World Bank to help stabilise Iraqi areas recaptured from ISIS

Friday 03/07/2015

Beirut - The World Bank is joining efforts to help Iraq’s coali­tion government stabilise newly liberated Sunni Arab cities that had been swiftly conquered in 2014 by the Islamic State (ISIS).
Restoring the trust of the Sunni Arabs in the central government, securing the return of the displaced inhabitants and rebuilding the in­frastructure in liberated cities could constitute a turning point in the fight against ISIS.
Ferid Belhaj, World Bank direc­tor for the Middle East, disclosed during an interview with The Arab Weekly details of the programme, which is to be discussed July 7th by the World Bank Board of Directors in Washington.
“What we are doing now [in Iraq] is extremely novel and extremely risky but extremely needed,” Belhaj said.
The project was meant to help re­build the infrastructure and restore basic services, such as health, edu­cation, water, sanitation and hous­ing, in the areas recaptured from ISIS.
“We are working with the Iraqi government to re-establish the func­tioning of the basic services… in the areas that are being liberated from Daesh, like Tikrit and Sulaimaniya.”
Belhaj said he considered the new World Bank project “crucial”, saying that when ISIS took control Sunni cities in Iraq, they “pretended they are establishing a new order, a new way of managing the place”.
He stressed that the Baghdad government must “show the popu­lation that not only they are doing way better but they are legitimate and they can secure the place”.
“We are taking big risks but we believe those risks are important to take,” Belhaj said.
One factor that encouraged the World Bank to engage in such a project was the establishment of a coalition government in Baghdad and Iraqi Prime Minister Haider al- Abadi’s pledge to mend sectarian divisions caused by his predecessor Nuri al-Maliki, who marginalised the Sunni and Kurdish minorities.
Iraq’s stabil­ity is thus the issue, although it’s going to be “very difficult” to maintain, according to Belhaj, who explained that the “country is in very dire need of a strong mac­ro-economic bal­ance. Oil has gone down. Spending is going up because of many things, including security for they need to spend money to train soldiers to repel Daesh.” Reforming heavily some of Iraq’s extremely inefficient sectors, such as banking and energy and pension and state-owned enterprises, is a must to boost the country’s economy.
According to Belhaj, economic, political and social exclusion were main factors that led to the out­break of the “Arab spring” in many countries of the troubled region, which is “in very deep transition”.
For years, he explained, the Arab region has been stagnant and char­acterised by “its immobilism”, with “nothing happening and strong re­gimes sitting on the majority of the productive economic instruments of the country”.
“For years, people seem to be okay with that and then all of a sudden, you had that accel­eration of history that really nobody saw coming.”
He considered the 2008 financial crisis to have been “a huge destabilising fac­tor” for the Arab world. “People kept on asking their governments for free servic­es and the governments that were affected by the finan­cial crisis could not af­ford to deliver anymore.” “Arab spring” countries, however, differed in absorbing the ongoing transition, with Morocco adopting a calm and gradual change; Libya, Yemen and Syria in outright civil wars; Egypt having its ups and downs; and Iraq making a “slow and very difficult coming back”; while Lebanon and Jordan reel under the burden of nearly 2 million Syrian refugees.
With no president elected since May 2014, a dormant parliament and almost paralysed cabinet, Leba­non became “dysfunctional” but strangely still holding.
“All the intelligence people around the world have predicted the collapse of Lebanon for years but it is still going. How much time would that be, I don’t know,” Belhaj noted.
He warned that Lebanon risks los­ing immediately $600 million out of $1.1 billion in loans by the World Bank to finance projects in educa­tion, health, water and telecommu­nications. The projects have been approved by Lebanon “but some still sitting somewhere” in the par­liament or Council of Ministers wait­ing to be ratified.
Belhaj said the World Bank moved quickly to help Lebanon and Jordan cope with the repercussions of the Syrian crisis, now in its fifth year, by financing emergency projects to “hopefully prevent unrest and ten­sions” between the local communi­ties and the Syrian refugees.
With 1.5 million Syrian refugees in Lebanon and more than 600,000 in Jordan, he said “the international community was not doing as much as it should to help” both countries deal with such a humanitarian trag­edy.
Belhaj, however, called for look­ing beyond the deadly violence and brutal conflicts sweeping the Arab world.
“We are today in a ‘Bretton Woods’ moment,” he said, referring to the UN Monetary and Financial Conference that gathered delegates from 44 nations in July 1944 in Bretton Woods, New Hampshire, to agree to a series of rules for the post- World War II international monetary system and the reconstruction of Europe.
“We believe we are in the 1943-44 moment. That’s why we are plan­ning and preparing for the next step because one day things will stabi­lise,” he said. “Today, what is inter­esting and quite encouraging is that not only we have countries thinking about the post-war but we have also people putting money on the table, investing in the future.”
Preparations for the reconstruc­tion of Syria are under way, with noticeable private sector invest­ment movement, he noted. Leba­nese businessmen are investing in cement factories while Lebanese banks are enlarging the scope of their business and expanding to Er­bil in Kurdistan. “Turkish banks are all over the place,” Belhaj said.
“When we see people investing their own money in places where most human beings don’t see the light at the end of the tunnel, I would think twice,” he concluded.