Cost of massive unemployment in Iraq could be paid in blood

BAGHDAD — For Raad Abdulsada, every day starts the same way. He wakes up at sunrise, heads to a busy, dusty corner in Baghdad's Karrada neighborhood and waits for work.

Most days, the waiting is in vain.

"Maybe once a week I am hired," said the 31-year-old, his pink polo shirt and torn sweatpants stained with dirt. When he's lucky enough to get picked up, his compensation for a day of labor — usually construction work — is around 15,000 Iraqi dinars, or $13.

"I support a family of seven on this," Abdulsada said. "But for years I cannot get a steady job. So what else can I do? I have responsibilities. So I come here and wait."

Abdulsada's struggle is anything but rare here. Though precise figures don't exist, most approximations put unemployment across Iraq at between 30 percent and 60 percent. U.S. officials estimate that well over half of Iraqis who want to work can't find jobs.

Violence has dropped dramatically here in recent months. But to keep it that way, Iraqi and American officials agree, the country's soaring unemployment rate must come down. They say that if more Iraqis don't find work soon, people here will pay the cost in blood.

"Unemployment is a very dangerous thing," said Mahmoud Othman, a Kurdish member of Iraq's parliament. "When people have no income to live on, they become desperate and can quickly turn to violence."

The link between unemployment and bloodshed is in especially sharp focus right now, as the U.S. military prepares to hand authority over the Sons of Iraq to the Iraqi government.

Also called Awakening Councils, the Sons of Iraq are citizen militias paid by the United States to fight the insurgency, and they are credited with playing a big role in improving security in Iraq. The reasons are twofold: Besides fighting al Qaida extremists who are still active, many of the roughly 100,000 Sons of Iraq are themselves former insurgents who agreed to turn against violence in exchange for paying jobs.

This week, the U.S. military is beginning to move the largely Sunni force to the payroll of the Shiite-led Iraqi government, which says it will gradually disband the militias. Despite mutual distrust between the Sons of Iraq and the government, Prime Minister Nouri al Maliki has promised to absorb some members into the national army, the police and other government jobs; the rest are supposed to be offered job training.

But there is widespread worry that the transition will go badly. If the government fails to pay the Sons of Iraq and they don't find other employment, many fear the former insurgents will turn back to violence.

"It's very important this works," said Maj. Gen. Jeffery Hammond, who oversees Baghdad. "This cannot be something that is allowed to fail."

Iraq's unemployment was high under Saddam Hussein. But the problem has worsened since the 2003 U.S.-led invasion. Soon after arriving, American officials disbanded the Iraqi army and the national police and fired government workers in Saddam's Baath party, leaving several hundred thousand people jobless. Indeed, those decisions helped fuel the insurgency.

More recently, the United States has changed its approach. But much of the fallout has proven hard to reverse.

"I think the U.S. learned a lot from its early mistakes," said Brian Katulis, a senior fellow at the Center for American Progress. "They realized that a big part of the fight in Iraq centers around basic quality-of-life issues, which obviously includes whether people have jobs."

Several U.S. programs now work to combat unemployment here.

The Army has handed hundreds of thousands of dollars to Iraqi businesses struggling to reopen, and the Defense Department is setting up secure commercial centers next to military bases where local entrepreneurs can operate. An initiative called Iraq First aims to give Iraqi companies the first crack at U.S.-funded reconstruction contracts.

Public works programs run by the United States now employ about 125,000 Iraqis, according to the State Department, up from 110,000 at the beginning of this year. Most workers are building roads, clearing damaged property and installing sewer and water lines.

And there is the most successful unemployment program, the Sons of Iraq.

But all that is only going so far. The big question now, Katulis and other experts say, is whether the Iraqi government will sincerely commit to fighting unemployment.

The country launched a job-creation program earlier this year, paying citizens by the day to clean streets, plant flowers and paint murals on the concrete blast walls that crisscross Baghdad. Some provinces are doing the same.

Other programs offer unemployment benefits and interest-free loans for businesses trying to rebuild. The government has allocated $150 million this year for vocational training for Iraq's jobless. Next year's $79 billion draft federal budget calls for $4 billion for state-owned companies.

But many Iraqis say they've seen little change. They say getting hired to most jobs — especially government jobs — usually involves sizable bribes, family connections and months of waiting.

Iraq's ethnic, religious and sectarian divides complicate matters even further. Some government ministries are dominated by Sunnis, others by Shiites, and they hire accordingly.

"I tried to enlist with the police and the army," said Abdulsada, the Karrada day laborer. "But all the jobs there are for people who know someone or can afford to pay bribes."

Another man who waits for work every day, 63-year-old Hadi Seleem Nejim, said he blames the government for his troubles. "I want them to know that we are waiting for companies to open. We want to develop ourselves, our country. But the government is doing nothing."

Nejim said he believes that Maliki, the prime minister, is trying to improve the plight of the poor. "But the rest are corrupt," he lamented. "There is an old Arabic proverb: One hand cannot clap."

Abdullah al Lamy, an adviser in Iraq's Labor Ministry, acknowledged the problem.

"Yes, sure there is corruption," he said. "People in many government ministries do not follow the rules."

But he insisted Iraq's poorest citizens get help.

"We have 1.25 million families collecting unemployment aid," he said. "As much as 65,000 Iraqi dinars ($55) per person per month."

People waiting at the Labor Ministry to pick up their unemployment payments said the money doesn't always come through.

"For a while it was okay, but for 10 months I haven't received anything," said Khalid Abdulsahb, a father of five who spent hours in line on Sunday only to be turned away. "They always say I am missing one paper or another. It's an excuse so the workers can take my payment for themselves. This happens to lots of people."

Iraqi lawmakers agree the government's efforts have been largely ineffective, despite the drop in violence here and the country's soaring oil revenues.

"We say this will be the year of reconstruction and fighting unemployment, but I am not sure," said Othman, the Kurdish parliament member. Besides corruption, he said unqualified public officials are stymieing progress.

Mahdi al Hafedh, a member of the parliament's economic committee, said Iraq's central government and provincial councils are not coordinating their efforts to address the problem. "We don't even have precise percentages of unemployment because no one credible is counting it," he said. "So how can we appropriately solve it?"

Most Iraqis who've had success have found jobs with the government, namely with the army and the police. About a third of the country's labor force works in the public sector, making the government Iraq's largest employer by far.

But only some are finding jobs that way.

Many Iraqis who can't find steady wages turn to day labor, driving taxis or buying gasoline at fuel stations and selling it on the black market for a profit. University officials say only a small percentage of their graduates are entering the workforce.

Private industry here is still stagnating. With electricity, clean water and other basics in short supply, re-opening shops and restaurants is difficult. Many state-owned factories that were shuttered after the invasion remain closed. Local manufacturers have had to deal with the added burden of cheaper, imported goods that flooded in after Saddam was ousted and embargoes lifted.

There has been some progress: More than 2,000 new business licenses were issued across Iraq last year, according to a July report by the Special Inspector General for Iraq Reconstruction.

With all the uncertainty, however, many Iraqis are still afraid to return to business as usual.

Tariq Faraj Naoosh reopened his sweets shop in Baghdad's Adhamiyah neighborhood about six months ago, but he sometimes has to close for short periods when he hears trouble might be coming.

"Sometimes a child is sent along to give us a tip that the American forces will be targeted in the vicinity," said Naoosh, 60. "So we hastily shut down and flee."

And the kitchen in Boob al Sham where he used to make his treats remains closed. "We cannot reach our workshop," he said, because it's still too dangerous there. So he prepares his pastries at home, but there isn't enough space to make candy and chocolates like before. He sees fewer customers now and employs less help.

"Our business has been decimated because many of our customers were from outside Adhamiyah," he said. "People are still very much afraid to enter Adhamiyah."

(Corinne Reilly reports for The Merced (Calif.) Sun-Star. McClatchy special correspondents Jenan Hussein and Sahar Issa contributed to this artocle.)


Iraqi government reassures the Awakening, but fighters are wary

Key U.S. Iraq strategy in danger of collapse

GAO: Iraq's oil profits huge as U.S. bears reconstruction load