Wednesday, February 9, 2011

More Government Jobs On Their Way In Iraq

Iraq’s Planning Ministry said that its strategic anti-poverty campaign announced in January 2011 would include the creation of four million public sector jobs over the next four years. A spokesman for the ministry said that this would be achieved through service projects aimed at jobs for the young. This comes on top of other reports that parliament wants to offer 285,000 new positions in the security forces and ministries this year as well, to fight unemployment. Both point to the continued domination of the economy by the government.

Baghdad claims that unemployment is at 15% and poverty at 30%. The jobless rate comes from 2008. An economic adviser to the government said in September 2010 that it was around 25-27%, while the United Nations has said that poverty is at 22.9%. Underemployment is also estimated at 33%, while many of those involved in farming that are counted as working do not receive wages. No matter what the actual figures are, they all point to a country that has a lot of people struggling to make ends meet.

The Planning Ministry didn’t say where the money will come from for these four million projected jobs, but it is probably funds from oil, which accounts for nearly 90% of government revenue. The government already provides 60% of full time work, and salaries and pensions eat up over 70% of the budget. With oil production expected to increase with the help of international companies, Baghdad is expected to plow some of this money into development projects. It also needs to diversify the economy so that it is not so dependent upon the fluctuations of the petroleum market. Unfortunately, despite the talk of promoting free markets, and new industries, it appears that the authorities are still looking towards the public sector to solve many of the problems facing the country. Iraq may continue to be a neo-socialist economy that becomes even more reliant upon petroleum than ever before as a result.

SOURCES

Dazzayi, Saman, “Iraq’s Planning Ministry promises 4 million jobs in 4 years,” AK News, 2/1/11

Department of Defense, “Measuring Stability and Security in Iraq June 2010,” 9/7/10

The Iraqi Dinar, “The Iraqi government for the first time reveals: Unemployment in Iraq, 27 percent and foreign debt 126 billion dollars?” 9/13/10

Jawayi, Falih, "Iraq to recruit 285,000 people in 2011," AK News, 2/4/11

Special Inspector General for Iraq Reconstruction, “Quarterly Report and Semiannual Report to the United States Congress,” 1/30/11
- “Quarterly Report to the United States Congress,” 10/30/10

6 comments:

Maury said...

Iraq is a lot like Texas in size, geography, population, and resources. Wouldn't it be nice if Iraq tried to copy Texas's success in wind power? Over 9000 MW of electricity. 5000 MW installed in the last three years. That would pretty much solve Iraq's electricity woes. And it would create a lot of jobs.

Better yet, Iraq should invite a few hundred Texas oil workers to work in Iraq for a few years. Let Iraqi's work alongside them, and get some experience drilling wells. The system in place ain't working. And it provides few, if any, jobs for Iraqi's.

Maury said...

New drilling method opens vast oil fields in US

A new drilling technique is opening up vast fields of previously out-of-reach oil in the western United States, helping reverse a two-decade decline in domestic production of crude.

Companies are investing billions of dollars to get at oil deposits scattered across North Dakota, Colorado, Texas and California. By 2015, oil executives and analysts say, the new fields could yield as much as 2 million barrels of oil a day — more than the entire Gulf of Mexico produces now.

This new drilling is expected to raise U.S. production by at least 20 percent over the next five years. And within 10 years, it could help reduce oil imports by more than half, advancing a goal that has long eluded policymakers.

http://tinyurl.com/4aduzgd

Imagine that. Beating Hubbert's Peak, and with no help from the government. Iraq needs to get on the ball. While Iraq's politicians have been quibbling over how best to capture the 70% of natural gas being flared off, US producers have tapped into vast new supplies of the stuff. Companies are getting rich, while paying a 50% tax rate. Consumers win with cheap, abundant supplies. And nobody seems concerned that them thar foreignors will make a plugged nickle. Even China has gotten in on the action.

Maury said...

While 2M bpd from previously untappable reserves would be great, it's nothing compared to the bonanza we'll see if/when they find a way to unlock the kerogen trapped in oil shale. There's an estimated 2.5 trillion barrels of kerogen in the US. That's double conventional world oil reserves. Kerogen can be refined into crude. The problem has been getting it to the surface without doing a lot of environmental damage. I don't think it will be long. Two years ago, we didn't know how to get natural gas from the shale. A year ago, we didn't know how to get conventional oil out. Who knows where we'll be next year. When it happens, it means 400 years of energy independence for the US. Or, the US could supply the world for 100 years. Pretty cool if you ask me. No doubt Iraqi politicians will still be quibbling over Kurdish exports. LOL.

Joel Wing said...

Maury,

I think Iraq needs to rebuild and expand its oil infrastructure and make up that 20 year gap they've had since the Gulf War in basic techniques before they do anything else.

Maury said...

Joel, my fear is that in 20 years, Iraq will have a 40 year gap, instead of 20. How many years have they quibbled over how to capture the 70% of natural gas being flared? Had private industry been running Iraq's oil fields, the gas would have been captured all along. Same goes for the electricity sector. They're burning crude oil to make electricity, for crying out loud. That shortens the life of generators by 50% or more. It keeps them offline much of the time. They say they do it, because they can't get the natural gas supplies. They can't get the NG, because Baghdad can't decide who should get the job of capturing it. The whole sorry mess is pathetic.

Baghdad could at least take the route the Saudi's did. Give private companies a share in the National Oil Company. Sit back, and let those companies run operations. That way, the government still gets the lions share of revenues, but doesn't screw everything up at the same time.

Joel Wing said...

Maury,

Believe me I share your pessimism about Iraq's economy. Just read these two pieces:

http://www.theatlantic.com/magazine/archive/2011/03/when-freedom-is-bad-for-business/8373/

http://www.theatlantic.com/business/archive/2011/02/doing-business-in-iraq/71097/

It's the reason why I believe Iraq needs to take small steps, because that might be all that it's capable of at this time.