OECD Iraq Project (2007-2013)
In 2007, the Government of Iraq looking to develop its private sector and create employment opportunities requested the OECD’s assistance to help tackle some of the issues stifling its reconstruction (a legacy of relying on public sector employment, its cumbersome regulatory and legal investment framework, high levels of perceived corruption, and the challenges stemming from a heavy dependence on hydrocarbon exports).
In response, the OECD created, with financing from the US Department of State, the MENA-OECD Investment Programme Iraq Project. Through the project, MENA-OECD partnered with the Government of Iraq to develop improved policies designed to promote investment and to provide tools to implement those policies.
To work on these challenges, MENA-OECD created three working groups and work streams. These work streams brought together Iraqi government officials, governments and development agencies, the OECD and other international experts, and the private sector to address overall policy issues and focus on a few pilot projects as examples.
The project ended with a capstone meeting with the Government of Iraq on 2-3 February 2014, Baghdad, Iraq.
Project Insights: Promoting Investment in a Fragile Context
Supporting Investment Policy and Governance Reforms in Iraq, OECD 2010
Infrastructure Finance in Iraq
From 2009-2013, the Working Group on Infrastructure Finance in Iraq, managed in conjunction with the Office of the Deputy Prime Minister for Infrastructure, examined selected projects and recommended different approaches that aimed to hasten Iraq’s infrastructure development.
The Working Group assisted the Government of Iraq (GoI) in accessing extra-budgetary sources of finance for essential projects that would have been delayed or shelved had they depended solely on government revenue. By combining public funds with private capital (and the associated technical expertise) budgetary funds available for infrastructure were used more effectively.
The Working Group on Infrastructure Finance in Iraq:
- identified regulatory and policy developments most likely to encourage private sector involvement in infrastructure finance
- prioritised infrastructure needs, identified crucial infrastructure projects and their appropriate financing mechanisms
- identified financing risks, and examined and recommended risk mitigation strategies
- helped government officials to prepare proposals and implementation strategies
- monitored the implementation of infrastructure projects
The Working Group mobilised 11 Iraqi ministries and agencies through the Office of the Iraqi Deputy Prime Minister for Infrastructure, as well as international experts from OPIC, Coface, the Islamic Development Bank, MIGA, and the World Bank.
Investment Zones in Iraq
From 2010-13, the Working Group on Investment Zones in Iraq helped the Iraqi government develop investment zones to mitigate many of the risks foreign investors face when operating in Iraq, allowing the Government of Iraq to set up a clear business, legal and regulatory framework on a pilot basis. In turn, this framework permitted the Iraqi government to attract foreign investment and develop high-growth industries. Eventually, the Government of Iraq should be able to expand the investment zone pilot structure outside its investment zones and truly begin to transform its economy and contribute to its sustainable development.
During the project, the Working Group on Investment Zones in Iraq:
- advised the Government of Iraq on the investment zone development plan, covering the legal framework for investment zones, the role of existing zones, sector prioritisation, investment zone policy frameworks and incentives, investment zone management structures, and tax and customs duty issues
- sought to incorporate simpler forms of public-private partnerships such as "build-operate-transfer" models in investment zone financing
- supported the creation of a dedicated investment zones unit within the National Investment Commission to take the lead on investment zone development and regulation, in particular, to meet the challenge of providing streamlined administrative services and a higher degree of investor protection
The Working Group mobilised three Iraqi ministries through the National Investment Commission as well as several international experts.
Developing, administering and managing investment zones requires a multiple set of skills and expertise in the field of promotion and marketing, business development, procurement, project management and project monitoring. The MENA-OECD Investment Programme provided capacity-building training sessions to drive the development of Iraq’s investment zones forward.
Special Training on Feasibility Studies for Investment Zones
The MENA-OECD Investment Programme’s "Special Training Session on Feasibility Studies for Investment Zones" trained participants from Iraq’s National Investment Commission and the Office of the Deputy Prime Minister for Infrastructure, as well as other ministries and agencies, on conducting and assessing feasibility studies using a TELOS framework.
Using this framework, Iraqi government officials were able to better assess the value of potential projects and evaluate the likelihood of project success, and were better equiped to develop the projects discussed throughout MENA-OECD’s Investment Zone and Infrastructure Finance Working Group meetings.
Capacity Development for Integrity in Public Procurement
The purpose of this work stream was to improve the integrity framework in Iraq’s private sector based on related international standards, such as the UN Convention Against Corruption and the OECD Anti-Bribery Convention. The work stream focused on improving Iraq’s public procurement procedures and practices aimed at reducing the prevalence of corruption, in order to reduce the costs of doing business and encourage new investments in Iraq.
The project promoted capacity development for integrity in public procurement through seminars, training sessions, expert coaching and publications on international investor exposure to integrity standards, including the OECD Anti-Bribery Convention.
The work stream focused on three main areas:
- integrity in public procurement, including participation by Iraq government officials in regional seminars on collective action to foster integrity and fight bribery and corruption
- public sector and business community awareness of the OECD Anti-Bribery Convention
- strengthening the role of civil society, particularly of private sector representatives in combating corruption
Improving the Business Climate Through Enhanced Integrity in Public Procurement
6-7 February 2013, Amman, Jordan
The “National Round Table Meeting on Improving the Business Climate Through Enhanced Integrity in Public Procurement in Iraq” presented findings of the “Draft Review of Iraq’s Public Procurement Rules and Provisions”, and developed policy recommendations to further reform Iraq’s public procurement system.
At the last meeting, participants agreed that the Iraqi government could undertake the following steps:
- develop a white/black list of contractors to facilitate hiring quality contractors
- train government staff members in best practice procurement procedures, develop model contracts for Iraqi government contracting entities to use
- integrate procurement administration and information in a one-stop shop, amongst others (most importantly, some participants stressed that the true problem was the Iraqi government’s poor implementation of anti-corruption procedures, rather than the lack of policies and institutions)