Published on Arab Voices

Growth, good jobs and governance: the re-development of Iraq

As the World Bank prepares a full Country Partnership Strategy for Iraq, Special Representative Marie- Hélène Bricknell reflects on the specific challenges of working in a post-conflict environment

A little more than a year ago, when Marie-Hélène Bricknell arrived in Iraq to establish a permanent presence for the World Bank, sirens in the "Green Zone" warning of incoming missiles wailed through the night.

Even before the permanent presence, and despite the difficult security situation, work had been ongoing. A number of important accomplishments had been achieved; including the construction and rehabilitation of schools, the rebuilding of hospitals and the training of nurse and doctors, improved drinking water for over 600,000 Iraqis, and the installation of a telecommunications backbone for the inter-banking network, to name but a few.

These came at an additional cost, however, due to the numerous logistical hurdles that had to be overcome. The projects were managed from afar, with planning and supervisory meetings held in third countries such as Lebanon and Jordan.

The sirens have since subsided in the Green Zone, and there have been steady but incremental improvements in the security situation. Oil has also begun flowing again. Opportunities have opened up for closer engagement, and Marie-Hélène has been intent on seizing them.

The relationship between the World Bank and Iraq has also been evolving, and consultations in preparation  for a full Country Partnership Strategy have just been completed. To deepen her understanding of the various challenges Iraq faces, and how best the World Bank can help confront them, Marie-Hélène has taken advantage of the improved security to travel the country.  She shared with us the insights gained from her recent travels and over a year spent on the ground in Iraq.

What are the greatest development challenges facing Iraq right now?

World BankMarie- Hélène Bricknell:  I think we need to think of Iraq in a different sort of paradigm: Iraq is not developing; we should talk about re-developing Iraq. Iraq was once a very developed country that guaranteed rights to women – women had the vote, the economic environment allowed for women to enter universities and income earning opportunities were available to women – this is just looking at the gender side, but in health and education too, they were also very much in the lead in the Middle East. I know many Middle Easterners who tell me they used to go to Baghdad to study. Today Iraq cannot guarantee even an adequate primary education to all its citizens. It’s stuck in sort of a time warp, where things that were very much up in the front 30 years ago, look quite decrepit today. So there is a need to re-vamp these systems, to provide adequate healthcare and vaccinations to children. The nutritional impact of the deterioration of the quality of Iraqi life has a huge implication both for children as they grow up and the population as a whole. A recent UNICEF report highlights a worrying trend in the malnutrition and stunting of Iraqi children as well as an increase in the morbidity and mortality rates in the 0-12 months population.   Even though the Gross Domestic Product per capita shows that Iraq has an annual average salary of over US$3,000 per head – this is simply the oil revenue divided by the number of people in the country, it is not a true reflection of the quality of life. The average Iraqi citizen is not living the life of a middle income country, such as Turkey.

Will the significant increase in oil production provide a solution?

World BankMHB: Actually, I think it could be the curse of Iraq, in a way. Iraq has vast oil and gas resources, and these resources generate quite a lot wealth. The problem is that it does not percolate through the rest of the economy in the form of jobs, and not just any jobs, but good jobs. The oil sector can only provide work for one percent of Iraqis, and it tends to be at the high end of the scale. What happens is that you need skilled workers, and as I mentioned earlier, the education system is not generating the level of skills that the industry needs, to increase the ranks of the Iraqis working in the sector. In addition, the incredible windfall they’ve been enjoying, with the price of oil so high, has sort of blinded authorities to the real needs - the development needs of Iraq. This means building institutions, building capacity, delivering basic services, reducing corruption and putting in place a governance framework that insures that the windfall profits from the oil actually go to serve the Iraqi people by providing them with education, and providing them with good healthcare. Iraq should use this opportunity to diversify its economy, allowing the private sector to come in and create the jobs that will absorb the huge number of Iraqis looking for work. These are the major challenges: diversifying its economy and promoting growth in the non-oil sector; creating a framework for good governance; and establishing good anti-corruption measures that will basically eliminate the climate of impunity in Iraq. In short, Iraq needs growth, good jobs and governance. 

What is the current role of the World Bank Group in Iraq?

MHB: Since 2004, the Bank has been engaged in the re-building phase of Iraq, financed by a multi-donor trust fund. That multi-donor trust fund will close in December 2013, and so the Bank now needs to develop a strategy for the post-trust fund, post-reconstruction phase. We therefore launched a series of consultations that included a broad section of Iraqi society, both government and civil society, as a vital stage in the development of a full Country Partnership Strategy (CSP). The CSP will guide the World Bank's relationship with Iraq for the next four years. Our plan is to  focus on, as I keep saying, the re-development of Iraq. This will involve support for much longer term issues that include institution building, promoting good governance through strengthening public financial management, sharing prosperity through job creation, economic diversification, sustainable growth, infrastructure, regional development and poverty reduction through improved safety nets, social protection and service delivery.  One thing to note about Iraq is that there is not a lot of practice in implementing laws. There are many laws on the books – if you look, there is an anti-money laundering law for example, a counter-terrorism financing law - the problem is implementation. During the Saddam period, who was the law? The dictator was the law. There was no independent recourse to the law, and the habit of implementing laws was therefore lost. There is a whole huge agenda there on revamping the legal system, and the judicial system, to re-introduce the need to implement laws that are on the books, and if they are no longer relevant, to revamp them.

What sort of limitations has the security situation imposed on World Bank staff and operations?

World BankMHB: The Bank really tried very hard to find a way of working in a country beset by violence. The formula that was adopted was to have teams meet in Amman or Beirut to supervise and manage projects. That had its limitations of course – it had some impact in the sense that we were able to maintain a dialogue with the government and continue to develop a partnership. But in some instances, I think our impact was limited simply because we were not able to get there on the ground ourselves to see what was happening. However, there were some successes, most notably the inroads made in the reform of the social transfer program. The universal subsidies introduced during the Saddam years needed to be better refined and targeted, because the fiscal burden to the state, even in a country like Iraq with its vast oil resources, was quite high. We have been working with the government to try and better target the social transfer system. There is still a lot more work to do.

How has it changed now that you are based permanently in Baghdad and when did it become safe enough to travel outside the Green Zone?

MHB: I have never restricted my activities to the Green Zone.  From day one, I started travelling into the red zone. When I arrived last year I was going at least every day, for two or three visits, because I wanted to meet everyone in the government, and a lot of the ministries are located in the red zone. Over this past year the security situation has improved gradually. I recently asked the security team to make a risk assessment of us travelling further afield. So, I have now been to Basra, Um Qasr, to the Hartha power plant where we have a project, to Erbil and Dohuk in KRG, Mosul in Nineveh Province, one of the still more violent region of Iraq and, to the marsh lands and down to the Al Muthana province, which is an incredible province.  It’s the largest in Iraq, but it’s mostly desert, on the border with Saudi Arabia, and it’s largely a nomadic society with Bedouins living in the desert in very much the old fashioned way. These trips really opened my eyes. It has given me a more balanced view of Iraq, which has the characteristics of a middle-income country, but what you see in Murthana is a poor country. This perspective is critical for tailoring our support to the diversity of Iraqi needs.  We can offer the kind of help a middle-income country needs, such as knowledge transfer, or the fee-based services that an oil wealthy country can afford, while at the same time providing the support that a region like Muthana needs, where women may die in childbirth because they can’t get access to pre-natal care. The Bank can play a very big role in assisting the government adopt policies that serve the needs of the different parts of Iraq.

What can the World Bank offer Iraq over the long-term, and how do you see the relationship developing over the long term?

MHB: Over the long term we need to continue strengthening our relationship with Iraq. They perceive the Bank as a partner that delivers solid and objective advice. When the Iraqi government needs an impartial opinion on anything they come to us.  For example, when they wanted to conduct a gas pricing study they came to us, rather than the many international oil companies working there. We can be a valuable partner as a knowledge provider - objective and impartial. We can also help Iraq regain its position as a leader in the Middle East. Iraq has taken the initial step to increase transparency in the management of its oil resources. We assisted by helping Iraq become compliant with the Extractive Industries Transparency Initiative. The Bank can also help Iraq look at all the constraints that are hindering private sector developments so that they can get a better "doing business" indicator. This would help improve the country’s image, while at the same time making sure that regulatory and policy work is being done on the ground to actually help Iraq reach its objective of diversifying its economy – which is one of the goals that was communicated to us during CPS consultations with the government. Through examples and pilots we can show that you can have a market economy while at the same time taking care of your most vulnerable citizens.  The state also has to step in to show the citizens that it can provide good services. Today, about 30 percent of Iraqis do not have access to potable water which is scandalous in a country with quite a good endowment of water resources. Managing water resources, delivering water to its citizens, delivering electricity in a country with soaring temperatures in summer, delivering education services, delivering health services - these are all areas that are critical to restoring the legitimacy of the state in the eyes of its citizens and at the same time helping Iraq move to the next level, in terms of re-developing itself.  Making this become a reality will be both difficult and challenging; requiring a lot of hard work and traction on the other side, and the World Bank is ready to offer its long term support to help them achieve it. 

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