UNDP to aid Kurdistan Region Government

May 6, 2009

Erbil, Iraqi Kurdistan – UNDP-Iraq launched a three-year 4.5-million US dollar project in Erbil, Iraqi Kurdistan, on Wednesday to support the budget planning and execution capacities of the Kurdistan Region Government (KRG).
“The KRG is at a cross road of its development process. Improvements in the political and security situation over the past few years have made it possible to step up its reconstruction efforts,” said Mr. Elballa Hagona, Deputy Country Director and Head of Programmes with UNDP-Iraq, adding:
“However, this process is still fragile and subject to reversal. Like the rest of Iraq, KRG is not insulated from the spill-over effects of the global financial crisis and economic recession.”
Mr. Hagona made the remarks at the launch ceremony for the project, which was attended by over 200 participants, including several KRG ministers and high-level officials from the central Iraqi government, as well as senior officials from the UN, World Bank and donor countries.
A key part of the new project is the implementation of the Action Plan for Regional Public Finance Management, which was adopted at the ceremony. The aim of the Action Plan is to strengthen the efficiency, effectiveness and transparency of the regional ministries’ budget execution and enhance the delivery of public services in the three northern Iraqi governorates. It is being implemented alongside a similar and wider effort across Iraq at the national level. 
The Kurdistan Region Government receives 97 percent of its budget from the central government in Baghdad, which again derives 86 percent of its income from the petroleum sector. The recent sharp decline in global oil prices has forced steep budget cuts on both the central and KRG authorities.
“Instead of a threat, the current crisis should provide an opportunity to accelerate much-needed structural reforms aimed at diversifying the economy and stimulating the growth of the non-oil private sector,” Mr. Hagona pointed out.
“The crisis calls for more effective management of public resources to get better value for money and increase the development impact of public spending. The KRG Action Plan for Regional Public Finance Management provides the right tool to carry out these reforms at the right time,” he stressed.
UNDP has worked in the Iraqi Kurdistan Region for several decades, currently implementing a portfolio of some 20 different development projects there. The many senior KRG officials present at the ceremony thanked the UN agency for its continued support of the region’s development.
“I would like to thank UNDP for their good work. Iraq has great financial, natural and human resources. It is rich in oil and water. Most of the revenue comes from oil, but for Iraqis to be able to benefit from this, we need to prioritize the execution of our budget,” Mr. Baez Saeed Mohammed, KRG Minister of Finance, noted in his speech.
Currently, the capacity-building project is only partially funded through a donation of some 850,000 US dollar from UNDP’s own funds, a 500,000 US dollar contribution from KRG authorities, and about two million US dollars from the World Bank. UNDP and the KRG government hope to get additional support from the international donor community to meet the funding gap.
In 2008 UNDP delivered 88.7 million US dollars in aid to Iraq, bringing the total for the five-year 2004-08 period to over 451 million US dollars.

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