The World Bank Group Country Partnership Strategy 2013-2016

1. The World Bank Group Country Partnership Strategy 2013-2016 for the Republic of Iraq

2. Table of Contents • What is the World Bank Group? • The World Bank Group program in Iraq. • The World Bank Group’s Country Partnership Strategy in Iraq. • Questions.

3. The World Bank Group • The World Bank is an international organization whose mission is to reduce poverty and to contribute to sustainable development. It consists of five organizations: • The International Bank for Reconstruction and Development (IBRD): Lends to governments of middle-income and creditworthy low-income countries. • The International Development Association (IDA): Provides interest-free loans—called credits—and grants to governments of the world’s 80 poorest countries. • The International Finance Corporation (IFC): Provides loans, equity and technical assistance to the private sector to stimulate private sector investment in client countries. • The Multilateral Investment Guarantee Association (MIGA): Provides guarantees against losses caused by non-commercial (political) risks to investors in developing countries. • The International Center for Settlement of Investment Disputes (ICSID): Provides international facilities for conciliation and arbitration of investment disputes.

4. Ownership of the World Bank Group

5. Voting Shares of the 188 member countries

6. Representation of Iraq in the World Bank Group • Governor: His Excellency Rafe Al-Essawi, Minister of Finance • Executive Director: MerzaHussainHasan

7. The IBRD’s Instruments • 1. Financing • Investment operations focus on the long-term (5 to 10 years) and finance goods, works, and services that support economic and social development projects. • The Government is in charge of developing and implementing these projects with support from the World Bank. • Development policy operations typically run from one to three years, and provide quick-disbursing external financing to support government policy and institutional reforms. • 2. Analytical and Advisory Services

8. The IFC’s Instruments • IFC responds to the demand for finance and expertise from the private sector. • IFC uses a range of financial instruments to provide both long and short term finance (equity, debt, guarantees etc). • IFC brings solutions to its clients through investment and advisory services that help businesses in the developing world meet the challenges of the global marketplace. • IFC aids in directing capital and knowledge to emerging market sectors which require more growth. • To be closer to its clients, IFC has based more than half of its 3,438 employees in country offices.

9. The World Bank Group Program Iraq • Program of on-going investment projects • New AAA/Advisory Services since December 2011 • The Country Partnership Strategy of the World Bank Group

10. Ongoing Investment Operations Iraq Trust Fund Projects IDA Grants Infrastructure: • Baghdad Water Supply & Sanitation • Water Supply, Sanitation & Urban Recon. • Electricity Reconstruction • Community Infrastructure (Supplement) Social Sectors • School Construction & Rehabilitation • Household Survey & Policies • Emergency Primary Health Care Services • Regional Health Emergency Response Financial Sector • Banking Sector Reform • Public Financial Management Private Sector Development • Private Sector Development Energy • Integrated National Energy Strategy TA Infrastructure • Emergency Road Reconstruction • Dokan& DerbandikhanHydropower • Emergency Electricity Reconstruction • Emergency Water Supply Education • Third Emergency Education

11. New Programs since December 2011 • New program of advisory services (Youth Employment, investment climate, Country Economic Memorandum, Public Expenditure Review). • Sought consultations with civil society organizations and non-governmental organizations (NGOs), private enterprises, financial sector, provincial regional councils, local governments, international partners and with Parliamentarians.

12. Current Portfolio of ITF and IDA Grants in Iraq Sectoral Distribution

13. IFC’s Investments • IFC has a total portfolio of around US$378.5 million in 6 projects as of December 2011, the largest in MENA region. • IFC investments include: • Financial markets, hotels, ports and logistics. • IFC has a large program of Advisory activities to complement its investment program. These include capacity building of banking staff, supporting private sector-led development of the housing industry, facilitating SMEs, and providing transaction advice for public-private partnerships (PPPs).

14. The World Bank Group’s Country Partnership Strategy • What is a Country Partnership Strategy (CPS)? Country Partnership Strategies provide a medium term framework for the Bank's engagement in a country.

15. Country Partnership Strategy (July 1, 2012 – June 30, 2016) • Approach: • Foster Consultations and Outreach • Adaptability and Responsiveness Three Main Areas of Engagement • Building institutions to improve the management of financial resources • Support economic diversification and sustainable growth • Improve delivery of basic services and social protection Two themes will be emphasized in all areas of engagement: • Governance • Gender Issues

16. Exchange views with citizens, Parliamentarians & private sector • Listen to different perspectives to: • Improve the quality of Bank interventions • Set priorities for engagement • The process of consultation will contribute to: • Promoting transparency • Designing operations that safeguard voice and accountability • Explain how Bank Group activities benefit Iraqi citizens

17. World Bank’s Group Approach to Supporting Iraq under the CPS • Given Iraq’s own financial resources, the Bank program aims to help Iraq better manage its own public resources and build up effective institutions. • The World Bank Group will focus on bringing knowledge and best practices to help find practical solutions to Iraqi problems.

18. Strengthening State Institutions to Improve Management of Financial Resources Help the Government to strengthen state institutions in the management of public finances by: • Putting in place an analytical framework for informed decision-making on the allocation of budget resources; • Developing a macro-fiscal framework to assist Iraqi policymakers in measuring financial flow from oil; and • Continuing the work of Extractive Industries Transparency Initiative (EITI).

19. Support Economic Diversification and Sustainable Growth • Improve regulatory environment for private investment and businesses; • Support the strengthening of the financial sector; • Restructure the state-owned enterprise sector • Promote trade and transport facilitation • Sound management of natural resources and environment protection.

20. Steps to Improve Delivery of Basic Services and Social Protection • Restore access to and improve quality of water and sanitation services; • Provide more reliable power and improved infrastructure services; • Improve transport connectivity along key corridors; • Improve delivery of health and education services; and • Strengthen capacity to develop, manage and monitor safety net reforms.

21. Instruments: How the Bank Group will provide its support • Ongoing Portfolio • New Lending • Analytical and Advisory Assistance, including sharing other country experience • IFC investments and advisory services • MIGA guarantees

22. Instruments: How the Bank will provide its support • Flexible approach to take into account changing circumstances • The Bank will work in areas that meet criteria: • Leveraging Iraq’s own resources (also so that Bank support is integrated into the Government’s priorities and investment program) • Strong government ownership and reform champion • Track record of successful implementation • Endorsement of Ministry of Finance

23. Points for Discussion • How relevant is the proposed program given Iraq’s development challenges and needs? • Are the proposed areas of engagement appropriate? • Is this the right strategy for Iraq? • Does the strategy address the key challenges –weak institutions, poor delivery of basic services and poor governance?