Half of Iraq is under 25 and the state cannot employ them, economist says

BAGHDAD — About half of Iraq’s population is under 25 and only 30% of people are in the labour market, economist Manar al-Obaidi said, warning that the next prime minister will face demonstrations by young people the state has no capacity to hire.

“I think the problem lies in the question of how many people we need to employ, and I believe the human time bomb has not arrived yet,” he told Alawla TV. The younger half will reach working age over the next five to 10 years. “This means that they will take to the streets in demonstrations looking for job opportunities, and of course that is their right. Quite simply, the government cannot employ them. The government has no capacity to hire anyone unless production lines are established.”

The public payroll is already the central fiscal commitment. It costs 7.7 trillion dinars a month, about $5.8 billion at the official rate, and supports around 40 million people, the prime minister’s financial adviser Mazhar Mohammed Salih said in August. “Every salary paid by the state is considered to support and affect four family members or beneficiaries,” he said, adding that securing it is an obligatory matter and that Iraq ranks fourth globally for state involvement in the economy. There are close to 4 million public employees, 62% of them in the security and military apparatus, acting Planning Minister Khaled Battal said, with many of the rest representing “quantity rather than quality.”

Obaidi described a paradox. “There is not a company in Iraq’s private sector that does not suffer from a shortage of staff,” he said, “because the level of education produced by the system is unable to meet market needs.” Sectors that expand turn to foreign workers because they cannot find Iraqis with the skills. On economic models, he said a 1% rise in a sector’s output generally produces a 2% rise in employment in that sector.

Iraq’s first census in nearly four decades, held in November 2024, recorded 46,118,793 people, including 340,131 foreign residents, across 8,054,385 households, with an average household of 5.7 and growth of 2.5% a year. Battal said the population is expected to reach around 73 million by 2050. The Planning Ministry said in May that poverty had fallen from 22% to 17% and unemployment from 16% to 13%.