Major challenges

UK Objectives | Working to improve power and water in southern Iraq | Supporting national and local government | Helping Basra realise its economic potential | Humanitarian | Working with international partners

UK Objectives

The UK’s overarching objective in Iraq is to support and encourage a stable, united and law abiding state that provides effective and representative government, sustainable growth and rising living standards for all Iraqi citizens.

DFID is contributing to this effort by supporting an inclusive, Iraqi led reconstruction process that brings real benefits to all citizens. DFID is also working with the Iraqi Government, the UN, the World Bank, the US and other donors to achieve a more coordinated Iraqi-led development process.

In 2003 the UK pledged £544 million to support Iraq’s reconstruction and development, which was subsequently increased to £744 million. Much of our work has been concentrated in Basra province in the south of the country.

Working to improve power and water supply in southern Iraq

In 2003, the Government of Iraq was not in a position to tackle immediate reconstruction needs, or to deliver public services to its people. Consequently, DFID’s initial priority was to help rebuild Iraq’s dilapidated infrastructure – which had suffered over 2o years of neglect and mismanagement under Saddam Hussein - to provide a basic level of services for the Basrawi people. Once these projects are completed in early 2009, this work will have added or secured enough electricity in the Basra region to provide 24 hour power to a city the size of Leeds. This programme will also deliver improved access to water for over 1 million people.

Supporting national and local government to deliver real change for the Iraqi people

Long term stability in Iraq will only be possible if Iraqi institutions are able to provide effective political leadership and deliver public services and economic growth. DFID’s long-term priority has therefore been to support and mentor Iraqi institutions at national and provincial levels so that they manage their financial resources better, deliver adequate public services, stimulate economic growth and generate jobs - thereby ensuring long term prosperity and improved quality of life for all Iraqis.

In Baghdad, we have provided technical assistance to improve the a variety of institutions - including the Office of the Prime Minister and the Council of Representatives Secretariat - to put in place the basic decision-making mechanisms and administrative systems. We have also advised the Ministry of Finance, to help improve their ability to function affectively.

In Basra, we are supporting the UK-led Provincial Reconstruction Team, which is helping the Basra Provincial Council (BPC) to plan, manage and deliver essential services. Our support and mentoring has helped develop the expertise of the BPC, and they are now in a position to take advantage of the improving security situation and take the lead on reconstruction. Since 2006, they have taken forward over 800 reconstruction projects in Basra, worth over $650 million.

Helping Basra realise its economic potential

Private sector development will be vital for Iraq’s long term economic growth, providing skilled jobs and long term prosperity. Basra has huge economic potential and considerable financial and natural resources. The UK is working to support Basrawis unlock the region’s potential, promoting economic growth and stimulating private sector investment by helping Iraqis create their own economic institutions and initiatives.

• The Basra Development Commission (BDC) is an Iraqi advisory body that champions inward investment, local business development and economic growth. DFID supported the creation of the BDC and continues to provide technical assistance to it, including securing Michael Wareing, CEO of international accounting firm KPMG, as co-chair. DFID is supporting BDC activities such as international investor visits, youth unemployment initiatives and production of a Basra Economic Development Strategy.
• The Basra Investment Commission is an Iraqi government agency recently established with DFID assistance. It is devoted to planning, promoting and creating the right conditions for development of the private sector, and attracting international investment into Basra.

Funding international agencies to provide humanitarian relief to the most vulnerable people

It is estimated 2.8 million Iraqis are displaced internally and another 2 million have fled to neighbouring countries - mainly Syria and Jordan. This is placing significant pressure on host communities and countries’ resources and public services.

We support international agencies to provide assistance to these vulnerable groups, both in Iraq and its neighbours. We are working to promote a coordinated international effort in response to the humanitarian situation, with the Government of Iraq in the lead. Our total humanitarian contribution since 2003 has been more than £170 million.

In the longer term, only the Government of Iraq can solve the humanitarian situation. We are therefore encouraging the Government of Iraq to take a lead in providing for the welfare of its own people by providing immediate humanitarian relief and by establishing longer term security, public services and opportunities that will encourage people to return to their homes.

Working with international partners for a coordinated Iraqi led reconstruction process

In October 2003, the international community pledged $32 billion in support of Iraq’s reconstruction. This has subsequently increased to over $60 billion.

DFID is working with the Government of Iraq, UN, World Bank, US and others to achieve a more coordinated and Iraqi-led reconstruction and development effort. We are a major contributor to the UN and World Bank trust funds for Iraq, and we are supporting other donors to establish programmes and increase their support for Iraq.

Under Saddam, Iraq built up an enormous and unsustainable level of external debt, which by November 2004 stood at an estimated 445% of GDP. The UK’s support for economic reform in Iraq has helped the government to gain IMF debt relief. Of Iraq’s $142 billion in external debt prior to 2004, only £43 billion in total debt remains. The third stage of debt reduction is pending an early 2009 review by the IMF. This will reduce debt by an additional $10 billion.