Iraq: World Bank Approves Grant for Social Protection

Contact
In Washington: Dina El Naggar (202) 473-3245
Delnaggar@worldbank.org

WASHINGTON, June 9, 2006 – The World Bank, on June 3, 2006, signed a grant agreement with the Ministry of Labor and Social Affairs of the Republic of Iraq to help strengthen the country’s capacity to reform social safety net and pensions programs to better assist poor and vulnerable populations. The $8 million Emergency Social Protection Project is financed by a multi-donor Iraq Trust Fund administered by the World Bank.

"I am extremely pleased that the World Bank and the Ministry of Labor and Social Affairs have signed a new grant agreement only two weeks after the establishment of a new government,” remarked Joseph Saba, the Country Director for Iraq. “The World Bank’s main objectives in Iraq are to help the country alleviate poverty and make more efficient use of its own resources, and this project will do both.”

The project addresses the urgent need to improve Iraq’s social safety net and pension programs. Iraq’s current social safety net program is small and beset by inefficiencies. But the Government is expanding it now to benefit up to 1 million families at a cost of $330 million annually. A modern management and information system could improve targeting and reduce leakages, thereby increasing the benefits that reach the poor. The project also aims to improve Iraq’s capacity to develop a more equitable yet fiscally sustainable pension system. The Ministry of Labor and Social Affairs will implement the social safety net program component while the Ministry of Finance will implement the pension component.

"The project will help the Ministry of Labor and Social Affairs increase by six times the number of poor households that will receive social assistance. It also will help the government improve assistance to the elderly, another important vulnerable population," noted David Steel, the project’s Task Team Leader.

The World Bank Iraq Trust Fund, within the International Reconstruction Fund Facility for Iraq, has financed twelve projects amounting to nearly $400 million to improve education, health, irrigation and drainage, telecommunications, urban infrastructure, and water supply and sanitation. The World Bank has also approved a $100 million International Development Association credit for the education sector.