Iraq to Tap World Bank for $5bn

According to a report from AK News, the Iraqi government is planning to borrow $5 billion from the World Bank to fund its 2010 general budget deficit, Iraq’s acting Finance Minister said Wednesday.

Iraq’s budget for 2010 is suffering a deficit of IQD23 trillion Iraqi dinars [approx $19bn] which the government is planning to narrow by a $5 billion loan from the world bank, Fathel Nabi said.

Kurdistan Region will have its 17 percent share of the loan as well, Nabi said.

The bank has not imposed any obligations on Iraq, he concluded.

A spokesman from A.A.I.B. Insurance Brokers, a company specialising in Iraq observed; “Some earlier loans taken from the I.M.F that were designed to help stabilise and assist the transformation of the national economy were criticised by some as having too stringent conditions attached, and as such created issues for politicians and government officials when certain policies were implemented. It is interesting to see that the planned loan from the World Bank appears not to be linked to policy changes.

The need for the loan to fund the 2010 budget and spending plans further underscores the need for Iraq to spur development of the oil sector and boost output. Iraq has the fourth largest proven oil reserves and is the eleventh largest exporter of oil, a position it is determined to improve upon.

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