He died a few days ago.. Who is Sinan Al-Shabibi, the godfather of monetary policy in Iraq?

The former Central Bank Governor, Dr. Sinan Al-Shabibi - who passed away on Saturday in Geneva as a result of a terminal illness at the age of 80 - is considered one of Iraq's most prominent men in making monetary policy after 2003.

Al-Shabibi was born in Baghdad on the first day of July 1941, his father, Muhammad Rida Al-Shabibi, who died in 1965, was a brilliant poet and a national leader plagued by politics. He was an idealistic social reformer rather than a politician and statesman.

Our friend studied at the College of Economics and Political Science at the University of Baghdad and graduated in 1966 with a BA in Economics. He also obtained a Postgraduate Diploma in Development and Economics in 1969. He received a Master’s degree in Economics from the University of Manchester in the United Kingdom (1970-1971) and also PhD in Economics from Bristol University, UK, in 1975.

Government advisor, Dr. Mazhar Saleh: Al-Shabibi possessed sincere professionalism and patriotism (Al-Jazeera)

his career

Al-Shabibi held the position of Head of the Import and Marketing Department at the Ministry of Oil from May 1975 until March 1977, then he headed the Planning and Coordination Department in the Ministry of Planning until the end of 1980.

After the outbreak of war with Iran, Shabibi moved to Geneva, where he stayed from 1980 until 2001 and worked as an economist at the United Nations Conference on Trade and Development.

The government advisor for financial affairs, Dr. Mazhar Muhammad Salih, had worked with Al-Shabibi for nearly a decade in the work of the monetary authority in the country.

Saleh said in an interview with Al Jazeera Net, "Al-Shabibi had confidence, honest professionalism, high academicism, and love of the homeland, which are the lofty qualities he inherited from his father," noting that the performance of monetary policy and the regulation of banking sector affairs were at the core of Shabibi's interest in the most stressful circumstances that Iraq experienced during the past decade. After wars, destruction, instability and inflation, to draw the road map for a prosperous Iraqi future that enjoys prosperity and monetary stability.

He added that Al-Shabibi - since assuming the position of Governor of the Central Bank - introduced modern accounting and payment systems for the financial institution, replaced manual printers and calculators with modern computer systems, introduced accounting tools such as foreign currency auctions, and replaced the pre-2003 currency with the new currency between October/October First 2003 and January 2004.

Al-Shabibi (second right) succeeded in rescheduling Iraq's foreign debt, which contributed to paying 80% of it (Reuters)

debt scheduling

Dr. Rajaa Al-Bandar, a retired general manager of the Central Bank, says that she witnessed the period of Al-Shabibi’s tenure as governor of the Central Bank from 2003 until 2012, and she indicates to Al-Jazeera Net that the late was distinguished by the successful, scientific and high-professional central administration, and he was one of the strongest defenders of the independence of the bank.

It also revealed that “Al-Shabibi was able to reschedule the pre-2003 debts owed by Iraq to other countries in the Paris Club with his colleague and deputy at the time, Dr. Mazhar Saleh, which contributed to the repayment of 80% of the external debt.

Banking expert Abdul Rahman Al-Sheikhly said, "Al-Shabibi was keen to restore the dinar's position among the sober world currencies and raise its value after it was suffering from the inflation that hit it after the economic blockade imposed after the invasion of Kuwait in the nineties of the last century, where it declined to 3000 dinars for every one dollar."

The banking expert indicates to Al-Jazeera Net that "Al-Shabibi was able to deliver the value of the dinar in the parallel market to about 1,100 dinars against the dollar before leaving the responsibility of the central governor after the government attempt to overthrow it in 2012."

He revealed that Al-Shabibi's monetary policy "was aimed at delivering the value of the national currency to about a thousand dinars against the dollar in order to ensure the success of the rule of raising the three zeros so that one dinar is equal to the dollar."

Banking expert Aqil Al-Ansari: Al-Shabibi disagreed with Al-Maliki, who wanted to use the currency reserves for private purposes (Al-Jazeera)

Conflict with Maliki

Al-Sheikhly continues that "Al-Shabibi did not agree with the government at the time headed by Nuri al-Maliki, which wanted to use the currency reserves for special purposes" in addition to contracting with international companies to implement projects on credit, which leads to "a decrease in the value of the dinar over the course of time."

For his part, banking expert Aqeel Al-Ansari says, "Al-Maliki's government in 2012 needed to withdraw $5 billion, but Al-Shabibi rejected the prime minister's request and submitted his resignation directly, which al-Maliki later rejected.

Al-Ansari attributed - during his speech to Al-Jazeera Net - the reason for these differences is that it is due to the government's lack of knowledge of the Central Law issued in 2004, which stipulated the independence of the bank in formulating monetary policy, as well as the absence of a conscious government economic team.

Although the Central Bank law allows him to lend to the government when needed, Al-Shabibi did not see at the time a real need for lending, which Al-Ansari considered correct, but the government - as he says - lacked cooperation and work with all institutions.

Al-Ansari also reveals the dispute that led to the accusation of Al-Shabibi following an investigation conducted by the Parliamentary Finance Committee in 2012 as a result of the rise in the exchange rate to 1340 dinars after it had been stable for a long time at 1230 dinars to each dollar, as the report was submitted directly to Parliament Speaker Osama Al-Nujaifi, who In turn, he referred it to the Integrity Committee.

The banker concludes, "There was no parliamentary vote to dismiss Al-Shabibi or issue an arrest warrant from the government at the time.