IMF stands ready to help Iraq

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IMF to help Iraq in six major areas

The IMF stands ready to play its part in international efforts to rebuild Iraq,Managing Director Horst Köhler told a donors' conference in Madrid on October 24. He assured the conference that the IMF would work actively with the international community in the reconstruction and development of Iraq and for the stability and prosperity of the Middle East as a whole.

The IMF has been engaged in the reconstruction effort from the outset, he noted, and "as the next stage of the reconstruction process gets under way, there is much more that the IMF can and wants to do." The task poses an "immense challenge," Köhler acknowledged, but it also represents a historic opportunity. He saw six major and interrelated areas for the IMF's contribution:

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* Economic policy advice. A stable macroeconomic framework will require comprehensive reforms, sound institutions, and effective policymaking.

There is much that can be learned from the experience of transition and other postconflict countries, Köhler said, stressing the vital role that structural reforms (ensuring transparency; establishing legal, institutional, and regulatory frameworks; and designing appropriate safety nets) can play in laying the foundation for sustained private-sector-led growth.

* Technical assistance. In the period ahead, Iraq will need technical assistance in virtually every area of IMF expertise. Köhler promised expanded technical assistance for Iraq to develop modern, unified budget and tax systems; design and conduct monetary policy; and rebuild its statistical database. The IMF will also provide training for Iraqi officials.

* External debt. Iraq currently has one of the largest external debt burdens in the world.Without substantial debt relief, Köhler said, the country "has no prospect of restoring its creditworthiness and of regaining access to private capital to finance future growth." The IMF is working with Paris Club creditors and has approached non-Paris Club creditors to develop reliable estimates of Iraq's debt.While the resolution of this issue will ultimately be a matter for Iraq and its creditors, he assured the conference that the IMF stands ready to help in any way it can.

* Financial assistance. The IMF also stands ready, Köhler said, "to provide financial assistance in a phased manner and in line with our policies and...