February 08, 2006

Azzaman quotes anonymous sources within the Iraqi government leaking aspects of the IMF deal which "the government has so far opted to keep under wraps. The sources said millions of Iraqis dependent on food rations for a living need now to prepare themselves to do without government-subsidized food... [the people] will find it almost impossible to make ends meet without them."

The sources also reiterated the imminent increase in fuel prices (which it warns are "very likely to lead to large-scale rioting") and the desire of the IMF for "Iraq to open up its oil fields to foreign investments".
Interestingly the paper notes that "the deal will have to be ratified by the parliament", however "the outgoing government of Prime Minister Ibrahim al-Jaafari, though agreeing to it, has refused to send it to the legislators." Perhaps there is still time for the new democratically elected government to revoke the disasterous IMF Stand-by Agreement?

February 07, 2006

Fuel price increases have already caused hardship and rioting in Iraq, as Jubilee Iraq has been warning about for a long time. Now the Washington Post reports that prices are set to rise a massive 10-fold this year to meet IMF demands. A litre of ordinary benzene (gasoline) before the first rise in December cost 20 dinars, or about 1.4 U.S. cents. It climbed to 50 dinars in early December. An unnamed Iraqi official is quoted "The price of benzene will gradually increase in 2006 to reach about 600 dinars (41 cents) per litre." This would be even more explensive than in Saudi Arabia where it costs 25-30 cents, raising the interesting possibility of oil smuggling TO Iraq. None of this hardship is worth the IMF's paltry $685m loan, less than half what Iraq is paying in reparations annually.