33590
                                     REPUBLICOF IRAQ

                           SECONDINTERIMSTRATEGYNOTE

                        CHAIRMAN'SCONCLUDINGREMARKS

                              Meeting of the Executive Directors
                                       September 15,2005

        ExecutiveDirectorswelcomedtheSecondInterimStrategy                  Note (ISN)forthe
Republic of Iraq and commended staff for their work under very difficult circumstances
in the country. They also acknowledged the        ISN's candid discussionof the risks involved
and existing.

        Directors
                welcomedISN's
                           the consistency the
                                            withcountry's National
Development Strategyand concurred with the proposed four pillarsof the strategy andits
statedfocus on countryownership. In particular,theyappreciatedtheemphasison
institution buildingandpublicsectormanagementissues.SeveralDirectorsraised
concerns about the results of the audits of the Development Fund for Iraq conducted on
behalf of the Internal Advisory and Monitoring Board for Iraq. Directors encouraged the
Bank to continue playing a strategicrole in coordinating other donors' effortsin helping
Iraq address thesekey issues.

        Directors broadly supportedtheISN'semphasis                  on analyticalandadvisory
activitiesandaskedstafftoacceleratecapacitybuilding,particularlyforproject
implementation. In this context, they alsohighlightedtheneedforreliabledataand
economic informationin order to formulate and implement appropriate policies.

        Directors concurred with the general thrust of the proposed lending program and
the balance between flexibility and focus. Directors emphasized the immediate need to
help restore basic services, provide support for agriculture, and diversify the economy.
SomeDirectorsurgedintegration             of region-specific,aswellasgenderandyouth
employment issues into thestrategy.Theyacknowledgedthecountry'shighrisk
environment and stressed the importanceof implementation of the proposed program, as
a prerequisite for increasing lending volumes, along with the need for compliance with
the Bank's fiduciary and safeguard requirements.

        Directors welcomed the efforts to improve aid coordination and partnership with
otherdonors, particularly the UN, aswell as bilateralpartners.Directorsnotedthe
important role played by the International Reconstruction Fund Facility for Iraq. They
encouraged continued steps to integrate donor assistance in the budgetary process based
on a comprehensive financial analysis.

        ManagementwillkeeptheBoardregularlyupdated                      on developmentsinthe
country and implementation of the ISN