Economic Recovery, Reform and Sustained Growth in Iraq
2003-2004 || U.S. Agency for International Development
Following the collapse of the Saddam regime, Iraq required significant support in order to rebuild its economy. This project aimed to create sustainable infrastructure in the areas of private sector development, fiscal reform and financial reform. As a secondary step to creating this infrastructure, Deloitte advisors provided support to Registrars and developed a modern business registration system, among other tasks.
At the start of the project, Iraq faced significant challenges to governance. With a quick transition to an open economy hampered by deterioration in the security situation and a drain on human capital, the government faced severe economic governance challenges in many facets. The goal of the project was to help build the capacity of the Iraqi Government, strengthening the country’s ability to transition from a command economy to that of one which is market-driven. Additionally, it was to assist the Government of Iraq (GoI) in structuring and implementing the enabling legislative, financial and institutional framework and fiscal reform within which policy could be formulated to foster a transparent and investment friendly economy.
This project provided technical assistance to help the GoI develop the necessary policies, laws, administrative procedures, systems and institutions to bring about economic reforms that can promote Iraq’s compliance with international standards. The common thread to these activities, and the area in which we expended the most effort, was developing the human capital base. This was the centerpiece of our work because we recognize that over the long term, sustainability will hinge on the extent to which the human capital base is developed and enabled. Deloitte supported the client’s efforts to build the capacity of the Central Bank of Iraq and its supervisors; complete a banking sector restructuring assessment; conduct a full currency exchange program to introduce the new Iraqi Dinar, assist tax policy makers to formulate and implement decisions based on sound economic data; draft laws, regulations and processes to implement social welfare reforms; and design a Government-wide IT strategy. In addition to helping build capacity across the Government, many of the economic governance reforms have helped Iraq meet the conditions of the International Monetary Fund Stand-By Arrangement (SBA) with Iraq and, in turn, substantial sovereign debt relief from the Paris Club and others.
Note: Prior to deployment of our advisors, Deloitte developed and implemented a security framework whereby individual advisors were under the physical protection of trained security professionals. Our security operations integrated with our security providers to assess local conditions, plan travel routes, alter travel routes based on current intelligence information, and protect our advisors while they met with critical Iraqi counterparts.
In Iraq, Deloitte advisors offered assistance at both the macro and micro levels to develop an approach that emphasized multi-faceted and sustainable economic technical assistance with a goal of improving Iraq’s economy. Deloitte’s program objectives centered first on fundamental activities that can create an environment that is conducive to broad-based and private sector led economic growth. A second focus was on activities that could quickly expand economic opportunities in the face of the massive economic dislocation following the removal of the Saddam regime.