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Did US Dollar Restrictions in Iraq Affect Tehran?

An exchange shop in central Baghdad (AP)
An exchange shop in central Baghdad (AP)
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Did US Dollar Restrictions in Iraq Affect Tehran?

An exchange shop in central Baghdad (AP)
An exchange shop in central Baghdad (AP)

A senior Iraqi government financial official said that the aim of the US restrictions imposed on selling dollars to banks and merchants is purely political and chiefly aims to curb the smuggling of hard currencies abroad, especially to Iran.

The New York Federal Reserve had introduced tighter controls on international dollar transactions by commercial Iraqi banks in November.

The move was designed to stop the illegal siphoning of dollars to Iran and apply more pressure along with US sanctions imposed over Tehran's nuclear program and other disputes, leaving Tehran struggling to source dollars.

“The restrictions imposed by Washington, which reduced dollar sales from $250 million to about $55 million per day, isolated financial interests that are active in the shadow of the factions and currency smugglers,” explained the official, who spoke under conditions of anonymity.

“This, however, does not mean that Iran has been greatly affected by the current situation,” they added.

“Tehran still manages its financial transactions formally with Iraqi banks,” noted the official, adding that Iran is trying to mitigate the damages sustained by some Shiite groups after they lost access to dollars due to US restrictions.

“Leaders of influential parties in Iraq believe that US restrictions were motivated by a plan to overthrow the Coordination Framework government, but Washington itself took internal measures to address the US public debt, in preparation for an expected economic recession.”

According to data leaked from Coordination Framework figures, Tehran is currently exerting pressure to help its friends affected by the dollar restrictions, but it is not very interested in opposing the restrictions themselves.

“Shiite party leaders have contacted circles in Tehran to convince them that the dollar crisis in Iraq targets Iranian national security,” a former government official revealed.

Hard currencies smuggled from Iraq often go to Iran-affiliated parties in Syria, Yemen, and Lebanon.

Observers believe that Iraqi Prime Minister Mohammad Shia al-Sudani’s decision to replace Mustafa Ghaleb Mukheef with Ali Mohsen Al-Alaq as Central Bank Governor will help those affected by the restrictions somewhat recover in the market.

Alaq enjoys close relations with former prime minister and head of the State of Law Coalition Nouri al-Maliki.

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Climate Change Imperils Drought-Stricken Morocco’s Cereal Farmers and Its Food Supply

A farmer works in a wheat field on the outskirts of Kenitra, Morocco, Friday, June 21, 2024. (AP)
A farmer works in a wheat field on the outskirts of Kenitra, Morocco, Friday, June 21, 2024. (AP)
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Climate Change Imperils Drought-Stricken Morocco’s Cereal Farmers and Its Food Supply

A farmer works in a wheat field on the outskirts of Kenitra, Morocco, Friday, June 21, 2024. (AP)
A farmer works in a wheat field on the outskirts of Kenitra, Morocco, Friday, June 21, 2024. (AP)

Golden fields of wheat no longer produce the bounty they once did in Morocco. A six-year drought has imperiled the country's entire agriculture sector, including farmers who grow cereals and grains used to feed humans and livestock.

The North African nation projects this year's harvest will be smaller than last year in both volume and acreage, putting farmers out of work and requiring more imports and government subsidies to prevent the price of staples like flour from rising for everyday consumers.

"In the past, we used to have a bounty — a lot of wheat. But during the last seven or eight years, the harvest has been very low because of the drought," said Al Housni Belhoussni, a small-scale farmer who has long tilled fields outside of the city of Kenitra.

Belhoussni's plight is familiar to grain farmers throughout the world confronting a hotter and drier future. Climate change is imperiling the food supply and shrinking the annual yields of cereals that dominate diets around the world — wheat, rice, maize and barley.

In North Africa, among the regions thought of as most vulnerable to climate change, delays to annual rains and inconsistent weather patterns have pushed the growing season later in the year and made planning difficult for farmers.

In Morocco, where cereals account for most of the farmed land and agriculture employs the majority of workers in rural regions, the drought is wreaking havoc and touching off major changes that will transform the makeup of the economy. It has forced some to leave their fields fallow. It has also made the areas they do elect to cultivate less productive, producing far fewer sacks of wheat to sell than they once did.

In response, the government has announced restrictions on water use in urban areas — including on public baths and car washes — and in rural ones, where water going to farms has been rationed.

"The late rains during the autumn season affected the agriculture campaign. This year, only the spring rains, especially during the month of March, managed to rescue the crops," said Abdelkrim Naaman, the chairman of Nalsya. The organization has advised farmers on seeding, irrigation and drought mitigation as less rain falls and less water flows through Morocco's rivers.

The Agriculture Ministry estimates that this year's wheat harvest will yield roughly 3.4 million tons (3.1 billion kilograms), far less than last year's 6.1 million tons (5.5 billion kilograms) — a yield that was still considered low. The amount of land seeded has dramatically shrunk as well, from 14,170 square miles (36,700 square kilometers) to 9,540 square miles (24,700 square kilometers).

Such a drop constitutes a crisis, said Driss Aissaoui, an analyst and former member of the Moroccan Ministry for Agriculture.

"When we say crisis, this means that you have to import more," he said. "We are in a country where drought has become a structural issue."

Leaning more on imports means the government will have to continue subsidizing prices to ensure households and livestock farmers can afford dietary staples for their families and flocks, said Rachid Benali, the chairman of the farming lobby COMADER.

The country imported nearly 2.5 million tons of common wheat between January and June. However, such a solution may have an expiration date, particularly because Morocco's primary source of wheat, France, is facing shrinking harvests as well.

The United Nations' Food and Agriculture Organization ranked Morocco as the world's sixth-largest wheat importer this year, between Türkiye and Bangladesh, which both have much bigger populations.

"Morocco has known droughts like this and in some cases known droughts that las longer than 10 years. But the problem, this time especially, is climate change," Benali said.