Iraq: Can There Be Peace Without Jobs?
Security in Iraq is undoubtedly improving, but rising unemployment threatens to increase instability and worsen corruption, according to Iraq expert Frank Gunter.
Gunter, who's done two tours in Iraq as an economics adviser, points out in a recent op-ed in the New York Times that 51 percent of the population — and an even greater percentage of young people — is either unemployed or underemployed.
Almost half of the country’s labor force is paid by the government from its revenues from petroleum exports. With the exception of agriculture, legitimate private-sector employment is small — by my calculations, about 6 percent of the labor force. Most of the remainder of the Iraqi labor force is either unemployed or working in the underground economy.
Gunter further laments that any business faces either the inefficiencies of the underground economy or the corrupt ministries that regulate them. (Iraq was just listed among the top five most corrupt countries in the world.) The process to register a new business is expensive and complicated — a license costs $2,800 and requires approval from 12 different ministries.
"The potential for private sector job growth is great," Gunter writes. So what needs to be done? The number-one thing, Gunter says, is to make it easier and less expensive to register a new business. He also recommends that provinces, rather than Baghdad, set rules for regulating businesses.
But whatever is decided, the government of Iraq is running out of time. It must either end its hostility toward private businesses — or accept that a sharply growing mass of unemployed will nullify the progress of the last three years.
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Comments
So what's your point exactly?
So what's your point exactly? This op-ed fails to compare Iraq's 2008 actual unemployment rate (18%) with those of nearby countries and the world economy in general. What's Jordan's unemployment rate as of 2008? 13.5%. What's Lebanon's unemployment as of 2008? 20%. Source on both items? CIA Fact Book.
Also note that according to many sources Iraq's unemployment rate has NOT increased dramatically in 2009, it's remained relatively stable.
Put down the op-ed section of the newspaper and think for yourself! From an economic standpoint Iraq isn't much different than its neighbors. What is different about Iraq....let me think...hmm.....what is different about Iraq....oh I know...US troops are there.
Actually
Obviously, the occupation also plays a huge role in Iraq's situation, and the op-ed did not address that.
But actually, Iraq's economy is very different from the economies of many of its neighbors. Iraq has significant oil reserves. Jordan and Lebanon do not. Syria (another neighbor) has much smaller, dwindling reserves. Iran, by contrast, also has significant reserves. In fact, the economic and political situations of rentier states often differ dramatically from that of non-rentier states.
The point of the op-ed is that a rentier state like Iraq, whose government by definition relies on revenues from a natural resource like oil, becomes extremely vulnerable when rents fall (a result of oil prices being lower than projected)--especially if they don't have some flexibility in their private sector to cushion the blow and provide more employment.
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