Iraq’s Public Employment Policies Unsustainable

The International Monetary Fund (IMF) recently said that the Iraqi government’s public employment policies are unsustainable. It is a drain upon the economy which is dependent upon fluctuating oil prices.

 

Baghdad relies upon the civil service to fight unemployment. As a result every government offers thousands of positions.

 

The Sudani administration is an example. Al Mada reported that in April the Federal Public Service Council said it was going to issue 8000 new jobs, the Health Ministry hired more than 28,000, over 1400 college graduates had been hired along with 63,000 others.

 

Most government workers are employed with the Defense and Interior Ministries which are overstaffed. Many civil servants lack qualifications for their jobs, are not needed and do nothing. At the same time other ministries such as Agriculture and Industrial are understaffed.

 

Iraq has a young and growing population who find it difficult to find work because the country is the most oil dependent in the world. Petroleum provides lots of money but very few opportunities for Iraqis. Each year around one million people join the workforce and 250,000 graduate from universities. Youth have the highest unemployment rate in the country at 35%. With a small private sector and a low wage informal sector that provides no benefits most people look towards the government. It in turn employs 40% of workers.

 

The ruling parties also use the government in their patronage networks to stay in power. They have failed at improving services over the years and therefore can only offer people public employment as a reward. This adds to the unqualified civil servants as people are hired for their party affiliations rather than competency.

 

All together this has led to an explosion of government workers. There were around 1 million in 2004 which rose to more than 4 million in 2024. Their salaries and pensions are one of the largest expenditures each year in the budget. When oil prices drop which they always do Baghdad finds itself in huge deficits and has to carry out large borrowing to maintain its civil servants. This is the reason why the IMF says this practice can’t continue. The problem is without hiring more into the public workforce unemployment would explode and the ruling elite would have no means to maintain their followers. Talk of promoting the private sector have also failed because the political parties want control over the economy so push state programs instead. That means the government will only hire more people into the future wrecking the country’s finances.

 

SOURCES

 

Gunter, Frank, “How can Iraq boost job growth?” The National, 12/9/24

 

Al Mada, “The public sector is expanding and production is declining! … an inverted equation in the Iraqi economy,” 5/12/25

- “A quarter of a million graduates annually in Iraq: between the dream of graduation and the nightmare of unemployment,” 12/3/24

- “Recording a surplus in the number of employees and fears of overburdening the budget with appointments,” 7/31/24

- “Unemployment affects 35.3% of Iraqi youth,” 7/14/24

 

Nair, Deepthi, “Falling oil prices have taken toll on Iraqi economic activity, IMF says,” The National, 5/15/25

 

Al Rafidain, “Economists: The Number Of Employees Increased From One Million In 2004 To More Than 4 Million,” 4/12/24