This post is also available in: Arabic
Years of conflict coupled with insufficient investment in health, education, infrastructure and basic service provision have had devastating effects on Iraqi society.
Despite its considerable oil wealth, overall poverty in the country remains widespread. Current estimates place the poverty rate at 18.9% nationally, particularly affecting vulnerable groups such as widows and displaced peoples. There is also considerable pressure on housing and basic services, including water and sanitation, as a result of population growth, but also conflict induced population movements into ill equipped urban areas.
Download BIC’s country study for NGOs to find out more about the work of the World Bank in Iraq:
The World Bank and Iraq: A Country Study , Bank Information Center, March 2015
Iraq is the third most populous country in the MENA region and has an estimated population of 36,575,000. The country has undergone significant population growth over the past decade making it one of the most youthful in the world today, with nearly 50% of the population less than 19 years of age. Iraq’s economy has seen sizeable growth in recent years averaging 7% annually, but it is heavily dominated by the oil sector as the second-largest crude oil producer in OPEC.
The country faces considerable development challenges as a consequence of economic stagnation and limited access to essential services due to sanctions, international conflict and sectarian strife. Iraq is suffering from the effect of long term deterioration in health outcomes, when it once boasted an efficient health system and some of the best health indicators in the region. In 2011 Iraq’s infant mortality rate was highest in the region, with the exception of Yemen, and stunting rates are currently at 22.6%. The education system and individual attainment levels have similarly declined. Today, adult male and female literacy rates in Iraq are below the MENA average and well below the average for similar upper middle income countries. Development trends are spatially uneven, with deprivation concentrated in the south of the country and the northern Kurdish regions faring better in a number of development indicators.
The World Bank did not carry out development projects in Iraq during the Saddam era. It resumed working in the country in 2004 under the aegis of the International Reconstruction Fund Facility for Iraq (IRFFI) that was established to help donors channel their resources and coordinate their support for reconstruction and development in Iraq. It was under this umbrella that the Bank administered the World Bank Iraq Trust Fund (ITF). The Fund closed in 2014; however some of its projects continue to be operational until their term’s end.
As of August 2014, the World Bank’s own financing portfolio for Iraq consisted of 6 projects valued at US$610 million focusing on infrastructure (water, electricity, and roads), youth employment, and capacity and institution building. In recent years, the Bank has played a strong advisory role to the government, especially in the energy sector, where it has helped to design Iraq’s new energy strategy. It has also advised the transportation sector by supporting the government’s development of the Transport Master Plan.
The IFC currently has 5 active projects in Iraq with an investment portfolio of $255 million in the sectors of infrastructure, banking, and telecoms. Over the next few years, IFC is planning to step up its investment and advisory services in the country. Investments are expected to amount to $100-130 million per year in sectors such as infrastructure and financial markets.
The World Bank’s operations in Iraq were guided by a series of Interim Strategy Notes (ISN) until 2013 when the Bank signed its first Country Partnership Strategy (CPS) with Iraq for 2013-2016. The new CPS aims to diversify Iraq’s economy by investing in value-added industries that complement the oil sector, such as the power and gas sectors. Additionally the strategy aims to address governance reform, social inclusion and poverty reduction.
BIC-MENA began working with Iraqi civil society organizations in 2014. BIC-MENA’s work currently focuses on providing capacity building training to strengthen accountability mechanisms between citizens, the World Bank and other development actors.
Governance and Accountability
Weak governance and accountability mechanisms are major obstacles hampering effective public service delivery in Iraq, as well as the optimal function of the private sector. Despite there being an active civil society network in the country, citizen engagement in decision-making and oversight is comparatively weak. This situation has contributed to widespread corruption, such that in 2014 Iraq ranked 170 out of 175 nations in Transparency International’s worldwide corruption index. Accountability mechanisms can help to ensure that governance is transparent, resources are distributed efficiently, and that public service provisions meet the needs of those they are designed to benefit.
The World Bank has not been immune from criticism regarding insufficient consultation and transparency of its work, and the lack of clear evidence and results-based programming in the MENA region. The Bank responded at the institutional level by approving a new World Bank Group corporate strategy in October 2013 with the twin goals of reducing absolute poverty and boosting shared prosperity, and with the thread of citizen engagement to be employed across operations. To this end, the Bank is developing a new Citizen Engagement Framework which aims to improve citizen participation in the preparation, implementation and monitoring of development projects.
In Iraq there is considerable scope for improvement in this area on a local level following the passage of a 2013 law, which provided a basis for further decentralization and distribution of increased powers to governorates. The law was envisioned to remedy the uneven decentralization process which has seen the country functioning largely as one unitary state that was managed and accountable to the central government, with the exception of the semi-autonomous Kurdistan region in the northeast. Governorates however have varying operational capacities and skilled personnel to manage public sector provision, particularly where sectarian divisions have negatively impacted communication between central government and the provinces.
BIC is working with Iraqi civil society organizations and networks to develop their capacity to hold development actors accountable. So far, capacity building training has been aimed at providing local civil society participants with a clear understanding of the World Bank, its operations in Iraq, and the different opportunities and tools that are available for civil society to influence the Bank’s projects and policies, and the best ways to use those tools for effective oversight. With this knowledge, civil society organizations will be able to apply many of the advocacy skills and oversight tools to other institutions operating and generally enhance accountability of broader development actors, government, and even private sector institutions in Iraq.
Country Partnership Strategy (CPS)
The basis for all World Bank Group operations in a country is typically the Country Partnership Framework (CPF) (formerly the CPS). This is a document that outlines the Bank’s engagement and development goals and priorities for the country for a period of usually three to five years. The Bank’s strategy for a country is usually based on that country’s national plan for development.
The most recent CPS for Iraq is for the period covering 2013 – 2016, and it is organized around the following three pillars:
- improving governance;
- supporting economic diversification for shared prosperity; and
- improving social inclusion and reducing poverty
In 2010, the Iraqi government prepared the National Development Plan (NDP) 2010-2014, a medium-term development strategy aimed at providing a framework for the country’s sustainable development. The CPS reflects the nature of the NDP and allows the government, with support from the Bank, to respond to challenges and opportunities as they arise. According to the Bank, the CPS is structured to pivot around the abovementioned three axes which aim to support the country’s efforts to build stronger government institutions and a more diversified economy that can deliver services to the population and create jobs. The key focus areas which shaped existing programs (i.e. public financial management, strengthening institutions, private sector development, infrastructure, and service delivery) remain relevant in this context.
The World Bank is currently considering an extension of the CPS beyond the four year engagement framework, due to recent changes in government and the associated volatile political situation on the ground in Iraq.
- Iraq Country Partnership Strategy 2013-2016
- National Human Development Report 2014, Iraq Ministry of Planning/UNDP
Civil Society Analysis
- The World Bank Group and Iraq: A Country Study, Bank Information Center, March 2015
- Access to Information Policy Guide (also available in Arabic), Bank Information Center
- IFIs and the Middle East & North Africa: A Primer for NGOs, Bank Information Center
- BIC’s Middle East & North Africa Program, Bank Information Center
Washington DC, USA
Tel : + (1) 202 473 8302
Tel: + (964) 78 112 00000
Manager, Middle East and North Africa Program
Washington DC, USA
Tel: + +1 (202) 624-0620