Administrator’s Weekly Report Economy — establish Baghdad Stock Exchange; Restructure National Debt — 28 أيار 2004 Arabic

Administrator’s Weekly Report Economy May 22 -May 28, 2004 HIGHLIGHTS As of May 26, 2004, estimated crude oil export revenue reached $6.4 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 The Iraqi Stock Exchange is due to open in mid-June. Final adjustments are being made to the depository system and site renovations are complete. The Board of Governors is approving internal regulations and procedures and the CFO is creating internal spending controls. Employees are coming to work each day to help with preparations towards the opening. Thirteen bankers from the Central Bank of Iraq participated in training on monetary data collection and another nine were trained in monetary policy issues. These sessions were part of a process which is teaching Iraqi staff to develop monetary/financial, fiscal, real sector and external sector data according to the format required by the International Monetary Fund. At the New Iraqi Dinar (NID) auction on May 27, the settlement price was 1,460 dinars per dollar, the same as the previous day, and up 0.3 percent from a week ago. The amount of dollars sold at the auction varied over the week from $11.9 - $16.8 million. New Iraqi Dinar monthly fluctuation: February 26 – March 27: NID no change March 27 – April 27: NID depreciated 1.1 percent April 27 – May 27: NID depreciated 1.4 percent Source: CPA Senior Advisor to the Central Bank of Iraq The annualized weekly volatility of the New Iraqi Dinar this past week was 1.6 percent. II. DEVELOP TRANSPARENT BUDGETING AND ACCOUNTING ARRANGEMENTS Redrafting and Execution of 2004 Budget As of May 27, the balance in the Development Fund for Iraq (DFI) was $10 billion, comprised of $8.7 billion in the original Federal Reserve Bank of New York (FRBNY) account, and $1.3 billion on deposit in DFI-Baghdad. Of this, $4.5 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 $28.2 million in interest. As of May 20, the total payments out of the DFI amounted to $9.4 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 18, $7.7 billion are committed to Iraq relief and reconstruction efforts, 74 percent of the July 1 goal. As of May 11, $3.7 billion of funds are obligated with contractors. The following shows the money committed by sector as of May 18 against the July 1 target. 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. III. DESIGN OIL TRUST FUND Proposal for Oil Trust Fund As of May 26, 2004, estimated crude oil export revenue reached $6.4 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; Develop Framework for Collateralizing Movable and Immovable Property Since opening in December 2003, the Trade Bank of Iraq has opened 238 letters of credit totaling $898.5 million, financing imports from thirty-six countries. Included is one letter of credit guaranteed by the Export-Import Bank of the United States for $6.9 million, forty-seven letters of credit for $144.07 million pending issuance, and twenty-three letters of credit to be funded with Oil For Food funds pending issuance. More than $2.7 million has been collected through the reconstruction levy, which was implemented on April 15 and charges a 5 percent tariff on most imports to Iraq. USAID partner BearingPoint installed computer equipment and software for the Ministry of Interior’s Customs Service at 10 of 21 entry points into the country where the levy is collected. Revenue from the reconstruction levy has been deposited with the Ministry of Finance for incorporation into Iraq’s overall budget. The reconstruction levy was developed through a collaborative effort between the Ministry of Finance, the CPA, the UK Customs Service, and USAID-partner BearingPoint. V. PURSUE NATIONAL STRATEGY FOR HUMAN RESOURCES DEVELOPMENT Begin to employ workers in Public Works programs around the country Ongoing security problems are still creating gaps in employment reporting. Security/national defense employs: 249,102 MNFI employs: 54,738 Governorate teams employs: 1,550 PAGE PAGE 4 FOUO Prepared by the Information Management Unit PAGE 1 FOUO Prepared by the Information Management Unit