## The IMF Stands Ready to Help Iraq--Statement of Horst Köhler, Managing Director of the International Monetary Fund to the International Donors' Conference for the Reconstruction of Iraq

_IMF News, October 24, 2003_

## Source details

**Canonical URL:** [The IMF Stands Ready to Help Iraq--Statement of Horst Köhler, Managing Director of the International Monetary Fund to the International Donors' Conference for the Reconstruction of Iraq](https://www.imf.org/en/news/articles/2015/09/29/18/04/dm102403)

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## Bibliographic details
- Published: October 24, 2003

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### Overview and purpose
- Statement delivered at Donor Meeting in Madrid.
- Objective: assure the international community that the IMF will work actively in the reconstruction and development of Iraq and for stability and prosperity in the Middle East region.

### The IMF's role to date
- IMF engagement from the outset of Iraqi reconstruction.
- Activities undertaken:
  - Preparations for the currency reform that is now successfully under way.
  - Advising on macro-economic policy issues including bank reform and regulation.
  - Development of the 2004 budgetary framework.
  - Close cooperation with the Governing Council and the Coalition Provisional Authority, and co-ordination with the World Bank and the United Nations.
  - Continued involvement despite security setbacks.

### Six areas of IMF contribution going forward
- 1) Economic policy advice
  - Help create a stable macroeconomic framework to underpin economic revival.
  - Aim to reduce uncertainty, encourage private sector investment and job creation, and curb the risk of financial crisis.
  - Emphasis on comprehensive reforms, development of sound institutions and policymaking processes, and Iraqi ownership of reforms.
  - Lessons from transition and post-conflict cases include:
    - Ensuring transparency and observance of best practices, especially in the energy sector and in operations and privatization of state-owned enterprises.
    - Establishing legal, institutional and regulatory frameworks for markets to work effectively.
    - Designing appropriate safety nets that contribute to social stability.
- 2) Technical assistance
  - Expand assistance on a wide range of issues to build administrative and policy-making capacity.
  - Specific needs: modern, unified budget and tax systems; Central Bank assistance in designing and conducting monetary policy and ensuring proper functioning of the banking system; rebuilding Iraq's statistical database.
  - Develop training programs for Iraqi officials.
  - Coordinate technical assistance provided by other agencies and governments.
- 3) Transparency and monitoring
  - Welcome establishment of the International Advisory and Monitoring Board to ensure transparent use of the Development Fund for Iraq and that petroleum sales follow prevailing international market best practices.
  - IMF will appoint a Fund representative to this Board.
- 4) External debt resolution
  - Initial estimates of Iraq's external debt (without reparation claims) are around $120 billion.
  - Without substantial debt relief, Iraq cannot restore creditworthiness or regain access to private capital to finance future growth.
  - IMF cooperating with Paris Club creditors and approaching non-Paris Club creditors to develop reliable estimates of Iraq's external obligations.
  - IMF stands ready to help resolve the issue, recognizing resolution is a matter for Iraq and its creditors.
- 5) Financial assistance
  - IMF stands ready to provide financial assistance in a phased manner and in line with IMF policies and procedures.
  - Possible financing package described:
    - Initially make available $850 million as emergency post-conflict assistance.
    - Followed by amounts between $850 million and $1.7 billion annually under regular facilities.
    - Total IMF assistance could range from $2.5 billion to $4.25 billion over a three-year period.
  - Disbursement conditional on IMF assessment of balance of payments need, development of strong economic programs, and Iraqi authorities’ ability to implement such programs effectively.
- 6) Regional integration and technical assistance center
  - Emphasize integration of Iraq into the region and the world as key to a virtuous cycle of growth.
  - Regional partners should be closely involved in reconstruction efforts.
  - IMF will contribute to developing a policy framework, in cooperation with regional institutions, for re-integration of Iraq into the Middle East and the world economy.
  - Proposal to the IMF Executive Board to establish a regional technical assistance center in the Middle East; donors urged to support its establishment.

### Conditions and constraints
- IMF effectiveness conditioned by actions of the international community and the security situation.
- Security problems currently hamper reconstruction work and recovery of economic activity.
- Resolution of security issues will aid citizens’ confidence and economic recovery.

### Closing assessment
- Reconstruction is an immense challenge but also a historic opportunity given Iraq's substantial natural and human resources and historical contributions.
- Confidence expressed that collective efforts can help Iraq return to stability and prosperity.
- The IMF stands ready to do its part.

*Statement of Horst Köhler, Managing Director of the International Monetary Fund to the International Donors' Conference for the Reconstruction of Iraq; October 24, 2003.*

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## References

- [Iraq and the IMF](http://www.imf.org/external/country/IRQ/index.htm)
- [Statements at Donor Meetings](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/29/18/04/dm102403_