What prevents Iraq from meeting the mounting youth employment challenge

Special Iraqis taking part in anti-government protests over corruption and unemployment. (AFP/File Photo)
Iraqis taking part in anti-government protests over corruption and unemployment. (AFP/File Photo)
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Updated 27 January 2022

What prevents Iraq from meeting the mounting youth employment challenge

Iraqis taking part in anti-government protests over corruption and unemployment. (AFP/File Photo)
  • Iraq’s economy shows few signs of breaking free of its longstanding dependence on oil production and export
  • Successive governments have failed to reduce the burden on state coffers by shrinking a bloated bureaucracy

DUBAI: When tens of thousands of young people took to the streets of Baghdad and towns and cities across southern and central Iraq in late 2019, one core demand resonated louder than any other — employment opportunities.

The country, which had only recently emerged from decades of tyranny, siege, war and insurgency, had delivered precious little for the generation of young Iraqis who came of age in the years after the fall of Saddam Hussein in 2003.

Two years on from those protests, which fizzled out with the onset of the COVID-19 pandemic in early 2020, and under the brutal heel of repression meted out by Iraq’s powerful militias, young Iraqis say nothing has changed.

“If anything we’re worse than when we started,” Rashid Mansour, a hairdresser from west Baghdad, told Arab News. “Neither me nor my cousins can afford to stay here. We all work part time. Just like the country, we’re all just getting by.”

With few performance indicators to suggest otherwise, Iraq’s sputtering economy shows little sign of breaking free of its long-standing dependence on the one thing that sustains it — oil.

Even though the country has opened up to the wider region and the world, having relaxed visa restrictions on visitors, there is not much sign of investment beyond the oil sector in the many other industries and enterprises long championed by its leaders.

Calls to diversify the nation’s economy have gone unanswered, while demands to streamline its bloated public sector continue to fall mostly on deaf ears. Efficiency drives are openly mocked by citizens, as are the hoops investors must jump through to establish private enterprises.

Almost two decades after the US-led invasion toppled the Baathist regime, Iraq continues to maintain one of the biggest per capita public-sector workforces in the world — which on paper employs about 7 million people among an estimated population of 39.3 million.

How this burden on state coffers might be reduced and workers moved into wealth-creating private ventures has stumped successive governments, and none have dared move against a constituency that could tip the result of any election, or against a system that has long been central to the way the country is run.




An Iraqi man smokes a waterpipe under a feminist mural painting with the Arabic slogan: “These are our women.” (AFP/File Photo)

“Iraq is up to its neck in this issue,” Ahmed Tabaqchali, chief strategist for the AFC Iraq Fund and a senior fellow at policy research institute IRIS Mideast, told Arab News.

“You see other countries, like Saudi Arabia with its Vision 2030 — it’s a good plan to stop oil dependency. But Iraq is different. You don’t have a strong central government there but rather multiple power sources.

“Oil revenues play a huge part. They pay public-sector pensions and salaries and offer social security. It’s a challenge to get off that. There is an unwritten social contract between the government and its people. People expect to be provided with services for their acceptance of the ruling government, and a public-sector job is one of those services.

“No party wants to embark on the reforms alone because that would weaken their power. Iraq needs a political class that is committed to long-term plans because that is the only way it would work. The private sector needs time to develop.”

INNUMBERS

* 39.3m Population of Iraq.

* 3.9% GDP growth rate (PPP).

* 12.8% Unemployment rate.

* $708.3bn GDP size (PPP).

Source: The Heritage Foundation (2021)

According to a recent World Bank country profile, oil revenues account for about 85 percent of the Iraqi government’s budget. A UN study in November 2021, entitled A Diagnostic of the Informal Economy in Iraq, found the country’s private sector is largely informal and accounts for 40-50 percent of employment.

Private-sector jobs pay lower average wages, offer fewer benefits and less job security than public-sector roles, which are seen as safer and more comfortable compared with the uncertainty of going it alone or trying to manage a start-up within a cumbersome regulatory environment.

“We have a big unemployment issue in the country,” Baghdad resident Tarek Abu Abdallah, 50, told Arab News.

“A large number of the youth are jobless and restless. Matters haven’t been improving with the dollar rising on the Iraqi dinar. Prices have doubled. It’s hard to afford a lot of things. The economic situation has everyone exhausted.”

The obstacles to building a functioning private sector are well understood by senior officials. In 2020 Ali Allawi, at the time the finance minister, introduced an economic reforms white paper that aimed to streamline the process of investing and setting up a business. A year later, he warned that oil revenues alone cannot support the salaries and perks enjoyed by state employees indefinitely.

Through the years, the tedious but necessary task of overhauling an ossified economy and a sclerotic bureaucracy has proved unappealing to Iraq’s ruling elite. The lumbering process of government formation after every general election demonstrates just how difficult it is to get the country’s many political factions on the same page on almost any issue.

“The Iraqi bureaucracy expanded because of the socialist system which had been established by Gen. Abd Al-Karim Qasim in 1958, and further in 1968 when the Baath party came,” Entifadh Qanbar, president of the Future Foundation in Washington and a former aide to Iraqi politician Ahmad Chalabi, told Arab News.

“The remnants of the socialist Iraqi state still control laws and regulations. I would call it ‘anti-business’ regulations. Bureaucracy was already massive but after 2003 bureaucracy exploded further. Iraqis developed a problematic perception of: ‘If you want to find a job, find a governmental one.’

“Every PM, when he comes to a new government, promises new government jobs — when the state is, in fact, incapable of paying more salaries.”




Iraq has one of the biggest per capita public-sector workforces in the world and a very weak private sector, and its leaders know that any attempt at reform will bring its own supporters out in protest. (AFP/File Photo)

In Iraq’s semi-autonomous Kurdish region, there are some signs of doing things differently, with Masrour Barzani, prime minister of the Kurdistan Regional Government, having embarked on a reform program that has shaken up the status quo, in whose preservation the governing factions had a vested interest.

“In the past two years, the KRG has embarked on the biggest initiative ever undertaken to reform our public finances and to empower private enterprise,” a senior Kurdish official close to the PM’s office, who asked to remain anonymous, told Arab News.

“The changes we have put in place are driving efficiencies and recouping large amounts that can be redirected to buy the goods and services that truly matter, such as electricity generation, medicine and frontline workers. We recognize that the old ways of poor public finances do not drive progress or better living standards.

“The digitization of our government expenditure has been central to these changes. This move alone has saved hundreds of millions of dollars a year from the cost of the government, eliminating waste. Better procurement exercises have introduced further savings.

“We are also making sure that small companies have a genuine shot at winning public money. We have streamlined the process of registering a business, which was previously so cumbersome it acted as a disincentive.”




The 2019 protests in Iraq showed that, having only recently emerged from decades of tyranny, siege, war and insurgency, the country’s leaders had delivered precious little for the generation of young Iraqis who came of age in the years after the fall of Saddam Hussein in 2003. (AFP/File Photo)

Looking to the future, Qanbar says the key to solving Iraq’s problems lies in radically improving the business environment and weaning the political economy off its dependence on oil.

“The addiction to the oil revenue has grown dangerous over the years,” he told Arab News.

“The Iraqi budget fluctuates depending on the prices of the oil market. The instability of the country isn’t attractive to foreign investment. There is a huge risk for foreign investors because they would require protection and security, services insurance companies cannot provide.”

The need to do things differently has long been touted by visiting officials and nongovernmental organizations in Iraq. The use of green energy is one such idea that has so far failed to gain traction.

“Given the lack of capability to invest and improve at the most basic levels, I think it’s out of the question that Iraq can invest in green energy at this point,” said Qanbar.

“It can’t provide basic services to its citizens, such as water, electricity, education and infrastructure.”


Lebanon expects US mediator offer for maritime border with Israel within days

Lebanon expects US mediator offer for maritime border with Israel within days
Updated 44 min 13 sec ago

Lebanon expects US mediator offer for maritime border with Israel within days

Lebanon expects US mediator offer for maritime border with Israel within days

DUBAI: Lebanon expects a written offer from US mediator Amos Hochstein concerning the demarcation of a maritime border with Israel by the end of the week, Lebanon’s presidency tweeted on Monday.
Lebanon’s deputy speaker of parliament Elias Bou Saab met with Hochstein last week during a visit to New York and briefed President Michel Aoun on the outcome, the presidency added.
Hochstein has been shuttling between Lebanon and Israel — enemy states with a history of conflict — in a bid to forge a compromise over the maritime boundary that would allow both to explore for offshore energy reserves.
A deal would defuse one potential source of conflict between Israel and the heavily armed, Iran-backed Lebanese group Hezbollah, which has warned against any Israeli exploration and extraction in the disputed waters.


Lebanese banks reopen partially after weeklong closure

Lebanese banks reopen partially after weeklong closure
Updated 42 min ago

Lebanese banks reopen partially after weeklong closure

Lebanese banks reopen partially after weeklong closure
  • Lebanon’s talks with the International Monetary Fund on a bailout have progressed sluggishly

BEIRUT: Banks in crisis-hit Lebanon partially reopened Monday following a weeklong closure amid a wave of heists in which assailants stormed at least seven bank branches earlier this month, demanding to withdraw their trapped savings.
The Association of Banks in Lebanon said last Monday it was going on strike amid bank holdups by depositors and activists — a sign of growing chaos in the tiny Mideast nation.
Lebanon’s cash-strapped banks had last closed for a prolonged period back in October 2019, for two weeks, during mass anti-government protests triggered by the crisis. That year, the banks imposed strict limits on cash withdrawals, tying up the savings of millions of people.
The country’s economy has since spiraled, with about three-quarters of the population plunged into poverty. The Lebanese pound has lost over 90 percent of its value against the dollar.
The frustrations boiled over this month, with angry and desperate depositors — including one armed with a hunting rifle — started holding up the banks. One of them, Sali Hafez, broke into a Beirut bank branch with a fake pistol and retrieved some $13,000 in her savings to cover her sister’s cancer treatment.
However, only a handful of bank branches opened Monday — accepting only customers with prior appointments for corporate transactions. The partial reopening was to continue indefinitely, until banks can secure the safety of their employees.
Crowds of anxious Lebanese gathered around ATM machines.
“I’ve been here for three hours, and they won’t let me in or schedule an appoint,” Fadi Al-Osta told The Associated Press outside a bank branch in Beirut. “The security guards can let us in one at a time and check for weapons. Isn’t that their job?”
George Al-Hajj, president of Lebanon’s Federation of Bank Employees Syndicates, said branches have downsized, to have a larger number of security guards per branch.
“Our goal isn’t to harm anyone, but we want to go to work feeling safe and secure,” Al-Hajj said. “We’re also human beings.”
Tensions were simmering in the southern city of Sidon, where State Security forces armed with assault rifles stood outside some bank branches. Some police officers and army soldiers, whose salaries have lost over 90 percent of their value, unsuccessfully tried to break into a bank branch to collect small cash bonus recently granted by the government.
Lebanon’s talks with the International Monetary Fund on a bailout have progressed sluggishly, with authorities failing to implement critical reforms, including restructuring the banking sector and lifting banking secrecy laws. Last week, a visiting IMF delegation criticized the government’s slowness to implement desperately-needed financial reforms.


Iran says US trying to violate sovereignty over unrest, warns of response

Iran says US trying to violate sovereignty over unrest, warns of response
Updated 57 min 29 sec ago

Iran says US trying to violate sovereignty over unrest, warns of response

Iran says US trying to violate sovereignty over unrest, warns of response
  • Iran has said the United States was supporting rioters and seeking to destablize the Islamic Republic

DUBAI: US attempts to violate Iran’s sovereignty over the issue of protests triggered by the death of a woman in police custody will not go unanswered, the foreign ministry said on Monday.
Iran has been rocked by nationwide demonstrations sparked by the death of 22-year-old Kurdish woman Mahsa Amini, after she was detained by morality police enforcing the Islamic Republic’s strict restrictions on women’s dress.
The case has drawn international condemnation. Iran has said the United States was supporting rioters and seeking to destablize the Islamic Republic.
“Washington is always trying to weaken Iran’s stability and security although it has been unsuccessful,” Iran’s Foreign Ministry spokesperson Nasser Kanaani told Nour news, which is affiliated with a top security body, in a statement.


Syria cholera death toll rises to 29 — health ministry

Syria cholera death toll rises to 29 — health ministry
Updated 26 September 2022

Syria cholera death toll rises to 29 — health ministry

Syria cholera death toll rises to 29 — health ministry
  • The highly contagious disease has also spread to the country’s Kurdish-held and opposition areas in north and northwestern Syria

AMMAN: A cholera outbreak in several regions of Syria has killed 29 people, the Syrian health ministry said on Monday in what the UN has called the worst outbreak in the war-torn country for years.
Rapid assessment testing confirmed 338 cases since the outbreak was first recorded last month, with the bulk of deaths and cases in the northern Aleppo province, the ministry said in a statement.
It said 230 cases were in Aleppo province where 25 people were confirmed dead. The rest were spread across the country.
The United Nations this month said the outbreak was believed be linked to irrigation of crops using contaminated water and people drinking unsafe water from the Euphrates river which bisects Syria from the north to the east.
The highly contagious disease has also spread to the country’s Kurdish-held and opposition areas in north and northwestern Syria where millions have been displaced by the decade-old conflict, medical officials said.
Suspected cholera cases have risen to 2,092 in the northeast of Syria since the outbreak was announced this month, said the US-based International Rescue Committee (IRC) which operates in the northern region.
It said there were fears about significant under-reporting of cases.
The widespread destruction of national water infrastructure after more than a decade of war means much of the Syrian population is reliant on unsafe water sources.
Prior to the recent cholera outbreak, the water crisis had caused an increase in diseases such as diarrhea, malnutrition and skin conditions in the region, according to the World Health Organization.


Egypt to release new batch of 39 pretrial detainees: Presidential Pardon Committee  

Egypt to release new batch of 39 pretrial detainees: Presidential Pardon Committee  
Updated 26 September 2022

Egypt to release new batch of 39 pretrial detainees: Presidential Pardon Committee  

Egypt to release new batch of 39 pretrial detainees: Presidential Pardon Committee  
  • MP Tarek El-Khouly said the move was in cooperation with state authorities and the country’s Public Prosecution

DUBAI: Egypt has ordered the release of 39 pretrial detainees on Monday. 
MP Tarek El-Khouly, a member of the Presidential Pardon Committee, said the move was in cooperation with state authorities and the country’s Public Prosecution. 
Egypt’s Public Prosecution has ordered the release of hundreds of pretrial detainees in groups since May. 
This comes as the government and various political forces prepare for extensive national political dialogue that will focus on political, economic, and social issues. 
Since its inception in 2016, the committee has received the names of prisoners eligible for presidential pardon consideration from different parties and political forces, including the National Council for Human Rights (NCHR), the parliament’s Human Rights Committee, as well as directly through its own official website.