Iraq’s economy is in a tailspin. Falling oil prices are depriving the country of much needed revenue. At the same time costs are up with the war and the hundreds of thousands of displaced. That’s leading to skyrocketing unemployment and an increase in poverty.
At the end of January 2016 a parliamentary committee said that the jobless rate had hit a new level. The committee announced that unemployment could be as high as 40%. It blamed the economic crisis caused by the drop in oil revenues and the war with the Islamic State.
Many of those out of work were the displaced from Ninewa, Salahaddin and Anbar, which have been most affected by the fighting. Iraq is one of the most oil dependent countries in the world with around 90% of its money coming from the sale of petroleum. That mostly goes to the government sector, which is the largest employer. Now the country’s revenues are down 45%, and it has to pay for the war and its effects.
News of Iraq’s faltering economy has been growing over the last two years. In May 2014 there were signs that the country was heading into a recession. Things like the real estate and car markets were slowing, projects were being put on hold because the budget was not passed, and unemployment was already going up.
At the end of January 2016 a parliamentary committee said that the jobless rate had hit a new level. The committee announced that unemployment could be as high as 40%. It blamed the economic crisis caused by the drop in oil revenues and the war with the Islamic State.
Many of those out of work were the displaced from Ninewa, Salahaddin and Anbar, which have been most affected by the fighting. Iraq is one of the most oil dependent countries in the world with around 90% of its money coming from the sale of petroleum. That mostly goes to the government sector, which is the largest employer. Now the country’s revenues are down 45%, and it has to pay for the war and its effects.
News of Iraq’s faltering economy has been growing over the last two years. In May 2014 there were signs that the country was heading into a recession. Things like the real estate and car markets were slowing, projects were being put on hold because the budget was not passed, and unemployment was already going up.
In September the jobless rate was at 25%, double what it was a few years before. At the start of 2015, the Planning Ministry released the results of a national survey that showed poverty was at 31%, up from22% in 2014. More people being out of work, the mass displacement caused by the Islamic State seizing Mosul, and the growing financial crisis were blamed for the increase. These problems were being felt across the country.
In December 2015, the Investors Syndicate in Kurdistan claimed that unemployment was at 20-25%, which was officially denied by the Kurdish authorities. The fact that the jobless rate continues to climb upwards should be no surprise. The economy is facing the double strain of low oil prices and rising costs putting the country in a bind.
Because the government is so dominant the private sector is relatively small, and cannot provide a safety net in this time of crisis. Worse yet the political class is reluctant to carry out any serious reform because they are so use to the status quo, and the benefits they derive from it. For now it appears that Baghdad is just trying to ride out the storm waiting for the petroleum market to recover. In the meantime unemployment and poverty situation will continue to worsen.
SOURCES
eKurd, “Unemployment on the rise in Iraqi Kurdistan: syndicate,” 12/2/15
Iraq Times, “Planning: The poverty rate in Iraq, 31%,” 2/12/15
Al Mada, “Depression dominates real estate market and merchandise..and record high unemployment indicators,” 5/18/14
- “Iraq war bill plagues the economy and raises unemployment to 25%,” 9/7/14
New Sabah, “Planning Ministry: poverty rate in 2014 22.5%,” 8/21/15
- “Unemployment in Iraq, amounting to 40% and the government is taking new measures to avoid risks,” 1/30/16
Source http://musingsoniraq.blogspot.co.uk/2016/02/growing-unemployment-and-poverty-in-iraq.html
In December 2015, the Investors Syndicate in Kurdistan claimed that unemployment was at 20-25%, which was officially denied by the Kurdish authorities. The fact that the jobless rate continues to climb upwards should be no surprise. The economy is facing the double strain of low oil prices and rising costs putting the country in a bind.
Because the government is so dominant the private sector is relatively small, and cannot provide a safety net in this time of crisis. Worse yet the political class is reluctant to carry out any serious reform because they are so use to the status quo, and the benefits they derive from it. For now it appears that Baghdad is just trying to ride out the storm waiting for the petroleum market to recover. In the meantime unemployment and poverty situation will continue to worsen.
SOURCES
eKurd, “Unemployment on the rise in Iraqi Kurdistan: syndicate,” 12/2/15
Iraq Times, “Planning: The poverty rate in Iraq, 31%,” 2/12/15
Al Mada, “Depression dominates real estate market and merchandise..and record high unemployment indicators,” 5/18/14
- “Iraq war bill plagues the economy and raises unemployment to 25%,” 9/7/14
New Sabah, “Planning Ministry: poverty rate in 2014 22.5%,” 8/21/15
- “Unemployment in Iraq, amounting to 40% and the government is taking new measures to avoid risks,” 1/30/16
Source http://musingsoniraq.blogspot.co.uk/2016/02/growing-unemployment-and-poverty-in-iraq.html
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