The Political Economy of Iraq

The Political Economy of Iraq

Restoring Balance in a Post-Conflict Society

Frank R. Gunter

This groundbreaking volume offers a comprehensive look at the current state of Iraq’s political economy in the aftermath of the US-led overthrow of Saddam Hussein in 2003. Frank R. Gunter describes the unique difficulties facing the modern Iraqi economy and provides detailed recommendations for fostering future economic growth and stability.

Chapter 10: Entrepreneurship in post- conflict Iraq

Frank R. Gunter

Subjects: economics and finance, development economics, political economy, politics and public policy, political economy


Iraq faces a severe unemployment problem because of its rapidly growing population. Any year in which the economy creates less than 250 000 new jobs will lead to further growth in the pool of unemployed young men with associated political instability. As discussed in previous chapters, the public sector is limited in its capacity to absorb each year’s addition to the labor force since government services are already severely overmanned. Almost 50 percent of Iraq’s labor force is currently directly or indirectly on the public payroll. Prior to 2003, with the exception of non-grain agriculture, the private sector was suppressed as part of the Arab Ba’athist Socialist Party’s philosophy. Since then, private sector growth has occurred mostly in the informal sectors of the economy. The quality of employment data is very low but an estimated 20 percent of the labor force was employed in the informal economy in 2009. As expected, most firms in the informal economy are very small and in the service sectors.

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