Pressing Challenges and a One-Sector Economy

Within the last twenty years, the Iraqi economy has experienced significant setbacks. Amid ongoing conflicts in the country, the private sector has gradually declined. In its heyday, Iraq boasted a diverse economy, thriving on the pillars of agriculture, tourism and manufacturing. However, a major transformation has taken place, leading to a heavy dependence on a single sector: oil. Global market swings lead to instability and fiscal imbalances when oil prices decline, which shrink the country’s revenue sources.

The high unemployment rate and scarcity of work prospects pose another substantial barrier, especially for young people. Population growth and inadequate employment creation contribute to social and economic frustrations. Additionally, the gap between labour market demand and higher education curricula hinders fresh graduates’ connections to employment opportunities. Creating sustainable employment requires stimulating entrepreneurship, improving vocational training and attracting private investment.

Pathways to Jobs conference

Bringing together influential leaders from the public, private, and non-governmental sectors, the conference addressed labour demand, economic transformation, entrepreneurship and small and medium-sized enterprise (SME) growth in Iraq. Some of the country’s most innovative solutions and policies were highlighted to help nurture a sustainable economic ecosystem, paving the way for robust job creation within the private sector.

“We recognise that the needs that people experience are not only related to one sector. Therefore, we work to integrate our work better… In order to foster a sustainable economy, the Netherlands supports SPARK and other initiatives that help youth and entrepreneurs on their journey to better jobs.”

-Hans Sandee, Ambassador of the Kingdom of the Netherlands to Iraq

Supported by the Netherlands’ Ministry of Foreign Affairs and the European Union through the EU Regional Trust Fund in response to the Syrian crisis, the ‘MADAD’ fund, the conference exemplified the commitment of international partners to support Iraq on its path to a prosperous and inclusive economy.

Bologna Process: Linking Higher Education with The Labour Market

Four workshops and a main panel discussion enabled stakeholders to connect. Panellists Prof. Dr. Salah Fatlawi, Head of Supervisory Authority at the Ministry of Higher Education and Scientific Research (MoHESR), Dr. Imad Abdulhussen Jiad, representative of the Central Bank, and Salah Abdel-Hadi Mazkhor, Expert Engineer in the Private Sector Development Department at the Ministry of Trade explored ways to revitalise the Iraqi private sector and economy.

As emphasised by Dr. Salah, since 2019, SPARK’s Jobs and Perspectives Programme, funded by the Dutch Ministry of Foreign Affairs, has been working to bring systemic change to the Iraqi higher education system by introducing the Bologna Process. The Ministry of Higher Education and Scientific Research in Iraq (MoHESR) announced on March 12, 2023, a new ministerial order to implement the Bologna Process in Iraqi universities starting from the academic year 2023-2024. The Bologna Process is an intergovernmental higher education reform process that focuses on creating labour-market-oriented educational systems. To date, it includes 49 European countries and a number of European organisations.

“It is our responsibility to understand the labour market requirements and to prepare these students for a prosperous future. We need to have clear plans and studies of labour market requirements in order to develop our curricula accordingly.”

-Prof. Dr. Salah Fatlawi, Head of Supervisory Authority at the Ministry of Higher Education and Scientific Research

At its core, the Bologna Process values the partnerships of local stakeholders, government-led policy processes and private-public partnerships. The Bologna Process connects the theoretical studies of higher education with the practical knowledge of the private sector to better align student skills with the demands of the job market.

“The Ministry of Higher Education has launched several important programmes in this regard, especially the launch of the Bologna Process, to make sure that students have the needed skills. SPARK has been a real partner in preparing the Iraqi staff for the Bologna path. We congratulate their efforts in transforming the Iraqi Higher Education System.”

-Prof. Dr. Haidar Abd Dahid, Deputy Minister of Higher Education, Iraqi Ministry of Higher Education and Scientific Research

Access to Finance: A Barrier to a Diverse Private Sector

During one of the workshops, several challenges were revealed facing SMEs on their path to growth in Iraq. Iraqi banks are reluctant to invest in innovative ideas, preferring to finance pilot projects with frequent proposals but lacking support for young entrepreneurs’ innovative solutions. Young entrepreneurs also face difficulties due to their limited experience in banking processes and maintaining project profitability. Uncertain guarantees and debt repayment issues also create hurdles for banks. Additionally, complicated regulations from the Central Bank of Iraq lead to delays in implementation, discouraging the younger generation from participating in the market. Limited access to financial investment favoured well-known merchants and powerful companies, excluding many others. The improper way of dealing with customers and investors raised concerns, stressing the need for professional communication skills. The shift in economic focus towards commerce, importing low-quality materials, and neglecting the industrial sector posed challenges for economic growth.

During the workshop, economic experts stressed the importance of SMEs and called for more investment in empowering and enhancing their quality, as well as linking Iraqi entrepreneurs with the labour market and government financing institutions to support their success.

Initiatives to Develop the Private Sector

Salah Abdul-Hadi Mazkhor, representing Iraq’s Ministry of Trade, emphasised the importance of fostering partnerships with colleges and promoting the growth of the private sector. Mazkhor’s remarks shed light on the crucial role that private sector development plays in the country’s economic landscape. The ministry has implemented measures to streamline the process of registering new businesses, making it a hassle-free experience for entrepreneurs. Additionally, the ministry actively works towards nurturing a new generation that is well-equipped to tackle the pressing challenges of our modern world.

Imad Abdulhussen Jiad, from the Central Bank of Iraq, shed light on the ongoing initiatives aimed at promoting entrepreneurship and providing support to SMEs. The Central Bank collaborates with the Ministry of Trade to establish favourable legal frameworks for startups by addressing obstacles such as taxes. In addition, the Central Bank is making efforts to develop a digital system that will allow for a faster and more efficient process.

Strengthening Youth Leadership in Iraq

Featuring experts and activists who are engaged in countering violent extremism in Iraq, one of the workshops addressed challenges related to violent conflicts, such as those exemplified by groups like ISIS.. Dr. Saaid Abdul Al Saied, from the Iraqi National Committee for the Implementation of the National Strategy to Counter Violent Extremism Conducive to Terrorism, emphasised the importance of engaging civil society organisations to combat scandal and support national peace through the implementation of committees within the national security services.

We highlighted efforts to ensure the teaching of ethics by addressing misinterpretations in curricula, particularly in religious schools and universities. Participants discussed challenges faced during different phases, including the impact of ISIS and highlighted the influential role of social media among Iraqi youth, raising concerns about its potential effects on radicalisation.

In exploring solutions, the workshop emphasised the significance of understanding prevalent forms of extremism and investing in and empowering Iraqi youth. They discussed the importance of youth involvement in voluntary work, aligning education outcomes with the labour market, and leveraging Iraq’s young population as a valuable resource.

Marya and NoC

SPARK’s Networks of Change (NoC) programme funded by the Dutch Ministry of Foreign Affairs, was presented by Marya Yasin, an NoC campaigner and youth trainer in Halabja. Marya showcased positive and alternative narratives that build trust and resilience among the youth in the Kurdistan Region of Iraq. The group created public awareness campaigns and safe spaces, both online and offline, to encourage meaningful discussions among youth and counter the influence of violent conflicts and radicalisation.

Read the event report here