Unemployment in Iraq is not a new issue. American and Iraqi leadership quickly realized that in a post-Saddam Iraq, preventing high levels of unemployment was one of the most fundamental means of combating rising levels of insurgency. The most susceptible population to insurgent recruiting, time and time again, is unemployed young urban men. As the insurgency increased, Iraq and the U.S. began to employ these young men through the development of larger and stronger national security forces. Young unemployed men were paid to join the police and national army, this method of reducing unemployment appeared to have worked. The insurgency was curbed and the Iraqi Parliament has finally reached an agreement that will lead to the inauguration of a new, legitimate and multi-ethnic Parliament.
The relatively new Iraqi government has much on their plate to address, but perhaps the most taxing and vexing issue is once again unemployment. While employing young men as members of the national security forces worked at first, Iraq’s absurdly high unemployment rate—upwards of 60 percent—continues to increase for two main reasons. The first is that numerous members of the security forces continue to face pressure to relinquish their duties and quit the police and army. Insurgents often threaten security force members’ families until the government supported fighter quits their job; although this protects several families, it leaves many of these newly employed young men unemployed once again. These men are forced to make a tough decision, quit their job and ensure their families’ physical well-being, but at the same time, leaving their family economically vulnerable. These men often turn to the insurgent forces and participate in black markets instead of working to rebuild the required security for rejuvenating legal markets.
A second factor that is contributing to the increasing level of unemployment is the U.S. military’s withdrawal. At the beginning of 2010, U.S. military forces, security contractors and developers were employing approximately 44,000 Iraqis, but as the U.S. has undertaken the withdrawal of combat forces, many of these 44,000 Iraqis are also finding themselves out of work. A majority of Iraqis who had worked with the U.S. military or U.S. contractors and are now unemployed are having difficulty finding new work because of their past association with the U.S. These workers are essentially blacklisted and are increasing unemployment statistics.
As the world first felt the effects of the global recession, Iraq had remained relatively recession free. For one, a vast majority of Iraqis did not have their money stored in a bank, let alone in stocks or real-estate. Iraq didn’t have a functional central bank after the overthrow of Saddam Hussein; therefore, Iraqis had no banking options and personally held onto their money. This worked at first, but now the negative effects of lacking a central banking system for years is wreaking havoc on unemployment. Without assets, banks don’t have money for loans or investments.
This was okay while foreign countries, especially the U.S., Japan, Turkey and China heavily invested in development and rebuilding, but as the recession heightened, foreign investment began to decrease in Iraq. Without heavy foreign investment, Iraq’s lack of ability to fund loans and investments has negatively impacted employment opportunities.
The increasing unemployment is a highly adverse impact of the U.S. withdrawal; whether it was anticipated or not by the U.S. or Iraqi governments is irrelevant. What is relevant is that high unemployment threatens the progress that has been made. But all is not lost. This month, the two decade-long sanctions on Iraq were lifted. The sanctions dating back to Saddam Hussein’s invasion of Kuwait required Iraqi oil revenues to be largely monitored by the UN; in return, Iraq would receive food and humanitarian aid. As of June 2011, Iraq will regain full control of oil revenues; this could potentially be a glorious day for battling rising unemployment.
The U.S. was one of the UN Security Council members leading the charge, perhaps because the government and representatives to the UN recognized the potential backlash of high unemployment in Iraq and saw the lifting of sanctions as a method for keeping unemployment in check. If Iraq maturely and properly regulates their oil production, sales and revenue investment, unemployment may drastically decrease because Iraq would have the investment capability to address the labor market and development projects. If not, Iraq could be heading down the road to another high-intensity insurgency that would negate all the hard work Coalition and Iraqi troops have accomplished over the past seven plus years.
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Lifting Sanctions and Unemployment: How They Impact Iraq’s Future
December 22, 2010
Unemployment in Iraq is not a new issue. American and Iraqi leadership quickly realized that in a post-Saddam Iraq, preventing high levels of unemployment was one of the most fundamental means of combating rising levels of insurgency. The most susceptible population to insurgent recruiting, time and time again, is unemployed young urban men. As the insurgency increased, Iraq and the U.S. began to employ these young men through the development of larger and stronger national security forces. Young unemployed men were paid to join the police and national army, this method of reducing unemployment appeared to have worked. The insurgency was curbed and the Iraqi Parliament has finally reached an agreement that will lead to the inauguration of a new, legitimate and multi-ethnic Parliament.
The relatively new Iraqi government has much on their plate to address, but perhaps the most taxing and vexing issue is once again unemployment. While employing young men as members of the national security forces worked at first, Iraq’s absurdly high unemployment rate—upwards of 60 percent—continues to increase for two main reasons. The first is that numerous members of the security forces continue to face pressure to relinquish their duties and quit the police and army. Insurgents often threaten security force members’ families until the government supported fighter quits their job; although this protects several families, it leaves many of these newly employed young men unemployed once again. These men are forced to make a tough decision, quit their job and ensure their families’ physical well-being, but at the same time, leaving their family economically vulnerable. These men often turn to the insurgent forces and participate in black markets instead of working to rebuild the required security for rejuvenating legal markets.
A second factor that is contributing to the increasing level of unemployment is the U.S. military’s withdrawal. At the beginning of 2010, U.S. military forces, security contractors and developers were employing approximately 44,000 Iraqis, but as the U.S. has undertaken the withdrawal of combat forces, many of these 44,000 Iraqis are also finding themselves out of work. A majority of Iraqis who had worked with the U.S. military or U.S. contractors and are now unemployed are having difficulty finding new work because of their past association with the U.S. These workers are essentially blacklisted and are increasing unemployment statistics.
As the world first felt the effects of the global recession, Iraq had remained relatively recession free. For one, a vast majority of Iraqis did not have their money stored in a bank, let alone in stocks or real-estate. Iraq didn’t have a functional central bank after the overthrow of Saddam Hussein; therefore, Iraqis had no banking options and personally held onto their money. This worked at first, but now the negative effects of lacking a central banking system for years is wreaking havoc on unemployment. Without assets, banks don’t have money for loans or investments.
This was okay while foreign countries, especially the U.S., Japan, Turkey and China heavily invested in development and rebuilding, but as the recession heightened, foreign investment began to decrease in Iraq. Without heavy foreign investment, Iraq’s lack of ability to fund loans and investments has negatively impacted employment opportunities.
The increasing unemployment is a highly adverse impact of the U.S. withdrawal; whether it was anticipated or not by the U.S. or Iraqi governments is irrelevant. What is relevant is that high unemployment threatens the progress that has been made. But all is not lost. This month, the two decade-long sanctions on Iraq were lifted. The sanctions dating back to Saddam Hussein’s invasion of Kuwait required Iraqi oil revenues to be largely monitored by the UN; in return, Iraq would receive food and humanitarian aid. As of June 2011, Iraq will regain full control of oil revenues; this could potentially be a glorious day for battling rising unemployment.
The U.S. was one of the UN Security Council members leading the charge, perhaps because the government and representatives to the UN recognized the potential backlash of high unemployment in Iraq and saw the lifting of sanctions as a method for keeping unemployment in check. If Iraq maturely and properly regulates their oil production, sales and revenue investment, unemployment may drastically decrease because Iraq would have the investment capability to address the labor market and development projects. If not, Iraq could be heading down the road to another high-intensity insurgency that would negate all the hard work Coalition and Iraqi troops have accomplished over the past seven plus years.
