Context:
Decades fraught with conflict, corruption and dependence on oil have left Iraqi financial institutions weakened and made investment almost impossible. A lack of transparency, inefficient procedures, poorly defined responsibilities, limited self-generated revenue and integrity risks are restricting the government’s fiscal capacity to act and inhibiting private growth.
The country therefore needs tax and budget reforms, an effective system for combating money laundering, and better financing conditions for small and medium-sized enterprises (SMEs). Private-sector investment – which is important if Iraq is to develop in a way that is stable and less reliant on oil – needs reliable financial governance.
Objective:
Reliable and transparent conditions for Iraq’s state financial institutions have been created which improve trust in the administration and financial institutions and promote investment.
Approach:
The project is supporting the finance ministry, the Central Bank and downstream government agencies in reforming key legal conditions and in building specialist knowledge and strategic competence in the following ways:
- It supports a fair and reliable tax system so that government revenue can be mobilised in a way that is broader-based and more equitable.
- It promotes modern and transparent budgeting so that public resources can be deployed efficiently and verifiably.
- It implements international standards to combat money laundering and financing of terrorism, which enhances the financial system’s integrity.
- It improves access to credit and financial services for businesses, boosting private investment and economic growth.
In particular, women, young people and SMEs benefit from improved revenue structures, a more transparent financial system and new financing services.