Insecurity means rising unemployment

Many foreign companies have scaled back or paused operations in Iraq in part due to rising security threats, exacerbating the still high unemployment rate in the country. According to Coalition Provisional Authority (CPA) figures, unemployment is now around 30 percent, down significantly from before the US-led invasion of Iraq last spring. But it is difficult to gauge the accuracy of these figures. There are also wide regional variations. Abdel Hussein al-Basri, head of media relations for the governorate of Basra in southern Iraq, told IRIN that unemployment could be as high as 60 percent in the south. Violence has escalated rapidly in the run-up to the handover of sovereignty, which took place today, two days ahead of schedule in an attempt to avert further attacks from insurgents on 30 June. In particular, the rise in kidnappings among foreigners has caused foreign companies to reduce or postpone operations in Iraq, taking away much-needed job opportunities. Shehab El-Samir, head of the Basra Business Centre, told IRIN that "employment is connected to security". In January, a jobs fair was held in Kuwait for the reconstruction of Iraq. Forty-six countries participated and 1,400 companies were registered. But despite a plan to start work in March or April, nothing has happened since the security situation deteriorated drastically after kidnappings increased from April, El-Samir said. "Besides, now with the shift in sovereignty, there is a great deal of concern over the new constitution and the change of some of the investment laws. Also, I think many companies will not start before September, as reconstruction work in the summer in a city like Basra is almost impossible," he said. At last October's international conference on reconstruction held in Madrid there were many deals and contracts with delegations from different foreign companies from Europe, the US, Canada, South Korea, Kuwait and Saudi Arabia, but so far little has been done, Basra governorate's al-Basri told IRIN. "A Kuwaiti delegation has opened Basra Reconstruction Centre and an investment company from Emirates (airline) is going to take over the Basra airport from the beginning of July when the airport is handed over to the Iraqis. But so far you can't see much progress," he said. Security threats are also affecting local companies which sub-contract to foreign firms. According to some workers, SNAFI, an Iraqi company that works in the reconstruction field, received threats because it's rumoured that all reconstruction companies take contracts from foreign countries. El-Samir from the Basra Business Centre added that there were many companies, such as the giant Kuwaiti company al-Khorafi, that have received threats. Other companies have received warnings as well for working with the occupation forces. Majid Abdel Hamid, from the Association of Arab Friendship and Brotherhood, said that the Association was formed early after the 2003 war "to improve our relations with neighbouring countries such as Kuwait, Iran and Saudi Arabia. We are working with many foreign companies and humanitarian NGOS to provide them with employees. For a time, the situation improved. But after security deteriorated in April, actual work decreased," he said. A spokesperson for the Khorafi group, which started work in May 2003, said that the company had reduced its work force by at least 25 percent since May and stopped working in Baghdad and Baiji. "We only work in Basra now. I know some other Arab and foreign countries which have left the country entirely. Most of the other companies like us are merely waiting until security improves," he told IRIN. Khorafi had been expected to create as many as 3,000 jobs in Iraq. Meanwhile, the situation leaves ordinary Iraqis who need to make a living in a difficult position. They can either look for jobs with those foreign firms still operating, and earn good salaries with increased personal risk, or turn to Iraqi companies which offer pitiful wages by comparison. Worker Ali Ahmed told IRIN in Basra that he worked for one week for a big international company, but in that brief time he received threats for working with the Americans and the British. "Now I work for the Athere Mobile Phone Company. It's a Kuwaiti firm, which could also be a problem. But what can I do? If I work for an Iraqi company, I may not earn enough money," Ahmed told IRIN. "We tried to inform the extreme religious parties that people need jobs and that we have to deal with the CPA until sovereignty is transferred to Iraq," he added. Heba al-Abdalla, who works for the international company Research Triangle Institute (RTI), said that her company has told its employees to be careful and has increased security. RTI has halted its work recently in two other southern cities, Mithan and Zhi Qar, for security reasons, she said. Abu Ammar Abdel Aziz also works for RTI and told IRIN that he received threats because he is working for a company that is said to be Jewish. But he added, "I haven't stopped working." Average salaries in Iraq for those working in the government sector are currently around 200,000 Iraqi dinars (ID) (around $100) a month. For policemen, it is 300,000 ID or $150. This cannot be compared to the time before the war when government employees earned only 6,000 ID ($3). "That's why people were refusing to work for the [previous] government," al-Basri said. "Now, there are a lot of opportunities opened up for employment such as around 2,000 jobs in the port police forces, but many others are still looking for work and wait for a better security situation,"