Iraqi Dinar Exchange Rate Will Rise 300 Times!!!

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Iraq is Growing Faster Than China And Has A Wealth Of Natural Resources

Iraqi Growth Rate Surpasses That of China

In anticipation of a stronger Iraqi currency, investment fever is rising in Japan

By Nagato Ito

17 March 2009 (Nikkei Business)In response to U.S. President Barack Obama's announcement of his Iraq withdrawal plan, anticipation of economic restoration in the country is rising among businesses as well as private citizens in Japan. The U.S. plan calls for 12,000 U.S. troops to withdraw from Iraq by the end of this September, and for the evacuation to be complete by 2011.Expectations mount for infrastructure investment from JapanOn March 1, representatives of 12 Japanese companies, including Mitsubishi Corp. and Japan Petroleum Exploration Co., Ltd., visited Baghdad with Japanese government officials.

There were concrete inquiries about oil concessions and other issues, using legal terms at times.Iraq expects Japan to invest in its infrastructure. Since 2003, Japan has granted $1.5 billion in aid to Iraq, making contributions by repairing hospitals and power-generation facilities. Marubeni Corp. has received orders from hospitals in 12 locations. "Our know-how of security measures is probably the best," said Executive Director Shoichi Ikuta, a member of the inspection team.Although deaths by terrorist attacks have decreased, about 500 people still are being killed in Iraq each month. Marubeni, which finds it difficult to send its employees in Japan to Iraq, has decided to train Iraqi staffers outside the country.

Its method of training is to videotape what goes on locally and confirm the procedures from outside the country. Ikuta pointed out, "If we were to continue business transactions with Iraq, it would be necessary to ensure safety and lighten loan-collection risks."The International Monetary Fund estimates Iraq's growth rate for gross domestic product (GDP) is on the recovery track at 9.8% in 2008 and 7.7% in 2009. Though the scale of Iraq's GDP is about 1/47th that of China, its growth rate last year is estimated to have been higher than that of China, which was 9.0%.Expecting high rates of growth, various nations are expediting their expansion of trade with Iraq. U.S.-based General Electric has sold power generators, while Royal Dutch Shell decided to participate in gas field development.

China already is engaged in oil field development, while South Korea plans to build power generation facilities.Japanese Foreign Ministry Ambassador Gotaro Ogawa, who is in charge of coordinating reconstruction assistance for Iraq, said, "The United States has declared it will be responsible for withdrawing troops from Iraq. Public peace and order is likely to be restored." Japanese firms look forward to expanding business opportunities while maintaining a balance with safety.

Some expect Iraqi currency to rise 300 timesIn the midst of all these movements, an Iraq boom is starting among private citizens in Japan. A 42-year-old housewife living in Fuji City, Shizuoka Prefecture, invested 1 million yen in Iraqi dinar last October. Since it can't be exchanged in banks in Japan, she made the purchase from a money changer in Tokyo. "When the Iraqi economy recovers, its value will surely rise sharply," she said.The money changer has been getting a considerable number of these orders lately. Its monthly trade was 500,000 yen last July, and swelled 60 times to 30 million yen by January of this year. The Iraqi currency had declined sharply due to the Gulf War and its aftermath. Some people have opined that if the official exchange rate returns to what it was before the war, the Iraqi currency may rise 300 times from its present rate.

Another money changer in Tokyo says he is getting similar orders, but remains calm about the currency rise. "On the basis of a practical rate, the rise will be no more than several times the present rate," he said. He said he only buys and sells after explaining the risks to customers, but in comparison with last September, the monthly trading volume has increased by about 20 times.

At first, President Obama had set the withdrawal deadline at April 2010, but was later forced to delay the deadline. There are some uncertain factors with regard to peace and order in Iraq in the future. Likewise, there is nothing certain about the value of its currency. Nevertheless, business firms and investors are attracted by Iraq, which boasts a high growth rate while the rest of the world is in recession. The economy of Iraq, not the military or political phases of the nation, is becoming the center of world attention.