The parliamentary Finance Committee said on Sunday that it is considering adding 42,000 jobs to the 58,000 allocated in the 2012 budget, according to AKnews.

On Jan. 5 the Iraqi government approved the 2012 budget of $100 billion USD (117 trillion IQD) with a deficit of up to $13.5 billion USD (20.5 trillion IQD), based on an oil price of $85 USD (99,400 IQD) per barrel and an export rate of up to 2.6 million bpd.

More than 90% of the Iraqi government’s revenue is raised through the oil industry, so the oil price the government uses to predict its income in the coming year is of vital importance.

Both Forbes and the Wall Street Journal estimate the price of oil to remain above $100 USD (117,000 IQD) a barrel. The government expects this disparity would wipe more than $10 billion USD (11.7 trillion IQD) off the deficit.

Committee member Najiba Najib told AKnews the Finance Committee is looking for financial resources to allocate for the new jobs without affecting the operating and investment budgets.

The Iraqi government says the rate of unemployment in the country does not exceed 15%, but local and international organizations put it at more than 30%.

The United Nations Mission in Iraq announced last November that the poverty rate in Iraq is 23%.

(Source: AKnews)

Bangladesh expects to export manpower to Iraq by the end of this year, according to its Expatriates’ Welfare and Overseas Employment Minister, Khandkar Mosharraf Hossain.

A Bangladeshi delegation recently visited Iraq at the invitation of Iraqi labour minister.

“Within next two months, a memorandum of understanding (MOU) will be signed between Bangladesh and Iraq for fixing modalities of sending manpower from here,” the minister reportedly told reporters.

He also said the Iraqi authorities have shown keen interest in recruiting Bangladeshi manpower, especially construction workers, as presently the country is continuing its rebuilding process.

Dhaka has decided to send the workers to Iraq under government arrangements to avoid malpractices that have been creating serious problems in the overseas employment sector.

“It was actually the Iraqi authorities who proposed that we must send workers through government arrangements,” the minister said added.

Currently, all manpower export to Iraq is done by private recruiters.

(Source: BBN)

This article was written by Hazim al-Sharaa, and was originally published by the Institute for War and Peace Reporting, iwpr.net. It is reproduced by Iraq Business News with permission. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The ministry of labour has drawn criticism for launching a fierce campaign against Iraq’s legions of illegal foreign workers and those who employ them.

After the fall of Saddam regime, thousands of overseas workers were legally recruited by foreign companies who’d secured contracts worth hundreds of million of US dollars to rebuild the country’s shattered infrastructure. When the work ended, many remained in the country and sought illegal work.

But economists and business owners say the drive to deny them employment is a politically-motivated attempt to reduce the joblessness following a wave of street protests demanding more public sector work. They warn it is an empty gesture which will fail to have a positive economic impact.

However, the ministry of labour says it is simply implementing Saddam-era employment legislation.

According to a 1987 labour law, businessmen caught hiring illegal labourers face up to six months in prison or a fine five times the gross total income of every foreign employee they engage. A new, more progressive labour law is being drafted, but the old one, as is the case with much legislation from the Saddam period, remains on the statute books.

Some commentators are doubtful whether the labour ministry will be able to fill the void left by foreign workers if they are forced to leave.

Meanwhile, the ministry has been carrying out inspection campaigns in busy districts across Baghdad and other major cities in an attempt to convince Iraqi businessmen to dismiss foreign workers.

Majid al-Soowari, an Iraqi economist and government critic, described the crackdown as “politically motivated [and] aimed at appeasing millions of unemployed Iraqis”.

Hilal al-Tahan, a senior professor at the Faculty of Economics at the University of Mustansiriya, also criticised the ministry’s plan, calling it counterproductive and politicised.

There are no official statistics on how many foreign workers are in Iraq, however, Al-Soowari and the ministry of labour estimate that there are around 15,000 to 25,000, mainly Muslims from the Indian sub-continent.

“We are not responsible for the entry of those foreign workers as most of them entered through contractors and they should have been responsible for them,” Hosni Ahmad, a ministry of labour official, said. He added that in 2004 the Coalition Provisional Authority, CPA, also brought in overseas labour from the sub-continent to work on building the Green Zone, Baghdad International Airport and military installations among other infrastructure projects.

The CPA was the transitional government, now dissolved, which was set up by America following the fall of Saddam’s regime.

The government says it has no money to repatriate illegal foreign workers. The 1987 labour law makes no mention of repatriation, but the new bill compels employers to take responsibility for ensuring that overseas employees they hire return home after completing their contracts.

In the interim, an interior ministry source said the department was working on the possibility of granting illegal labourers a six-month temporary residency visa, and allowing their employers to deduct enough money from their salaries to repatriate them.

He conceded that for this to work, the ministry would need to carry out a statistical study on the exact number and identity of the workers – but acknowledged that it would be a challenge.

“It takes much effort and a long time to introduce new [labour] laws,” Al-Soowari said. “[But] solutions must… not just be for propaganda purposes.”

He was referring to the crackdown on foreign workers coming in the wake of protests over unemployment – currently over one million, according to government figures.

“The question here is: will [sacking] overseas workers who are hired as housemaids provide new jobs for Iraqis? It’s not going to achieve a thing,” he said.

Al-Tahan warned that the government move would have an immediate negative impact on the economy and could trigger an inflation hike.

“Business owners will have to employ Iraqis instead with higher wages, less working hours and even less productivity, taking away money from the economy,” he said, adding that the labour ministry should look at training and skill programmes for unemployed Iraqis and introducing start up loans for small-to-medium sized business start-ups as a priority.

Yunadim Kana, a member of the labour and social affairs parliamentary committee, said it was examining the government’s decision to implement the 1987 law, with members currently undecided about the merits of the move.

Iraqi businesses say enforcing the Saddam-era legislation would damage their operations.

Like most businessmen, Zaid Hadi, the manager of a popular ice-cream shop in the high-end Al-Mansoor district in Baghdad, does not want to lose his workers.

“The decisions by the ministry are always hasty, and changes are always radical,” said the 23-year-old, who employs two Bangladeshi waiters, both Arabic speakers. “I got my Bengali workers into training courses on etiquette and service, and they are serious at work, unlike Iraqis.”

Six major employers in Baghdad who were interviewed by IWPR said the work ethic of foreign labourers was superior to that of Iraqis.

Jamal Bilal, one of Hadi’s Bangladeshi workers, said in a mixture of Arabic and English that he is comfortable where he is and has good ties with his boss and local people.

He sends his entire 350 US dollar monthly salary to his family back home and is provided with food and accommodation by his employer, like most low-income foreign workers in Baghdad.

Mohammd Muhsin, a 41-year-old Baghdad-based businessman, who runs a recruitment agency, said he was inundated with requests to bring in maids from abroad. He receives on average 20 to 30 enquiries a day – however, has no option but to turn away customers.

In eight years, the ministry of labour has granted 44 work visas – the official total number of all low-skilled foreign workers in Iraq – to mostly Bangladeshi housemaids.

Muhsin, along with other Iraqis, believes that hiring foreign rather than Iraqi housemaids is a safer option as the country continues to grapple with sectarian violence.

Violence in Iraq has dropped sharply since the peak of sectarian bloodshed in 2006 to 2007, which pitted Sunni and Shia neighbourhoods against each other. Although things are now much quieter in Baghdad, militant groups on both sides continue to carry out attacks, though many now target Iraqi security forces.

Ahmad Khalid, a 26-year old newlywed Baghdadi, is looking for a foreign maid for the same reason as Muhsin. “She won’t be ethnically committed to anyone here, therefore she will be less of a security risk for my family,” he said.

Al-Soowari believes that rather than kicking foreign workers out of jobs, the government should be opening its doors to them to help rebuild Iraq.

“We need to hire foreign workers… to get things back on track, after the Iraqis failed to step up and move the economy forward,” he said, adding that even the government of Iraq could do with the expertise of foreign workers.

(Source: IWPR)

When tacking the problems of unemployment and illegal work practices, Iraq has a difficult balancing act to achieve.

On one hand, a civilised country cannot accept a situation where foreign labourers are tricked by traffickers to get them into the country illegally, and then told their pay will be a fraction of the minimum wage of $600 per month.

On the other hand, blanket quotas and restrictions on foreign workers increase the problems faced by legitimate businesses and workers, and slow the pace of development.

Iraq’s parliament is considering new laws to limit foreign workers by forcing employers to hire at least as many Iraqis.

Legislation, of course, is only followed by the law abiding, and will not concern those who already operate outside the system. And as labour minister Nasser al-Rubaie points out, the problem is by no means unique to Iraq.

But imposing an arbitrary 50% limit on foreign workers, regardless of their conditions, is unlikely to solve Iraq’s problems of unemployment and exploitation.

By Layth Mahdi, Agricultural Advisor. The opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Agricultural development plays a key role in achieving human well-being, maintains food security, reduces poverty and mitigates violence. In addition, it contributes to the protection of natural resources, environmental stability and the balance between rural and urban populations as well as the protection of cultural heritage. The agricultural sector is essential to the provision of employment opportunities and the reduction of violence.

Prior to 2003, Iraq had imported about 30% of its food needs annually. The decline in agricultural production after this period, created the need for importing 90% of the food at a cost estimated at more than $12 billion annually. Due to the sudden shift in the agricultural policy from subsidized assistance to an immediate shift to a free market policy, the outcomes lead to a decline in production. The observed outcome resulted in many farmers abandoning the land and agriculture. The impact on natural resources results in an exploited and degraded environment leaving the land destitute and the people impoverished, unemployed experiencing a sense of losing their human dignity.

Despite the huge Iraqi budget (more than $ 90 billion/year), the trend of unemployment, poverty, malnutrition, among Iraq’s most vulnerable population-children; hunger and homelessness has accelerated in the past eight years. For example, unemployment reached more than 40%, and poverty up to 23% (7 million people) of the population. There are five million illiterate, eight million representing widows and spinsters. Additional, an estimated 2.7 million disabled Iraqis and more than two million displaced inside and outside the country. The average family size is large with 5 members per household in the urban sector and 8 members in the rural areas. Another issue that Iraqis face is their incomes per capita is low (300-400 dollars / month) contributing to deepening poverty.

Iraqi population birth rate has increased to more than 750 thousand per year. These worsening living conditions and the deterioration in the agricultural sector, education and health, poor services and increased violence coupled with the lack of or absence of economic development has increased the suffering of average Iraqis fomenting increased suffering from turmoil and political instability, social, and creates violence and terrorism.

Current Iraqi decision makers have exhibited a lack of vision for economic development due to their deficient skills, knowledge and the absence of leadership. Therefore, the performance of the GOI remains below par. Iraq is rich in natural resources and the government has all the administration, regulatory laws and funding, but lacks the political guidance and ability to reform and create economic development ultimately leading to unsustainable growth.

The Iraqi reconstruction efforts led by United State and the coalition have spent more than $60 billion to date. The goal has been to improve basic services, rebuild the economy, strengthen democracy, and improve the infrastructure, building capacity and legitimacy of the Iraqi government. USAID contractors have struggled and are perceived to have failed, unable to reach the full potential of their goals to improve economic growth. The projects were really quite simple and had little to no value in improving the local economy.

The U.S. government has a long-term strategic plan in the Middle East. At the same time the US government has many enemies. Tensions are rising (note recent ME riots) and more protests may be upcoming that will have a negative impact on GOI. The US military should consider initiating agricultural programs to assist GOI in creating jobs and reduce poverty which ultimately will enhance US-Iraqi relations. It is not in the best interest of America to keep the country impoverished and suffering from rising unemployment and poverty.

A presentation on the way ahead for Iraq’s restoration of the agricultural sector in job creation and reduction of poverty and violence is attached,

… also available in pdf format.

And please click here to download a spreadsheet calculating the profit projection for a typical farmer in Muthanna.

A number of Iraqi trade unions and NGOs called for a new labor law, lifting restrictions on the freedoms of assembly and association, more job opportunities and social security for the unemployed, according to a report from Aswat al-Iraq.

“The trade unions and activities of civil society organizations in Iraq stress their demands compatible with the democratic transition taking place in Iraq,” said a statement issued by several trade unions and NGOs on International Labor Day.

They also called for removing all obstacles impeding the freedoms of assembly and expression and abrogating all previous laws and arbitrary measures practiced by the previous regime.

The statement rejected all types of interventions and discrimination among trade unions according to governmental agendas.

“There will be no legitimacy for any law concerning the workers without the participation of the trade unions in studying and approving them”, the statement added.

In a statement, Premier Nouri al-Maliki congratulated the Iraqi workers, urging Iraqis to work hard re-build the nation so that it may take its position among world countries.

(Source: Aswat al-Iraq)

A major project for the reconstruction and rehabilitation of west Baghdad’s al-Sadr City will employ between 75,000 and 100,000 people during its implementation period, and another 50,000, Baghdad’s Mayor, Sabir al-Issawi said on Wednesday.

According to the report from Aswat al-Iraq news agency, Issawi stressed that the project would comprise the construction of several multi-storey buildings, along with social, environment, and administration facilities, as well as hospitals, a university, schools, kindergartens, stadiums, sport and trade centers.

“The project, in its first phase, comprising the construction of 82,000 housing units, shall be implemented by an international company on an 18 square kilometer area east of al-Sadr city, which will be implemented by the High Committee for the Main Design of Baghdad city,” he concluded.

The project is valued at $11.3bn, and will be carried out by six Turkish contractors, includung Kur Insaat, Kazova Insaat, Iskaya AS and Kocoglu Insaat.

(Source: Aswat al-Iraq, Hurriyet Daily News, Bloomberg)

Visa problems for foreign workers in Iraq continue to make the headlines.

Last week we reported on the difficulties caused by a decision to channel visa applications through the office of the Prime Minister, Nouri al-Maliki; now we hear that the Basra Investment Commission has imposed its own restrictions, with the intention of reducing unemployment.

While the restrictions do not appear to be limited to specific sectors or levels of employment, the main game in town is clearly oil and gas, and in this area there are many foreign workers whose expertise is required in Iraq.

But when we say ‘many foreign workers’, that is relative – in the context of an unemployment rate between 15% and 39% (depending on whose figures you choose to believe), the number of foreign experts who need to enter Iraq is trivial. While the energy sector accounts for as much as 90% of Iraq’s GDP, it employs only about 1% of the workforce, and the number of non-Iraqi experts required would be a very small fraction of this 1%.

It’s also worth noting that native Iraqi oil workers are the cheapest in the world, so companies would be inclined to employ them first, if they have the required skills.

If Iraq is to thrive, it must allow companies to bring in the talent they need to development the country’s biggest asset.

Your business in Iraq can benefit from the knowledge and experience of both Upper Quartile and AAIB. For more information please contact Gavin Jones or Adrian Shaw.