dinar (NID) auction on May 6, the settlement price was 1,460 dinars per
dollar, the same as the previous day, but down 0.69 percent from a week ago. The amount of
dollars sold at the auction varied over the week from $4.0 - $14.3 million.

New Iraqi Dinar monthly fluctuation:
 February 6 – March 6:
 March 6 – April 6:
 April 6 – May 6:
NID depreciated 4.8 percent
No change
NID depreciated 2.6 percent
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Exchange Rate Movements
1600
1400
1200
12
/2
5/
2
1/ 003
1/
2
1/ 00 4
8/
1/ 200
15 4
/
1/ 20 0
22 4
/
1/ 20 0
29 4
/2
2/ 0 04
5/
2/ 200
12 4
/
2/ 20 0
19 4
/
2/ 20 0
26 4
/2
3/ 0 04
4/
3/ 200
11 4
/
3/ 20 0
18 4
/
3/ 20 0
25 4
/2
4/ 0 04
1/
2
4/ 00 4
8/
4/ 200
15 4
/
4/ 20 0
22 4
/
4/ 20 0
29 4
/2
5/ 0 04
6/
20
04
New Iraqi Dinars (NID) per US $1
1800
Saddam Rate (250 per $)
Street Market Price
Old Saddam Rate (10K per $)
Settlement Price (Auction)
Source: CPA Senior Advisor to the Central Bank of Iraq
Annualized Weekly Volatility of the NID
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
2/
14
/2
00
4
2/
21
/2
00
4
2/
28
/2
00
4
3/
6/
20
04
3/
13
/2
00
4
3/
20
/2
00
4
3/
27
/2
00
4
4/
3/
20
04
4/
10
/2
00
4
4/
17
/2
00
4
4/
24
/2
00
4
2/
7/
20
04
0.00%
Settlement Price NID Volatility

Street Market Price NID Volatility
The annualized weekly volatility of the New Iraqi Dinar this past week was 1.00 percent.
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II. DEVELOP TRANSPARENT BUDGETING AND ACCOUNTING ARRANGEMENTS
Redrafting and Execution of 2004 Budget

As of May 6, the balance in the Development Fund for Iraq (DFI) was $10.2 billion,
comprised of $9.3 billion in the original Federal Reserve Bank of New York (FRBNY)
account, and $0.9 billion on deposit in DFI-Baghdad. Of this, $4.8 billion is already
committed to projects, and the remaining $5.5 billion is slated for projected 2004 budget
items. Since establishment, the DFI investment program at FRBNY earned $24 million in
interest. As of April 30, the total payments out of the DFI amounted to $7.9 billion.

The Program Management Office (PMO) intends to commit $10.4 billion (56 percent of the
$18.4 billion supplemental) toward contracts by July 1, 2004. As of May 5, $6.6 billion are
committed to Iraq relief and reconstruction efforts, 63 percent of the July 1 goal. As of May
5, $3.12 billion of funds are obligated with contractors (30 percent of the committed fund’s
goal). The following shows the money committed by sector as of May 5 against the July 1
target.
PMO: Supplemental Money Committed by July 1
6000
5000
Millions of Dollars
4000
3000
2000
1000
0

Oil
Electricity
Security
Water
Transport/
Telecom
ED &
Human
Rights
Roads/
Bridges
Private
Sector
Justice &
Public
Safety
2207 Report
1701
5539
3243
4148
500
259
370
184
1038
793
451
July 1 Target
1701
2079
3057
861
601
618
4
131
540
325
458
Updated Apportionment April 21
1701
2538
2976
816
467
259
270
136
825
512
451
Total Committed May 5
1397
1824
1636
509
220
37
211
54
354
31
326
Health Care Democracy
Source: Program Management Office
Section 2207 of the Emergency Supplemental Appropriations Act for Defense and for the
Reconstruction of Iraq and Afghanistan, FY 2004 (Public Law 108-106) enumerates the
allotments granted to CPA for each sector and levies a quarterly reporting requirement to
Congress detailing PMO’s spending.
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III. DESIGN OIL TRUST FUND
Proposal for Oil Trust Fund

As of May 4, 2004, estimated crude oil export revenue reached $5.7 billion for 2004 (crude
oil export revenue for 2003 [June - December] was $5.1 billion).
IV. LAY FOUNDATIONS FOR AN OPEN ECONOMY
Provide IG Staff Capability; Trade Bank; WTO Observer Status; Draft Intellectual Property law
to IGC by April 15, 2004; Develop Framework for Collateralizing Movable and Immovable
Property

Since opening in December 2003, the Trade Bank of Iraq has opened 202 letters of credit
totaling $778.7 million, financing imports from thirty-two countries. Included is one letter of
credit guaranteed by the Export-Import Bank of the United States for $6.9 million, twentyeight letters of credit for $103.7 million pending issuance, and twenty-three letters of credit
to be funded with Oil For Food funds pending issuance.

The CPA advisors office for the Ministry of Trade (MOT) gave a presentation on the U.S.
Generalized System of Preferences (GSP) to MOT Director General Al-Mukhtar and other
Ministry officials. Daniel Ross, newly-arrived in the Advisors Office from USTR, explained
the eligibility criteria for the program and how a country requests designation as a
beneficiary of the program. MOT officials agreed to work with CPA advisors to request
designation of Iraq as a beneficiary country and seeking expedited consideration of the
request. The advisor’s office will also collaborate with MOT to draft a required report on
Iraq’s compliance with GSP eligibility criteria.

CPA Administrator L. Paul Bremer III signed CPA Order 83, the Amendment to the
Copyright Law. The Order revises and amends existing Iraqi Copyright Law to provide for
its modernization and to provide increased protections for writers, computer software
engineers, performers, producers of sound recordings, and others who create or own literary
and artistic works. The Order brings the current Iraqi Copyright Law into accordance with
internationally-recognized standards of protection.

As part of the preliminary stages of Iraq’s WTO accession process, on May 5, the CPA
Office of the General Counsel briefed the Iraqi Ministry of Trade senior leadership on how
implementation and enforcement of CPA Orders 80, 81 and 83 (Trademarks and
Geographical Indications; Patents, Industrial Designs, Undisclosed Information, Integrated
Circuits and Plant Varieties; and Copyrights, respectively) would help Iraq meet its
obligations under the WTO Agreement on Trade-related Aspects of Intellectual Property
Rights (TRIPS). As a result, Ministry officials have requested that the Office of General
Counsel organize technical assistance programs for Ministry of Trade officials. Future
training programs are also being planned for officials of the Patent and Trademark Offices.
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V. PURSUE NATIONAL STRATEGY FOR HUMAN RESOURCES DEVELOPMENT
Begin to employ workers in Public Works programs around the country

Ongoing security problems have reduced the reliability of data on Iraqi employment by
CPA and CJTF-7 this week. Where data is available, it indicates a small decline in the
jobs identified as created by CPA/CF. However, until the employment numbers are
confirmed in official reports, no new employment figures will be reported.
VI. INITIATE PUBLIC SECTOR MANAGEMENT REFORM
Civil Service Salary Review

The Inspector General for the Ministry of Defense was appointed this week. With this
appointment, all 26 Ministries have Inspector General.

On May 4, newly appointed Inspectors Generals met at the Baghdad Convention Center
to review staffing, training plans, staff pay, ethics and the code of conduct program, and
the 2005 Inspector General budget. The Inspectors General are meeting together weekly
basis to discuss common issues (particularly budget staff) and develop their individual
and collective roles.
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