New Partnership to Improve Public Sector Governance, Increase Private Sector Participation, and Rebuild Human Capital

Washington DC, August 05, 2021-The World Bank Group has renewed its commitment to the continued support of Iraq, approving a new Country Partnership Framework (CPF) to form the basis of its 2022-2026 partnership with the country. The framework lays out the main development goals the World Bank Group aims to support in Iraq and proposes a series of strategic interventions to help Iraq respond to the ongoing pandemic crisis, reform the economy and rebuild human capital.

The new framework comes against a background of highlighted fragility in Iraq, where the impact of the COVID-19 crisis, volatility in oil prices, and growing climate risks have compounded existing challenges. Such challenges could lead to more instability but also provide an opportunity for a new government to realign the country’s priorities by moving forward on economic reform and tackling deep structural issues.

“With its inherent flexibility, the CPF will serve as a platform for the World Bank Group to address immediate needs of the poor and most vulnerable, and work on the causes and drivers of Iraq’s fragility and crises,” said Saroj Kumar Jha, World Bank Mashreq Regional Director. “The Bank Group is ready to support the people of Iraq by contributing to tackling corruption, building transparent and accountable institutions, and a more enabling public sector for improved business environment in Iraq.”

The CPF has been drawn up in keeping with the World Bank Group’s 2020-2025 Strategy for Fragility, Conflict and Violence. The Strategy allows the World Bank Group to continue to engage with countries during periods of conflict and violence in order to help them transition out of crises more successfully. The CPF is aligned with Government of Iraq (GOI) reform priorities listed in their programs and national strategies, and promotes the renewal of the social contract between citizens and the state, as well as fostering a healthy local private sector and strengthening the legitimacy and capacity of core institutions.

“This CPF’s foundations are aimed at improving governance, public service delivery, and private sector participation, and at strengthening human capital,” said Ramzi Afif Neman, Head of World Bank Iraq Office. “In this way, we get to mainstream our priorities-citizen engagement, gender equality, and responding to climate change.” Added Merli Baroudi, MIGA’s Director of Economics and Sustainability, “Indeed, the Iraq Country Partnership Framework offers a strong opportunity to promote green, resilient and inclusive development in Iraq, leveraging the World Bank Group Climate Change Action Plan 2021-2025 and placing the country on a more sustainable pathway to a lower carbon future.”

Having maintained its engagement and an uninterrupted field presence in Iraq since 2003, the World Bank Group has built a strong active portfolio in the country. This has resulted in important initiatives, notably in multi-sector emergency reconstruction programs in areas liberated from ISIS occupation, reforms of the public financial management (PFM) and social protection system among others, and private sector investments of more than US$1 billion.

“As Iraq rebuilds its economy, the private sector will have a critical role to play in creating jobs and more opportunities for young people. This CPF provides the framework for the World Bank Group to focus on advisory and investment engagements with the business community in priority sectors, as well as to support improving the enabling and business environment to pave the way for Iraq’s private sector to lead the country’s future and generate shared prosperity,” said Abdullah Jefri, IFC’s Manager for the Levant.

Furthermore, the sustained WBG engagement in Iraq has resulted in an accumulation of a wealth of experience on the country’s economic and political context. Key lessons include the importance of national ownership, building the capacity of public institutions for sustainable development, working in partnership with international partners to drive governmental reforms, adopting flexible and adaptable approaches in mobilizing resources, improving the business environment and ensuring access to finance for and the thriving of small and medium-sized enterprises, and adopting innovative approaches to progress in the implementation of the portfolio in the field under challenging political and security situations.

The framework of the CPF will be implemented in two phases to allow the flexibility to adapt to changes over the five-year period. A first phase will cover roughly the period until a new Iraqi government is in place, with a focus on protecting the poor and vulnerable and on supporting initial government reforms. During a second phase, the Bank Group will support medium-term reforms to help shape a more diversified economy by creating a more enabling environment for the private sector and by developing human capital.

Acknowledgment of the World Bank Group’s role in supporting Iraq’s development has been prominent over the years, especially in supporting the implementation of the GoI’s reform plan, rebuilding damaged vital infrastructure from conflict and violence, improve basic service delivery, and mitigating the risks of COVID-19 pandemic by launching a 100 million immunization project. The CPF program will build on this trust to support Iraq’s efforts in addressing its challenges towards a more stable and prosperous future for all Iraqis.

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