British report: Money laundering and officials’ corruption deprive Iraq from its wealth

“The Iraqi economy has been suffering since a period from sharp fluctuations in the exchange rate of dinar that clearly reflected on the economic situation of the Iraqi citizen,” The report, briefed by “Shafaq News” said.

The report attributed this to the money laundering operations as well as financial and administrative corruption in the Iraqi state, which led to Iraq’s loss of nearly three billion dollars in just two months in 2012.

The Central Bank of Iraq (CBI) announced in August of last year that its hard currency reserves amounted to 67 billion $ while the Iraqi government announced that the preventive funds in the Development Fund for Iraq amounted to 18 billion$.

CBI’s reserves of gold has fallen by 20%, in less than a year from nearly 39 tons in 2011 to 31 tons in 2012, while some accuse the current Presidency of the central bank of being responsible for the disappearance of ten tons of gold reserves, Iraq needs to these reserves to enhance the value of the Iraqi dinar funds in money markets abroad.

International Center for Development Studies pointed out that some powerful parties in the Iraqi government are seeking to take advantage of the surplus oil revenues to exploit the reserves built by Iraq during the past ten years to maximize their assets abroad.

The decline in CBI’s reserve is considered a serious matter for the Iraqi economy because it depends on cash revenues from oil sales which means that Iraq's lack of flexibility margin to cope with fluctuations in international oil prices and maintain the required economic balance.