Informal Businesses in Iraq: Critical Lessons

The World Bank's Enterprise Analysis Unit, in collaboration with colleagues from the Social Protection and Jobs team in the Middle East and North Africa (MENA) region, recently published the data from an Informal Sector Enterprise Survey conducted in Iraq, covering four major cities in the country: Baghdad, Basrah, Sulaymaniyah, and Najaf.

These surveys are designed to mirror the standard World Bank Enterprise Surveys, which cover the formal sector but are tailored to help better understand the unique conditions in which informal businesses operate .

Challenges Faced in Iraq

While the strength of the method is that it can systematically be applied in most countries, there is no doubt that each country poses unique challenges that we can learn from.

In Iraq, we faced three key challenges that substantially extended the duration of fieldwork from the expected 9 - 12 weeks per city to an average of 15 weeks. By sharing these challenges, we hope that future surveys take these factors into consideration when conducted in fragile economies.

  • Accessibility to location: Accessibility, due to changing regulations related to the access to location, was the main challenge. This was especially taxing at the beginning of fieldwork when squares were randomly selected to be enumerated as it was not possible to predict which areas/squares needed approval from local government offices to enter, making it difficult to plan ahead of time.
  • Security Concerns: There were multiple instances in which fieldwork had to be stopped - in one instance, for almost two weeks - due to security concerns. When implementing face-to-face surveys in fragile contexts, it is critical to stay in touch with local authorities as the safety of field team is critical.
  • Poor Response Rate: Willingness to participate in interviews was low due to the challenges related to lack of trust and social cohesion. On average, 40% of potential respondents refused to be interviewed. While this challenge was unavoidable, there are ways to address it. We learned from enumerators who had highest response rates that dressing down and approaching respondents in a more casual manner made respondents more open to conversations/being surveyed. We also found that female enumerators, on average had higher response rates; so, to improve response rate, additional female enumerators were added to the field team.

Lessons Learned

The key lesson from implementing this survey in Iraq is adaptability, as situations were often unpredictable. However, as challenging as it can be, the outcome of the field work is rewarding.

The Informal Sector Enterprise Surveys in Iraq is the first survey on the informal sector in Iraq, and the first of its kind in the region . The survey provides data on performance and characteristics of these businesses.

Of the 5,193 businesses that were enumerated, 1996 were randomly selected to participate in a longer interview that contained over 200 questions.

The topics covered included business characteristics such as performance, infrastructure, interconnectedness with the formal sector, as well as owner characteristics such as education level, employment history and even some household details.

This new data has the potential to address many of the unanswered questions that development practitioners need answers to better understand the sector and design a more comprehensive private sector development strategy  that otherwise would only focus on the formal sector.

Click here to view the full report.

(Source: World Bank)

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