On June 20, 2023, the Ministry of Planning launched a roadmap to better support Iraqi Micro, Small, and Medium Enterprises (MSMEs) and promote private sector growth. This roadmap was developed with funding from the United States Agency for International Development (USAID) and in partnership with the United Nations Development Programme (UNDP).
The MSME roadmap is a guide for all stakeholders - from private sector and financing institutions, to government authorities - to facilitate MSME development, thereby strengthening the Iraqi private sector. The roadmap indicates four primary paths for supporting MSME development in Iraq: first, develop the capabilities of MSMEs and promote emerging business leaders; second, increase access to growth opportunities through financing, e-commerce, and electronic payment options; third, improve the regulatory environment to enable private sector growth; and fourth, strengthen the ability of public sector entities to better support MSMEs, including by bolstering communication channels between the government and private sector.
The guidance outlined in the roadmap is drawn from the findings of recent USAID-funded studies, which analyzed Iraqi MSME structures, trends, business dynamics, challenges, and opportunities, and covered six governorates: Babil, Baghdad, Basrah, Kirkuk, Ninewa, and Dhi Qar. The studies highlighted that 80% of the Iraqi private sector is informal, which is a major barrier to sustainable economic growth.
"This roadmap, and the results of the comprehensive studies conducted, will enable the Government of Iraq to start reforms to help resolve challenges faced with regards to financing, use of modern technology, and empowering women entrepreneurs within Iraqi enterprises," says Deputy Prime Minister and Minister of Planning, Dr. Mohammed Ali Tameem.
The United Nations Assistant Secretary-General and United Nations Development Programme Assistant Administrator and Regional Director for Arab States, Mr. Abdallah Al Dardari, states, “Small and medium enterprises play a large role in driving innovation and supporting the economy. The roadmap we launch today will act as a blueprint to diversify the local marketplace and stimulate economic development in communities across Iraq.”
“We are grateful to USAID and the Ministry of Planning for their partnership in supporting the private sector and economic diversification in Iraq. Through development of MSMEs, we are encouraging sustainable and inclusive economic growth that positively affects youth employment,” adds Auke Lootsma, UNDP Iraq Resident Representative.
"Small businesses are the backbone of an inclusive, robust economy," said Elise Jensen, Mission Director of USAID in Iraq. "Being an entrepreneur or able to form a small and medium enterprise opens opportunities for youth, women, and vulnerable populations to play a critical role in growing the country’s economy and helping to innovate products and services important to the communities where they live. USAID is proud to partner with the Ministry of Planning and UNDP to help these businesses play a bigger role in diversifying and strengthening the Iraqi private sector."
The MSME studies, including the MSME development roadmap, are part of UNDP Iraq’s Funding Facility for Economic Reform Programme to promote sustainable poverty-centered economic reform and develop the private sector, with the generous support of the American people through USAID.