Midterm Review of Economic Reform and Diversification Sector 22 – 23 June 2009, Baghdad

UN Agencies UNDP, ILO, UNIDO, UN-HABITAT, FAO, UNOPS, UNIFEM, ESCWA, UNFPA, UNEP NGOs NCCI, CHF, IOM Chaired by UNDP Line Ministries Ministry of Planning and Development Cooperation, Advisory Board of the Prime Minister, Ministry of Finance, Ministry of Labour and Social Affairs, Ministry of Agriculture, Ministry of Education, Chamber of Commerce and Industries Partnerships and Coordination

UN Assistance Strategy National priority or goals (NDS ) Strengthen the foundations for Economic Growth Mitigate Poverty and Hunger Enhancing gender equity and strengthening women issues Prioritize increasing electricity generation and distribution to meet current and projected needs To contribute to the achievement of the goals defined in the National Development Strategy (NDS), International Compact with Iraq (ICI) benchmarks, and Millennium Development Goals (MDGs) Economic Reform and Diversification Sector

ICI Benchmarks Economic Reform Goal (4.3): Create an enabling environment for investment, public and private, domestic and foreign, as a driver for sustainable and diversified economic growth and job creation; create the conditions for maximizing the benefits from foreign aid and investment and integration into the global economies Create an enabling environment for private investment and job creation Undertake specific measures to design and implement private sector development policies 4.3.4Regional and International Economic Integration Eradicate Extreme Poverty and Promote Area-Based Development Reduce unemployment by one half and double labor force participation for women 4.5 Energy Goal: The Government will develop an energy sector that meets Iraq’s needs and maximizes the benefits of hydrocarbons for all Iraqis and reinforces national unity and institutions. MDGs Goals Goal 1: Eradicate extreme poverty and hunger UN Assistance Strategy (cont.)

Sectoral Achievements & Contributions Private Sector Development, Employment, Job Creation and Support to Small and Medium-sized Enterprises 9,688 jobs for men and women created across Iraq 26,115 enterprises established/ supported under Economic Reform and Diversification Sector programmes/ projects. Public Financial Management Support Capacity of local authorities in Public Financial Management improved in Diwaniya and Misan. Budget execution projects are presently in Al-Anbar, Basrah and KRG.

Support to the Transportation Sector A draft Civil Aviation Sector Master Plan was developed by the ICAO specialist team and endorses over 200 recommendations to comply with key international regulations. An abridged edition is currently being developed and the Master Plan is expected to be finalized and endorsed in Extensive consultations have resulted in H.E. Minister of Transportation forming a Legal Drafting Group to finalize a Civil Aviation Bill for Support to Energy and Electricity Sector A draft Electricity Master Plan was developed and is being updated to include renewable energy and environmental issues. Increased power supply in Mussayab, Hartha, Taji and Mosul Gas Power Stations increasing the capacity of the National Electricity Grid by 533 MW. Sectoral Achievements & Contributions (cont.)

Lessons Learned Programmes to be closely aligned with national economic strategies and implemented in close partnership with local and national authorities and key non-governmental stakeholders to ensure government ownership and partnership. The transition to a healthy private sector based economy requires not only substantial legislative reforms but successful institutional reform as well. The Economic Reform and Diversification Sector’s approach to improving the Government’s capacities in developing the private sector is designed to address both legislative and institutional reform.

Key Recommendations Importance of adopting a consultative process involving government stakeholders, private sector, CSOs, and international donors in programmes formulation and implementation though continuous dialogue between parties involved, the establishment of projects’ steering committees consisting of all stakeholders and maintaining the SOT coordination mechanism. Ensuring coherence and synergy of implementation of Joint Programmes through maintaining effective management strategy under the leadership of One Programme Director (e.g. imitating PSDPI approach in assigning one programme director to manage the work of 9 implementing partners).