Baghdad — Small and medium enterprises (SMEs), which employ a majority of Iraq’s workers, were severely impacted by the conflict against ISIL. They were gradually recovering when the COVID-19 pandemic struck, further exacerbating vulnerabilities and increasing economic challenges for Iraqi businesses and their workers.

A recent joint study by the International Organization for Migration (IOM), the International Trade Centre (ITC) and the Food and Agriculture Organization (FAO) showed the scope of the problem — as of September 2020, Iraqi SMEs had suffered a nearly 53 per cent decline in production. These economic difficulties, combined with the global public health crisis, have dramatically increased the need for support to Iraqi workers and small businesses. They underscore the need to support domestic industry and increase the competitiveness of local products, on the path towards socioeconomic recovery.

The German Government, via KfW Development Bank, is supporting IOM Iraq’s continued efforts to boost economic recovery and sustainable job creation, by providing a further EUR 20 million in funding for 2020-2024. The contribution was made by the German Federal Ministry for Economic Cooperation and Development (BMZ) with financing provided through KfW; from the first grant in 2018, BMZ has now committed a total of EUR 56 million to IOM Iraq through KfW.

“IOM is extremely grateful for the German Government and KfW’s continued generous support, and for their partnership in supporting livelihoods and job creation in Iraq,” said IOM Iraq Chief of Mission Gerard Waite. “This additional funding will allow IOM to expand its collaboration with the Iraq Government and local communities, to address socioeconomic challenges and advance development objectives.”

The project, “Contribute to the economic recovery of Iraq through employment creation and revitalization of local economies – Phase III”, will build upon the experience of previous phases, and it will particularly target vulnerable groups including Internally Displaced Persons (IDPs), returnees and other conflict-affected populations. Phase III will also have broader geographical reading — extending to nine governorates from seven reached in Phase II — to ensure inclusion of more diverse Iraqi populations, including increased activity in the Kurdistan Region of Iraq.

“The continuation of this program is vital to ensure that those most vulnerable receive assistance in accessing short, medium and long-term employment," said Marc-André Hensel, KfW's Portfolio Manager. "Looking at the magnitude of displacements and returns across Iraq, providing affected Iraqi citizens with sustainable livelihood opportunities is one of the key cornerstones in rebuilding this proud country.”

With this funding from the German Government, IOM Iraq will increase support to the SME sector through the Enterprise Development Fund (EDF) mechanism, which contributes to sustainable job creation and private sector revitalization. IOM will also support efforts to increase women’s economic opportunity and participation, and assist individuals with improved employability skills through the provision of business support packages and vocational training. Additionally, the funding will allow for continued rapid cash injections into communities in need, via Cash-for-Work (CfW) programmes which also support reconstruction in affected communities. Finally, IOM will rehabilitate key community infrastructure to enhance businesses consolidation and growth.

Since December 2018, Germany and IOM Iraq have supported a total of 199 SMEs through EDF grants, leading to the creation of 1,037 jobs. A further 886 individuals received microenterprise support packages or vocational training, and 665 individuals have taken part in CfW activities aimed at improving their financial security.

For more information please contact IOM Iraq’s Public Information Unit, Tel: +964 751 402 2811, Email: iraqpublicinfo@iom.int