Economic Growth
December 2006
USAID granted this small candy shop $5,000 for stoves, drying trays, mixer machines and workspace renovations. The owner contributed $1,050 of his own money to purchase storage boxes, commercial heating pots, and natural gas cylinders. The new equipment increased his production rate from five boxes of Naana Kaisi, a traditional Iraqi fruit candy, a day, to sixty.
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With USAID's support, Iraq has begun making crucial changes to reenter the global economy. USAID's economic growth programs are building the capacity of the Government of Iraq and the Iraqi people themselves to reform the public sector and expand private sector growth.
USAID's $353 million economic growth programs focus resources to ensure that national-level reforms are paired with sub-regional economic development assistance to ensure that communities and entrepreneurs in all of Iraq's provinces are capable of taking advantage of the opportunities created by the country's economic reforms.
PUBLIC SECTOR REFORM
USAID has advisors at ten ministries and at the Central Bank. At the Central Bank, USAID has supported mechanization, creating the capacity of executing monetary policy and maintaining price stability. USAID also assisted the Central Bank in banking supervision and problem bank resolution to increase public confidence. USAID has furthermore developed strategies to modernize the customs and taxation processes to provide for increased revenue for public sector expenditure.
USAID helped establish Iraq's Financial Management Information System (FMIS). Now covering 100 percent of the GoI spending units, the FMIS has transformed Iraq's accounting systems from manual to electronic based, improving the transparency and efficiency of Iraq's national financial networks.
USAID has helped the Ministry of Finance and the Ministry of Labor and Social Affairs to develop and implement a more effective Social Safety Net (SSN) system for Iraq's poorest citizens.
Fast Facts - Economic Growth
Private Sector Development ($ 105m)
- Modernizing Business Registry. 32,500 business now are registered
- Allowed 3,000 individuals and hundreds of firms to gain business skills
- Created microfinance lending in 15 of 18 governorates. Loan portfolios consist of over 17,000 loans totaling over $18.5 million
- Established WTO Unit, Investment Promotion Agency, Trade Information Center, Loan Guarantee Corporation
- Amended/drafted dozens of private sector reform laws
Economic Governance ($ 147m)
- Captured 100 percent of GOI budget in FMIS
- Assisted in securing IMF Stand-By Arrangement
- Expanded Social Safety Net to cover 23 percent of Iraqis
- Strengthening capacity of Ministries & CBI
- Initiating plans for banking sector reform
- Engaging GOI on formalizing budget processes and fiscal decentralization
Agriculture Rehabilitation ($ 101m)
- Distributed 169 seed cleaners
- Rehabilitated 66 veterinary clinics, responsible for serving almost five million animals and 130,000 animal breeders.
- Rehabilitated 321,000 acres of irrigation systems
- Reflooded 50km2 of marshlands
- Repaired over 2,000 tractors to return to use for agricultural production
- Developed Water & Land Use Strategies
For more information please visit our website:
www.usaid.gov/iraq/ |
The system is designed to ease the possible impact of decreases in some social services and subsidies on Iraq's vulnerable populations. USAID's assistance to the GoI will allow roughly 25 percent of Iraq's citizens to meet the poverty threshold of income of $1/day.
Currently, 750,000 families are enrolled in the SSN program and are ready to receive Government benefits. An enrollment of one million families is anticipated by year's end.
LEGAL AND REGULATORY REFORM
To facilitate private sector growth, USAID helped draft and amend dozens of commercial laws supporting private sector growth in Iraq. USAID has also helped conduct legal assessments in over 23 economic areas in cooperation with the Iraqi government.
Through banking reforms, and the establishment of an Iraqi Investment Promotion Agency and Trade Information Center, USAID has encouraged the growth of new businesses and is helping remove many of the constraints and bottlenecks to economic investment and development.
INCREASED DEPTH OF PRIVATE SECTOR GROWTH
To foster Iraq's accession to the World Trade Organization (WTO), USAID helped the GOI draft the Memorandum of Foreign Trade Regime, a detailed accounting and explanation covering all aspects of the WTO applicant's trade and legal regime, and established the Trade Policy Unit within the Ministry of Trade which serves as a coordination point for WTO-related accession tasks and planning.
USAID integrated Iraq's three business registry entities and implemented a harmonized IT infrastructure. To date, over 30,000 businesses have registered via the new system.
USAID facilitated the formation of Iraq Business Associations Alliance from 10 business associations that have received technical assistance and grants. To help them continue their growth, USAID established 45 accounting, law and economics learning resource centers throughout Iraq.
Over 2,436 entrepreneurs from micro, small, and medium sized businesses (22.6 percent women) were trained in business skills.
USAID approved 350 competitively solicited grants totaling $3 million to provide much needed capital to startup small and medium-sized businesses throughout Iraq.
STRENGHTENING AGRICULTURAL CAPACITY AND PRODUCTIVITY
The agriculture sector is the largest employer in Iraq, currently employing about 30 percent of the labor force; however, it is filled with low-skilled workers with little ability to participate in the country's economic growth. With reform policies and dedicated training to farmers and Ministry of Agriculture officials, USAID has laid the foundation for extensive agricultural improvements. USAID will continue its work in agriculture with a new program beginning in spring 2007 which will focus on agribusiness support and development.
Mechanization
Most wheat production in Iraq is mechanized; farmers depend on tractors to cultivate their crop. USAID has repaired over 2,000 tractors to return them to use for agricultural production. Making Iraq's tractor fleet operable provides incentive for agribusinesses to invest private equity in a country-wide infrastructure for agricultural machinery. USAID trained tractor mechanics to ensure the sustainable use of the vehicles.
Iraqi farmers gather for information on this salt tolerant variety of wheat introduced through USAID's Agriculture program.
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Grain and Date Palm Production
USAID has demonstrated a 40 percent average wheat yield increase over traditional methods for farmers that utilized a cost-effective technical package. Additionally, USAID
distributed 173 seed cleaners, improving over 30,000 tons wheat seed for planting in 2006-2007 season. This benefits over 46,000 wheat-producing farm families around the country.
To help revitalize a struggling industry, USAID increased the area of 21 date palm mother orchards to preserve the over 600 varieties of date palms in Iraq from genetic deterioration, and to propagate up to 240,000 commercially viable offshoots per year to increase availability to date producers.
Livestock Production
USAID rehabilitated 66 veterinary clinics, responsible for serving almost five million animals and 130,000 animal breeders. Additional assistance was provided to ensure the health and vitality of livestock including a vaccination program for over 570,000 sheep against brucellosis.
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