1. Key development issues and rationale for Bank involvement
a. Iraq faces monumental reconstruction and development challenges in the coming years. As highlighted in the Iraq United Nations/World Bank Joint Needs Assessment, years of conflict, international economic sanctions and dictatorial rule have resulted in the nearly complete degradation of the country's physical, economic and social infrastructures. An estimated 60 percent of the population is dependent on a volatile public food distribution system, while basic human development indicators such as child mortality, universal primary education, gender equality, etc., as well as environmental conditions have greatly deteriorated over the last decade.
b. In the rural space, lack of investment and maintenance in water supply, sanitation, irrigation and drainage infrastructure and services, a centralized command economy with distorting policies and legislation, and physical destruction have led to the disintegration of a potentially productive and market-oriented agriculture-based rural economy. In 2001, agriculture contributed an estimated 8 percent to Iraq's GDP and about 20 percent to total employment. Consisting in large parts of subsistence farming, agriculture currently supports a rural population of 7 million out of an estimated total population of 26 million.
c. The proposed Project will expand the Bank's support to Iraq's reconstruction and address current emergency needs for infrastructure rehabilitation at the community level. This will be undertaken through the restoration of rural infrastructure by financing labor-intensive small-scale civil works programs through water supply, sanitation, irrigation and drainage infrastructure rehabilitation, thereby creating short-term rural employment. The Project will complement the Bank's efforts in water supply infrastructure rehabilitation in urban areas. It is fully consistent with the World Bank's Interim Strategy Note for Iraq (January, 2004), which emphasizes the need for rapid rehabilitation of critical infrastructure and services, short-term employment generation, and institutional capacity building as prerequisites for long-term and sustained recovery. The Project's strategic objective is to lay the groundwork for the Bank's medium-term reconstruction and development program in the rural space in Iraq. The Project is part of the Bank's proposed work program that has been agreed upon with key Iraqi ministers. It would be implemented through grant financing from the World Bank Iraq Trust Fund (ITF) under the International Reconstruction Fund Facility for Iraq.
d. The comparative advantages of the Bank lies in its ability to: (i) bring its international experiences and best practices in community rehabilitation and development projects under postconflict/ in-conflict conditions (Afghanistan, East Timor, Kosovo, West Bank and Gaza); and (ii) build capacity in existing local Iraqi institutions by involving them in the execution of the Project and thereby creating greater commitment and ownership of the reconstruction process of their country.
2. Proposed objective(s)
a. The project development objective is to contribute to economic and social recovery and improve the standard of living through developing community-based rehabilitation of rural infrastructure. Starting with the emergency rehabilitation of priority water supply, sanitation, irrigation and drainage in selected rural areas (accompanied by capacity building technical assistance to local institutions), the Project will use a phased and flexible approach building on pilots and increasing community involvement.
b. In summary, the three primary objectives of the Project are: (i) to restore some of the basic small-scale water supply, sanitation, irrigation and drainage facilities in the rural areas that are currently in a damaged state and causing hardship to the rural inhabitants; (ii) to carry out the restoration works in a manner that creates short-term employment in communities where the subprojects are located; and (iii) to increase community involvement in small-scale infrastructure rehabilitation that will eventually result in decentralization through community planning, implementation and operation and maintenance of these infrastructures.
c. The objective is to be accomplished by means of piloting and financing labor-intensive civil works programs in the form of many small sub-projects that are based on immediate infrastructure rehabilitation needs and priorities of communities, particularly those located in low-income areas.
d. The principal outputs of the Project would thus be: (i) increased short-term employment in project areas; (ii) improved access to community infrastructure and services; (iii) enhanced capacity to implement infrastructure programs; and (iv) increased private sector activity in rural areas through opportunities for local contractors and suppliers.
