Introduction
A World Bank Social Protection team from the Middle East and North Africa Region visited Amman, Jordan, during the period January 27 – February 6, 2008 to undertake a workshop on Iraq’s implementation of pension reforms. The objectives of the workshop were (i) to develop a medium-term action plan for implementation of pension reforms in Iraq; (ii) to identify areas in which the Bank can provide support in this area; and (iii) to undertake initial capacity building.
Background
Pension expenditures in Iraq represent a high proportion of the national income imposing a major fiscal burden on the budget. Law #27 of 2006, the public sector pension law, represented a threefold expansion of pension benefits for public employees, but was deemed to be unsustainable and was suspended. Amendments to the Law were approved by the Council of Representatives in October 2007 and became effective in December 2007. The amendments, creating the Unified Public Pension Law, are expected to improve financial sustainability and are more aligned with international best practices. These recent pension amendments require substantial resources, capacity and time requirements for implementation.
The Iraqi delegation indicated a strong desire for future World Bank technical assistance to support the implementation of the reforms. In addition, the workshop was successful in supporting the Iraqi delegation in the development of the draft implementation Action Plan and in delivering high quality capacity building. The Action Plan provides the key set of activities that will need to be undertaken by the GoI to move forward on implementation of pension reforms. In addition, the outcomes of the workshop has provided sufficient grounds for discussions between senior management representatives of the World Bank and the Government of Iraq to determine the areas of World Bank support in pension reform implementation on the short-run and further pension policy cooperation in the medium-term. In terms of capacity building, substantial time was dedicated to delivering training in the areas of pension reform implementation, and covered the following topics: (i) Governance; (ii) Organization and Business Systems; (iii) Technical Systems Design; (iv) Contribution Collection; (v) Public Information and Communications; (vi) Human Resources; (vii) Project Implementation and Planning); and (viii) Policy, Budget, and Legal Issues.
The Iraqi delegation was led by Dr. Azez Jaafar, Advisor to the Minister of Finance, and was well attended by staff from the Ministry of Finance (MOF), the State Pension Fund (SPF), and the Social Security System at the Ministry of Labor and Social Affairs (MOLSA), as well as a delegation from USAID/BearingPoint.
Donor Coordination
 The other donor organization present in the implementation support associated with the recently amended public sector pension law is USAID/BearingPoint. The USAID/BearingPoint team participated in the workshop, and the cooperation recognizes the importance of BearingPoint’s capability to provide implementation support on the ground in Iraq, but also relying on the World Bank’s leading position in providing highest quality knowledge products in the area of pensions. This combination and cooperation offers the GOI a strong combination of knowledge, skills, and on-the-ground support.
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