More than a fourth of young men are out of work, a U.N. report says. Unemployment statistics illustrate the difficulty of attracting investment to a country still viewed as a risky environment.
February 16, 2009, Baghdad, Iraq – More than a fourth of Iraq’s young men are out of work, a situation that is likely to worsen and threatens the country’s long-term stability, according to a dismal economic forecast Sunday from U.N. and nongovernmental agencies.
Overall, the country’s unemployment rate is 18%, but an additional 10% of the labor force is employed part time and wanting to work more, said the first Iraq Labor Force Analysis, which cited falling oil prices and a weak public sector as major problems facing the nation.
Among its findings: 28% of males ages 15 to 29 are unemployed, 17% of women have jobs, and most of the 450,000 Iraqis entering the job market this year won’t find work “without a concerted effort to boost the private sector.”
The analysis was released by the United Nations’ Information Analysis Unit and is based on government, banking and other statistics from 11 U.N. agencies and four independent organizations.
The statistics highlight the difficulties of luring foreign investment to Iraq and encouraging business start-ups in a country safer than at any time in the last five years, but still viewed as risky by outsiders and by wealthy Iraqis who left during the war.
The findings also bode ill for government vows to find civilian employment for nearly 100,000 Sons of Iraq, the mainly Sunni Arab paramilitary force, many of whom once supported the insurgency but who have been paid about $300 a month to bolster security alongside U.S. and Iraqi forces.
Late last year, the United States began handing control of the program to Iraq’s government. Both sides have said the key to the transfer succeeding and to preventing Sons of Iraq from returning to violence is finding them work.
With private sector employment lagging, most Iraqis have turned to the government for employment. Public sector employment has doubled since 2005 and now accounts for 60% of full-time jobs. But falling oil prices “make this level of public employment unsustainable,” the report said
Oil provides 90% of Iraq’s revenue, and prices have dropped more than $100 a barrel since July to just below $40. When oil prices were at their peak, the government announced raises ranging from 50% to 100% to retain civil servants and lure back doctors, teachers and others who had fled during the war.
Raad Ommar, who heads the Iraqi American Chamber of Commerce and Industry in Baghdad, said the solution to unemployment was more private sector jobs. “But they have a lousy reputation,” he said of private companies, which pay less than the government.
“By and large they don’t really take care of their human resources,” Ommar said in a recent interview, citing lack of regular raises, evaluations and perks.
The chamber, on the other hand, has lost people to government jobs.
“Even though they’re stupid jobs and they want to do something creative, they feel it’s better pay, and they want a pension,” Ommar said. “The private sector really is not that attractive to many Iraqis.”
U.S. and Iraqi military and political officials have said that young men in particular need to find work, or they will become vulnerable to recruitment by insurgents willing to pay people to plant bombs and commit other acts of violence. Attacks have plummeted in recent months, but Iraqis and U.S. forces continue to be targeted. A roadside bomb south of Baghdad killed a U.S. soldier Sunday, the military said without giving further details. At least 4,245 American troops have died in the war since the U.S.-led invasion in March 2003, according to www.icasualties.org.
Also Sunday, election officials overseeing the counting of votes from the Jan. 31 provincial elections said there was minor fraud but not enough to change the results.
Preliminary results showed candidates loyal to Prime Minister Nouri Maliki’s bloc winning the most seats in nine of the 14 provinces that held elections.
Final results are expected this month.