Memorandum submitted by the Department
for International Development
IRAQ UPDATE, SEPTEMBER 2007
AN OVERVIEW
OF THE
UK'S AID
EFFORT TO
DATE
1. The UK has pledged £744 million
for reconstruction and development in Iraq since 2003. So far
£669 million has been disbursed, of which £493 million
has been spent by DFID (including EC contributions). This includes
over £125 million to support humanitarian agencies since
2003 (£10 million of which has been spent in 2007). The table
below shows the estimated amount that will have been spent by
the end of FY 2007-08.
| Department / Budget
| 2002-03 | 2003-04
| 2004-05 | 2005-06
| 2006-07 | 2007-08
| TOTAL |
| DFID Iraq budget | £8.9m
| £209.3m | £49.1m |
£86.9m | £49.6m | £30.0m
| £433.8m |
| DFID contributions to European Commission |
£0m | £17.4m | £21.3m
| £23.2m | £23.7m |
£8.0m | £93.6m |
| Foreign & Commonwealth Office | £0m
| £30m | £8.5m | £0m
| £0m | £0m | £38.5m
|
| Global Conflict Prevention Pool | £0m
| £5.0m | £18.0m |
£15.7m | £25.0m | £22.0m
| £85.7m |
| Peacekeeping Conflict Pool | £0m
| £0m | £11.0m | £11.0m
| £14.0m | £10.0m |
£46.0m |
| Ministry of Defence | £0m
| £0m | £30.0m | £5.0m
| £3.0m | £0m | £38.0m
|
| TOTAL | £8.9m
| £261.7m | £137.9m
| £141.8m | £115.3m
| £70m | £735.6m
|
2. Since 2003 UK support to Iraqi reconstruction and
development has:
— Increased water supply by up to 30% in some Governorates,
and improved the electricity supply to 1.5 million residents in
Basra. We replaced 200 kilometres of water mains in southern Iraq
and constructed a Water Training Centre in Basra to provide Iraqi
engineers with the facilities to improve their skills.
— Added or secured power equivalent to a 24 hour
supply for a million people in southern Iraq, and improved access
to water for around a million people. These projects have also
generated thousands of work-days for local people.
— Supported the Iraqi government to negotiate and
implement two International Monetary Fund programmes, laying the
groundwork for a major debt reduction deal that has so far been
worth $24.4 billion.
— Helped provincial councils in southern Iraq set
their priorities for development and access central government
funds. Basra Provincial Council was consequently able to access
$205 million of central Government funds in 2007, after receiving
nothing in 2005, and is already using its three-year development
strategy to plan and implement essential repairs to roads, water
and sewage infrastructure and power generation.
— Provided over £125 million in humanitarian
relief to meet urgent needs, both for vulnerable people in Iraq
(largely through the International Committee for the Red Cross)
and for those displaced in neighbouring countries such as Syria
and Jordan (largely through the UNHCR).
— Contributed £70 million to the UN and World
Bank trust funds for Iraq, as part of the total UK effort. These
funds helped support successful democratic elections in 2005,
the rehabilitation of over 500 schools, the supply of learning
materials for 10 million children, and training over 3,700 health
staff.
— Trained around 200 Iraqi journalists in international
journalism, photojournalism, news feature writing and news security
training, and provided £7.5 million to enable independent
radio and TV programmes to begin broadcasting in southern Iraq.
— Supported programmes which provided voter education
to over 300,000 people in some of the most remote areas of Iraq,
as well as a range of partnerships between international and Iraqi
NGOs to build a new generation of leaders who can engage with
government and contribute to policy-making and service delivery.
This includes support to trade unions, women's groups, humanitarian
groups and Kurdish community groups.
— Provided over £2 million for to the justice
sector in Iraq, allowing 216 judges, prosecutors, lawyers and
justice department officials to be trained in International Human
Rights Law with a focus on fair trial and due process (in addition
to support for the Iraqi Special Tribunal).
— Supported police and prison reform in southern
Iraq through the Global Conflict Prevention Pool; so far over
10,000 Iraqi police officers and over 680 prison officers in Basra
have been trained in issues including international human rights
standards.
— In conjunction with security training and operations
by multinational and Iraqi Forces, Operation SINBAD in southern
Iraq completed around 550 projects to improve the local environment
such as infrastructure and agricultural development.
DFID'S CURRENT
PROGRAMME IN
IRAQ
3. Iraq is a wealthy country, with government revenues
this year of $33 billion. Iraq therefore has considerable economic
potential, but its ability to realise this is constrained by a
number of factors: the poor security situation; the weak capacity
of the provincial government to deliver public services; and the
dilapidated state of key infrastructure (particularly energy production).
The Government has the resources to fund the necessary investment
itself but is consistently failing to spend its budget. In 2006,
it spent only two-thirds of the total budget; capital spending
was particularly poor. Despite receiving 50% of the capital budget,
the Ministry of Oil only spent 3%.
4. DFID is therefore focusing on the areas where it can
add the most value:
a. Building the capacity of the Iraqi Government to unlock
its own human and financial resources to enable economic growth
and deliver better public services.
b. Internationalising the aid effort by leveraging a more
effective role for key players such as the World Bank and the
IMF.
c. Supporting the most vulnerable Iraqis through support
to international humanitarian agencies.
Influencing the Iraqi Government and international partners
5. DFID's programme emphasises the importance of Iraqi
leadership. Economic reform and progress on national reconciliation
require strong political leadership from the Iraqi Government,
who have to see these issues as a strategic priority. The UK is
using its presence in Baghdad to help the Iraqi Government to
drive forward both issues, including implementing its commitments
made in the International Compact for Iraq.
6. DFID has played a key role in establishing a World
Bank presence in Baghdad, providing accommodation and logistical
support to their staff in country. As a result the World Bank
now has two full-time international staff, including a Country
Manager for Iraq. We are also encouraging greater IMF engagement
with the Government. We are helping to support greater UN leadership
and engagement on humanitarian and development issues, as well
supporting a stronger UN role in political issues; the recently
extended UNAMI mandate will help here.
Economic development
7. The scale of the challenge is considerable. Improving
infrastructure and services in Southern Iraq is a multi-billion
dollar problem. Infrastructure is old and dilapidated and investment
has been lacking for decades. The World Bank estimates that Iraq
needs to invest $20 billion over 10 years simply to upgrade Iraq's
power sector. Other estimates suggest that just over 20% of homes
in Basra receive piped drinking water (lowest in Iraq) and electricity
supplies average 11-12 hours per day. Improvements will require
significant and sustained levels of investment from GoI. Much
of DFID's work is therefore designed to stimulate private sector
development and help the Iraqi Government implement key economic
reform commitments, as in the International Compact for Iraq.
8. Together with the Iraqi government, our challenge
therefore is to unlock Iraqi resources and get them where they
need to be—at the local level, improving the lives of ordinary
Iraqis, giving them stake in their future and providing the foundations
for economic growth. To do this, action is required at both national
and provincial levels.
Building capacity to deliver public services and providing
policy advice
9. DFID's Economic Reform Programme (ERP) advices the
Government on macro-economic, fiscal and public financial management
issues. Currently, the programme is focused on fuel subsidy reform,
improving macro-economic forecasting, 2007 budget implementation
and 2008 budget preparation (including investment budgeting).
10. DFID's Support for the Centre of Government Programme
(SCOG) is helping build up key institutions of central government.
We are working with the Prime Minister's Office, the Council of
Ministers Secretariat and the National Media Centre. Our work
focuses on helping establish the basic mechanics of government
decision-making; for example, managing meetings and committee
structures, and mentoring on core civil service skills.
11. Through our work in the UK-led Provincial Reconstruction
Team (PRT) in Basra, we have been instrumental in helping provincial
governments in the South identify their development priorities
and produce costed budgets. We have also put considerable effort
into linking provincial government in Basra with national ministries
in Baghdad, in order to improve resource flows, and promoting
private sector development. In Basra, we are helping the Provincial
Council establish key institutions designed to facilitate private
sector development. This work is already serving as a model for
assistance elsewhere in Iraq. We are:
a. Establishing an Investment Promotion Agency which will
implement programs designed to stimulate private sector development
and provide services to the business sector and policy advice
to government.
b. Setting up a Development Fund to provide investment
and credit for small and medium-sized enterprises, which form
the backbone of any market-led private sector economy.
12. On behalf of HMG's Global Conflict Prevention Pool,
DFID manages a programme to build capacity and improve accountability
in the Ministry of Interior. This is one of our most challenging
programmes: we are the only civilian donor working directly with
the Ministry. Activities focus on strategic planning, improving
administrative controls (to reduce corruption), clarifying the
Ministry's legal and constitutional framework, and human resource
management.
Infrastructure projects in southern Iraq
13. DFID is also working directly to improve the lives
of ordinary Iraqis. DFID's Iraq Infrastructure Services Programme
(IISP) is making good progress. We have added or secured 350 megawatts
of electricity to the Iraqi national grid, and by the end of this
year will have added or secured a further 120 megawatts. This
is equivalent to 24 hours of electricity for one million people.
By early 2008 we will have improved access to water for a further
million people in Basra. From this point onwards we will move
away from direct infrastructure provision and will instead concentrate
entirely on helping Provincial Government in southern Iraq to
access reconstruction funds from central Government, as well as
promoting private sector development through initiatives such
as the Basra Investment Promotion Agency and the Development Fund
for Basra.
THE HUMANITARIAN
SITUATION
14. Humanitarian needs in Iraq are on the rise, although
exact and reliable information remains a key issue. However, it
is estimated that four million Iraqis are food insecure; of which
40% do not receive any rations from the Iraqi Public Distribution
System—the main Iraqi social safety net. Two million people
are internally displaced, with a further two million displaced
across the region, 80% of which are in Syria and Jordan. The map
of Iraq is increasingly being redrawn along ethnic and religious
lines, with possible long-term consequences for both Iraq and
the region.
15. Many vulnerable groups are denied adequate protection
and access to basic services. Health facilities are often overwhelmed
by mass casualty emergencies; public services (water, sewerage,
electricity) are inadequate to meet demand. Many of the problems
facing the population at large will need to be addressed by systemic
change and reform. In the short term, however, there is a humanitarian
imperative for the international community, including the UK,
to help address immediate needs among the Iraqi population.
16. Humanitarian agencies are increasing their appeals.
The International Committee of the Red Cross (ICRC) has raised
its appeal from $45 million to $75 million and UNHCR has just
doubled its appeal to $123 million. DFID has provided £10
million in humanitarian funding so far in 2007 and over £125
million since 2003, in support of the International Committee
of the red Cross (ICRC), UN high Commissioner for Refugees (UNHCR),
the International Organisation for Migration (IOM), and the UN
Office for the Co-ordination of Humanitarian Affairs (OCHA) to
provide much needed assistance both inside Iraq and across the
region. We are working with the UN for a more strategic international
approach to the humanitarian crisis in Iraq. We will continue
to work with the UN and other agencies to ensure that needs are
met. We are also lobbying other donors (especially the European
Commission) to increase their support to humanitarian agencies.
Support to civil society and the reconciliation process
17. Iraq has a growing civil society with more than 2,500
registered NGOs. Over 250 newspapers and magazines have been launched
since 2003. DFID has funded three programmes with civil society,
all of which are now complete. We are now in the process of designing
our next phase of support.
FUTURE PLANS
FOR UK DEVELOPMENT
ASSISTANCE TO
IRAQ
Southern Iraq
18. Our direct infrastructure programme will be complete
in 2008. Given the scale of the infrastructure challenge, DFID
will shift its focus of effort towards supporting the Provincial
Council in Basra to access funds from central Government and manage
its own budget to finance reconstruction projects and to support
economic and private sector development. This is a sensible shift
given the level of resources available from central government,
the need for Iraqi ownership and the difficulty for donors to
deliver infrastructure projects in this operating environment.
This work will be taken forward in tandem in both Baghdad and
Basra, through the UK-led Provincial Reconstruction Team in Basra.
Baghdad
19. We will continue to work in Baghdad to support greater
leadership on economic development, improve the delivery of public
services and support political reconciliation by the Iraqi Government,
and to help them to manage and spend their own resources to improve
services and living standards. We will place particular emphasis
on encouraging central Government support (including funding)
for economic development in southern Iraq. This will include initiatives
to encourage private sector development and external investment
in the region. We will continue to work with other donors, in
particular with the US, World Bank, the UN and EC.
20. We will continue to work with humanitarian agencies
working in Iraq and across the region to meet the urgent needs
of displaced Iraqis and of vulnerable sectors of the population.
DFID
September 2007
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