By Layth Mahdi, Agricultural Advisor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.
The Iraqi agriculture production and productivity has been on a linear decline since 2003. Despite this, it remains the second-largest contributor to Iraqi GDP after oil revenues. It has the potential role in decreasing unemployment, poverty and violence if essential programs are implemented in its restoration.
Iraqi people believe that the occupation severely damaged the agricultural sector. The reconstruction efforts that were led by USAID contractors failed to achieve any significant progress. This is because inadequate planning, management and an inefficient political situation in this country.
The country’s urban population makes up roughly 21.1 million (66% of total) compared to a rural population of 10.9 million (34%). Demographically 50% of the population is under the age of 18. Illiteracy rates are on the rise. Recent data indicates that over seven million Iraqis are illiterate, meaning 24% of the population are unable to read and write. Iraq's literacy gender gap is significant, only 46% of adult females and 66% of adult male are literate. Education in Iraq is continuing to decline due to mismanagement of government funds. Over 15% of school aged children are not enrolled in any education program due to their obligation to help support their families.
One of the main challenges that the Government of Iraq (GoI) faces in rebuilding Iraq is high unemployment and poverty. The GoI cannot make a serious attempt at implementing programs to tackle these issues because the decision makers are not knowledgeable and they lack vision. They have attempted to provide aid and social welfare without addressing the root causes of the nation’s problem. For example, the GoI employed more than one and half million people from 2004 to 2010 in the government sector, primarily police and military.
In the next five years, oil production will triple and annual oil revenue is projected to increase to $200 billion by 2015. Currently, Iraq is still under Chapter 7 and huge amounts of money have been spent to cover military and security costs every year. High unemployment and poverty are among the main sources of social turmoil. Iraq is still politically, socially and economically unstable. If these issues are left unresolved, poverty, unemployment, and military operations will hinder growth in oil sales.
Unemployment and poverty are rising. The GoI must create jobs for more than three million citizens over the next three years (2014) in order to decrease the unemployment rate. Agriculture has traditionally been the largest employment sector in Iraq. It contributed more than 7.5% of GDP before 2003 and employed more than 25% of the total work force. Therefore, the agriculture sector needs to be restored in order to absorb the large number of unemployed people.
Current GoI employees lack working experience, management and are corrupt. These situations result in a lack of economic growth. Seven million people who live under poverty line ($2 per day). The private sector is not functional, and the government’s economic growth programs are either slow, ineffective or haven’t started. Therefore, I expect that about 10 million people will live under the poverty line by 2015. Iraqi leaders need to help people to overcome these social problems. PM Al Maliki MUST initiate a fund from Pertro-dollar (see my articles in Iraq Business News) and create International Working Groups in order to restore the agricultural sector in the coming years.