Iraq's next task: Paring down unemployment

updated 1:09 a.m. ET July 18, 2008

BAGHDAD - They fan out across Baghdad in summer's scorching heat — men in blue overalls picking up trash, mowing the sparse grass in parks, and standing on ladders to paint highway underpasses and prune palm trees.

Iraq's government has launched a job-creation program in recent months in a first step to address high unemployment and revive the economy — moves that U.S. and Iraqi officials call crucial in advancing Iraq from this summer's relative calm to a more lasting stability.

Baghdad officials alone are hiring as many 4,000 people a day, paying most a small daily rate to clean streets, do repair work and complete other small tasks like painting signs. Many provinces have similar programs, but in smaller numbers.

The national government also is offering some limited job training, and it is paying unemployment benefits of about $100 a month to some jobless people.

Even with violence at its lowest level in four years, solving unemployment won't be simple. Iraq has few functioning modern factories to provide solid-paying jobs, and many of its institutions like schools are still getting back on their feet.

Hazim Kadim, 23, works as one of the new street cleaners in Baghdad, earning $8 a day, although he has a teacher's certificate. He has been unable to get a teaching job.

"I want to work a real job, a job that is in my profession," he said. "These jobs, they are very little."

High unemployment — estimated between 35 percent and 50 percent nationally by the labor ministry and by some outside economists — has long fed Iraq's violence, beginning with the 2003 invasion. The decision to disband Saddam Hussein's army, in particular, left thousands of men out of work, pushing many into the arms of the Sunni insurgency.

Other Iraqis were so desperate for jobs that they risked their lives to work for U.S. officials and international groups. U.S.-led efforts to revive state factories and lure in private investment foundered as the violence grew.

The reasons for high unemployment now are many, but most ultimately cycle back to the violence that afflicted Iraq's 27 million people for years: the battles in cities like Baqouba, Basra and Mosul, and the sectarian threats that drove people from neighborhoods and jobs in Baghdad.

Iraqi Prime Minister Nouri al-Maliki has begun a major push to increase trade ties and attract investment from neighbors like Turkey. But investment is coming in only slowly and sporadically, even in key industries like oil, for which a law meant to pave the way for investment is still hung up in parliament.

Not all of Iraq's economic problems resulted from the war.

The economy was state-controlled and in the doldrums under Saddam, discouraging private entrepreneurship and outside investment. Years of U.N. sanctions imposed after Iraq's occupation of Kuwait proved a devastating blow, depriving Iraq of modern technology and spare parts to maintain power stations and factories.

With the rot so deep, reviving the economy is a formidable challenge, even for a country awash in $70 billion in oil revenues.

There are no recent, generally accepted estimates on how much it would cost to secure and rebuild Iraq, perhaps because early figures floated by the U.N., World Bank and Bush administration proved disastrously low. But some private economists have pegged the overall figure at $80 billion to $100 billion, depending on the definition of a "rebuilt Iraq."

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