By Saif Hameed
BAGHDAD (Reuters) - U.N. Secretary General Ban Ki-Moon called on the Iraqi government on Saturday to step up efforts to foster reconciliation between the nation's Shi'ite and Sunni Muslim communities in order to combat Islamic State.
"National reconciliation is an important part of the strategy to defeat Daesh (Islamic State), who have ruthlessly exploited divisions and targeted the marginalized and disenfranchised," he told a joint news conference in Baghdad with Iraqi Prime Minister Haider al-Abadi.
The U.N. chief was referring to the country's minority Sunnis who say they were marginalized under the Shi'ite-led government installed after the U.S.-led invasion in 2003 and some of whom have joined the militant group which seized swathes of Iraq nearly two years ago.
World Bank President Jim Young Kim and president of the Islamic Development Bank (IDB) Ahmad Mohamed Ali joined Ban in the rare visit to Iraq's capital and were expected to accompany him to the northern Kurdish city of Erbil later in the day.
The officials also met with Foreign Minister Ibrahim al-Jaafari and later addressed a closed session of Iraq's parliament.
Kim told lawmakers that Iraq needed to do more to empower local governments, encourage the private sector and reform the state's economic policies which are hamstrung by waste and corruption.
"Inefficient state owned enterprises that stifle private sector development need to be reformed, so a more vibrant entrepreneurial sector can emerge," he said, according to a copy of the speech posted on parliament's website.
Kim added that Iraq would "feature prominently" in the bank's plans to invest $20 billion in the region by 2021, without providing details.
The World Bank lent Iraq around $2 billion last year for reconstruction, infrastructure, and emergency budget support to help it deal with the economic effects of the fight against Islamic State and the low price of oil, which accounts for around 90 percent of government revenues.
IDB's Ali said the bank would contribute to the reconstruction of areas destroyed in fighting between Islamic State and U.S.-backed Iraqi forces seeking to recapture them.
(Additional reporting by Maher Chmaytelli; Writing by Stephen Kalin; Editing by Mark Potter)