By: Neal Wolin
2/18/2011
In support of President Obama’s goal for a sovereign, stable, and self-reliant Iraq, I was in Baghdad this week for meetings with senior government officials, parliamentarians, regulators and banking sector leaders on key economic challenges facing Iraq’s leadership. My discussions focused on priorities facing the new government, including Iraq’s ability to use its oil resources to encourage economic growth and create opportunities for the Iraqi people and better integrating Iraq into the global economy.
On Sunday, Deputy Prime Minister Shaways and I co-chaired a meeting of the Iraq-U.S. Economics and Energy Joint Coordination Committee (JCC), attended by a broad range of U.S. and Iraqi government officials as well as Central Bank Governor Shabibi. The JCC was established under the U.S.-Iraq Strategic Framework Agreement, which lays out areas of cooperation in economic, political and security spheres and provides both governments with a platform to work closely on issues of mutual concern. At Sunday’s meeting, I reaffirmed the commitment of the United States to support Iraqi efforts to develop the economy across a wide range of issues, including public financial management, trade and investment, private sector development, and oil and gas.
While in Baghdad, I emphasized the need for financial sector reforms to create a modern, competitive and vibrant private sector that meets international standards, to help attract foreign investment in Iraq. I heard from Iraq’s leadership on the steps they are planning to take to improve Iraq’s investment climate, reduce corruption, increase transparency and strengthen the non-oil sectors of the economy. Over dinner, Finance Minister Issawi and I weighed various approaches to achieving his goals for Iraq’s economic agenda for the coming months and years, and resolved to enhance the relationship between Treasury’s technical assistance advisors in Baghdad with their Finance Ministry counterparts.
Key to creating and maintaining a globally competitive banking sector is an independent central bank. I reinforced the importance of maintaining the Central Bank’s independence, and congratulated Governor Shabibi on the progress the Central Bank has made in reducing inflation and maintaining a stable currency. I also talked about ways to improve joint efforts by the government and the Central Bank to strengthen banking supervision and to reduce the risk of abuse of the financial sector by illicit actors.
Deputy Secretary Wolin and Minister of Finance Rafi Al-Issawi
Iraq’s budget was also core to my discussions. I discussed with Finance Minister Issawi and other officials a prudent 2011 budget that will allow the government to effectively spend resources on investment projects that are needed to enhance the provision of basic services such as electricity, water and social services, including health and education.
I also heard from senior government officials on their efforts to establish a robust successor arrangement to the Development Fund for Iraq so that Iraq can transparently and effectively manage its oil resources. Iraq has been working closely with the IMF and World Bank on budget and financial sector issues, and I strongly encouraged such cooperation going forward to help provide expertise and resources where they are most needed.
Treasury has nearly a dozen staff in Baghdad – one of our largest teams anywhere in the world – providing technical assistance to help Iraq create a stable macroeconomic environment and build a solid foundation for economic growth. My meetings were extremely productive and helped to strengthen Treasury’s relationship with Iraqi leadership on key economic issues as part of the Strategic Framework Agreement.
The Obama Administration is committed to a sovereign, stable, and self-sufficient Iraq and intends to remain a key partner of the Iraqi people and government across a full range of issues. I look forward to strengthening Treasury’s partnership with Iraq’s leadership toward that end.
Neal Wolin is Deputy Secretary of the Treasury
Posted in: International
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