Co-Chair’s Statement issued by the joint EU-German Co-Chair and the World Bank, following the Iraq Economic Contact Group Directors’ Meeting,

Co-Chair’s Statement issued by the joint EU-German Co-Chair and the World Bank,

following the Iraq Economic Contact Group Directors’ Meeting,

2nd March 2021

Following the launch of the Iraq Economic Contact Group (IECG) on 22nd October 2020 in London, the Government of Iraq and its international IECG partners met at Directors’ level on 2nd of March 2021 to take stock of recent reform steps, to begin outlining and aligning international support, and to map out the path ahead towards a High-Level IECG meeting to be held in late spring 2021.

The Iraqi economy has faced multiple shocks that resulted in a sharp recession and rising poverty rates. Structural impediments that have accumulated over decades limit the availability of financial buffers to alleviate the social and economic impact on Iraq’s most vulnerable citizens and its businesses.  As a result, engaging on reforms is the quickest way to turn the situation around. Indeed, the long-term success of Iraq is critical for the stability of the entire region. Yet, the oil-based economic model of Iraq is increasingly challenged by a young and growing population in need of diversified employment prospects and an irreversible global trend towards decarbonisation and a green economy.

The Iraqi government has taken commendable steps to address its immediate and longer-term fiscal and economic challenges by initiating an honest conversation about structural reform requirements to address fiscal imbalances, to address critical infrastructure gaps and to put the Iraqi economy on a path toward sustainable and inclusive development, including gender equality.

As partners and friends of Iraq, we noted our appreciation for recent steps taken to move from analysis to implementation, as exemplified by the Cabinet of Ministers’ approval of the Implementation Plan for the White Paper, including a governance structure to this end and commended the Prime Minister and his cabinet for their push forward.

We therefore call on the swift adoption of a reform-oriented Iraqi National Budget, since it is needed to provide the necessary means and the toolkit to ensure that Iraq can continue along its reform path to stability. At the same time, we took note of the additional work necessary to implement reforms. There is an economic and social cost for delayed actions and therefore it will now be critical to begin swift implementation based on articulated priorities. The reform agenda needs to be part and parcel of a far-reaching and open dialogue between the Government, the Parliament and the citizens of Iraq in order to ensure that Iraq’s future is shaped in an inclusive manner.