The decline in oil prices and the ongoing insecurity have contributed to a sharp deterioration of economic activity in Iraq. Economic growth fell by 2.4 percent in 2014 and is projected to expand by only 0.5 percent in 2015. Iraq faces a significant challenge in rebuilding its infrastructure, with service delivery currently unreliable across core infrastructure sectors. Only 12.5 percent of people connected to the network report stable water supply, while only 22.4 percent of the population are fully and reliably connected to the electricity grid. The private sector has stepped in to provide limited infrastructure service provision, such as diesel generators, but this is largely unregulated.
Iraq has had limited experience with private participation in infrastructure, with experience to date focused in the telecom sector, power generation in Kurdistan, and the Umm Qasr Container Terminal. The Government of Iraq has expressed interest in exploring PPPs to improve infrastructure service provision but this has yet to translate into a tangible PPP program. In 2010 the government launched a IPP program that aimed to mobilize significant private investment but it was subsequently canceled in 2011. A PPP Law was also drafted in 2011, but as yet the PPP Law has not been passed. Nevertheless, private investment and involvement in infrastructure remained a core theme of the 2013 Integrated National Energy Strategy and the government remains keen to introduce private sector participation across infrastructure sectors.
The successful IPP program in Kurdistan demonstrates that well-structured PPPs could remain attractive to the private sector, particularly in the energy generation sector. Although the current economic and securityvolatility will likely curtail any significant growth.
The Global Competitiveness Index (GCI) is published in the Global Competitiveness Report and assesses the competitiveness landscape of 140 economies. The GCI Infrastructure Score is a component of the overall index and covers transport, electricity and telephony infrastructure.
This was a training workshop on legal and fiscal regimes, revenue management, and good governance in extractive industries. It was jointly organized by the PREM Public Sector and Governance Group (PRMPS) and the SDN Oil, Gas and Mining Policy Division (COCPO).