Washington: With no government in Baghdad and the old currency not worth the paper
on which it is printed, the United States is airlifting Dollars from the New York
Federal Reserve Bank to temporarily replace the Iraqi Dinar, the 'Wall Street
Journal' reported.
The Dollar becomes the de facto currency of Iraq for now.
As an initial step, it said, American officials charged with the reconstruction of
the country will use small-denomination bills (notes) to make "emergency" payments
to hundreds of thousands of Iraqi civil servants in an effort to quiet civic unrest
and to stabilise the chaotic Iraqi economy.
The use of the Dollar as the currency of Iraq till a new government decides
otherwise could prove controversial in the Arab world, said the paper, but it will
give the Iraqis a currency that will retain its value despite the uncertainties
about the country's reconstruction.
American officials are working with finance and postal ministry officials from
Saddam Hussein's government to figure out appropriate wages. Setting wages too high
would worsen inflation that is already running at about 70 per cent annually.
At first, said the paper, the Iraqi workers will be given $ 20 each (about Rs 950)
in $ one and $ five bills. That is a large sum in Iraq, where a mid-level oil
professional with a chemical degree used to make the equivalent of $ 50 a month in
Central and Southern Iraq.
Funds for the Dollar payments, said the paper, will come from the $ 1.7 billion in
Iraqi assets that the US recently confiscated.
Meanwhile, the first meeting of dozens of representatives from Iraqi factions, who
met in a gold-coloured, air-conditioned American tent near Ur, the birthplace of the
biblical prophet Abraham, released a 13-point statement saying that the new Iraq
should be Democratic and that the rule of Law must be respected.
White House Envoy Zalmay Khalilzad assured the group that the United States has "no
interest, absolutely no interest", in ruling Iraq.
Similar meetings will be held in other parts of the country with the goal of
choosing 40 members of an interim advisory panel that will write a new Constitution,
among other duties. The interim authority will be led by retired American general
Jai Gabner.
British forces are already using American Dollars to pay dockworkers in Umm Qasr and
maintenance workers in Basra, who are starting to clean up looted buildings.
Using Dollars, US officials said, is a stopgap measure brought about by the looting
of Iraqi banks and by large-scale counterfeiting.
Iraq now has two currencies. A pre-Hussein Dinar, nicknamed the Swiss Dinar because
of Switzerland's reputation for financial probity, circulates in the Northern Iraqi
regions under Kurdish control. The Kurds have been enjoying semi-independence for 12
years under the protection of American and British warplanes.
PTI
