About that budget surplus in Iraq...

Severns Guntzel, Electronic Iraq,
Oct 14, 2008

We've heard a lot about Iraq's $79 billion budget surplus--which always seems to raise eyebrows but never the question: how exactly has Iraq found itself with a surplus? Iraq's Finance Minister explains. This is from a United Press International report:

Speaking with the Council on Foreign Relations, Iraqi Finance Minister Bayan Jabr Solagh said August reports of a budget surplus of as much as $79 billion through 2008 fail to take into account the true nature of the Iraqi financial system."The surplus or the excess in money that people talk about is money that was not spent (in August)," he said. "We are spending it now through the budget process."

The minister said the budget surplus is at the Iraqi Central Bank and not the development fund for reconstruction in New York. Solagh said the Central Bank deposits, which total no more than $30 billion, are used to back the Iraqi currency."It is not surplus; it is the federal reserve," he said. "It is the reserve of Iraq. That means we cannot have a fixed currency without it."