Money moves again in Iraq’s Mosul, but not via banks

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A photo taken on October 14, 2018 shows an electric appliance store in Mosul. Since militants were ousted from Mosul last year, taxi driver Abu Aref has ferried more than just people into Iraq's second city: he regularly smuggles envelopes stuffed with cash. (AFP)
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A car drives past a graffiti in the street of Mosul, Iraq October 27, 2018. (REUTERS)
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A picture taken on October 14, 2018 shows an electric appliance store in Mosul. (AFP)
Updated 04 November 2018
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Money moves again in Iraq’s Mosul, but not via banks

  • The reach of banks in Mosul appear to be par for the course in Iraq, where only one in ten people has an account, according to the World Bank
  • But the central bank has not budged on its ban on transfers to and from the city

MOSUL, Iraq: Since militants were ousted from Mosul last year, taxi driver Abu Aref has ferried more than just people into Iraq’s second city: he regularly smuggles envelopes stuffed with cash.
This is how salaries are paid and bills settled in the northern metropolis, despite the banks reopening since Iraqi forces seized it back last year from the Daesh group after three years of militants rule.
Iraqi authorities, fearing that free flows of money could help finance an IS comeback, have not authorized even simple transfers.
So Mosul banks, exchange offices, and money transfer companies have watched helplessly as more rudimentary methods fill the gap.
Abu Aref said he typically carries anywhere between $10,000 (8,800 euros) to $50,000 at a time in his cab.
“I put the money in an envelope that I then tape underneath my seat,” he told AFP.
The journey can be risky. One of his colleagues was recently the victim of a highway robbery along the 200-kilometer (120-mile) route between Mosul and Baiji, further south.
“Despite the risks, businessmen entrust this much money to me because they don’t have another choice,” the 35 year-old said.
IS swept into Mosul in 2014, seizing several hundred million dollars from a branch of Iraq’s central bank and other financial institutions.
Mosul came back under Iraqi government control in July 2017 after a months-long assault that left its infrastructure devastated, but IS cells appear to remain active.
Security forces last month arrested nearly a dozen members of an IS financial network based in Iraq, according to a US-led coalition against the militants in Iraq and Syria.
The central bank has remained wary of resuming operations in Mosul, saying it wants to know “where this money comes from and where it’s going.”
Around 20 private and state-owned banks have reopened in Mosul, allowing residents to open an account, deposit and withdraw money, and issue cheques.
But the central bank has not budged on its ban on transfers to and from the city.
That decision appears to have hurt business owners trying to rekindle economic activity in Mosul, a centuries-old trade hub with access to Iraqi, Turkish and Syrian markets.
Among them is Abdullah Basman, a Mosul native who sells computer parts brought in from other areas of Iraq and from Dubai.
To pay suppliers, he hands envelopes of cash to a driver he trusts, who rushes the money to Baghdad and wires it to other Iraqi cities or internationally to pay the shop’s bills.
“The banks in Mosul are just buildings. Nothing more,” said Basman, 27.
For company employee Abu Akram, the ban on bank transfers means he often goes months without a salary, which is issued from his firm’s headquarters in Baghdad.
The 35-year-old relies on friends of relatives who traverse the dusty 400 kilometers (250 miles) south to Baghdad or travel to nearby Iraqi Kurdistan to retrieve his cash.
But there are hiccups.
“Sometimes, my company refuses to give my salary to someone other than me. With a taxi, there’s a risk of an accident or of theft,” Abu Akram told AFP.
The reach of banks in Mosul appear to be par for the course in Iraq, where only one in ten people has an account, according to the World Bank.
“The banking system in Iraq is underdeveloped, dominated by inefficient state-owned banks. Some of them are believed to be capital deficient and extend little credit to the private sector,” the multilateral lender wrote in a recent report.
“Private banks are small and they are mostly active in currency exchanges and wire transfers.”
Despite the challenges, Iraqi economist Rafea Ahmed says multiple businesses and investors have already resumed operations in Mosul.
“They rapidly brought back their money in their own ways,” he said.
Secret transfers even continued during IS’s rule over the city, with family members living in Baghdad finding ways to smuggle money to relatives stuck inside Mosul.
Some of that cash, says Ahmed, has contributed to the revival already visible in Mosul.
Even if the banks sit empty, the restaurants, commercial centers, and open markets are now buzzing with activity.


Libyan government boasts of new weapons despite arms embargo

Updated 27 min 32 sec ago
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Libyan government boasts of new weapons despite arms embargo

CAIRO/BENGHAZI, Libya: Fighters allied with the Tripoli government in Libya say they have received armored vehicles and “quality weapons” despite a UN arms embargo on the country.
A Facebook page linked to the Government of National Accord (GNA) posted photos appearing to show more than a dozen armored vehicles arriving at a port, without saying who supplied them.
The Facebook page is run by the media office for the GNA’s counter-offensive against Khalifa Haftar’s Libya National Army (LNA).
Supporters of the various militias allied with the government say the vehicles, which resemble Turkish-made Kirpi armored vehicles, were supplied by Turkey.
Spokesmen for Turkey’s military and Foreign Ministry did not immediately respond to phone calls seeking comment.
Turkey’s President Recep Tayyip Erdogan said last month his government would stand by Tripoli authorities as they repel an offensive launched by the LNA
The battle for the Libyan capital has threatened to ignite a civil war on the scale of the 2011 uprising that toppled and killed longtime ruler Muammar Qaddafi. The UN Security Council imposed an open-ended arms embargo on Libya in February of the same year.
Fathi Bashagha, the interior minister for the Tripoli-based government, also visited Turkey late in April to activate “security and defense agreements” between the two governments.
The offensive on Tripoli was launched April 4 by the LNA, which controls the country’s eastern half.
Haftar, who in recent years has been battling extremists and other militias across eastern Libya, says he is determined to restore stability to the North African country. He has received support from several countries in the region including the UAE and Egypt.
“The GNA supplies armor, ammunition and ... weapons, to its forces who are defending Tripoli,” read a statement published on Facebook.
The weapons embargo has been regularly violated by different groups in Libya, according to the UN. Haftar has accused Turkey and Qatar of supplying weapons to his rivals.
In a September report, the UN’s group of experts on the country noted an increase in the number of armored vehicles supplied to LNA.

Turkey’s President Recep Tayyip Erdogan said last month his government would stand by Tripoli authorities.
Initially controlling swathes of Libya’s east, Haftar launched an offensive in the south of the country in January before attacking the coastal capital last month.
His forces have been held back from the city center by pro-government forces, with fighting continuing on the outskirts of Tripoli and particularly in the southern suburbs.




Daesh attack

Two guards and a soldier were killed and four other people were kidnapped on Saturday in a suspected Daesh attack targeting Libya’s Zella oilfield, a security source said.
The death toll was confirmed by the National Oil Company (NOC) which condemned the attack in a statement on Saturday evening.
The attackers struck at an entrance gate to the field, which lies near the town of Zella about 760 km southwest of the capital, Tripoli, before fleeing, according to the source and local residents who asked not to be named.
Islamic State claimed responsibility for the attack through its Aamaq news agency later on Saturday.
The Zella field belongs to Zueitina Oil Company, which pumped 19,000 barrels per day on average in the last quarter of 2018 across all its fields.
An engineer told Reuters workers at the field were safe and facilities had not been damaged.
Libya’s NOC chief said on Saturday continued instability in the country could cause it to lose 95 percent of oil production.
Speaking in Saudi Arabia ahead of a ministerial panel gathering on Sunday of top OPEC and non-OPEC producers, Mustafa Sanalla also confirmed the Zella attack.
Islamic State has been active in Libya in the turmoil since the overthrow of Muammar Qaddafi in 2011. The militant group took control of the coastal city of Sirte in 2015 but lost it late in 2016 to local forces backed by US airstrikes.
In the last two years, the group has targeted three state institutions in Tripoli, home of the UN-backed government of national accord led by Prime Minister Fayez Serraj.
Saturday’s assault took place as LNA, which is allied to a rival administration in eastern Libya, mounts an offensive to control Tripoli.