World Bank Pledges Support for Iraq's Program Budget and Banking Sector Reform

Ajay Banga, President of the World Bank Group, affirmed the organization's readiness to support Iraq in preparing its program budget and reforming its banking sector. This came during a meeting between Prime Minister Ali Falih Al-Zaidi and Banga and his accompanying delegation in Washington on Wednesday evening, which included Mukhtar Diop, Head of the International Finance Corporation, and several senior World Bank officials. For his part, Al-Zaidi emphasized Iraq's current significant stability, which he expects to positively impact the economy and investment, anticipating clear growth thanks to government policies and reforms. He noted the government's focus on banking reform and program budgeting to ensure efficient allocation of resources towards development, thereby shaping a new economic identity based on diversification, reform, and sustainability. Al-Zaidi also affirmed efforts to increase oil production to meet development requirements, alongside developing non-oil sectors and enhancing their contribution to the national economy. He clarified that the government is proceeding with establishing a Development Fund to finance investment projects across all governorates, expand funding for qualified Iraqi banks, and support and empower the private sector to be a key partner in the development process. In turn, Banga expressed admiration for Iraq's recently achieved stability and peace, affirming that the country possesses good potential and resources capable of achieving broad economic transformation if well-invested. The World Bank expressed its readiness to provide technical and advisory support to Iraq in program budgeting and banking sector restructuring, calling for consideration of forming a large Iraqi banking holding company by merging several government banks, to enhance financial sector efficiency and support the economic reform trajectory.