September 29, 2004: Iraq Reaches Agreement with IMF on Economic Reforms

The Iraqi government agrees to meet conditions set by the IMF for an “enhanced post-conflict facility” program. The IMF program will include $436.3 million in Emergency Post-Conflict Assistance loans to the Iraqi government. The amount will be upped if Iraq meets more demanding conditions. A press release issued by the organization states that it intends to develop “a reform program in areas in which progress must be made in 2005 to set the economy on a sustainable path, including tax reform, financial sector reform, restructuring of state-owned enterprises, and enhancing the governance and transparency of the oil sector, all of which will be key in promoting the recovery and growth of the private sector.” [International Monetary Fund, 9/29/2004; Inter Press Service, 10/1/2004] One of the reforms the new Iraqi government agrees to implement is the rolling back of Iraq’s huge subsidies system. But as Inter Press Service notes, Iraq’s food subsidies system “kept millions of Iraqis from starvation under US and UK-pressed sanctions imposed by the United Nations after the 1991 Gulf War.… It is believed that many more Iraqis would have died if not for Hussein’s strong subsidies system that gave food to Iraqi families.” [US Department of State, 12/21/2004; Inter Press Service, 12/24/2004]