Project Case Study
Devising a strategy for state enterprise reform in Iraq
Establishing a working group and seminar on state-owned enterprise reform for government ministers
In 2003, state enterprises in Iraq comprised about 90% of total industrial capacity. Almost all were damaged, had obsolescent technology (mostly installed in the 1970s) and had suffered from years without sufficient re-investment, maintenance or repair. They also constituted a significant drain on the state budget.
Extensive state controls inhibited the development of both a sound financial sector and the business services which are essential for industrial growth, while the legal framework for industry and commerce was also weak and out of date.
We were asked by the Department for International Development to work closely with the Iraqi Ministry of Industry and Minerals to develop a state-owned enterprise reform programme for Iraq. One of the key issues addressed was overstaffing of state-owned enterprises, and the particular attention that needs to be paid to redeployment of labour. Our consultants helped set up an inter-ministerial working group who met regularly to discuss these reform issues and formed strong relationships with Iraqi counterparts. Our team additionally facilitated the drafting of an Iraqi industrial and state-owned enterprise reform strategy by the Ministry.
Subsequently, we successfully designed and delivered a 3-day reform seminar for senior Iraqi government officials and ministers on behalf of the World Bank. The team identified and brought from Iraq to Jordan 30 senior Iraqi policy makers.
The seminar looked at the key issues in designing a state-owned enterprise reform programme based on experience from the Middle Eastern region and around the world. It was designed to be as interactive as possible, enabling our team to successfully identify Iraqi attitudes to privatisation and critical insight into what Iraqi policy-makers believe are the objectives of privatisation, what the obstacles to such a reform programme would be, and the best methods for achieving sales. The seminar was rated highly successful by bank staff.
We subsequently worked with Iraqi officials to produce a policy paper on state-owned enterprise reform that was published by the World Bank, and designed a range of World Bank interventions.