Administrator’s Weekly Report
Economy
April 10-April 16, 2004
HIGHLIGHTS

As of April 16, 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

At the New Iraqi Dinar (NID) auction on April 15, the settlement price was 1,445 dinars per
dollar, the same as the previous day, but down 1.46 percent from a week ago. The value of
dollars sold at the auction varied over the week from $6.1 - $21.3 million.

New Iraqi Dinar monthly fluctuation:
 January 13 – February 13:
 February 14 – March 14:
 March 15 – April 15:
NID appreciated 6.6 percent
NID appreciated 0.7 percent
NID depreciated 2.1 percent
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Exchange Rate Movements
1800
1600
1400
1200
12
/2
5/
20
1/ 03
1/
20
1/ 0 4
8/
2
1/ 00 4
15
/2
1/ 0 04
22
/2
1/ 0 04
29
/2
0
2/ 04
5/
2
2/ 00 4
12
/2
2/ 0 04
19
/2
2/ 0 04
26
/2
0
3/ 04
4/
2
3/ 00 4
11
/2
3/ 0 04
18
/2
3/ 0 04
25
/2
0
4/ 04
1/
20
4/ 0 4
8/
2
4/ 00 4
15
/2
00
4
New Iraqi Dinars (NID) per US $1
2000
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
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
12
/2
5/
20
03
1/
1/
20
04
1/
8/
20
04
1/
15
/2
00
1/
4
22
/2
00
1/
4
29
/2
00
4
2/
5/
20
04
2/
12
/2
00
2/
4
19
/2
00
2/
4
26
/2
00
4
3/
4/
20
04
3/
11
/2
00
3/
4
18
/2
00
3/
4
25
/2
00
4
4/
1/
20
04
4/
8/
20
04
4/
15
/2
00
4
0.00%
-10.00%
-20.00%
Daily return
Street Market Price NID Volatility

Settlement Price NID Volatility
The annualized weekly volatility of the New Iraqi Dinar this past week was 3.56 percent.
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II. DEVELOP TRANSPARENT BUDGETING AND ACCOUNTING ARRANGEMENTS
Redrafting and Execution of 2004 Budget

As of April 16, the balance in the Development Fund for Iraq (DFI) was $9.97 billion,
comprised of $8.97 billion in the original Federal Reserve Bank of New York (FRBNY)
account, and $1.0 billion on deposit in DFI-Baghdad. Of this, $3.7 billion is already
committed to projects, and the remaining $6.2 billion is slated for projected 2004 budget
items. Since establishment, the DFI investment program at FRBNY earned $18.6 million in
interest. As of April 16, the total payments out of the DFI amounted to $6.7 billion.

State Department and U.S. Agency for International Development (USAID) assistance to
Iraq disbursed in FY 2003/2004 totals $3.7 billion as of April 13, 2004:





$2.6 billion
$101 million
$426 million
$161 million
$39 million
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 April 15, $4.8 billion are
committed to Iraq relief and reconstruction efforts, 46 percent of the July 1 goal. As of last
week, $2.56 billion of funds are obligated with contractors (25 percent of the committed
fund’s goal). The following shows the money committed by sector as of April 15 against the
July 1 target.
PMO: Supplemental Money Committed by July 1
6000
5000
Millions of Dollars

USAID/Asia and Near East (ANE):
USAID/Office of Foreign Disaster Assistance (OFDA):
USAID/Food for Peace (FFP):
USAID/Office of Transition Initiatives (OTI):
State Department/ Bureau of Population, Refugees,
and Migration (PRM):
4000
3000
2000
1000
0
Oil
Electricity
Security
Water
Transport/
Telecom
ED &
Human
Rights
Roads/
Bridges
Private
Sector
Justice &
Public
Safety
2207 Report
1701
5560
3243
4332
500
280
370
184
1018
793
458
July 1 Target
1701
2079
3057
861
601
618
4
131
540
325
458
Updated Apportionment April 6
1600
1708
2483
496
165
203
119
70
526
330
458
Total Committed April 15
940
1435
1221
307
165
37
119
53
157
31
332
Health Care Democracy
Source: Program Management Office
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
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.
III. PRIVATE SECTOR INITIATIVES
Streamline existing commercial code/regulations; Facilitate lending to private businesses;
Technical Assistance for Small and Medium Enterprises (SMEs); Iraqi Participation in
Reconstruction Subcontracts; Business Development

The Ministry of Trade began approving applications for branches of foreign companies.

To date, more than 1,800 loans totaling $3.5 million have been disbursed to micro and small
enterprises throughout Iraq. The loans range from $100 to $5,000 for micro-enterprises and
$5,001 to $25,000 for small enterprises. The average loan size is $1,944 with a repayment
rate of 100 percent. Approximately 15 percent of the program’s clients are women. In an
effort to increase the diversity of its clients, ACDI/VOCA (USAID’s implementing partner)
recently designated several loan offices to specialize in group lending techniques for women
and another group of loan officers to investigate an agricultural lending program.
IV. DESIGN OIL TRUST FUND
Proposal for Oil Trust Fund

As of April 16, 2004, estimated crude oil export revenue reached $5.7 billion for 2004 (crude
oil export revenue for 2003 [June - December] was $5.1 billion).
V. 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, the Trade Bank of Iraq has 183 Letters of Credit issued or
pending issuance totaling $708.9 million in imports from thirty one countries. This includes
one letter of credit pending issuance with a guaranty from the Export-Import Bank of the
United States and twenty one letters of credit pending issuance under the Oil for Food
program.

CPA is close to initiating field work on a year-long National Economic Survey of Iraq. The
survey, using 20 or more Iraqi economists, will study a number of priority economic sectors
to formulate a picture of how each sector works, its relationships with other sectors, and how
it contributes to the national economy. Project staff will also use secondary data available
from the Iraqi government and CPA offices. Two project economists are near to completing
a sector outline and questionnaire for agriculture which will be the first sector surveyed.
CPA is holding discussions with the Ministry of Planning and the World Bank to explore
possible collaboration. Project bids are due April 25 and CPA plans to complete the contract
and commence field work by mid-May.
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
The National Economic Survey project team is exploring the possibility of forming an
independent economic policy institute. In addition to being a possible vehicle for conducting
the National Economic Survey project, such an institute could perform the functions of a
Western think tank including formulating policy recommendations, holding seminars,
publishing reports and acting as counterbalance to the government’s economic policymaking.
VI. 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.

Ministry of Labor and Social Affairs has 16 Employment Centers up and running across the
country. Three more are scheduled to open over the next few weeks. Over 54,000
jobseekers have registered in the Baghdad Center since its opening in late 2003. In March,
nearly 500 jobseekers were placed in jobs in Baghdad alone. In addition to ongoing English
and computer courses, last week the Employment Center began teaching Arabic literacy
courses to registered jobseekers. English, computers and literacy courses will soon be
expanded to Basra, Arbil, and Sulaymaniyah Employment Centers.
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