European Union External Action

EU development assistance

08/09/2021 - 13:46
Thematic overview

The EU's development assistance in Iraq since 2003 amounts to more than EUR 1.4 billion. It is largely channelled through the Development Cooperation Instrument but also the Regional Trust Fund in Response to the Syrian Crisis, covering a wide array of sectors. Between 2014 and 2018 there was a pronounced focus on stabilisation and basic-service provision in liberated areas following the Da’esh conflict.

EU development assistance

The EU's development assistance in Iraq since 2003 amounts to more than EUR 1.4 billion. It is largely channelled through the Development Cooperation Instrument but also the Regional Trust Fund in Response to the Syrian Crisis, covering a wide array of sectors. Between 2014 and 2018 there was a pronounced focus on stabilisation and basic-service provision in liberated areas following the Da’esh conflict.

But today, Iraq is on the cusp of entering into a renewed phase of state building, economic development and reconstruction, redrawing political and social dynamics.

While an upper-middle income country, persisting development challenges in the country include a lack of adequate public services, limited governance, pervasive corruption, insufficient financial and human resources, environmental degradation and, most worryingly, the absence of any social contract between the people and the state. In this fragile context, the continuing and massive displacement of population, limited livelihood opportunities, strong disparity in wealth distribution and growing demographic bulge continue to add pressure to an already saturated job market, fuelling sentiments of inequality and exclusion.

 

Within the parameters of the EU Strategy for Iraq and the EU-Iraq Partnership and Cooperation Arrangement (PCA), the key strategic interests of the EU in Iraq are to preserve security and stability, to diversify the economy and create jobs, and to rebuild the social contract between citizens and institutions. Ensuring sustained improvements in democratic processes and governance, enhancing the business and investment enabling environment, fostering fair and sustainable employment opportunities and building a solid human capital are all areas of strategic relevance in achieving these goals.

 

Thus, the general premise of EU development support is to support Iraq better use its own resources. This is accomplished through technical cooperation in the areas of 1) economic development and job creation, 2) human and social capital, 3) participatory governance and democratisation, as well as through continued support for 4) recovery. EU development efforts build on reinforced strategic policy dialogue and the transfer of knowledge, while concentrating assistance in support of human and social aspects of economic development and recovery. This is helping Iraq to consolidate stabilisation gains and kick-start recovery.

As of mid-2021, the currently active portfolio of EU development programmes (DG INTPA and DG NEAR, the latter through the MADAD trust fund) amounts to EUR 587 million (65 projects) and is implemented with a wide array of partners.

 

The Iraq Multi-annual Indicative Programme for 2021-2027 focusses on three priority areas:  

  • Priority area 1 “Job creation and economic diversification” aims at creating jobs through private sector development, improving the enabling environment for investment and formalising the labour market as a means to tackle the root causes of fragility and migration as well as to create viable job perspectives for youth and displaced populations. As Team Europe, it supports emerging efforts at diversifying the economy of an oil rentier state in support of macro-fiscal stability. It continues the EU’s successful approach to agriculture/value chain development coupled with continued support to creating the investment-enabling environment.
  • Priority area 2 “Human development and social contract” aims at creating the human capital indispensable for sustainable economic development and to counter fragility through support to education and skills trainings/TVET as well as to the integration of displaced populations into national education systems. It aims at reinforcing the social contract through the continuation of support for the improvement of social safety nets to address COVID-19 induced poverty/social unrest, creating resilience against future shocks, equally integrating displaced populations and refugees into national systems.
  • Priority area 3 “Digital participatory governance and democracy” aims at strengthening national institutions and addressing endemic corruption for the better management of national resources. It also aims at supporting capacities for managing migration and durable solutions for displaced populations to advance reconciliation, stabilisation and peace-building..

 

EU Covid-19 response

The European Union has mobilised EUR 159 Million to support Iraq in the response to the Covid-19 pandemic severely affecting Iraq. Further exacerbated by the 2020 economic crises, Iraq is at a turning point to build an inclusive and accountable governance system and restore trust between the people and their institutions. In light of these multiple challenges, Iraq risks the consolidation of stabilisation gains and reconstruction efforts that had just kick-started. Ensuring the availability of basic services, education and health and providing jobs and livelihood opportunities – in particular to youth - remain a priority. This will foster the sustainable return of displaced families and rebuild the country's economy based on a solid human capital.

The EU is working closely with national authorities and the UN on the basis of Iraqi policies such as the Iraq Covid-19 Response Plan and the National Action Plan for Health Security (2019-2023). A total of EUR 159 million has been mobilised in the short-term to support the Covid-19 response in the larger sense. This includes a reorientation of already ongoing activities, as well as new funds to respond to the acute crisis.

EUR 35 million are dedicated to the immediate humanitarian needs including healthcare, water and sanitation as well as protection, prioritising the most vulnerable populations such as internally displaced people. This includes awareness raising; public health surveillance; training of health staff; rehabilitation of water and sanitation systems; and provision of hygiene kits and multipurpose cash assistance.

The remaining EUR 124 million address the socio-economic impact of the crisis in Iraq through employment creation - especially for young Iraqis-, small and medium businesses and private sector development, especially in the agribusiness sector. It will extend existing programmes that stimulate employment in the reconstruction of urban centres and that help university graduates enter employment. At the same time, the EU’s support focusses on social and labour protection to help the most vulnerable at this time of crisis.

To fight the coronavirus on a global scale, on 8 April 2020, the EU, its Member States, the European Investment Bank and the European Bank for Reconstruction and Development announced more than EUR 20 billion to partner countries’ efforts in tackling the pandemic. The EU is redirecting more than EUR 15.6 billion of existing funds previously allocated to our partners to tackle immediate needs, both humanitarian and in the health care sector, strengthen the health, water and sanitation systems of partner countries, and support research, and to address the economic and social consequences. The EU’s response follows a Team Europe approach, combining resources from the EU, its Member States and financial institutions, including the European Investment Bank and the European Bank for Reconstruction and Development, to support each partner country.

 

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