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| Horst Köhler, Managing Director of the IMF. Photo/IMF | The International Monetary Fund (IMF) is supporting institution-building in Iraq and has sent a series of missions, including on monetary matters and fiscal affairs, which have been working on draft legislation for a new central bank law and bank licensing, among others. The fiscal affairs group has also been examining public expenditure management and development of a consolidated budget framework. Other areas of focus include: attention to the social safety net; advice on options for monetary policy; developing a macroeconomic policy framework consistent with stability and growth; preparing for diagnostic studies of the banking sector and other financial institutions; obtaining information on external debt; beginning work on macroeconomic data compilation and reporting arrangements; and identifying priority technical assistance needs and the IMF role in meeting them. This work will be carried out in close cooperation with other organizations and donors.
While Iraq has been a member of the IMF since 1945, the last Article IV consultation—an annual discussion between the IMF and a member country on the general health of the economy—was as far back as 1980; its 1983 consultation was prepared but never completed. Although Iraq does not have any outstanding loans from the IMF, it does have arrears of close to $72 million. Fund officials have been in regular contact with the Coalition Provisional Authority and the people in the central bank of Iraq and the Finance Ministry, as well as with donors or potential donors for a possible conference, likely to be held in the next few months.
Although there is some concern about a lack of a formal relationship, i.e., a recognized government, this has not precluded the IMF from beginning the first step in institution-building. This is not unique, however. Similar situations had been the case in the Balkans following the conflict there, as well as in Afghanistan, where the IMF had been working closely with the World Bank and UN organizations, as well as other international bodies and Governments. |
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