Private Sector Development

USAID helps Iraqi Central Bank get back to business Private Sector Development USAID's Private Sector Development Initiative (PSD II) is coordinating with Iraqi government officials and private sector representatives on a range of activities to build a flourishing private sector and generate employment. Restructuring and privatization is a core component of this $120 million initiative, as a liberalized economy would encourage competition, investment, and overall economic growth. Key objectives of this program, which began in September 2004, include: Providing businesses with reliable access to credit through the Micro, Small, and Medium Enterprise (MSME) initiative. Building the foundation for reform and privatization of state owned enterprises. Promoting foreign and domestic investment and developing the relevant institutions. Supporting integration with the international economy through World Trade Organization (WTO) accession. Establishing fair, efficient, liquid and transparent capital markets systems in compliance with international standards. Developing business management skills, strengthening business associations, and establishing modern accounting and auditing standards. By stimulating these core objectives, PSD II will help to ensure that new economic opportunities benefit all Iraqis. ACCOMPLISHMENTS Progress highlights to date include: Drafting privatization law; strengthening the Iraqi Privatization Commission. Engaged with Ministry of Trade to achieve WTO accession. Working to establish and officially adopt modern accounting and financial reporting standards. SME lending program and partnerships developed; 3 banks selected; 30 bankers trained. Trained 80 lending officers in microfinance best practices. NEXT STEPS A full-scale micro, small and medium-sized enterprise (MSME) lending program will begin in summer 2005. This program will include activities to promote the growth of MSMEs and is organized into three parts: policy and legal reform; small and medium business lending; and sustainable microfinance. USAID's implementing partner will train 900 microfinance lending officers by September 2005. USAID's implementing partner is working with the Iraqi government to establish an Investment Promotion Agency (IPA). The first grant agreement between the U.S. Government and the IPA will be signed in July 2005.