Monday, April 25, 2011

Iraq Revises Its Unemployment Figures

In April 2011 Iraq’s Planning Ministry released new numbers for the country’s unemployment rate. This was the first time the official figures had been revised since 2007. The Ministry puts the jobless rate at the same level today as before the war.

Iraq’s Planning Ministry said the unemployment rate was 23% in 2011. Underemployment was 43% in rural areas and 21% in urban ones. Together, roughly 55% of the workforce was either out of work or not working enough. The last time the government issued official figures on the matter was in 2007. Then it said the unemployment rate was 17.6% and underemployment was at 38.1%. Combined together, those figures equaled 55.7%, the same as 2011. That shows that the overall labor market in Iraq has not changed much in the last four years.

In fact, the jobless rate seems to have returned to the same level as before the 2003 invasion. The Iraq Survey Group, going through official Iraqi government papers found that there was an average of 23% unemployment from 1988-2003. In addition, the Special Inspector General for Iraq Reconstruction (SIGIR) estimated 50% unemployment and underemployment in the mid-1990s in the country. At the time, the Iraqi economy was suffering from international sanctions imposed for the 1990 invasion of Kuwait. The state was the major employer then, and many were working useless jobs. The same situation remains today. Instead of sanctions, the war set the economy back, and the government remains the largest employer.

The figures between 2003-2007 are disputed. In November 2003, the Deputy Labor Minister Noori Jafer told the press that he believed that up to 70% of workers were unemployed due to the disbanding of the Iraqi Army, deBaathificaiton, and the closing of state-run companies. The United Nations reported in January 2009 that the unemployment rate was roughly 18% from 2004-2008. In comparison, the government’s Central Organization for Statistics and Information Technology claimed that unemployment went from 28% in 2003, to 26% in 2004, to 18% in 2005, and then 15% by 2009. The jobless rate undoubtedly went up immediately after the invasion because of the massive disruption the fall of the regime and the subsequent looting caused. What happened in the pursuing years is far harder to determine since a large portion of the population fled the country or became internally displaced, not to mention the heavy fighting going on across the nation. Those are probably the causes of the discrepancies between the different numbers. Since the sectarian civil war ended in 2008, the government and other organizations should be able to get a much better grip on the issue.

What all the different reports agree upon is that the lack of jobs hits the young and rural areas the hardest. The U.N. found 28% unemployment amongst 15-29 year olds, which was 57% of all those lacking jobs in 2009. The Central Organization for Statistics and Information Technology said similar things. According to the Planning Ministry, the rural areas of the country have twice as many people looking for work as the cities. Those show two important trends occurring within the Iraqi economy. First, Iraq has one of the youngest populations in the region. According to the CIA World Factbook, the median age in the country is 21 years old, with 40% of the population 14 years or under. In comparison, the median age in Egypt is 24, and 30 in Tunisia. In Egypt and Libya 33% of the populace is 14 or under, and 23% in Tunisia. That means between 240,000-450,000 people enter the workforce each year with very little chance of making a steady living. The frustration that has caused is currently boiling over with the weekly demonstrations in Iraq. Second, since the fall of Saddam Hussein agriculture has declined due to a number of factors. This has led to a migration of farmers to the towns and cities, and a higher unemployment rate in the rural areas. Both are major problems for the future of the country unless new jobs are created to sustain the growing population of young people.

The latest government figures show that the unemployment and underemployment rate in the country are just about the same as they were pre-2003. After eight years of the invasion, looting, fighting, and displacement, things have finally begun to stabilize. The major problem is that the economy is dependent upon oil, which is not a labor-intensive industry. Farming, which could provide many jobs, is struggling. The government remains the largest source of income, but many of the positions offered are unproductive, and exist to provide patronage for the ruling parties. That’s not working out, and a few Iraqis have begun taking to the streets for the last few months to complain about it. Hopefully with Iraq becoming more stable, and foreign investment increasing there will be a better future. As for now, up to 50% of the workforce is struggling.

SOURCES

Arango, Tim, “Iraqi Youths’ Political Rise Is Stunted by Elites,” New York Times, 4/13/11

Aswat al-Iraq, “COSIT: Unemployment, poverty drop in Iraq,” 12/13/09
- “Iraqi Unemployment Rate Dropped by 15% in 2008,” 1/27/09

Beehner, Lionel, “Economic Doldrums in Iraq,” Council on Foreign Relations, 6/20/07

Cordesman, Anthony, “Transferring Provinces To Iraqi Control: The Reality And The Risks,” Center for Strategic and International Studies, 9/2/08

Currency Newshound, “Iraq Ministry of Planning confirms 23% poverty rate,” 4/18/11

Department of Defense, “Measuring Stability and Security in Iraq June 2010,” 9/7/10
- “Measuring Stability and Security in Iraq September 2007,”
    September 2007
- “Measuring Stability and Security in Iraq September 2008,” September 2008

Glanz, James, “In Report to Congress, Oversight Officials Say Iraqi Rebuilding Falls Short of Goals,” New York Times, 10/31/07

Inter-Agency Information and Analysis Unit, “Iraq Labour Force Analysis 2003-2008,” United Nations Office for the Coordination of Humanitarian Affairs, January 2009

Iraq Survey Group, “Comprehensive Report of the Special Advisor to the DCIA on Iraq’s WMD,” 9/30/04

Sanders, Edmond, “Lack of jobs pushes Iraqis toward critical mass,” San Francisco Chronicle, 11/2/03

Special Inspector General for Iraq Reconstruction, “Hard Lessons,” 1/22/09
- “Quarterly Report and Semiannual Report to the United States Government,” 7/30/07
- “Quarterly Report and Semiannual Report to the United States Congress,” 7/30/09

United Nations Country Team – Iraq, “The Millennium Development Goals In Iraq,” August 2010

Al-Wannan, Jaafar, “Iraq’s self-sufficiency of wheat reached 50%,” AK News, 4/17/11

White, Josh, “U.S. Falters In Bid to Boost Iraqi Business,” Washington Post, 8/24/07

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