Abundant natural and human resources enabled Iraq to attain the status of a middle-income country in the 1970s. The country developed good infrastructure and a well-performing education and healthcare system, widely regarded as the best in the Middle East. Income per capita rose to over US$3,600 in the early 1980s. Since that time, successive wars and a repressive, state-dominated economic system have stifled growth and development and debilitated basic infrastructure and social services for Iraqi’s 27 million people. International trade sanctions imposed in 1991 have also taken a toll on the economy. Despite the country’s rich resource endowment, Iraq’s human development indicators are now among the lowest in the region,and income per capita has continued to drop. In 2003, GDP per capita declined by another 30 percent to $480-630.
Following the recent war, Iraq faces enormous challenges, and the situation is still evolving. In addition to a complicated political transition, Iraq needs to rebuild social cohesion and implement an economic transition from a centrally planned economy to a diversified market economy. It will be particularly important to mitigate the temporary adverse effect of reforms on the poor and vulnerable.
A Needs Assessment covering fourteen sectors, prepared jointly by the World Bank and United Nations Development Group (UNDG), and with the participation of the International Monetary Fund estimated that Iraq requires about US$36 billion over four years, and the Coalition Provisional Authority estimated separately that Iraq requires about US$19 billion over four years for areas not covered by the Needs Assessment, such as security and oil.
As of July 2005, the World Bank has financed 12 operations in the country for a total original commitment of US$156.2 million.
The World Bank's portfolio, as of July 2005, in Iraq comprises seven active projects:
Emergency Community Infrastructure Rehabilitation Project
IQ-TF EMERG. WATER, SANITATION & URBAN
IQ-TF EMERG. BAGHDAD WATER SUPPLY
Emergency Health Project
IQ-EMERGENCY PRIVATE SECTOR DEVELOPMENT
Emergency School Construction and Rehabilitation Project
Iraq Emergency Textbook Provision Project