World Bank Authorizes Iraq Reconstruction Trust Fund
The World Bank has authorized a trust fund for the reconstruction of Iraq and approved a rebuilding strategy for the next six to nine months.
In a January 29 press release, the Bank said the strategy covers both emergency projects and technical assistance. It is based on a needs
assessment conducted jointly by the Bank and the United Nations in 2003, the release said.
The goals of the strategy are to build the capacity of the Iraq government to manage the country's reconstruction, initiate immediate programs to
address the urgent needs of creating jobs and restoring basic infrastructure and services, and provide policy advice that will help Iraq make the transition to a market economy.
"This short-term strategy is based on the realities on the ground and enables us to respond rapidly and flexibly to the Iraqi people's immediate
needs in coordination with the Iraqis and the international donor community," said Christiaan Poortman, World Bank vice president for the
Middle East and North Africa. "It is an Iraqi-led process."
The fund is one of two created to channel resources from international donors for Iraq. The other is managed by the United Nations.
The Bank's lending practices -- including the issue of Iraq's debt, security and legal issues related to Iraq's government -- remain subject
to board approval, the release said.
Following is the text of the World Bank press release:
World Bank Authorizes Trust Fund, Endorses Interim Strategy For Iraq
WASHINGTON, January 29, 2004 -- The World Bank's Board of Executive
Directors today authorized the Bank to act as an administrator for the
Iraq Trust Fund, which will finance a program of emergency projects and
technical assistance. The program is contained in the Interim Strategy
for Iraq, discussed by the Board today. It includes not only specific
projects and technical assistance, to be financed by the trust fund, but
also a program of economic and sector work aimed at laying the groundwork
for an expanded development assistance program in the near future. The
Interim Strategy builds on the Bank's previous work in Iraq during 2003
and outlines a Bank-sponsored work program for Iraq for the next six to
Over the last two decades, the effects of war, misdirected resources, and
Iraq's centralized command economy have stifled growth and development.
Basic infrastructure and the education and healthcare systems have
dramatically declined due to years of neglect. International sanctions
imposed in 1991 further crippled Iraq's economy. Despite the country's
rich resources, Iraq's human development indicators are now among the
lowest in the region.
Although reliable economic information remains limited, unemployment is
high and there is severe poverty and vulnerability stemming from decades
of economic decline combined with the impact of the recent war.
Preliminary estimates indicate that Iraq's GDP [gross domestic product]
declined by about 4 percent in 2002 and a further 31 percent in 2003,
amounting to an estimated $13-17 billion in 2003, or $480-630 per capita.
This year, however, GDP is projected to increase by about 33 percent,
bringing it to $17-22 billion or $620-810 per capita.
The work program detailed in the Interim Strategy is based on a Joint Iraq
Needs Assessment of reconstruction and development challenges conducted by
the United Nations and the Bank last year. The immediate goals of the
work program are threefold -- build the Iraqi government's ability to
manage a reconstruction program, including administering large amounts of
external funding in a transparent and accountable manner; initiate
emergency programs to address urgent needs such as job creation and
restoring basic infrastructure and services; and provide policy advice and
analytical work that will pave the transition to a market-based economy
and a medium-term development program.
"This short-term strategy is based on the realities on the ground and
enables us to respond rapidly and flexibly to the Iraqi people's immediate
needs in coordination with the Iraqis and the international donor
community," says Christiaan Poortman, Vice President for the Middle East
and North Africa. "It is an Iraqi-led process that ensures the key
priorities on their national development are taken into account."
During this interim period, the Bank will implement projects in close
coordination with Iraqi officials out of a temporary office set up in
The Iraq Trust Fund is one of two trust funds that fall under the
International Reconstruction Fund Facility for Iraq designed by the World
Bank and the UN. The Facility was created in response to international
donors' request for a vehicle to channel their resources and coordinate
donor financing for Iraq's reconstruction and development activities.
The Bank's lending services remain subject to Board approval on several
issues including settlement of Iraq's arrears, the security situation on
the ground, and the legal issue of Iraq's government.