Believe it or not -- this from Aljazeera....
Saddam Hussein?s last battle on paper
?Saddam Hussein? will no longer be in currency in Iraq once the United States dollar goes into circulation in Iraq. He will fight his last battle on a banknote, as the United States gets ready to pay Iraqi civil servants in dollars, not in the local dinar that carries his picture.
And this battle will take longer than the three-week military campaign that ousted the Iraqi leader from Baghdad on April 9, since billions of banknotes have to be replaced.
"For sure there will be a new dinar, this one has Saddam Hussein's picture and the quality of the paper is poor," said Humam Shamaa, who teaches in the faculty of management and economics at the University of Baghdad.
A new currency is also needed because Kurdish areas in northern Iraq use the so-called "Swiss dinar," Iraqi banknotes printed in Europe that do not carry the picture of Saddam, he argued.
The "Swiss dinar" was withdrawn from circulation in areas under Saddam Hussein?s control in 1993, replaced by higher denomination banknotes printed locally and carrying the picture of Saddam, a move prompted by skyrocketing inflation.
Once a new post-Saddam government is formed, "it should not take more than two months to decide on a new dinar, if the will is there," said Shamaa. US officials have reportedly put the timeframe at three to six months.
The central bank in Baghdad was looted and destroyed after the collapse of the regime but its operations could resume in another location as "the staff is ready to return if there is security," said Shamaa.
Until its replacement, "the old dinar will remain in circulation as no law had cancelled it," he added. But this will start to change at the end of the month in the state dministration.
The United States had said employees of the Iraqi state would receive their salaries in dollars, taken from the estimated $ 1.7 billion dollars in Iraqi funds confiscated from US banks.
Washington is planning to pay up to 2.5 million civil servants 20 dollars per head, a total of 50 million dollars. If the Iraqis receive their salaries in one banknote, it will carry the picture of Andrew Jackson.
At the current exchange rate of 3,300 dinars per greenback, 20 dollars fetch 66,000 dinars, slightly above the average salary of 50,000 dinars during Saddam's rule. But Shamaa said the civil servants often supplemented their monthly pay with extra sources of revenue, mainly illegal, and therefore their April income is likely to be less than in February.
The economist played down the threat of dollarising the economy. He said the greenback had become the shelter currency some 10 years ago, because of sharp fluctuations in the dinar exchange rate due to the United Nations sanctions imposed on Iraq for its 1990 invasion of Kuwait.
"The dollar has been around and freely exchanged for years," he added, dismissing a parallel with Afghanistan where the local currency slumped under the weight of an influx of dollars brought in by aid agencies.
From 1991 until the US-led war started a month ago, the United Nations had an important presence in Iraq, for humanitarian and disarmament purposes, injecting significant amounts of dollars into the local economy.
Ali Abdussalam, a forex dealer on Saadoun street in central Baghdad, expects the dinar's value to improve if there is a new influx of dollars on the short term as there will be more greenbacks on offer.
Shamaa said the main inflationary threat comes not from dollarisation, but from the higher wages likely to be offered by foreign companies taking part in the reconstruction and the rehabilitation of the vital oil sector. --- Al Jazeera with agency inputs
April 18, 2003
Link
Saddam Hussein?s last battle on paper
?Saddam Hussein? will no longer be in currency in Iraq once the United States dollar goes into circulation in Iraq. He will fight his last battle on a banknote, as the United States gets ready to pay Iraqi civil servants in dollars, not in the local dinar that carries his picture.
And this battle will take longer than the three-week military campaign that ousted the Iraqi leader from Baghdad on April 9, since billions of banknotes have to be replaced.
"For sure there will be a new dinar, this one has Saddam Hussein's picture and the quality of the paper is poor," said Humam Shamaa, who teaches in the faculty of management and economics at the University of Baghdad.
A new currency is also needed because Kurdish areas in northern Iraq use the so-called "Swiss dinar," Iraqi banknotes printed in Europe that do not carry the picture of Saddam, he argued.
The "Swiss dinar" was withdrawn from circulation in areas under Saddam Hussein?s control in 1993, replaced by higher denomination banknotes printed locally and carrying the picture of Saddam, a move prompted by skyrocketing inflation.
Once a new post-Saddam government is formed, "it should not take more than two months to decide on a new dinar, if the will is there," said Shamaa. US officials have reportedly put the timeframe at three to six months.
The central bank in Baghdad was looted and destroyed after the collapse of the regime but its operations could resume in another location as "the staff is ready to return if there is security," said Shamaa.
Until its replacement, "the old dinar will remain in circulation as no law had cancelled it," he added. But this will start to change at the end of the month in the state dministration.
The United States had said employees of the Iraqi state would receive their salaries in dollars, taken from the estimated $ 1.7 billion dollars in Iraqi funds confiscated from US banks.
Washington is planning to pay up to 2.5 million civil servants 20 dollars per head, a total of 50 million dollars. If the Iraqis receive their salaries in one banknote, it will carry the picture of Andrew Jackson.
At the current exchange rate of 3,300 dinars per greenback, 20 dollars fetch 66,000 dinars, slightly above the average salary of 50,000 dinars during Saddam's rule. But Shamaa said the civil servants often supplemented their monthly pay with extra sources of revenue, mainly illegal, and therefore their April income is likely to be less than in February.
The economist played down the threat of dollarising the economy. He said the greenback had become the shelter currency some 10 years ago, because of sharp fluctuations in the dinar exchange rate due to the United Nations sanctions imposed on Iraq for its 1990 invasion of Kuwait.
"The dollar has been around and freely exchanged for years," he added, dismissing a parallel with Afghanistan where the local currency slumped under the weight of an influx of dollars brought in by aid agencies.
From 1991 until the US-led war started a month ago, the United Nations had an important presence in Iraq, for humanitarian and disarmament purposes, injecting significant amounts of dollars into the local economy.
Ali Abdussalam, a forex dealer on Saadoun street in central Baghdad, expects the dinar's value to improve if there is a new influx of dollars on the short term as there will be more greenbacks on offer.
Shamaa said the main inflationary threat comes not from dollarisation, but from the higher wages likely to be offered by foreign companies taking part in the reconstruction and the rehabilitation of the vital oil sector. --- Al Jazeera with agency inputs
April 18, 2003
Link
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