At the conclusion of its visit to Iraq of September 18 to October 6 1989, the UNDP Management Development Program (MDP) Team submitted a Preliminary Report to the Resident Representative and discussed it with officials from the Ministry of Finance. That Report contained the team’s understanding of the country's management problems, the administrative reform process currently underway, and ways in which the UNDP could usefully contribute to the reform process.


Ziggurat (from Iraq's tourism website)

  The principal purpose of the Preliminary Report was to ensure that the Team did not leave Iraq with grossly inaccurate impressions concerning the current situation or the kinds of UNDP activities that could be considered in support of the administrative reform. The fact that we received no serious adverse response to our approach does not, of course, imply governmental agreement with any specific proposals we may suggest, but does indicate that our overall analytical framework is a reasonable one.     In this Final Report, our main task is not to further analyze and describe the current situation, because every Iraqi official must understand that in greater depth and detail than could possibly be grasped by short-term visitors. Instead, this report seeks to define as clearly as possible the type of management problem the UNDP MDP and the regular program of the UNDP can be most useful in dealing with, and to suggest specific courses of action for utilizing available resources.

      Consequently, this Report deals only briefly with the elements of the administrative reform already implemented and with the functions currently being performed by the National Center for Planning and Management Development (NCPMD), and concentrates primarily on defining program activities through which the UNDP could assist the NCPMD to contribute more effectively to the reform process. In taking this approach, we believe we are directly responsive to the directives of the Minister of Planning.  


      The Government and people of Iraq have been involved in all-out war for nearly a decade. Such a conflict by its nature demands the setting of priorities and the imposition of systems of management that are inappropriate to peacetime society.

      Even before the lasting cease-fire was agreed upon, the Government began a process of administrative reform for the purpose of greatly increasing the efficiency of the Government and the productivity of the economy as a whole. Among the elements of the reform process are a reduction in size of the public administration by nearly 20% in two years, the elimination of an entire layer of bureaucratic control in the industrial sector, the review and simplification of over 100 governmental procedures, the privatization of non-strategic industries and state farms, and greater use of market mechanisms in the agriculture sector.

      These actions constitute as difficult and drastic a reform process as any country has undertaken in recent years, yet the process is far from over. Additional elements of the process of which we are aware are the following:

·        The production and more widespread use of microcomputers in the Government and other sectors;

·        The broader use of market mechanisms in the agricultural sector and non-strategic industries; and

·        The development of unit assessment techniques to permit more accurate evaluation of the contributions made by different governmental units to national objectives.

      The first two of these elements, and the general direction of the administrative reform process, are strongly endorsed by the Team, and the specific suggestions for action contained in this Report are designed to strengthen their implementation. Microcomputers and market mechanisms can both be viewed as complex technologies with great potential value to Iraq. Their use in other countries needs study and adaptation to the conditions of Iraq.

      The development of unit assessment techniques is a measure of more doubtful utility. Although the objective of being able to measure the contribution of each organizational unit to national goals is commendable, the cost of developing and implementing reliable techniques for the purpose is probably too high. The effort that will be devoted to making plausible reports on units where outputs and inputs are not easily quantifiable could, in our opinion, be used more productively in other ways.     


      Having trimmed the size of the bureaucracy, simplified procedures, sold enterprises to the private sector, allowed farmers to decide what to produce, and decided to introduce microcomputer technology more broadly, is it fair to say that the administrative reform has already taken place?

      We think the answer to that question is, unfortunately, no. Certainly many of the preconditions of vastly increased efficiency in the allocation and use of resources have been met, but there remain several less tangible factors that need to be dealt with before the potential gains in efficiency are likely to be realized. We cited these factors in the Preliminary Report: manpower utilization, information flows, and achievement orientation. These factors involve attitudes, motivations, and the reward structures of the entire society. They represent even greater challenges to efficiency than the obstacles that have already been dealt with in the reform program.

A. Manpower Utilization

      Every society finds in one way or another that it does not have as many well-trained and highly motivated people as it could use. Training new people to high levels is a high priority for Iraq, as elsewhere. But training is costly and takes a great deal of time. Other measures may offer an earlier return to the nation, although they will not avoid the need to replenish the stock of high-level manpower through training.

      Efficient high-level manpower utilization is largely a question of providing qualified people with the incentives and the opportunities to make best use of their talents. This will frequently involve designing mechanisms and markets for the use of skills across institutional lines. Particularly as the private sector attracts more of Iraq’s educated elite, it will be important to find ways for Government to continue to tap critical skills as needed. Research competitions, consulting arrangements and teaching assignments are all methods of broadening the contribution of scarce talents to more than one organization.

      In this connection, we gained the impression that, despite the enormous reduction of staff in the public service that has taken place, permission is still required for highly trained people to leave the Government, and this permission is often refused. We believe this policy to be mistaken. Trained people should be permitted to leave Government employment, assuming they have satisfied length of service requirements related to overseas training paid for by Government, but links with them may be forged on a part-time basis after they have left. Their motivation and morale will be much higher if they are permitted to accept outside employment, and their overall contributions to society should consequently be greater than if they are forced to languish in positions not of their choosing.

      At the same time, conditions of Government service should be made more attractive, for example by making salary adjustments for superior qualifications and performance.

B. Information flows

      The Government apparently recognizes that more abundant flows of information are essential to efficient management. Its decision to greatly expand the use of microcomputers would be pointless if this were not the case.

      At the present time, however, the most ordinary statistics, such as the national budget, the national debt, and production figures for crops and industrial products, are either considered confidential or are of doubtful accuracy. It is very difficult to acquire a reliable understanding of the dimensions of critical issues because the data are unavailable or fuzzy. It has clearly become customary, not only acceptable but expected, for officials to speak in broad generalities without a ready command of the facts.

      Modern management is, of course, primarily an information revolution. Individuals at many levels of organizations need vast amounts of data to perform their tasks well. The ability to access and analyze data is essential to a good manager. In order to realize the benefits of more widespread use of microcomputers, new data banks will need to be compiled, information flows established, and analyses published, on a wide variety of subjects on which accurate information is not now available.

      This will be a tremendous challenge. The first part of the challenge, the mind-set of open information flows, may be the most difficult of accomplishment. Policy and attitude changes aren't enough, however, to make up for the current lack of solid data about all aspects of society. Iraq needs an intensive program of applied research to build up the stock of accurate knowledge necessary to sound decision-making in a wide variety of fields. The needed knowledge may be physical, concerning salinity problems in agriculture for example, or economic and social.

      It is our impression that many of the greatest gaps in knowledge are in the economic and social areas. The social sciences have been lumped with the humanities in the universities of the country, and seriously neglected relative to the physical sciences. This imbalance is clearly recognized by senior educators, but it will take time and effort to correct.

C. Achievement orientation

      Perhaps the greatest challenge of the administrative reform process is to find a way to instill achievement orientation into the Government in place of fear of making mistakes. Personal risks should be incurred through lack of action and initiative, not through saying or doing too much.

      On the other hand, initiative and good performance should be rewarded in both material and non-material ways. Promotions, bonuses, and official recognition should flow from hard work and effectiveness, not from symbolic displays of loyalty or avoidance of mistakes.

      In summary, these three intangible factors represent the shift in attitude and orientation appropriate to a country making the transition from a wartime to a peacetime situation. The military style of organization and command that is so important for effective performance in wartime is, as virtually every country has discovered, inappropriate and ineffective in peacetime, in terms of managerial efficiency. A flourishing peacetime economy requires people taking initiatives and risks at many levels of society, and an atmosphere of openness rather than secrecy.

      The transition from a military management system to one encouraging innovation and risk-taking, or from a command economy to a market-oriented economy, is very difficult, but it is not without precedent. In many parts of the world, socialist and non-socialist countries are experimenting with structural reforms in search of greater efficiency and effectiveness within the context of their national goals and values.

      No country can import and apply the experience of another without adaptation to local conditions, but this does not mean that foreign experience is irrelevant. A great deal has been learned in the last ten years, while Iraq was fully engaged in its historic struggle, which could be usefully studied and adapted by Iraqis to serve national goals.  


      The NCPMD is well suited to serve as the principal instrument for studying and adapting foreign experience concerning the introduction of market mechanisms and information technologies to the needs of Iraq. Its main assets for this role are the quality and level of training of its staff, its location in the Ministry of Planning, and its close relationship with the UNDP. The UNDP can be a partner in this process, supplying funding and access to foreign experience through its network of country representatives.

      It must be recognized that the NCPMD is not playing this role at the present time. Although the Center served as the secretariat for the administrative reform program that took place in the mid-1970s, it is not now central to the important process of reform currently underway. Its functions have become routinized, it no longer has direct access to those leaders who are designing and managing the reform process, and its staff members are not working up to their potential.

      The essential irrelevance of the NCPMD to the current administrative reform process is not of its own choosing. The staff of the Center are busily producing guidelines for the next five-year administrative plan based upon their understanding of the elements of the administrative reform emanating from the President’s Office. The Center is also increasing its course offerings in cost accounting in response to demand from other organizations, which are being urged to become more efficient and accountable. Staff from the Center are also engaged in helping ministries respond to the requirement for unit evaluations.

      These are reasonable responses to the signals they receive about the directions in which the Government seeks to move, but in reality these activities will make a very limited contribution to reform. The five-year administrative plans may once have served some purpose, but they are now divorced from the economic and social plans produced by the Ministry, and the result is largely a compilation of textbook exercises which other ministries may, or may not, use for guidance. Additional cost accounting and project evaluation courses are useful but, as now offered, the Center’s staff may be somewhat overqualified for the task of putting them on.

      Although the administrative revolution today originates at the highest levels of Government and the role of the Center cannot be determined by its own actions alone, we believe the NCPMD can position itself, with UNDP assistance, to play a more useful part in the process. Specifically, it can equip itself to be the mechanism for learning and adapting external experience to domestic conditions in support of policies determined from above.

      In the mid-1970s, when the National Center was more centrally involved in the administrative reform program of the day, it was not structurally part of the Ministry of Planning but instead reported directly to the National Planning Board in the President’s Office. The Team considered recommending that an organic link between the Center and the Presidency be re­established, but on balance decided that this could be a mistake.

      We do believe that the staff of the Center should be asked to study the likely impact of new administrative policies before they are promulgated, and that the Center should have responsibility for evaluating the impact of new policies, but its effectiveness will in the long run depend upon the Center’s achieving a service orientation rather than a control orientation. Attachment to the Presidency could make the Center appear to other ministries as a control mechanism rather than as a source of assistance in meeting their objectives. This would affect the client-provider relationship that we believe should be nurtured by the Center.

      The attachment of the Center to the Ministry of Planning is desirable for other reasons. Its research functions, in particular, need to be closely associated with the planning process. Policy-oriented economic research should take on much more importance in the future, as the country considers various means of stimulating the growth of the economy, than it has had in the past.

      The location of the Center in the Planning Ministry is also conducive to providing consultants to ministries having difficulty in implementing new policies. The advantages of the Center’s attachment to the Planning Ministry can be diminished, however, if its role is perceived, within the Ministry and outside it, as being merely supportive of the activities of that body. Its value to all ministries as an avenue to external experience bearing upon their missions should be made explicit.  


A. Training and Consultation

      In the Preliminary Report, we suggested that the NCPMD should become more problem, client, and quality oriented, and indicated an intention to use the introduction of microcomputers and the increasing reliance on market mechanisms in agriculture as illustrative of challenges to which the Center could appropriately respond. In responding to such challenges, the Center should undertake a four-step process as follows:

      1. Agree on the definition of the problem with the client agency. To take the specific case of using microcomputers in understanding agricultural pricing, which narrows and combines the examples chosen, the NCPMD would seek agreement of the Ministry of Agriculture, and the agricultural pricing section of the Ministry of Planning, as to the types of capacity in this area the Ministry needs to develop and the ways in which NCPMD can assist in the acquisition of that capacity.

      2. Identify the best external sources of expertise for acquiring experience and assistance in the problem area. The UNDP Office of the Resident Representative can be helpful in this regard, either from the personal experience of UN staff based in Baghdad, or through tapping external sources through UNDP in New York.

      In this case, high-quality external expertise on the applications of microcomputers to agricultural pricing policy is known to exist in at least three institutions: the Economic Development Institute of the World Bank (EDI), the Food Research Institute at Stanford University (FRI), and the Harvard Institute for International Development (HIID). Each of these organizations offers courses of four to six weeks that would be appropriate to the needs of Iraq at this point.

      3. Send out a team to examine external sources of expertise and explore potential relationships. At least two persons, one from NCPMD and one from a client organization, should reconnoiter the potential sources of external expertise in order to form opinions as to the quality of the courses offered, the basis of the organization’s experience and its relevance to Iraq, the interest of individuals in the institution in cooperating with Iraq in adapting courses and expertise to Iraq’s needs, and the potential for further institutional cooperation. The team would also be able to collect reading lists and course materials helpful for preparing future course participants.

      An alternative to a reconnaissance mission of this sort would be a visit to Baghdad by an expert supplied by UNDP. This would not normally be as useful, in our opinion, as a site visit abroad, because the Iraqi staff know their needs and possibilities better than a visitor, and they have the educational backgrounds and experience to be intelligent shoppers for services.

      4. Plan a course of action. Based on the problem definition arrived at locally, and the tour of external sources of expertise, the NCPMD would then be in a position to map out a detailed course of action, possibly extending over more than a year, for building local capacity to deal with the problem. In this case, it might be decided to send two or three staff from the Center and the Ministry of Agriculture and Irrigation to attend a summer course at one of the institutes in order to develop staff expertise. The course could be followed by consulting assistance from the source institute in order to mount a similar course, modified as appropriate to relate to local conditions, at the NCPMD.

      Other elements of the training and consultation program could include PhD training for staff of the NCPMD or the Ministry, joint consultations on particular problems, etc. The amount to be invested in dealing with each problem area should be determined taking into account the seriousness of the problem, the quality of assistance available, and the availability of funds.

      Other aspects of public management in which computer application courses and consultancies are readily available include the following:

·                     Public budgeting and financial management, including cost/benefit analysis, performance indicators, alternative approaches to budgeting, resource allocation, links between development and recurrent budgets, public enterprise budgeting, user charges, and multi—year budgets.

·                     Investment appraisal and management, including modern methods of conducting financial, economic and social evaluations of projects, techniques for project planning and implementation, and using microcomputers to make financial and management decisions.

·                     Banking and monetary policy, including patterns of regulation of financial institutions, alternative instruments of monetary policy in a de-controlled monetary system, implications of deregulation for bank policies, incentives for state-owned or mixed banking systems, innovations in financial instruments, customer services, and information systems; and techniques for managing risk and maintaining solvency in unstable financial environments.

·                     Public enterprise management, including their use as an instrument of national development policy, organizational development and conflict management, marketing and communications strategies, strategic planning, pricing and financing policies, project appraisal, performance evaluation, and privatization.

      Programs like these are available in summer workshops at HIID, EDI, the Asian Institute of Management, and other places.

B. Research

      Of the three functions of the NCPMD, research currently makes the least contribution to national goals. This may reflect wartime attitudes towards information and openness, rather than the priorities or capacities of the Center. Indeed, many of the staff of the Center have earned strong research degrees.

      If the analysis put forward in this Report is accepted by the Government, particularly the finding that solid data on many vital aspect of the society do not exist, then the Government will need to be prepared to invest resources in building research capacity in a variety of fields. UNDP funds should be used only for external requirements: the identification of organizational models, training, publications, and consultation.

      The importance of research capacity building is now so widely recognized that there are a number of excellent models to consider in developing countries, and a number of international research facilities capable of providing assistance. Building research capacity is, however, a long-term and costly endeavor.

      To return to the example of agricultural market mechanisms, the need for research is obvious. Iraq no longer has an extension corps in direct contact with its farmers. At a time when the farmers are expected to make their own decisions on what crops to plant, there is no direct link with them to either guide their decisions or understand the basis for the decisions they make. Field research is needed to understand the factors that affect the choices farmers make and the outcomes they achieve, the absorption of labor by agriculture and off-farm employment opportunities, agricultural credit and marketing problems, the availability of inputs, and land management and conservation practices.

      Field research could be conducted by the Ministry of Agriculture and Irrigation, or by the university faculties of agriculture or economics, or by all of them. The organization of research programs that would engage the qualified people in the universities and other institutions in useful applied research is probably beyond the capacity of the Ministry of Agriculture and Irrigation at this time. The NCPMD could equip itself to be able to assist the Ministry to mount a research competition that would produce the desired results. This is a management function that does not fit well with the current talents of the Center’s staff, but arises from the importance of the problems of generating reliable information.

      Other research relating to market mechanisms in the agricultural field should be conducted within the NCPMD as part of its planning research program. The interaction of agricultural policies with macro-economic adjustment measures, domestic and international markets for Iraqi agricultural products, food processing and export possibilities, and rural-urban migration patterns all require careful study by qualified economists in a research institute setting.

      The NCPMD could also contribute to a third type of agricultural research capacity building, the strengthening of the national agricultural research system. In this case, access to the international research community through the UNDP would enable the Center to help its client, the Ministry of Agriculture and Irrigation, to meet its needs. The International Service for National Agricultural Research (ISNAR), based in The Hague, Netherlands, is one of 13 Centers supported by the Consultative Group on International Agricultural Research (CGIAR), dedicated to assisting developing countries. ISNAR specializes in helping to strengthen the institutional basis for national agricultural systems, recognizing that strong and productive systems require:

·        a coherent research policy designed to meet national development goals;

·        an organization compatible with the objectives and functions the government assigns to research;

·        an integrated set of management processes allowing the system to effectively mobilize and use the required resources; and

·        the ability to communicate effectively with its clientele, its partners in the scientific community, and the country’s policy makers.

      The NCPMD, through UNDP, could request a visit by ISNAR staff to determine the conditions and prospects for collaboration, diagnose constraints and possible solutions, and plan a system-building strategy. In addition, ISNAR could be an avenue to other international agricultural research centers, such as the International Irrigation Research Center, for assistance on problems such as salinity.

      To perform these three roles well in support of what might be called an information revolution, helping clients organize research programs, conducting policy—oriented research, and mobilizing external expertise in research management, the NCPMD will need to actively strengthen its own abilities in this area. For example, the Center will need to become acquainted with various methods of organizing research programs, develop skills in research proposal development, acquire familiarity with a wide range of research methodologies, and establish links with sources of research expertise abroad.

      The UNDP program can assist the Center in all of these activities. The CGIAR network is readily accessed because it was set up specifically for the purpose of assisting developing countries. Other external sources of experience include the following:

1. For-research management techniques:

      a.      The National Science Foundation, Washington, DC. NSF manages a wide range of research programs, domestically and internationally. Research topics are defined by NSF and researchers from other institutions apply for funding. Peer review procedures, funding mechanisms, and monitoring techniques could be reviewed there.

      b.      National Institutes of Health, Bethesda, Maryland. NIH conducts research in its own laboratories, and also manages research competitions for researchers in other institutions.

      c.      HIID conducts research on development issues, collaborates with researchers in developing countries, and manages research capacity building projects in developing countries.

2. For conducting policy-oriented research programs:

      a.       The Korean Development Institute, Seoul. KDI is an autonomous policy-oriented research organization founded in 1971 by the Korean Government to meet the need for a rigorous academic perspective on various economic policy issues that arose during the country’s rapid period of growth in the 1960s. KDI is now called upon to provide expert analysis and advice on aspects of government policies in areas of domestic economic policy and international economic cooperation. Currently, research is conducted in five major fields:

·                     macroeconomic management;

·                     financial markets and public finance;

·                     industrial policy;

·                     international trade and cooperation; and

·                     social development.

      b.       The Thailand Development Research Institute, Bangkok. TDRI was established in 1984 to conduct policy-related research on long—term development problems, to assess constraints and opportunities facing Thailand, and to assess alternative development strategies. It was set up by the Government as an independent foundation and it has enjoyed financial support from the Canadian International Development Research Center in Ottawa. It conducts research on the following broad topics:

·                     agriculture and rural development;

·                     industry, trade and international economic relations;

·                     macroeconomic policy;

·                     natural resources and the environment;

·                     human resources and social development;

·                     science and technology development;

·                     and energy, infrastructure and urban development.

      c.       Malaysian Institute of Economic Research, Kuala Lumpur. MIER is an independent, non-profit research center founded in 1985 to undertake high-quality problem-oriented research on economic and financial issues facing the country, and to provide advice on macro-economic management, development and future economic perspectives. It serves as a bridge between the private and public sectors, undertakes research projects commissioned by public and private sector clients, collaborates with other domestic and foreign research institutes, publishes and disseminates the results of its research, and occasionally provides training for public and private sector participants. It is currently planning or undertaking research in the following areas:

·                     poverty, inequality, restructuring and development;

·                     standard of living and the quality of life;

·                     agriculture and rural development;

·                     industrial development;

·                     the State and development;

·                     urbanization, regional imbalances and regional development;

·                     management of the economy development planning, implementation, and policy-making;

·                     human resources development, labor markets and education;

·                     politics, government and nation-building.

      As in the case of training and consultation, the NCPMD should first clearly define its objectives, identify possible external sources of experience and support, visit the most promising locations, and construct a plan of action.


      For the first example, the reconnaissance trip would cost approximately $8,000 for two persons for two weeks, and participation in a four- to six-week course would cost around $10,000 or $12,000 each. A two-week consultancy from one of the source institutes would cost approximately $10,000. The total foreign exchange cost of the activity would therefore be in the $40,000 to $50,000 range.

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