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Handbook 09-27
April 2009

Chapter 15

Other People's Money

Other funding sources are available to support the U.S. and the coalition's efforts to secure its objectives in Operation Enduring Freedom and Operation Iraqi Freedom. For example, both the U.S. Department of State (DOS) and U.S. Agency for International Development (USAID) are funded to resource select requirements. USAID provides diverse assistance as a service provider versus a bill payer. USAID uses economic support funds for programs and support for key U.S. mission programs. These funds target security, economic, and political issues. Funding for the DOS and USAID is generally dependant on annual appropriated funds, and those amounts fluctuate from year to year.

Sources of Non-U.S. Military Funds

U.S. DOS:

  • Migration and refugee assistance funds provide support to refugees and internally displaced persons.
  • International narcotics customs and law enforcement funds support rule of law and prisons.
  • DOS rewards pay for information leading to the acquisition of man-portable air defense systems.

USAID:

  • The Community Stabilization Program focuses on short-term employment, job skills training, and business development.
  • Provincial economic growth funds provide business development services and expand commercial lending through microfinance institutions and banks.
  • The Iraq Rapid Assistance Program allows provincial reconstruction teams/embedded provincial reconstruction teams to provide grants to support economic, social development, and civil society efforts to mitigate conflict.
  • The Inma (Arabic for growth) Agribusiness Program is an initiative to improve farmer livelihood and to advance provincial economic growth through market-based development.
  • The National Capacity Development Program develops the capacity of  the key government of Iraq ministries to deliver core services to the Iraqi population.
  • The Elections Support Program provides technical and material support to the Independent Higher Electoral Commission as it prepares for Iraq's provincial elections.
  • The Community Action Program assists community action groups and local government counterparts to identify critical priorities and implement programs to address those needs.
  • The Local Governance Program promotes diverse and representative citizen participation in provincial, municipal, and local councils.
  • Economic governance funds assist in establishing and implementing a legal, regulatory, and institutional framework within which reform and policy can be formulated to foster a transparent, investment-friendly, and market-based economy.
  • The Marla Ruzicka Iraq War Victims Fund aids civilian victims of armed conflict. Assistance includes small loans, business training, medical care, children and orphan assistance, and the restoration of battle-damaged homes. Contracts provide funds to local vendors versus cash payments.

USAID manages a micro-loan program started in 2004 by the Office of Private Sector Development. This program has grown to expand access to capital for Iraqi businesses and entrepreneurs across all 18 of Iraq's governorates. Loans average $1,300 with interest rates between 12 and 18 percent. The governorates repay the loans at a rate of over 98 percent. There are presently three international microfinance institutions serving Iraqis: Al Thiqa (operated by Agricultural Cooperative Development International and Volunteers in Overseas Cooperative Assistance), Cooperative Housing Foundation International, and Relief International.

USAID currently supports six indigenous microfinance institutions: Al-Aman in Kirkuk; Al Bashair in Baghdad; Al Takadum with offices in Al Qa'im, Fallujah, and Ramadi; Al-Intilaq in Tikrit; Nenawah Economic Development Center in Mosul; and Tal'Afar Economic Development Center in Tal'Afar.

Government of Iraq (GOI) funding initiatives:

  • The employment stimulus program improves access to capital in order to encourage job creation.
  • Iraq 2020 is a large-scale, 12-year plan for funding infrastructure and employment.
  • The National Housing Compensation Fund pays families whose homes were damaged or destroyed because of war.
  • The Iraqi-Commander's Emergency Response Program (I-CERP) is similar to DOD CERP and is executed by Multi-National Corps-Iraq.
  • The Sons of Iraq (SOI) Security Contract is funding set aside to assume resourcing responsibility for SOI security contracts.
  • The Business Startup and Small Business Loans Program is an initiative based on successful Ministry of Labor and Social Affairs (MOLSA) and Ministry of Industry and Minerals (MOIM) business finance programs.
  • Business finance loans are currently available through two GOI programs (MOLSA and MOIM) and two U.S. government programs (USAID and Overseas Private Investment Corporation ([OPIC]): 
    • MOLSA Program: 
      • Average loan size: $2,100
      • Recipients: Mostly college or technical school graduates but also displaced families, the disabled, and businesses impacted by violence
    • MOIM Program: 
      • Average loan size: Approximately $17,244
      • Recipients: Small- to medium-size enterprises
  • The Iraq Mid-Market Development Loan Program, started by the Office of Private Sector Development and OPIC, provides credit to middle-market Iraqi companies and offers loans ranging from $500 thousand (K) to $5 million (M) for up to 5 years with an average interest rate of 12 percent. The program expanded to $10 M in 2007 to fund small credits in a variety of business sectors with an emphasis on agribusiness. The loans range between $250K and $500K.


 

 
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