Iraq脗聬s National Development Strategy
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Iraq恠 National Development Strategy
NATIONAL DEVELOPMENT
STRATEGY
2005-2007
JUNE 2005
Iraqs National Development Strategy
CURRENCY AND EQUIVALENT UNITS
(As of April 30, 2005)
Currency Unit= Iraqi Dinar
US$1= 1,500 ID
WEIGHTS AND MEASURES
Metric System
ABBREVIATIONS AND ACRONYMS
Bcf
Billion cubic feet
BCG
Baghdad Coordination Group
CBI
Central Bank of Iraq
CIC
Council for International Coordination
CPA
Coalition Provision Authority
EPCA
Emergency Post Conflict Assistance
GDP
Gross Domestic Product
ICSD
International
Center
for the Settlement of Disputes
IMF
International Monetary Fund
IRFO
Iraq Reconstruction Forum
IRFFI
Iraq Reconstruction Fund Facility for Iraq
ISRB
Iraqi Strategic Review Board
ITG
Iraqi Transitional Government
IIG
Iraqi
Interim
Government
ISF
Iraqi Security Forces
NDS
National Development Strategy
MW
Megawatt
MIGA
Multilateral Investment Guarantee Agency
MOF
Ministry of Finance
MOPDC
Ministry of Planning and Development Cooperation
NGOs
Non-governmental Organizations
OPEC
Organization of Petroleum Exporting Countries
OPIC
Overseas Private Insurance Corporation
PDS
Public Distribution System
PER
Pubic Expenditure Review
SOE
State-owned
Enterprise
SWAp
Sector wide approach
SWG
Sector Working Group
TAL
Transitional Administrative Law
Tcf
Trillion Cubic Feet
WTO
World Trade Organization
WB
World
Bank
UN
United
Nations
UNDG United Nations Development Group
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Iraqs National Development Strategy
TABLE OF CONTENTS
Foreword...................................................................................................................vi
Executive Summary........................................................................................viii
I.
The Country Context .........................................................................................1
The Legacy of the Past ............................................................................1
Recent Achievements .............................................................................2
II. Recent Economic Developments .......................................................................4
Economic Growth .................................................................................4
Inflation and the Exchange Rate .................................................................5
The External Sector................................................................................5
Oil Industry .........................................................................................5
III. The Medium-Term Fiscal Framework................................................................7
Government Revenues............................................................................7
Government Expenditures .......................................................................8
IV. Strengthening the Foundations of Economic Growth..................................... 12
A Stable Macroeconomic Environment ...................................................... 12
The Oil and Gas Sector ......................................................................... 15
Structural Transformation of the Economy ................................................. 17
Agriculture ........................................................................................ 18
Tourism............................................................................................ 22
V. Revitalizing the Private Sector......................................................................... 23
Banking and Finance ............................................................................. 23
Electricity.......................................................................................... 24
Transport and Telecommunications .......................................................... 25
Privatization and Restructuring of State-owned Enterprises ............................. 25
WTO Accession and Trade Liberalization................................................... 26
Foreign Direct Investment...................................................................... 27
VI. Improving the quality of life............................................................................ 28
Water and Sanitation ............................................................................ 28
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Iraqs National Development Strategy
Education .......................................................................................... 29
Health .............................................................................................. 29
Housing and Urban Development............................................................. 34
VII. Strengthening Good Governance and Improving Security............................. 35
Eradicating Corruption.......................................................................... 36
Law Enforcement ................................................................................ 36
Judiciary ........................................................................................... 38
Corrections........................................................................................ 39
VIII. Implementing the Strategy .............................................................................. 40
Enhanced Donor Coordination Mechanism ................................................. 40
Improving Iraqs Intra-Government Processes. ............................................ 42
Bringing Both Sides Together .................................................................. 45
Intergovernmental Fiscal Framework and the Planning Process......................... 46
IX. The Way Forward ............................................................................................. 48
Forecasting ........................................................................................ 48
Monitoring and Evaluation ..................................................................... 48
X. References ........................................................................................................ 49
XI. Annexes ............................................................................................................ 51
Annex 1: Indicators for Iraqs Development Goals ........................................ 51
Annex 2: Investment Expenditures by Cluster 2005-2007............................... 55
Annex 3: Projects distributed by geographical location (2005-2007) .................. 57
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Iraqs National Development Strategy
Text Tables, Figures and Boxes
Table 1: Iraq: Key Economic Indicators (2004-2007)
Table 2: Iraq: Quarterly Economic Indicators (2003-2004)
Table 3: Iraq: National Budget, Investment and Expenditures (2005-2007)
Table 4: Quick Guide to the Planning Process
Figure 1: Enhanced Donor Coordination Mechanism
Figure 2: Simplified Work-Flow Process
Figure 3: Sector Programs in the Budgeting Process
Box 1: Iraqs Public Distribution System---- Helps the poor but is costly.
Box 2: Iraqs National Development GoalsAmbitious but achievable.
Box 3: Decentralization----Key Element of the National Development Strategy
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Iraqs National Development Strategy
Foreword
[M]any of the solutions to hunger, disease, poverty and lack of education are well known. What is
needed is for efforts to be properly resourced and for services to be distributed more fairly and
efficiently. None of this will happen unless every country, rich and poor, assumes its
responsibilities.
UNDP Human Development Report, 2003
This is the first National Development Strategy produced by a democratically elected
government of Iraq. It is about creating opportunities for all the people of Iraq to contribute to the
reconstruction and development of our great country. It is about ending ignorance, hunger, disease
and sectarian conflict. Above all, it is about creating opportunities for job creation so as to raise
household incomes, restore peoples dignity and move Iraq down the road to prosperity.
This National Development Strategy sets out strategic priorities for Iraqs reconstruction and
development. It is organized around four key drivers of prosperity that we believe best reflect the
multi-faceted and complex challenges confronting us today. In each p