DINAR REVALUATION REPORT: Iraq's Economic and Financial Reform Program: Collaboration with the World Bank, 29 AUGUST

 Iraq's Economic and Financial Reform Program: Collaboration with the World Bank

In a significant move towards strengthening Iraq's economic foundations and achieving fiscal stability, Finance Minister Taif Sami convened with Jean-Christophe Carret, the Regional Director for the Middle East at the World Bank, and Richard Abdelnour, the Bank's Special Representative in Iraq. 1 This meeting, held on August 29, 2024, focused on reviewing and supporting the economic and financial reform program in Iraq. 2

Iraq's Economic Reform Program

Iraq, heavily reliant on oil revenues for its economy, has embarked on a critical reform journey to enhance its financial and business sectors and improve the investment environment. 2 The World Bank's involvement in this process is pivotal, as it strengthens bilateral coordination and supports Iraq's government program concerning economic reform. 2

Financial and Banking Reforms

The Iraqi government, under the leadership of Finance Minister Taif Sami, has outlined plans to accelerate financial and banking reforms.  3 These reforms aim to solidify the national economy, achieve economic balance, and correct the course of financial policy in Iraq. 3

World Bank's Role

The World Bank's engagement is multifaceted, involving support for development projects and facilitating reforms in the financial and business sectors. 2 The Bank's representatives have expressed their commitment to providing professional assistance for development initiatives and sector reforms, highlighting the productive collaboration with the Iraqi government. 3

Technical Assistance and Financial Support

In addition to strategic guidance, the World Bank is providing technical assistance and financial support through loans and grants. 2 This support is critical for Iraq's economic recovery and long-term sustainability. 1

Economic Challenges and Opportunities

Iraq's economy, recovering from the oil and COVID-19 shocks, has seen real GDP growth of 1.3% in 2021, a stark contrast from the 11.3% contraction in 2020. 1 The non-oil economy's robust growth, particularly in the services sectors, has been instrumental in this recovery. 1

Unemployment and Fiscal Space

However, Iraq faces significant unemployment challenges, especially among specific demographic groups. 1 The country's fiscal rigidities and oil dependency restrict its ability to implement countercyclical policies, highlighting the need for diversification and fiscal reforms. 1

Conclusion

The collaboration between Iraq's Finance Minister Taif Sami and the World Bank signifies a renewed commitment to economic and financial reforms. By addressing unemployment, enhancing fiscal space, and diversifying the economy, Iraq aims to establish a more sustainable and resilient economic framework. The World Bank's support, through technical assistance and financial resources, is crucial in this transformative period for Iraq's economy. 2