The report builds on previous analytical and technical World Bank assessments, and draws on the International Finance Corporation’s experience with the private sector in the KRI over the last few years.
“Challenges are high, but our findings show that KRI has significant economic potential to diversify the economy through private sector development, and benefit from regional untapped opportunities in non-oil sectors which will be beneficial for the people in KRI,” said Rapti Goonesekere, IFC Principal Economist and co-Task Team Leader.
The KRG has previously laid out broad objectives for its economic policy, with the diversification of its economy away from the oil sector being at their core. The immediate priority is to stabilize the economy without heightening socio-political fragility. Since the escalation of conflict in Syria and Iraq in mid-2014, a combined influx of 1.8 million Syrian refugees and Iraqi IDPs has imposed additional strains on the budget and service delivery.
The poverty rate has doubled in KRI host communities, with even higher increases in poverty among refugees and IDPs. KRG is providing public goods for the entire region and delivering services to this increased population. A World Bank study carried out jointly with the KRG Ministry of Planning estimated stabilization needs in 2015 at US$1.4 billion.
“The success of these reforms, and the region’s ability to deal with multiple shocks, will require support from KRG’s partners,” said Dr. Ali Sindi, KRG Minister of Planning. “Our Government welcomes this economic reform roadmap and is fully committed to implementing reforms to secure fiscal consolidation in the short-term and achieve sustainable and inclusive growth in the KRI in the medium-term while protecting our people from the impact of multiple crises through robust social mitigation measures.”
(Source: World Bank)
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