Experts question if Iraq's ambitious employment plan is possible

Published September 23rd, 2012 - 09:41 GMT
Iraq's unemployment is some of the highest in the Middle East, but experts question if this plan is workable
Iraq's unemployment is some of the highest in the Middle East, but experts question if this plan is workable

Iraq is set to embark on an ambitious job creation plan it hopes will result in work for as many as five million Iraqis in the next five years as it spends US$275 billion (Dh1.01 trillion) of cash earmarked for development.

"Between 2013 and 2017, these investment projects will bring four to five million job opportunities, some of which will be public sector positions and others will open up at private and foreign companies operating in Iraq," said Abdel Zahra Al Hindawi, the official spokesperson at Iraq's ministry of planning.

Iraq's unemployment rate is among the highest in the Middle East at 16 per cent. That compares with 18.1 for Tunisia and is above Egypt at 12.6 per cent.

"Iraq's high unemployment rate is one of the main reasons why we see breaches of security, terrorism, as people on the edge feel more and more marginalised," Mr Al Hindawi said.

"We plan to tackle this problem with a three-pronged approach, through investment by government, private sector and foreign investors to kick-start these projects," he said.

"The more jobs open up as these developments come online, the more we will see a more stable Iraq."

The development projects will focus on housing, tourism, higher education, industries and agriculture, he said.

Ahmed Shakir, a recent graduate with a bachelor of science from the University of Baghdad said he had spent almost a year looking for a job with no avail.

"I have applied everywhere," he said. "For two years I have been working at one ministry, from 7am to 3am, with no pay in the hope that one day they will consider hiring me."

The United Nations International Labour Organisation this month warned thta jobless rates among young people were expected to rise in North Africa and the Middle East, to above 25 per cent and possibly more.

The high rate of unemployment means "even a quick acceleration in growth may not provide sufficient job opportunities in a short period of time", the ILO report said.

Iraq's record budget of $100.5bn for this year, based on an estimated oil price of $85 per barrel, accounted for the addition of only 100,000 new jobs this year, indicating it has a long way to go to reach the planned five million in such a short time.

In a country with a population of 32 million, more than 80 per cent of Iraqis work for the government or state-related entities, while the private sector is considered very small and weak.

In this year's public budget only $30bn went into investment projects.

That would mean either Iraq would have to depend on growing oil revenues, or on further foreign investment.

High levels of corruption and inefficiency, particularly in government departments, also led experts to question whether Iraq would be able to deliver on its ambitious job-creation plan.

"Iraq's government targets are ludicrously optimistic, especially when it comes to their potential to deliver infrastructure projects," said Toby Dodge, an Iraq expert at the London School of Economics, who has advised oil companies in Iraq.

"That is part of the propaganda of state for population, 'Hurrah! good times are around the corner, you are going to see the final seed of crazy bonanza.' The great danger is that won't happen, institutions are too weak and do not have the capacity to oversee the spending, to direct where it should go, or oversee that it is being spent in the right way."

The anti-corruption watchdog Transparency International ranked Iraq 175th out of 182 countries in its Corruption Perception Index last year.

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