Shafaq News / Equal Times, the European website based in Brussels, highlighted what it called the new era of opportunities in Iraq, where a revolution in the field of entrepreneurship is being stimulated, despite the presence of several challenges.
The European website stated in a report translated by Shafaq News Agency: The winds of optimism are blowing from the heart of the bustling city of Baghdad, to the private sector in Iraq, especially in the Karrada neighborhood, where with the morning breezes the doors of the “station” open to receive about 30 young students and entrepreneurs, who are eager to revive their ideas and push their emerging companies towards new horizons. New.
The report was considered; The “station” is more than just a co-working space, as it is also the catalyst for the entrepreneurship revolution in Iraq, which was founded in 2018 by a group of local investors, and provides training in 3D printing, building drones, and vocational training in robotics, as well as Being a place to host all types of festivals and conferences in a way that encourages a climate of stimulation, creativity, innovation and knowledge exchange.
The report quoted the head of the station’s communications and public relations department, Ghada Ahmed
She said, “Since the 1980s, the Iraqi education system was designed to serve the public sector primarily, in compliance with the socialist ideology of the Baath Party. However, despite the fall of Saddam Hussein, this system failed to adapt to the country’s current needs.”
The report pointed out that the Iraqi Constitution, in Article 34, stipulates that education is free, adding that a series of laws that were implemented since the late 1960s led to limiting the development of private education and gave the government complete control over citizens’ education. Although the report said that this policy led to a significant reduction in the illiteracy rate in Iraq, from 50% in the late 1950s to 16% in the early 2000s, a large number of people found themselves relying on public state institutions to obtain jobs. .
The report indicated that the work system in the public sector carries advantages, supported by oil revenues that amounted to 43% of the gross domestic product in the year 2021, and they are many and varied, such as the retirement salary system and a certain number of days of paid leave, which makes the public sector able to… It creates unequal competition with the private sector which is not always able to offer such benefits and is therefore less attractive to some workers.
According to the report, a 2021 labor force survey conducted by the International Labor Organization shows that no less than 38% of Iraqis work in the public sector, which is one of the highest rates in the region and the world.
Big challenge
In addition, the report stated that the private sector in Iraq has suffered greatly from the years of armed conflict since the fall of Saddam in 2003, which was followed by the civil war and the war against ISIS. Therefore, the entrepreneurship scene in Iraq is now composed of a mosaic of small and medium-sized enterprises that It contributes, to a greater or lesser degree, to the economic landscape of the country.
The report quoted the International Labor Organization’s coordinator in Iraq, Maha Qataa, as saying, “These multiple crises have created a climate of uncertainty, which has strongly deterred investors from taking risks and participating financially in the national economy.”
In addition, the report said that the business registration process in Iraq is often cumbersome and bureaucratic, which frustrates many entrepreneurs who then prefer to work informally rather than having to deal with difficult administrative procedures. Closing a business is also a complex and expensive process that prevents business owners from ending unprofitable projects.
The report continued; The government’s lack of resources, especially with regard to labor inspectors, limits its ability to expand coverage to include small and medium-sized enterprises, which reinforces individuals’ frustration with registering and complying with legal standards.
As a result, the report says that about 54.8% of the workforce in Iraq works in the informal sector, which makes many people who work on fixed-term contracts vulnerable to exploitation and are often deprived of social security. The report added that in addition to restricting the government’s ability to collect tax revenues, the informal private sector also limits the possibility of business prosperity and expansion.
Make the private sector more attractive
The report stated that the Iraqi government has begun to increasingly realize the need to reform this system, noting that in 2014, it published a strategy for developing the private sector until the year 2030, which not only provides a description of the current situation of the private sector, but also serves as a road map for implementing various policies, He added that the government is working to ensure that the private sector represents no less than 60% of the gross domestic product between 2023 and 2030 and absorbs 4% of unemployment.
The report stated that, in May 2023, the House of Representatives issued a law regarding social security for workers in the private sector, which led to a significant expansion of the legal coverage of the social security system to include different types of informal workers and the self-employed, indicating that this law grants rights In maternity and unemployment benefits, along with health insurance, which represents significant progress for workers’ rights in the country.
The report quoted businessman Labib Al-Jita, Chairman of the Board of Directors and CEO of Al-Nakhla Company, which specializes in palm tree maintenance, as saying, “The environment today is more suitable for establishing startup companies, as the government encourages more young people to launch their projects and register their businesses more than before.”
According to the report; These reforms are also necessary to help meet Iraq’s current demographic challenges, adding that given that 40% of the population is under 25 years of age, it has become increasingly difficult for the public sector to be able to absorb all available workers.
As for the World Bank, it says that at least 34.5% of the young population of working age are unemployed, which contributes to fueling social discontent, recalling in this context the protest demonstrations in 2019 that shook Iraq, where young people were at the forefront demanding… By changing the system they consider to be corrupt, providing more job opportunities and improving public services.
The report quoted Maha Qataa as saying that reforms must be comprehensive as a large number of young women cannot find work opportunities, adding that “the rate of women’s participation in the labor market does not exceed 10.5%, which is one of the lowest rates in the region, if not in the Asian continent.” Most of them are in the public sector.”
She pointed out that estimates indicate that there are hundreds of thousands of women in the private sector, even though there are 13 million working-age women in Iraq.
Referring to Al Mahatta, the report said that despite the challenges, there is a promising economic future for the private sector, as the emerging companies here represent a diverse group of sectors, from technology and agriculture to trade and services, and they all share a common passion of contributing to the development of the private sector. For Iraq’s economic future.
The report quoted Muhammad Al-Bayati (35 years old), who established the “Zulitak” company specializing in the manufacture of high-quality handmade carpets, as saying, “I want to make a positive change in my country and my community and show my loved ones that it is possible to achieve success through the idea and the necessary resources.”
The report indicated that after decades of conflict and instability, Iraq is currently witnessing relative political and security calm, which opens new horizons for the private sector, which can develop in a safer manner than ever before, which is reflected in the growing interest of foreign investors, as it was announced In June 2023, Qatar announced its intention to invest 5 billion US dollars, while Saudi Arabia and the UAE signed an agreement in the same month to allocate 6 billion US dollars to support commercial and infrastructure projects in Iraq.
But the report pointed out that challenges still exist, such as the lack of infrastructure related to transportation logistics, Internet connections and energy supply, which could hinder the growth of startups. “That is why we have also opened a branch in Turkey to help us with the logistical process,” Al-Bayati said, adding, “Despite these challenges, I see around me that Iraqi youth have great motivation and have a lot of potential. I am sure that if investors give us the opportunity, Iraq will be a focus.” A real regional for the private sector.
