High-level meeting on economic and governance policy reforms in the Republic of Iraq

Paris, 8-10 July 2008

Meeting summary l Workshop summaries l Meeting documentation l Presentations and papers

The high-level meeting on economic and governance policy reforms in the Republic of Iraq was jointly organised by the MENA-OECD Initiative on Governance and Investment for Development, and the United Nations Development Programme (UNDP) Iraq on 8-10 July 2008 at the OECD Conference Centre in Paris.

The main focus of the meeting lay on:

• investment climate, anti-corruption policies and aid management, based on priorities suggested by GoI officials during prior meetings of MENA-OECD/Iraq under the framework of the International Compact with Iraq (ICI)
• economic policy reforms and private sector development, following the first Roundtable on Economic Reforms and Capacity Enhancement for Private Sector Development in Iraq, organised by the UNDP and MENA-OECD on 1-2 July 2008 in Baghdad

Participants discussed options for the implementation of economic and private sector development reforms, and presentations made by Iraqi officials and OECD/UNDP representatives encouraged active discussion to help identify the most relevant policy and reform areas in Iraqi economic reconstruction.

In particular, the discussion highlighted that reforms in investment policy, private sector, business integrity and anti-corruption, tax, public-private partnerships, and privatisation of state-owned enterprises must be implemented and enforced.

The meeting brought together representatives from Iraq and OECD member countries, and included the Chairman of the National Investment Commission, the Iraqi Ambassador to France, and senior representatives from the Prime Minister’s Office, the Council of Ministers, the Ministries of Finance, Planning and Development), the Joint Anti Corruption Council and the Commission of Integrity.

Members of the Iraqi Parliament as well as representatives from the Iraqi business sector were also in attendance. Representatives from OECD member countries included the United States (U.S.) Ambassador to Iraq, and members from the OECD permanent delegations of Australia, France, Germany, Japan, Turkey and the U.S.

The concluding session provided a platform to identify the key outcomes of this three-day event and to decide upon the next steps for co-operation between the GoI, MENA-OECD and UNDP.

The discussion led to the final Conclusions and Recommendations for Next Steps in GoI/MENA-OECD/UNDP Co-operation on Private Sector Development, Anti-Corruption and Aid Management, which include input of all participants, were approved as an official commitment between the GoI delegation and MENA-OECD/UNDP.

The following thematic workshops addressed progress achieved in the areas of co-operation between the GoI and the MENA-OECD Initiative:

The workshop on investment climate policy

Tha main focus lay on priorities identified in the letter of agreement signed between the Iraq National Investment Commission (NIC) and the MENA-OECD. These priorities include implementing regulations of investment law, determining an institutional set-up and work plan of the NIC, and formulating a national strategy for attracting investment in Iraq.

Specific issues related to the investment policy framework were discussed, including jurisdiction, transparency in screening procedures, establishment of an efficient One-Stop-Shop, dispute settlement mechanisms, and thresholds for the definition of strategic investment projects.

Next steps identified as priorities for improving the business climate include:

• development of a national investment strategy
• involvement of the NIC as well as other ministries and agencies
• further legislative and institutional measures
• sectoral components to be targeted for investment promotion
• capacity-building for negotiation of international investment and double taxation agreements

The workshop on transparency in public procurement and anti-corruption

This workshop referred to the work conducted by MENA-OECD Initiative and to the ICI benchmarks presented by GoI representatives.

In view of enhancing transparency in public procurement, the MENA-OECD Secretariat presented the draft results of a survey conducted on public procurement regulations in Iraq, and introduced tools to enable procurement officials to map out corruption risks and detect corruption in the public procurement process. Iraqi representatives confirmed this survey, and approved preliminary policy recommendations to enhance transparency and resistance to corruption in line with international good practices.

MENA-OECD also presented a draft stocktaking on sources of corruption and anti-corruption provisions and procedures in Iraq. Iraqi participants validated the analysis identifying the main causes of corruption in Iraq, and agreed that legislative measures adopted to fight corruption require amendments. Participants agreed that security considerations prevail over the need for further efforts to strengthen law enforcement mechanisms and institution-building. Subsequent presentations by the United Nations Office on Drugs and Crime (UNODC)/UNDP and the MENA-OECD Secretariat highlighted key instruments to enhance integrity in both the public and the private sector.

The workshop on aid effectiveness and budget planning

This workshop provided an opportunity for participants to exchange views on the way forward following Iraq’s adherence to the Paris Declaration on Aid Effectiveness in May 2008.

Experts from the OECD Development Assistance Committee highlighted the significance of sending an important signal to the international community about the GoI's intention to take ownership of its development strategy.

It was also noted that Iraq’s adherence represents a commitment taken together with over 100 countries and organisations to increase efforts in harmonisation, alignment, ownership, managing aid for results and mutual accountability -- the five principles of the declaration -- on the basis  of a set of monitorable actions and indicators.

The main elements of the review process and of a monitoring survey on the targets were presented, with particular attention to the Fragile States Framework. GoI officials presented the Iraq context vis-à-vis the Paris Declaration, highlighting progress made and the way forward as outlined in the country plan.

The obligations and commitments to be undertaken by both donors and the GoI for each of the five principles of the declaration were presented, and subsequent discussion focused on priorities and next steps to establish a baseline for the definition of the 2010 targets.

A presentation on public budget management, outlining OECD practices and tools, served to underline the link between aid accountability and budget planning.

A parallel anti-corruption training was organised by MENA-OECD in co-operation with the French anti-corruption agency, Service Central de la Prevention de la Corruption (SCPC). The training provided Iraqi representatives an opportunity to exchange experience with experts from the SCPC and other major French anti-corruption, anti-money laundering and asset recovery bodies. General intra-governmental co-ordination to prevent and fight corruption was given particular attention.

Agenda [English l Arabic]

Conclusions [English l Arabic]

Economic Policy Reforms in Iraq:

Investment Policy and Transparency for Growth and Private Sector Development in Iraq, by Mr. Rainer Geiger, Deputy Director, Directorate for Financial and Enterprise Affairs, OECD

Supporting Tax Reform and Implementation in Iraq : Role of the OECD, by Mr. Jeffrey Owens, Director, Centre for Tax and Policy Administration, OECD [Arabic version]

Investment in Iraq, by Dr. Al Anbaki, Economic Advisor of the Prime Minister, Prime Minister's Economic Council, Iraq

Investment Policies:

Rules of Investment Law No. 13 in 2006, by Dr. Qayssar Al Saed, Legal Department, National Investment Commission, Iraq

Work Proposal for a National Investment Strategy in Iraq, by Ferris Nesheiwat, Regional Advisor, MENA-OECD / Iraq Programme, OECD

International Investment Agreements, Strategies and Content, by Mr. Alexander Böhmer, Head of Unit, MENA-OECD Investment Programme, Private Sector Development Division, OECD

Iraq - International Investment Agreements Treaty Programme - Checklist, OECD

Anti-Corruption and Public Procurement:

The Iraq Compact, by Mr. Sirwan Ibrahim, Chief of Staff, Deputy Prime Minister's Office, Iraq

Public Procurement:

OECD Activities for Improving Transparency in Government Procurement in Iraq, by Mr. Janos Bertok, Principal Administrator, Public Governance and Territorial Development, Innovation & Integrity Division, OECD

Risk-mapping Methodology - Practical Tools for Procurement, by Mr. Jean-Pierre Bueb, Consultant, OECD.

Fighting Corruption - OECD Typology on Bribery in Public Procurement, by Ms. Nicola Ehlermann-Cache, Senior Policy Analyst, MENA-OECD Investment Programme, Private Sector Development Division, OECD [Arabic version]

Paper on Inventory of Mechanisms to disguise Corruption in the Bidding Process, OECD

Discussion Paper on Transparency in Procurement Procedures in Iraq, OECD [Arabic version]

Anti-Corruption and Integrity:

Iraq's Main Corruption Sources and Counter-measures, by Mrs. Nicola Ehlermann-Cache, Senior Policy Analyst, MENA-OECD Investment Programme, Private Sector Development Division, OECD [Arabic version]

Building an Effective Anti-Corruption System for Iraq, by Mrs Sylvia Fletcher, UN Development Programme, and Mr. Oliver Stolpe, Crime Prevention Expert, UN Office on Drugs and Crime

Paper on the impact of the OECD Anti-Bribery Convention, OECD [Arabic version]

Enhancing Integrity in Private Sector - Responsible Business Conduct in the MENA Region, by Ms. Arouna Roshanian, Policy Analyst, MENA-OECD Investment Programme, Private Sector Division, OECD.

Developing Practical Tools for Promoting Integrity in Iraq, by Mr. Janos Bertok, Principal Administrator, Public Governance and Territorial Development, Innovation & Integrity Division, OECD

Discussion Paper on Practical Tools to Enhance Integrity in Public Service, OECD.

OECD Working Methodology, OECD

Fight against Corruption, Service Central de Prévention contre la Corruption (SCPC)

Aid Management and Budget Planning:

Paris Declaration in Aid Effectiveness : Context of Iraq, by Mrs. Huda Malik, Director General for International Development, Ministry of Planning and Development Co-operation, Iraq

The OECD and Budgeting, by Mr. François Lacasse, Consultant, OECD