Building a sustainable future for Iraq’s economy

Context

Iraq's economy highly relies on oil exports, leaving it vulnerable to fluctuations in oil prices. Additionally, the public administration is heavily subsidised and overstaffed, already employing approximately 38 per cent of the country’s workforce. On the other hand, an unfavourable business climate, due to outdated laws and regulations, lack of access to finance, and inadequate infrastructure, hinders the development of the private sector. Consequently, there are not enough job opportunities for the increasing number of young people entering the labour market annually. While the government aims to diversify the economy and improve employment prospects in the private sector, lacking framework conditions impede necessary reforms. Furthermore, the compounding challenge of climate change exacerbates the situation, posing threats to both social and economic stability in Iraq.

Objective

The Iraqi government has successfully improved the policy framework for a sustainable economic transformation with a significantly augmented role for the private sector.

Approach

Key measures of the project include:

• Supporting the Iraqi government in developing and implementing evidence-based reforms for a sustainable economic transformation. The aim is to align policies more closely with empirical data and the needs of the private sector.
• Cooperating with chambers and associations to facilitate better access to sustainable business development services for micro, small, and medium-sized enterprises.
• Working with government entities to design labour market policies and provide employment services in the area of job-matching.

Last update: April 2024