Workers at the construction site of Azadi Hospital in Dohuk, April 2018

Iraq Germany supports reforms and reconstruction

After years of crisis, Iraq is making significant progress in stabilising the country and driving reconstruction. The Federal Ministry for Economic Cooperation and Development (BMZ) is cooperating with Iraq to support this development. The aim of Germany’s involvement is to support Iraq in its efforts to achieve lasting stability in political, social and economic terms, implement necessary reforms and broaden the basis for people to live together peacefully.

Rebuilding the destroyed Al Shifaa Hospital in Mosul — Straight to

Following a time marked by violence, Iraq now has a comparatively stable security situation. The main challenges to be dealt with include the country’s heavy economic dependence on oil exports, a huge public sector and weak private sector, high population growth and the tangible effects of climate change.

The situation continues to be marked by social tensions and ethno-religious conflicts, corruption, significant deficits in meeting the basic needs of the population and the unresolved conflicts over resources and territorial disputes between the central government and the Kurdistan Region of Iraq.

Even if the group calling itself “Islamic State” (IS) is regarded as having been defeated territorially since it has not had any parts of the country under control since 2017, active cells still exist.

More than six million people were displaced by the advances of the IS that started in 2014. Most have returned to their home towns, not least thanks to extensive international support. Yet, there are still more than one million internally displaced persons and more than 260,000 refugees from Syria in the country (as at September 2024).

German development cooperation with Iraq

cover strukturbildende übergangshilfe irak_en

The BMZ has been cooperating with Iraq since 2014. The country is one of the so-called nexus and peace partners of German development cooperation.

Initially, Germany’s engagement was aimed at supporting Syrian refugees, internally displaced Iraqis and host communities in northern and central Iraq. Development cooperation has made a significant contribution to the reconstruction efforts, enabling millions of displaced persons to return home and advancing stability in the country.

Against this backdrop the crisis response measures will now be phased out gradually while increased support is being given to longer-term reform processes, especially in the area of economic development and climate action.

Currently, cooperation with Iraq is focused on the following core areas:

Peaceful and inclusive societies
Sustainable economic development, training and employment
Climate and energy, just transition

Germany is one of Iraq’s biggest bilateral donors, the others being the USA and Japan. The German government has provided over 3 billion euros to the partner country since 2014. Of this sum, roughly two billion euros has come from the BMZ’s budget.

At the government negotiations in July 2024, the BMZ made a new commitment to Iraq of around 117.7 million euros, of which just under 73.3 million euros was for transitional development assistance (External link) and for projects under the Special Initiative “Displaced Persons and Host Countries” (External link).

Deficits in meeting the basic needs of the people, a weak administration, economic mismanagement and corruption are among the challenges the Iraqi government is facing. In order to strengthen social cohesion Germany is supporting dialogue processes that bring together the government, civil society and academia.

An employee of the Al-Saheroon sewage treatment plant near Mosul checks lines.

Iraq’s economy is currently almost entirely dependent on the oil business. The development of the private sector is being hampered by unfavourable framework conditions such as outdated legal regulations, poor infrastructure and inadequate access to loans. As a consequence, there are not enough jobs for the country’s growing young population. Germany is supporting Iraq in its efforts to undertake the necessary structural reforms.

A farmer carries irrigation pipes to a field near Zakho, Iraq.

Iraq is one of the countries most strongly affected by climate change, according to estimates by the United Nations. At the same time the country is one of the largest oil producers worldwide and contributes to the causes of global warming. Rising temperatures, increasing aridity, sand storms and increased soil salinity are already jeopardising the country’s biodiversity – and hence food and water security and the livelihoods of the people. Climate-related migration movements are starting to emerge.