The World Bank Group and the European Union have signed a €15.6 million (US$18.1 equivalent) technical assistance program to strengthen public financial management (PFM) oversight and accountability Institutions in Iraq and increase the efficiency in the management of public resources and delivery of services.
The initiative, which will be implemented jointly by the European Union and the World Bank, complements the $41.5 million "Modernization of Public Financial Management Systems" program launched by the World Bank in 2017. It addresses some of the key vulnerabilities in Iraq's PFM and supports the commitments and objectives for PFM reform currently under implementation.
"PFM is an essential part of any development process”, said Saroj Kumar Jha, World Bank Mashreq Regional Director. “Sound PFM supports aggregate control, prioritization, accountability and efficiency in the management of public resources and delivery of services, which are critical to the achievement of public policy objectives, as well as to restoring the trust and social contract between Iraqi citizens and the country's institutions”.
As aid is increasingly provided through modalities that rely on well-functioning systems for budget development, execution and control, a sound PFM system is fundamental to the appropriate use and effectiveness of donor assistance. A more efficient PFM system is also instrumental in reducing inequalities in wealth distribution and promoting a dynamic and prosperous economic environment more conducive to business development.
"As was pledged in the Kuwait Conference, the European Union is committed to stand by Iraq in reconstruction and economic and political reforms,” said Ramon Blecua, European Union Ambassador to Iraq. “Our cooperation with the World Bank has been very fruitful and this project complements ongoing efforts supporting public finance management. The focus of the project we are signing today will be on the coordination of government and donors, more efficient management of resources, enhanced oversight and accountability, and fighting corruption. The EU is ready to help Iraq in facing the challenges ahead to secure a better future for Iraq".
The program comprises of three pillars and nine sub-components. Each sub-component corresponds to a specific Government reform commitment/objective and has been assigned to a lead government institution/department acting as WBG-EU counterpart. While some components will be recipient-executed with support from the World Bank, others will be initially WBG-EU executed on behalf of the recipient due to capacity constraints.
The program envisages the creation of a Donors' Coordination Committee, where all decisions regarding public finance management reforms and donor support to reforms will be discussed under the supervision of the Government of Iraq to ensure ownership, coordination, complementarity and overall reforms.