Iraq annually sees 350,000 graduates faced with limited job opportunities due to heavy reliance on oil and an underdeveloped private sector. Youth unemployment is a significant concern, with rates at 36%. Structural reforms are needed to foster private sector growth and align education with market needs, drawing lessons from European economies that prioritize vocational training and social protections for workers.
Each year, around 350,000 graduates enter Iraq’s labor market, facing limited job openings due to a constrained economy. The public sector is overstretched, while the private sector remains underdeveloped, raising concerns about long-term economic sustainability. The reliance on oil, which accounts for over 90% of state revenue, exacerbates vulnerability to price fluctuations and restricts job growth in essential industries like manufacturing and technology.
The unemployment rate in Iraq stands at approximately 16.5%, with youth unemployment soaring to 36%. According to the Parliamentary Committee on Labor, nearly 15 million Iraqis are jobless. Economic researcher Ahmed Eid highlighted that the government cannot accommodate these numbers, while the bureaucracy inhibits private sector expansion.
Another critical issue is the disparity between educational outcomes and labor market demands. Between 2015 and 2023, Iraqi universities produced over 1.1 million graduates, but fewer than 200,000 secured public-sector roles, translating to an employment entry rate below 20%. Economist Karim Al-Hilu emphasized the necessity of aligning educational outputs with market needs.
Iraq also fails to capitalize on potential growth sectors such as technology, manufacturing, and tourism. Despite the decline of agriculture, vital due to outdated policies and inadequate investment, sectors like banking face structural weaknesses that impede support for entrepreneurs. Such conditions restrict private sector growth, limiting employment opportunities.
Policymakers advocate for reforms to revitalize the private sector, including the Retirement and Social Security Law of 2023, which incentivizes private employment. MP Ibtisam Al-Hilali noted the importance of boosting investments and modernizing industries to facilitate private sector development. Parliament plans more initiatives to enhance private-sector job prospects.
To decrease public-sector dependency, MP Al-Yasari suggested enforcing a ‘one job per person’ rule and banning dual employment, thereby re-structuring the labor market. Eid stressed that legislative support is vital for creating a stable and attractive environment for investors, necessary for reducing the migration of skilled graduates.
Al-Hilu proposed that Iraq could learn from European economic models where employment is balanced between public and private sectors. In Europe, 15-20% of jobs are state positions, while private sectors dominate the labor market. This approach provides job security and social benefits, making private employment compelling and aiding in unemployment reduction.
A unique feature of the European model is the emphasis on vocational education. Unlike Iraq, where university degrees predominate, European countries focus on vocational training, aligning skill development with labor market needs, thus ensuring a steady supply of skilled workers and reducing overall unemployment.
Iraq faces significant challenges regarding unemployment, with structural issues stemming from a reliance on oil and a lack of private sector development. The educational system also struggles to meet labor market demands. However, proposed reforms aim to stimulate the private sector and draw inspiration from successful European models that emphasize vocational education and balanced job distribution. Effective implementation of these reforms is crucial for improving employment opportunities and sustaining economic growth.
Original Source: shafaq.com
