Iraq faces a critical challenge with about one million new job seekers entering the market annually, necessitating the creation of 350,000 jobs each year to prevent rising unemployment. Historically, from the 1980s until 2014, government jobs funded by oil exports kept unemployment low, but this led to a bloated bureaucracy that employed nearly 40% of the workforce. However, with potential declines in oil prices due to OPEC's weakening and increased US oil production, the government can no longer serve as the primary employer [55db0792].
The oil industry, which contributes more than 90% of state revenues, is currently employing over 100,000 foreign workers, violating Iraqi law that mandates 80% of the workforce be Iraqi. Major companies like Shell, Exxon Mobil, and BP are under scrutiny for this practice. The Parliamentary Oil and Gas Committee is planning to engage with the Ministry of Oil to ensure compliance with local employment laws and create more job opportunities for Iraqis [18859f3f].
The World Bank's 2024 report, 'Iraq: Business Ready', highlights the poor private sector environment, ranking Iraq last among upper-middle-income countries. Key issues include complex regulations and inadequate public services, particularly in taxation and market competition. The Iraq Britain Business Council's upcoming conference on December 12-13, 2024, will focus on recommendations for improving the private sector, emphasizing the need to reduce corruption and simplify regulations [55db0792].
The employment of foreign workers in Iraq's oil industry has sparked protests among Iraqi university graduates, who are demanding job opportunities from the oil giants operating in the country. The government aims to enforce the law requiring companies to employ 80% of the Iraqi workforce, and the Parliamentary Oil and Gas Committee is taking steps to address this issue with the Ministry of Oil [18859f3f].
To boost job creation and prevent political instability, improvements in governance and the formalization of informal firms are critical. The challenges facing Iraq's job market underscore the urgent need for a robust private sector that can absorb new job seekers and provide sustainable employment opportunities [55db0792].