Economic and Governance Reforms - Action Plan 2021 2023 - UNDP
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Ministry of Planning
Kurdistan Regional Government
Ministry of Planning
Action Plan 2021 – 2023
Economic and Governance Reforms
Report for Structural Reforms to Lay the Grounds for Sustainable and
Inclusive Growth in KRG
Prepared by the UNDP Project: “Funding Facility for Economic Reform”
(FFER)
December 2020Table of Contents
Acknowledgments............................................................................................................. 2
List of Abbreviations ........................................................................................................ 3
Introduction ........................................................................................................................ 4
Chapter I - Action Plan of Economic and Governance Reforms for Sustainable
and Inclusive Growth, 2021-23 ........................................................................................ 5
Chapter II- Implementation Modalities and Coordination of Action Plan 2021-23 ... 6
1. Implementation Modalities and Roles of the Involved Institutions .................................6
2. Coordination and Monitoring of the Action Plan Implementation ...................................8
Chapter III- Technical Assistance Components for Supporting the Action Plan ... 10
Annex I - Action Plan for Economic Reforms in the KRI, 2021 - 2023 ..................... 11
Annex II –Organizational Chart For Action Plan Implementation............................. 31
Annex III - Key Technical Assistance Components to Support the Action Plan .... 32
1Acknowledgments
This document presents an Action Plan on the economic reforms in the Kurdistan Region of Iraq (KRI). The
document is prepared by Dr. Sherefedin Shehu with the support of Mahab Madani, Head of Governance
and Economic Diversification Pillars of the United Nations Development Program (UNDP) Iraq and Halwan
Bakhtyar, Project Manager of the Funding Facility for Economic Reforms (FFER) project for the Kurdistan
Region of Iraq (KRI).
The UNDP funded this program as part of the FFER project in order to support the Kurdistan Region
Government (KRG) through the Ministry of Planning (MoP) which is key Government agency responsible
for the design and implementation of economic reforms. UNDD is happy to support the development of the
action plan and other modalities that will contribute to the implementation of the economic reforms’ agenda
of the KRG, developed with the support of the FFER project of the UNDP in the 1st quarter of 2020.
The MoP has always been a loyal counterpart of the UNDP in the KRG and UNDP wishes to express its
gratitude and thanks to the MoP and other Government institutions that provided valuable comments and
recommendations on the Reforms Agenda developed earlier by UNDP and the development of this action
plan for its implementation.
Special thanks go to Mr. Zagros Fatah, Deputy Minister of the Ministry of Planning, who guided the
development of the reforms Action Plan 2021 – 2023, provided valuable contribution on its content and
implementing modalities and managed the submission of comments from other line Ministries and
Government agencies on their sector reforms.
UNDP wishes to express its gratitude and thanks to the following institutions, which provided valuable
comments on the Reforms Agenda and its implementation Action Plan:.
Council of Ministers, Department of Administration and Finance, Directorate of Administration
Ministry of Finance and Economy
Ministry of Agriculture and Water Resources
Board of Investment
Ministry of Construction and Housing
Ministry of Municipalities and Tourism
Ministry of Higher Education and Science and economists in Kurdistan Universities
Ministry of Trade and Industry
Ministry of Education
Ministry of Labor and Social Affairs.
2List of Abbreviations
BOI Board of Investment MoTC Ministry of Transport and Communications
BSA Board of Supreme Audit MoMT Ministry of Municipalities and Tourism
CBI Central Bank of Iraq MoTI Ministry of Trade and Industry
CoA Chart of Accounts MTBP Medium Term Budget Program
CoCI Chamber of Commerce and Industry MTEF Medium Term Expenditure Framework
CoI Commission of Integrity MTFF Medium-Term Fiscal Framework
CoJ Council of Justice NDP National Development Plan
CoM Council of Ministers NS/DP National Strategy/Development Plan
CSRP Civil Service Reform Program PC Provincial Council
DBR Doing Business Report PFM Public Financial Management
DoPA Department of Public Administration PIM Public Investment Management
DP Development Partners PIMS Public Investment Management System
EU European Union PM Prime Minister
FFER Funding Facility for Economic Reform PMT Proxy Means Test
FGI Federal Government of Iraq PPP Public-Private Partnership
GDP Gross Domestic Product PPMIS Public Pension Management Information
GFSM Government Finance Statistics Manual System
GP Government Program PTM Poverty Targeting Mechanism
IFI International Financial Institutions SACU Strategy and Aid Coordination Unit
IKFMIS Integrated Kurdistan Financial Management SMEs Small and Medium-Sized Enterprises
Information System SOEs State-Owned Enterprises
IMS Identity Management System SPC Strategic Planning Committee
KIPA Kurdistan Institute for Public Administration SSN Social Safety Net
KRG Kurdistan Regional Government TA Technical Assistance
KRI Kurdistan Region of Iraq TSA Treasury Single Account
LM Line Ministries TVET Technical Vocational Education and
MoAWR Ministry of Agriculture and Water Resources Training
MENA Middle East and North Africa UNDP United Nations Development Program
MoHR Ministry of Housing and Reconstruction USAID United States Agency for International
MoE Ministry of Electricity Development
MoEd Ministry of Education VAT Value-added Tax
MoFE Ministry of Finance and Economy WB World Bank
MoH Ministry of Health
MoJ Ministry of Justice
MoLSA Ministry of Labour and Social Affairs
MoP Ministry of Planning
3Introduction
The UNDP project FFER supports the Federal Government of Iraq (FGI) and the KRG in their efforts to
implement economic reforms. More recently it has developed a reform agenda which refines and adjusts
previous reform agendas to reflect new developments, visions and approaches to the economic reforms.
After, Government representatives through the MoP have indicated that e detailed action plan and other
modalities are needed for the successful implementation of the recommended Reform Agenda.
In response to the Government request, the UNDP designed and financed this program under FFER-KRG
to prepare an action plan on economic reforms 2021-2023 and related implementation modalities. It will
ensure the implementation of economic reforms recommended by the KRG Reform Agenda and supported
by various development partners.
Main output of the program will be an economic reforms action plan that will help government institutions
prioritize and implement KRG Agenda 2019 and identify and employ the Technical Assistance (TA) needed
in the process. The prioritization will be based on the importance and the expected results of the specific
economic reforms and the best practice principles for developing an adequate legal and institutional
framework and capacity building. The action plan will be supported with recommendations for the modalities
that can be used in the management of the reforms implementation and their monitoring and evaluation
processes.
FFER-KRG project is extended for an additional 3-year timeframe and the action plan will inform its review
and adjustments to ensure a better alignment with KRG reform plans. Through this project, UNDP plays
also a trustee role and a credible action plan with a strong ownership from the KRG institutions will increase
the contribution and commitment of the present development partners to the project and bring new
contributing partners
Ownership and determination of the government institutions in the process of action plan implementation
will be a great contribution to the fast and inclusive growth of the KRI. Speeding up the economic reforms
implementation and producing visible and tangible results will increase the trust of citizens, businesses and
development partners to the KRG and bring more investments.
4Chapter I - Action Plan of Economic and
Governance Reforms for Sustainable and
Inclusive Growth, 2021-23
Action plan on economic and governance reforms 2021-2023 is developed and presented in Annex I. It
provides detailed reform actions that should be undertaken for implementation of the KRG current and
future economic reforms Agenda. Reforms are grouped into 5 (five) pillars aligned with the KRG Agenda
20191 presented by new Government of the KRI inaugurated in July 2019. They include financial
management, business development, public services, social service and the governance,. Under each pillar
are listed key objectives that will be achieved through many reform and policy actions that will be undertaken
and supported by necessary human and financial resources.
KRG Agenda 2019 has received a broad support by ruling political factors and is supported by an economic
reforms Roadmap developed by the FFER project of the UNDP. It shows a strong intention from the
Government side for the engagement in a comprehensive set of reforms that will contribute to a sustainable
and inclusive growth. To support its implementation, reform actions are detailed under specific
outputs/broad reform areas and timing of their completion and respective responsible government agencies
are assigned. Action plan will be supported by other modalities that aim to measure and monitor the
performance of Government agencies and strengthen their accountability during its implementation. This
will increase the ownership of Government on the reform process, which is likely to gain the support of the
development partners provided that tangible and visible results will be produced from the beginning of the
action plan implementation.
1 Kurdistan Regional Government of Iraq agenda 2019 - https://gov.krd/english/government/agenda//
5Chapter II- Implementation Modalities and
Coordination of Action Plan 2021-23
Action plan of economic reforms will be implemented through an all-inclusive and accountable process.
The Council of Ministers (CoM) of the KRG will lead the process to show its determination and leadership
in undertaking the needed reforms for the KRI and the Ministry of Planning (MoP) will coordinate and
support it in the process. Line Ministries (LM) will play key role in the design and implementation of sectoral
reforms and they will be closely monitored and coordinated by the CoM with the support of the MoP.
Sections below present implementation modalities and coordination mechanisms among management,
supervision and implementation layers of the KRG during the implementation of the action pan.
1. Implementation Modalities and Roles of the Involved Institutions
The CoM will supervise the implementation of the action plan by establishing specific structures responsible
for the management and supervision of the process. Supervision will be provided by delegate powers from
the CoM to the permanent structures established to supervise the implementation of the action plan. These
structures will inform officially the CoM on a quarterly basis by preparing and submitting progress reports
on the action plan implementation. Based on the received reports, the CoM will hold quarterly meetings for
analyzing the progress and issues on the action plan implementation and making recommendations for the
improvements needed in the process.
The CoM may use two options for delegating supervision powers to an Executive Authority established for
management of the implementation of the action plan:
A. Empowering the High Council Committee (HCC) as a sole authority for the management and
supervision of the reform action plan implementation process in the KRG, or
B. Establishing a Steering Committee (SC), similar to the HCC, with representation of key Ministries
and involving key contributing development partners as the SC members.
In both cases the Authority will involve key LMs, selected Government agencies and development partners.
The latter will play their role in any form through direct participation or consultations. Thus, despite the form
of the delegated powers, the structure assigned with the supervision and management of the
implementation of the reform action plan will have attributes of the Steering Committee (SC). The SC will
be main Government structure that supervises the implementation of the action plan and coordinates the
support provided by development partners.
Key line Ministries that have a cross-cutting role in the KRG such as the MoP and the MoFE will be
permanent members of the SC while other line ministries will be ad hoc members based on the discussion
6agenda. The SC will conduct consultations with private businesses, think tanks, academics and the Civil
Society Organizations (CSO) to get their input on the ongoing reform processes.
Development partners may be invited to have their seats in the SC and appoint their representatives as SC
members with or without voting right. Other experiences show that SCs are more effective if co-chaired by
Government authorities and donors’ community. If this will be the case, the SC may be cochaired by the
KRG and UNDP, which has provided direct support in the design of the reform agenda for the KRG and
implementing action plan. The role of the UNDP has to be endorsed by other development partners as their
trustee for mobilization and use of their technical and financial contributions provided to support reforms in
the KRI.
The SC will perform its activities with direct support of the MoP. Thus, the MoP will be formally assigned as
the Secretary of the SC. The MoP will be responsible for coordination with LMs, which have the sole
responsibility for the implementation of the reform actions planned under each pillar and prepare progress
reports. Each responsible LM will assign its top officials to chair or participate in the task forces or
subcommittees that will be established for key outputs and broad reform areas of the action plan. They
should involve also private sector representatives, local experts (think tanks), academics, CSOs and other
stakeholders through consultation processes that should be undertaken from the task forces or
subcommittees. Different groups of interest may have the status of the task force members when it will be
appropriate. Task forces created for each broad reform area will involve also the technical assistance
contracted by Government or development partners and representatives of the development partners may
be invited too.
Main responsibilities of the SC will be:
• Approval of the action plan, 2021-2023 for the implementation of the reform agenda;
• Reviewing and approving annual work plans prepared by LMs and Government agencies and
submitted by the MoP;
• Approving monitoring plan based on the sectors action plan implementation proposed by the MoP.
• Developing a Technical Assistance (TA) plan for the implementation of the Action Plan, 2021-2023.
• Communicating and cooperating with development partners on the TA and project financing provided
for the implementation of the action plan the support of the economic growth and prosperity of the KRI;
• Review, approval and submission to the CoM of quarterly and annual reports on the progress of the
action plan implementation prepared by the MoP.
• Based on the review of the action plan implementation progress reports, making changes on the reform
actions and their completion time;
• Proposing staff changes and other improvements needed for timely and quality implementation of the
reform actions approved in the action plan;
72. Coordination and Monitoring of the Action Plan Implementation
Council of Ministers (COM) will exercise the supervision of the action plan implementation through the SC
or HCC. The SC with the support of the MoP will assign the leading institution(s) for each pillar of the action
plan and task forces or sub-committees will be established for each output or broad reform area foreseen
under the reform pillars of the action plan. The whole implementation process of the action plan will be
coordinated and performed based on the organizational chart presented in Annex II.
The MoP will be main coordination structure to facilitate implementation of economic reform actions, which
stays between the SC and the heads of the reform pillars. It will provide detailed action plans, performance
indicators and monitoring reports and develop agenda for the SC,
Task forces created from LMs will prepare their own action plans detailing outputs that will be produced by
their sectors reform actions, time of completion and responsible organizational units. They will be based on
the outputs and time of their completion specified in the master action plan and copies of the sector action
plans will be submitted to the MoP. Based on the detailed action plans, the MoP will prepare and submit to
the SC a set of performance indicators for each sector. task force and based on them a draft annual
monitoring plan for the implementation of the action plan. This plan will be formally approved by SC and
based on it each task force will prepare a quarterly and annual progress report. They will be used as a
resource from the MoP which will prepare a summary progress report and submit it to the SC on a quarterly
and annual basis. The SC will review and approve these reports and submit to the CoM for review and
approval.
Reform actions will be implemented in partnership with development partners. Detailed action plans
developed by each task force for the implementation of the reform actions will be used to identify the support
needed from development partners. Development partners will provide their support in the selected areas
in various forms including technical assistance, policy papers and action plans, capacity building and other
technical and financial support. A summary of the coordination structure is shown in Chart 1 below.
8Chart 1 - Coordination Structure for Implementation of Action Plan
Supervisory Authority
Council of Ministers- Quarterly Implementation Progress Analysis and Improvements Needed
Executive Authority
Steering Committee/ High Council Committee- Approval and supervision of the implementation of the
overall and sectoral action plans in close coordination with development partners, review of
implementation progress reports including needed improvements and submission to the CoM. Coordinates
support of the Development Partners
Ministry of Planning
Drafts performance indicators and progress reports on the implementation
of sectoral Action Plan and agenda for the SC
LMs/Task Forces and Special Committees
Prepare sector action plans and related performance indicators, perform reform actions
and prepare and submit progress reports to the MoP
9Chapter III- Technical Assistance
Components for Supporting the Action Plan
A short-term TA plan is needed to address immediate and short-term interventions for undertaking
economic reforms. It will rationalize the ongoing and future support of the development partners for the
development of KRI. Short-term TA is focused on key reforms that are needed to stabilize public finances
and pave the way for a deeper reformation of economy and modernization in the KRI. Annex III presents
key TA components needed for each economic reform pillar that should be used for the identification and
employment of the TA for 2020-21.
10Annex I - Action Plan for Economic Reforms in the KRI, 2021 -
2023
Reform Actions/Activities Time of Responsible
Completion Ministry/Agency2
Pillar 1 - Stabilization of Public Finances and Developing a Good Public Financial Management (PFM) System
Output/Reform Area 1: Human and Technical Capacities of the MoFE Strengthened, Public Finances Stabilized and PFM Improved
1. Undertaking the restructuring of the Ministry of Finance and Economy (MoF&E) functions and structures for 2021- Jun 2022 MoFE
empowering it as a sole authority for formulating fiscal policy, establishing public financial management system and
establishing managerial responsibilities for its execution and performance:
a. Reviewing, updating and improving the recommendations of the previous TA on the structure of the Ministry of April 2021 MoFE
Finance;
b. Develop new structure for the Ministry of Finance and Economy. June 2021 MoFE
c. Drafting required legal and regulatory acts for undertaking and making permanent organizational restructuring Dec 2021 MoFE
and functions to be performed by the MoF&E
d. Building staff capacities and upgrading their fiscal policy and PFM skills. June 2022 MoFE/ CoM (DoPA)
Output/Reform Area 2: Human Resource Management Mechanisms and Information System (HR-MIS) Improved and Public Payroll
Rationalized
1. Developing an internal regulation that provides mechanisms for the enforcement of the existing legal provisions March 2021 MoFE/ CoM (DoPA)
and government decrees on the rationalization of the public payroll and allowances;
2. Preparing a policy paper that recommends necessary provisions for drafting laws and regulation and undertaking June 2021 MoFE & MoP; CoM
institutional changes on public administration payroll. (DoPA)
3. implementation of recommendations made in the policy paper on the public administration payroll:
a. Developing legal and regulatory framework and undertaking restructuring of public payroll: separating the 2021 MoFE with support
payroll of public services departments/parastatals (electricity, water, solid waste, sanitations, etc.) from of MoP & MoMT
Government spending units/institutions (as defined in the Government Finance Statistics Manual (GFSM));
b. Establishing the upper limit (ceiling) of the number of employees for Ministries and other Central Agencies Sep 2021 MoFE with support
(excluding public services departments/parastatals) for the 2022 budget; of MoP & MoMT
Sep 2021
2 When more than 1 (one) institution is listed as responsible Ministry/Agency the first institution in row will be the leading institution
11c. Developing and establishing a performance-based subsidies system for public services departments/ MoFE with support
parastatals, which pushes them rationalize their number of employees. June 2022 of MoP & MoMT
d. Harmonization of salaries system across the Government units and consolidation of various social and non- CoM (DoPA)
social allowances to salaries paid for public employees after a substantial review of and the decision made for supported by MoFE
their discontinuation, lowering and freezing their indexation in the future; & MoP
4. Customizing the Identity Management System (IMS) for public employees to create a locked database after the June 2022 CoM (DoPA)
public payroll restructuring and establishment of the number of public employees’ ceilings for both Government supported by MoFE
units and public enterprises/parastatals. & MoP
5. Launching a communication/education campaign to facilitate the payment of utility bills from citizens and June 2021 MoF&E & MoE
business consumers and linking the utility bill compliance with the service improvement.
Output/Reform Area 3: Budget Document Prepared, Basic Budget Discipline Established and Foundations for a Good PFM System Built
1. Developing a basic 2021 annual budget through an all-inclusive budgetary process, approve it by Parliament and March 2021 MoFE and MoP
publish in the official gazette and other media to replace the existing practice of ad-hock budget decisions;
2. Preparation and release of quarterly spending authorizations broken down into two parts, operating and April 2021 MoFE and MoP
investments;
3. Developing and approving by the CoM the 2022 budget preparation instructions including macro-fiscal targets May 2021 MoFE and MoP
(GDP growth, revenue and expenditure growth, and fiscal deficit), and operating and investment spending ceilings;
4. Developing and establishing a medium-term fiscal target for wages and salaries of the Government units; Nov 2021 MoFE and MoP
5. Drafting and implementing a set of basic rules and regulations on quarterly limits for main budget spending items Nov 2021 MoFE and MoP
and investment projects, compliance and commitment control, accounting, reporting and auditing;
6. Developing a set of rules and mechanisms that can be negotiated and agreed with the Federal Government to June 2021 CoM supported by
ensure predictability of the KRG budget (share of oil revenue and other federal subsidies should be known earlier in MoFE & MoP
the budget process)
Output/Reform Area 4: Program-Based Budgeting in a Medium-Term Context Introduced and PFM System Improved;
1. Developing terms of reference and establishing the function of macroeconomic and fiscal analysis and 2022 -2023 MoFE
forecasting including organizational structure, job description, staff skills upgrade, software development and
methodology for producing the Medium-Term Fiscal Framework (MTFF).
2. Revising the methodology and building a system of data collection and technical capacities for forecasting and 2022-2023 MoFE; MoP (Dept.
reporting the economic growth, Gross Domestic Production (GDP). of Statistics)
3. Developing and implementation of the strategy on the introduction of the program-based budgeting system in a 2022 -2024 MoFE & MoP
Medium Term Expenditure Framework (MTEF) context including institutional restructuring, capacity building, supported by
development of the national and sector strategies with prioritized and costed programs and projects within the selected Line
annual budget ceilings determined in the MTFF, development of technical guides and software for the MTEF Ministries (LM)
submissions;
125. Drafting and approval of the legal framework for the Management of the Budget and Treasury Systems and other 2023 MoFE supported by
components of the PFM system, i.e. public accounting, internal and external audit and inspections in line with MoP
international best practices and standards.
Output/Reform Area 5: Public Investment Management (PIM) System Improved and New PIM System Implemented
1. Establishing medium-term share (targets) of overall public spending and public investments to GDP and 2021 MoFE supported by
approving them as ceilings to be considered for the preparation and approval of the 3-year MTEF. MoP
2. Improving PIM rules and regulations under the overall legislation package for the Budget and Treasury 2022-2023 MoP supported by
Management and drafting new Public Investment Management (PIM) Manual that regulates PIM cycle, i.e. linking MoFE
project identification to national and sector strategies priorities, project appraisal (cost-benefit analysis), project
approval, contracting, implementation, monitoring, reporting, auditing and ex-post evaluation.
3. Customization and integration of the PIM software module in the KRI Integrated Financial Management 2022-2023 MoP supported by
Information System (IFMIS) to capture all types of public investment (domestic, foreign & co-financed); MoFE
4. Building capacities for the implementation of the new PIM processes and procedures in the MoP, MoFE and Line 2022-2023 MoP; MoFE &
Ministries. Selected LM
Output/Reform Area 6: A Modern Tax System Established and its Administration improvement
1. Developing a set of rules and mechanisms that can be negotiated and agreed with the Federal Government and 2021 MoFE, Customs &
other KRI Border Control and Protection Authorities for a better coordination and management of the custom duties Other Border
collection and sharing. Control Agencies
2. Conducting an overall review of the legal and regulatory system on taxes and development of the new fiscal 2022-2023 MoFE supported by
system that establishes simple, equal and fair rates for the direct taxes (multisource personal and corporate income Taxes & Customs
taxes), property tax and indirect taxes (excise and sales or Value Added Tax (VAT)) Departments
3. Developing best practice based internal rules and regulations and building capacities for tax assessment, 2021-2022 MoFE, Tax
collection, enforcement, control, auditing and the taxpayers right to appeal. Administration
4. Developing and implementation of the Tax Management Information System (TMIS) that provides a unique 2022-2023 MoFE, Tax
Taxpayer Identification Number (TIN) and online tax assessment (billing), collection and risk analysis. Administration
Output/Reform Area 7: A Modern Treasury System Based on the Treasury Single Account (TSA) System Established
1. Make a full inventory of the existing budget accounts opened for Line ministries and other Government agencies March 2021 MoFE.
and procedures involving the use of cash and transferring their end of 2020 balances to the single account opened
on behalf of the MoFE.
2. Developing procedures for the introduction of the Treasury Single Account (TSA) system and a temporary excel- May 2021 MoFE
based database that ensures computerization of its operations.
3. Establishing a Modern Treasury system: 2022-2023 MoFE.
a. Developing and establishing laws and regulations for the implementation of the Treasury Single Account (TSA)
referring to the previous recommendations of the TA on the TSA and recent developments in this area focused
13on the budget compliance and commitment control, issue of payment orders, accounting and monthly and
annual budget execution reporting;
b. Developing and implementing rules and procedures on the cash budget and cash management which establish
quarterly cash ceilings and authorizations
4. Developing the module of the Budget execution (based on the TSA) as part of the KRI Integrated Financial 2022-2023 MoFE.
Management Information System (IFMIS)
5. Preparation of technical guides and manuals and delivering training for upgrading staff technical skills on the TSA 2021-2022 MoFE.
based modern Treasury system and preparation and publication of Government Finance Statistics (GFS) reports.
Output/Reform Area 8: Automated Integrated Public Financial Management Information System (IPFMIS) Developed and Made Operational
1.Conducting an assessment of the computerized systems and procedures for the budget preparation and 2021 MoFE.
execution as well as other TA outputs and identification of needed improvements;
2. Developing architecture for an automated Integrated Public Financial Management Information System (IPFMIS) 2022 MoFE supported by
for the KRI and specifications and costs for the development of the software and purchase of the hardware; MoP
3. Developing and implementation of the KRI IPFMIS in line with other developments in the budget and treasury 2022-2023 MoFE supported by
systems and including also the module for e-payroll and e-payment that will further enhance administrative MoP
performance and transparency.
Pillar 2 - Creating a Diverse Economy and Promoting Economic Development for a Sustainable and Inclusive Growth
Output/Reform Area 1: A Self-sustaining Agriculture Sector Crated and Integrated Rural Development Promoted
1. Based on the recommendations made in the Agriculture Study financed and endorsed by the FFER-KRG 2021-Jun 2022 MoAWR
undertaking an inventory and assessment of laws in the Agricultural sector to identify improvements and provisions
in the existing legal system and the development of the new laws for:
a. An integrated law on the agriculture sector that promotes a self-sustainable and integrated development of the
agriculture sector.
b. Replacing old legislation on agricultural land tenure and land resource management to address emerging
issues such as urbanization and cities invasion in the agricultural land, resolve conflicts and clientelism of
agriculture land tenure and management and improve land distribution law;
c. Unifying and reorganizing Agricultural sub-sectors;
d. Protection of Agricultural land.
e. Protection, development and management of Water;
f. Providing extension, veterinary and food safety services.
2. Developing a rural development strategy to make the agriculture a budget priority by increasing financing for: 2021 MoAWR supported
a. Strategic Projects for Dams and large-scale Irrigation. by MoFE & MoP
b. Development and implementation of investment programs in rural roads, irrigation systems and land
preservation and reclamation;
142. Developing a legal and regulatory framework and establishing proper mechanisms and workable incentives and 2022 MoAWR supported
promotional policies for attracting private investments in the agriculture sector through PPP and other investment by BoI
options and entrepreneurship that supports local agricultural production, food processing industry, agritourism,
agricultural products fairs, artisanal products, private agricultural markets and cold storage capacities, etc.;
4. Reviewing and resuming microcredit (Small Loans) program managed by Microcredit department at Ministry of MoLSA & MoAWR
Labor and Social Affairs (MpLSA)and supported by the Ministry of Agriculture and Water Resources (MoAWR) and
increasing the support to small agricultural projects.
5. Developing a set of policies and recommendations on the necessary legal and institutional framework that 2021 MoAWR
regulates and promotes the establishment of the farmers associations and other forms of cooperation
6. Developing and Implementing legal and regulatory framework to promote the establishment of agricultural 2022 MoAWR
collaborative institutions and producer marketing groups and finding new markets for the agricultural production
7. Developing a platform for negotiation and establish close coordinationwith Federal Government to increase 2021 CoM supported by
support to the agriculture sector and farmers in the KRI. MoAWR
Output/Reform Area 2: Inefficient/Abandoned Public Enterprises/Sites Restructured and Public Utilities Departments Corporatized and Made
Viable and Attractive to Private Investors;
1. Developing a policy paper with recommendation on the laws and related regulations needed for the restructuring 2021 MoFE, MoP,
and corporatization of public services departments/parastatals and abandoned public enterprises focused on: MoMT, MoTI, MoE,
a. The statute for their establishment, registration, operation, management, liquidation, closure and bankruptcy, Other selected LMs
aligned with commercial/private sector companies; and the PPP Joint
b. The managerial accountability for the company’s non-performance; Committee
c. Removal of the public companies/parastatals’ (Departmental Enterprises) payroll from the budget of the KRG;
d. Rules and procedures for the public companies/parastatals’ employment (number, hiring and firing), layoff
notice, severance pay and other legal rights of the laid-off workers;
e. The delivery of goods and services in the transition period.
2. Based on the policy paper recommendations, developing a package of laws, rules and regulations for the 2022 MoFE, MoP,
restructuring and corporatization of public utility departments/enterprises (electricity, telecommunications, water and MoMT, MoTI, MoE,
sewerage, etc.) and abandoned public enterprises following the model of commercial companies and their Other selected LMs
registration in the commercial register.
3. Developing a mass-corporatization, conservation and liquidation program for transformation and registration of 2022-2023 MoFE, MoP,
all public services departments/parastatals and abandoned public enterprises, and determining their status by MoMT, MoTI, MoE,
categorizing them for continuing the operation, conservation (to preserve the value of assets while waiting for Other selected LMs
potential private investors) or liquidation (sale of land and assets and abandonment of sites) Inventory of all the
existing assets by a competent and specialized committee for the parastatal institutions and agencies; and
determine values of the assets when there are possible investment by potential private investors.
154. Establishing an agency responsible for the implementation of public companies/parastatals mass-corporatization, 2022-2023 MoFE, MoP,
conservation and liquidation program and rules and building necessary staff capacities. Enacting laws, issuing MoMT, MoTI, MoE,
regulations and developing special plans for the implementation of this action. Also developing training programs Other selected LMs
for the employees’ capacity building.
Output/Reform Area 3: Number of Registered Businesses Increased and Implementation of the Ongoing Business Reforms Accelerated
1. Developing and implementation of the action plan that provides the process, actions and institutional roles and June 2021 MoFE, MoP, BoI
responsibilities for undertaking the identification and mass-registration/formalization of operating private
businesses.
2. Reviewing the current platform for business registration and undertaking any quick customization that may 2021 MoFE, MoP, BoI,
needed for supporting the program for business identification and formalization and accelerating the ongoing MoTI
business reforms including online licensing, centralized industrial information, and database on logo and copyrights
in line with the one-stop-shop model.
3. Finalizing and promoting Investment Map for KRI to expedite the process of land provision to approved 2021 MoFE, MoP, BoI,
investment proposals. MoTI
4. Developing the methodology and negotiating with FGoI and the WB options for involvement of the KRI in the 2021 MoFE, MoP, BoI,
preparation of the “Doing Business” survey of the WB and creating a section/set of data in the publication for the MoTI
KRI to promote business climate and investments opportunities in Kurdistan, i.e. the ten-year investment plan in
Kurdistan.
Output/Reform Area 4: Business Environment Improved and the KRI Made More Attractive to Foreign Investors
1. Supporting the approval of the proposed amendments for the law on investments and preparing regulatory and June 2021 BoI, MoP, MoFE,
institutional framework to facilitate its implementation. MoTI
2. Approval of proposed PPP Framework and preparing PPPs pipeline and necessary legal and regulatory acts 2021 BoI, MoP, MoFE,
compatible with the Investment Law amendments that speed-up and move forward the ongoing PPPs practices and MoTI
support the implementation of the Framework.
3. Developing technical guides and training module, establishing new institutional arrangements, and building June 2022 BoI, MoP, MoFE,
capacities and in-house expertise on the process of identification, appraisal, design, negotiations, contracting, MoTI
implementation, monitoring, supervision and termination of public-private partnerships (PPPs) projects.
4. Developing an action plan (using the ongoing consultancy contract) to lay the ground and accelerate the 2021 BoI, MoP, MoFE,
implementation of the Investment Roadmap (IRM), recommendations made in the investment Roadmap and the KRG MoTI, MoMT,
reform agenda. It should provide actions, deadlines and responsible institutions for designing and undertaking a selected LMs
comprehensive business legal, regulatory and institutional reform focused on:
a. Abrogating, replacing and integrating all existing business-related laws, i.e., trade agency law, trade exhibitions
regulation, trade organization law, special economic areas and free trade zones law, amended investment law,
16amended trade law, labor law, etc. into a single law on private investment climate that makes it easier to start,
operate, and exit a business;
b. Sorting out Investment Issues and any other issues related to Investment through KRG Judicial /Court system;
c. Providing special protection to foreign investors and special institution to resolve foreign investment related
issues;
d. Removing/liberalizing all trade and business tariffs and licenses except those for hazardous materials and
environment protection and establishing business operation and ethics rules and standards instead;
e. Reducing bureaucracy and number of institutions dealing with business startup by establishing new institutional
arrangements that simplify and unify the business registration and development procedures, i.e. factories,
import and export, business and trading places licensing, etc.;
f. Establishing One Window (One-stop-shop) system and giving authority to Ministerial member to make required
decisions to expedite Investment/business registration and licensing.
g. Amending existing laws or developing new ones to establish simple rules and procedures for online mandatory
registration of businesses and their by-laws and regulations, changes made in the deposited by-laws,
ownership and management team, annual balance sheets, financial statements, profit distribution and any
other data required by the law on KRI statistics or any other laws;
h. Developing new investment promotion tools, improving promotion and information media (website) and building
necessary capacities for their effective use and business promotion events organization. Allocating required
budget for this from the KRG and channeling the support of International organizations, i.e. WB FFER-KRG,
etc. and non-governmental organizations for this purpose.
i. Strengthening the processes of receiving and collecting information in the institutions of trade and industry and
developing channels for dissemination of information and guidance to promote private investments.
5. Reviewing legal system and improving the legislation on the business organizations to: 2021 BoI, MoTI, selected
a. Incentivize Chambers of Commerce and Industry to become business advocacy and lobbying institutions; LMs
b. Involve/consult private businesses when Ministries prepare reform plans and legal acts and regulations
impacting business.
c. Conducting regular hearings from Ministry/ies with the representatives of the private sector;
d. Conducting hearings from the KRI Parliament during the review/approval of the draft laws;
e. Facilitating meetings and exchanges with foreign businesses counterparts form diplomatic representatives;
6. Reviewing University curricula of Business Administration and Management including tourism services 2021 MOHE, BoI, MoP,
administration and management and support KRG Ministry of Higher Education (MOHE) develop contemporary MoFE, MoTI,
curricula, teaching aides and training programs on business, finance and entrepreneurship classes and courses. MoMT, MoLSA
7. Establishing a Business Registration Center for the KRI and upgrading the online system for business 2022-2023 BoI, MoP, MoFE,
registration and linking it to the tax and customs systems aiming at establishing a “one-stop-shop” in the future for MoTI, MoMT,
business registration, tax compliance and other business-related services for businesses and citizens. selected LMs
17Output/Reform Area 5: Financial Institutions Restructured and Banking Services and Loans to Businesses and Citizens Promoted
1. Reviewing and making implementable the law and other regulations allowing Government agencies to place 2021 MoFE
deposits and open accounts for paying wages and salaries of their employees and checking accounts with both state-
owned financial companies and private banks, and accept letters of credit and checks issued by private Banks;
2. Reviewing the existing small short-term loans program of the KRG Ministry of Labor and Social Affairs and 2021 MoFE, MoLSA
preparing relevant recommendations aiming at:
a. Improvement of the process of the borrowers’ origination.
b. Establishing rules and standards used from financial institutions for licensing, management and supervision of
the small loans programs and renew their licenses and put under the supervision of the KRI financial institutions’
licensing and supervision authority.
c. Supporting special entrepreneurship categories (i.e. youth, women, farmers, etc.);
d. Strengthening program management and supervision.
3. Developing new/amending existing legal framework that increases business access to finance, especially for 2021 MoFE, MoLSA
Medium and Small -Sized Enterprises (MSMEs) by regulating and promoting the establishment of small loans and
microfinance institutions from private businesses, and Government and development partners as Microcredit or
Investment Funds and incentivizing private investments in the small loans and microcredit institutions supporting
vulnerable categories of population and geographic areas without presence of other financial institutions.
4. Developing and negotiating rules, regulations and infrastructure for the CBI branches within the KRI in order to 2021 CoM supported by
make them operate linked under the Central Bank and its Erbil Subsidiary, which will play also the delegated authority MoFE
of the Central Bank;
5. Developing and negotiating an agreement with the CBI to provide credit bureau coverage for the KRI; 2021 MoFE
6. After negotiations and Agreements reached, developing new legal framework that empowers the branch of the June 2022 MoFE, BoI
Central Bank of Iraq in Erbil operate as a Subsidiary with delegated Central Bank authorities and puts it under dual
jurisdiction, KRI Parliament and CBI, which licenses and supervises banks and financial institutions of all categories
to enable:
a. Increasing banking services and banking system liquidity;
b. Cashing KRG-issued checks,
c. Corporatization of State-Owned Financial companies of the KRI, which operate as banks, and make them get
bank licenses by the CBI through its subsidiary in Erbil and become subject to banking regulations and
supervision;
d. Providing loans to public and private businesses, and
e. Attracting private investors in the banking sector.
7. Restructuring the balance sheets of the state-owned banks (financial institutions) by cleaning-out them from the 2022-2023 MoFE, MoP, MoTI,
nonperforming loans and establishing a State-Owned Agency named Bank Assets Resolutions Trust (BART) that MoMT
will register, manage, recover and collect non-performing loans portfolio of the state-owned banks;
188. Developing modern banking training modules and considering the option to convert the training program into a 2022-2023 MoFE supported by
school of bankers that will provide continuing education for the staff of banks. Banking Sector
Output/Reform Area 6: New Insurance System and Regulatory Framework Developed and Made Operational
1. Conducting and assessment of the existing legal, regulatory and institutional framework of the property and life 2021 MoFE.
insurance system in the KRI and preparing a package with recommendations for its improvement including
supervision and licensing authority and the related action plan for their implementation.
2. Implementing action plan for the development of the new legal, regulatory and institutional framework for the 2022-2023 MoFE
insurance system in the KRI and its licensing and supervision authority.
Output/Reform Area 7: Special Incentives for MSMEs Provided and their Number and Business Boosted
1. Establishing a special government agency and building necessary capacities for designing and implementing 2021 MoP, BoI
special policies in support of the SMEs.
2. Preparing special regulatory and fiscal packages to be integrated respectively in the investment and tax laws June 2022 MoP, BoI, MoLSA,
aiming at: MoFE
a. The removal of all barriers and providing special incentives for starting and operating MSMEs and requiring their
formalization, and
b. The Development of a simple and low tax rates system for MSMEs.
3. Establishing a Government supported grants program for small businesses startup especially for specific 2022 MoFE, MoLSA
categories, i.e. women and youth.
Output/Reform Area 8: Industrial Sectors Restructured and Industrial Development Tools to Attract Private Investments Developed
1. Developing an adequate legal and regulatory environment for the development of existing industries that paves 2021-2022 MoTI, BoI, MoFE,
the way for their restructuring, makes them competitive and promotes industrial exports, which should: MoP
a. Replace or make implementable laws on Patent Registration and Industrial Models, Local Product Protection
Law, Economic Areas and Free Trade Zones, etc.
b. Devlop contemporary laws on the industrial sector, and
c. Support the development and administration of industrial zones and sectors, special lending programs,
investments in new technologies and other aspects of industrial development.
2. Based on the findings and recommendations from the study on the industrial zones. developing and 2022-2023 MoTI, BoI, MoFE
implementation of a masterplan for:
a. Identifying potential investments for all industries
b. Establishing industrial parks and free trade zones, and
c. Preparing an industries atlas that describes and makes them attractive to interested investors
3. Developing an action plan and start the implementation of the recommendations made from the ongoing FFER- 2021-2023 MoTI, BoI, MoFE
KRG Consultancy Contract on the development of the Industry Growth and Development Roadmap on the legislative,
regulatory and institutional reforms, procedural improvements, promotional programs for boosting the economic
growth and industry development in KRI, and the TA needed for the implementation of the proposed roadmap.
194. Developing a best practice informed package of laws, regulations and institutional arrangements for industrial 2022-2023 MoTI, BoI, MoFE,
sector that promotes PPPs and other private investments in the industry, based on the road map developed and the MoP
TA assessed by the above-mentioned ongoing FFER-KRG Consultancy Contract.
Output/Reform Area 9: Trade, Tourism, Transportation and Other Services Restructured and Made more Attractive to Private Investors
1. Developing a set of procedures and finalizing a cooperation and coordination agreement among customs and 2021 MoFE, BoI, Other
other border control and protection authorities to harmonize and simplify border control processes and improve Border Control
border security/protection. Agencies
2. Developing a policy paper recommending a comprehensive border control modernization system based on 2021 MoFE, BoI, Other
international standards and an integrated border control and customs information system including the assessment Border Control
of the financing needed for investments in the border control and customs procedures and infrastructure. Agencies
3. Developing new regulatory system that promotes free trade by liberalizing trade permissions and import and 2022-2023 MoFE, BoI, Other
export licenses, reducing border control and clearance fees based on a cost recovery policy analysis and promoting Border Control
markets’ openness. Agencies
4. Undertaking a broad assessment of tariff and non-tariff barriers to trade and preparing a comprehensive export 2021 MoFE, BoI, MoP,
promotion program that includes assistance and capacity building for an export promotion agency, fiscal incentives MoTI
for exported products and services and loan guarantee schemes and trade insurance system, which will contribute
to make the KRI an important regional trade and tourism center.
5. Establishing procedures and authorities responsible for the continuous review and approval of custom duties 2022 MoFE, BoI, MoTI
including the review of the roles and restructuring of the Board of Border Standardization and Quality Control.
6. Conducting assessment of the Tourism sector legal and institutional framework and developing a package of 2021-2023 MoMT, Board of
laws, regulations, mechanisms, institutional arrangements and capacity building aiming at: Tourism
a. Easing/Liberalization of licenses for travel/tourist agencies;
b. Removing all regulatory and non-regulatory constraints that impede private operators and investments in the
tourism sector
c. Updating the KRG Tourism Strategic Plan and upgrading into a Strategy for the Tourism Sector outlining
workable reforms, projects and programs prioritized and costed within the medium-term budget ceilings for the
sector;
d. Revising and developing a new system for the quality assessment and the adoption of the quality certificate for
the tourism industry in the KRI;
e. Developing and promoting various (archeological and other beauties) tourism sites, products and infrastructure
involving all relevant ministries;
f. Building capacities for tourism sector development and quality assessment.
7. Liberalization of licenses for drivers and companies operating in passenger transportation, logistics and trade 2022 MoMT, MoTC
sectors.
208. Developing a legal and institutional reform package for privatization and corporatization of the public 2022-2023 MoTC, MoMT, BoI,
transportation system and facilities focused on: MoP,
a. Liberalization of licenses and establishment of business standards for urban and inter-urban public
transportation system;
b. Corporatization, commercialization and privatization of the urban and inter-urban transportation
faculties/systems;
c. Laying grounds for PPPs and other private investment options in all transportation components including urban
and inter-urban public transportation;
d. Promoting private investments and PPPs in the airports system, railway network development and clean and
energy-efficient transport modes, walking and cycling within the cities, etc.
Output/Reform Area 10: Oil Downstream (Refining, Marketing and Distribution) Improved
1. Developing and coordinating with Federal Government of Iraq an adequate legal and regulatory reform focused 2021-2023 CoM supported by
on: MoFE, MoP, BoI,
a. Improving contractual and commercial framework governing existing and future activities; MOTI
b. Improving business environment for attracting prominent investors;
c. Regulating pricing system, sector subsidies, and fuel standards;
d. Increasing refining capacity and optimization of import arrangements and fuel substitution.
Pillar 3 - Providing Adequate Public Services
Output/Reform Area 1: Transportation Infrastructure Upgraded and Private Investments in all Transport Modes Promoted
1. Developing the strategy for the transportation sector that establishes priority policies, projects and programs 2021 MoTC, MoHR,
costed within the MTEF ceilings and covering: MoMT, BoI
a. Policy and project priorities as well as new legislation needed for their implementation;
b. List of costed priority projects within the available budget for all transportation modes, and
c. Transportation sector management system, restructuring, commercialization and decentralization.
2. Reviewing and updating legislation, regulations, standards, manuals and guidelines for planning, design, 2022 MoTC, MoHR,
implementation, supervision, maintenance and operation of the transportation infrastructure and the sector as a MoMT, BoI
whole with a special focus on the involvement of the private sector through public-private partnerships (PPPs) in
order to reduce infrastructure gaps, improve transportation services in the KRI and freeing financial resources for
other public and social services.
3. With reference to the above-recommended strategy for the transportation sector, developing and implementing 2022-2023 MoTC, MoHR,
an Integrated Masterplan for transportation infrastructure and other transport modes in the KRI focusied on: MoMT
a. Updating and integrating the existing Highway Master Plan and any other strategic document for the
transportation sector;
b. Preparing the list of main transport routes and other transport modes projects;
21c. Prioritizing the list of the projects for different transportation modes and establishing mechanisms and
standards for their implementation.
Output/Reform Area 2: Transportation Services Commercialized, Restructured and Improved, and Partnership with Private Investors
Strengthened
1. Conducting a comprehensive study for cost analysis of the transportation services and introduction of service 2021 MoTC, MoHR,
fees (tickets prices), charges for road users (automobile registration fee, fuel (consumption) levy, highway toll, and MoMT, MoFE
overload/overweight fee) and charges for the airport services based on the best practices and standards applied
over the world.
2. Developing an action plan for restructuring the departments/parastatals providing public transportation services 2022 MoTC, MoHR,
and making them operate as viable corporates financed from the sale of tickets for services and collection of other MoMT, MoFE
fees and charges collection of charges.
3. Preparing and Implementing a Service Improvement Plan for transportation sector that should include: 2022-2023 MoTC, MoHR,
a. Promotion of the private inter-urban transportation services, privatization of any inner-city transportation service MoMT, PPP Joint
and improving standards required for private operators that will provide the service; Committe
b. Corporatization, decentralization, privatization and PPPs in the urban transportation and the regulatory
framework for the service provision standards, supervisory authority, tickets pricing and protection of the
vulnerable groups of populations;
c. Corporatization, privatization and PPPs in the Logistic hubs and Airport services;
d. Rules and procedures for an effective and transparent system that ensures a due process of selection of
projects and procurement planning to encourage local contractors and partnership between local and foreign
contractors and consultants.
4. Developing capacities and improving institutional arrangements for establishing effective structures and 2022-2023 MoTC, MoHR,
capabilities for the restructuring and management of the transportation services. MoMT,
Output/Reform Area 3: Water, Sewerage, Solid Waste, Sanitation, Parks, Recreation and Other Public Services Corporatized, Restructured and
Improved, and Partnership with Private Investors Strengthened
1. Conducting a comprehensive study for cost analysis of the drinkable water, sewerage, solid waste, sanitation, 2021 MoMT, MoFE,
parks, recreation and other public services, and policies for services decentralization and introduction and collection Municipalities
of service user fees and environmental charges based on the best practices and standards applied over the world.
2. Developing an action plan for restructuring the departments/parastatals providing drinkable water, sewerage, 2022 MoMT, MoFE,
solid waste, sanitation, parks, recreation and other public services and making them operate as viable corporates MoP, Municipalities
or quasi-commercial companies financed from the service user fees. Included there should be a financial support
program for compensating vulnerable groups of population that are unable to afford the payment of user fees for
commercialized public services, as part of the targeted social safety net schemes.
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