Baghdad, December 21: The World Bank has approved a new loan of $1.485 billion to help Iraq lessen the impact of low oil prices on its economy and shoulder the cost of the war on Islamic State, the international lender said in a statement on Tuesday.
The package includes loan guarantees from the UK for about $372m, and from Canada for about $72m.
"Despite an ongoing war and low oil prices, Iraq is undertaking bold transformational reforms that will safeguard economic stability and lay the foundations for longer term private sector development and inclusive growth for all Iraqis," said Ferid Belhaj, World Bank director.
The reforms also will help to expand social safety nets "to reach the most vulnerable segments of the population," he said in a statement. Also he said that “the reforms will help build trust between Iraqi citizens and their government, by making the management of public funds more efficient and transparent and expanding social safety nets to reach the most vulnerable segments of the population.”
The bank also approved $41.5m for a programme to improve management of the country's public funds.
With the new package, the World Bank engagement in Iraq rises to nearly $3.4bn, including support for reconstruction of areas recently recovered by government forces and a transport corridor investment.
In July, the International Monetary Fund (IMF) approved a $5.34bn loan for Iraq.
"Iraq has been hit with a double shock for an extended time period," Christian Josz, IMF mission chief for Iraq, told IMF News earlier this year.
He said the rise of IS has created "a humanitarian and social crisis" that resulted in millions of internally displaced refugees, harmed the country's infrastructure and disturbed trading routes."Second, the steep fall in global oil prices - on which Iraq depends almost entirely for its government revenue - has made the situation worse," Josz added.
With the new package, the World Bank’s present engagement in Iraq rises to nearly US$3.4 billion, including multi-sectoral support to the reconstruction and rehabilitation of areas recently recovered by government forces. In addition, the Bank is providing wide-ranging technical assistance to the Kurdistan Regional Government.