10 September 2003

Search all issues

powered by FreeFind

Send Your Feedback!

Malta printing for Iraq’s new currency

By David Lindsay
US officials are making plans to eliminate Iraq’s former currency bearing the engraved likeness of fugitive Iraqi dictator Saddam Hussein and replace it over a 90-day period, with new bills featuring images of the natural wonders of Iraq.
Interesting for Malta is the fact that many of the new dinars will be printed in Malta, presumably at the De la Rue plant in Bulebel. In addition to Malta, Iraq’s new dinars will also be printed in Spain, Germany, Sri Lanka and Britain.
De La Rue Malta, which employs close to 500 employees, has been operating since 1975 with a great deal of success. The Malta installation, which forms part of De La Rue’s Security Paper and Print Division made up of four locations around the world, produces over 50 per cent of De La Rue’s global output and is probably the single largest banknote producing plant in private hands. With some 100 customers, De La Rue Malta also has one of, if not the, largest market shares in currency printing.
The USD100 million operation to swap Iraq's currency begins mid-October, when bundles of the new currency will be ferried into Iraq by cargo planes and sent to more than 300 currency distribution sites protected by heavily-armed American GIs.
Iraq's currency now will now come in two denominations - the 250-dinar bill with a fluctuating value of about 20 US cents and the 10,000 dinar bill with a changing value of about USD8. They will be replaced by bills in six denominations ranging from 50 dinars worth about four US cents to 25,000 dinars worth about USD20.
The goal is to provide Iraqis a symbol of Iraq after Saddam, unify the nation's currency, cut the risk of counterfeiting and make currency more convenient, according to US officials.
John Taylor, the US Treasury's under-secretary for international affairs overseeing the currency transition, says US officials hope a single national currency will help quiet bitter regional and tribal rivalries symbolised by Iraq's different currencies in different regions of the country. So-called Swiss dinars circulate in Kurdish-controlled areas in northern Iraq and pastel-coloured Saddam dinars circulate in Baghdad and the southern two-thirds of Iraq.
"The new currency will be a national currency and symbolise national unity again," Taylor said in a telephone interview last week.
Protecting distribution of the new currency remains a top priority for US officials, who note that an estimated USD900 million was looted from Iraqi banks before US troops and Iraqi police gradually took control.
"We don't see any obstacles at this point, but as with any kind of operation like this, we may have to call audible signals on the ground," Taylor said. "We're ready for all contingencies."
Tom Nicastro, vice president of the Louis Berger Group consulting firm that is handling logistics for the currency exchange, said security is "always an issue when you carry large amounts of cash and valuable equipment into areas that have not seen this kind of investment before."
He adds, "We think we know the strengths and weaknesses of the logistics network in Iraq. We had no trouble - zero theft, zero robbery - in Afghanistan."
In Afghanistan, Nicastro's firm relied on two fixed-wing planes, three helicopters, 2,500 contract Afghan employees and watchful US combat troops to swap an estimated 13 trillion old Afghanis for new currency at 53 locations between 7 October 2002 and 2 January 2003.
Surveys are under way in Iraq to determine the logistics and security requirements for what Nicastro describes as "just-in-time delivery" of two billion new Iraqi bills.
The Bush administration moved quickly to implement a new currency in Iraq after seeing the economic and political benefits of creating a national currency during the US occupation of Afghanistan, Taylor said.
The Iraq currency swap will take place barely seven months after the US military invasion began. Afghans waited a year before swapping three currencies for a single national currency.
"We saw the importance and the value of a new currency making a big difference in economic confidence," said Taylor, a former Stanford University economist who served as a member of the White House Council of Economic Advisers under President George H.W. Bush.
Nicastro said the Afghan currency swap served as a "tremendously stabilising influence" in post-Taliban Afghanistan. "It was the initial national effort undertaken by the new Afghan government, and it was a success."

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
The Malta Financial & Business Times, Newsworks Ltd, Vjal ir-Rihan, San Gwann
Tel: (356) 21382741-3, 21382745-6 | Fax: (356) 21385075 | E-mail