Economic Improvements Needed to Stabilize Iraq U.S. and Iraqi officials hail improvements in Iraq's security, but they say economic improvements — especially job creation — are urgently needed. Government and military spending are picking up, but the private sector still has much catching up to do.
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Economic Improvements Needed to Stabilize Iraq

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Economic Improvements Needed to Stabilize Iraq

Economic Improvements Needed to Stabilize Iraq

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This is WEEKEND EDITION from NPR News. I'm Liane Hansen.

Republican presidential candidate John McCain spoke to Republican governors meeting in Washington, D.C. yesterday. On the issue of Iraq, Senator McCain said he believes the country is moving in the right direction.

Senator JOHN MCCAIN (Republican, Arizona; Presidential Candidate): It's going to be long and hard and tough, but I am convinced that now we are on the road to success in Iraq and that affects the entire region.

HANSEN: Even as U.S. and Iraqi officials hail the improvements in Iraq's security, they say economic improvements are urgently needed to consolidate those gains.

NPR's Peter Kenyon reports from Baghdad.

PETER KENYON: Reliable figures are elusive, but according to the U.S. embassy in Baghdad the official unemployment rate here is 18 percent and underemployment may be as high as 50 percent. For years officials and analysts have pointed to high-end employment as an economic and a security problem since it leaves a large pool of idle men available for recruitment by insurgents, militias and other armed groups.

With the daily violence well down in many parts of the country, people say jobs programs are finally beginning to gain momentum.

(Soundbite of sawing)

KENYON: At the edge of a huge U.S. military base near Tikrit, north of the capital, an Iraqi carpenter in training tries his hand at the power saw as an American advisor looks on.

Under a program called IBIZ, the military is beginning, nearly five years after the invasion of Iraq, to train Iraqis to be plumbers, electricians and carpenters. Once certified they can either set up shop back home or get a job with KBR, the major U.S. contractor. Most choose the latter option.

Twenty-nine-year-old Munif Munawer(ph) says the pay isn't great but when a neighborhood leader, known as a mukhtar, told him the Americans would help him learn a trade, he seized the opportunity.

Mr. MUNIF MUNAWER: (Through translator) I was unemployed for a long time. We used to be shepherds. This is much better. When the mukhtar said there were jobs for Iraqis on the base, I said yes.

KENYON: In Baghdad's massively fortified Green Zone, the Iraqi-American Chamber of Commerce and Industry finally managed to launch its Buy Iraqi First initiative. A previous attempt in 2004 had to be cancelled due to insurgent violence. Chamber CEO Radd Omar is a gregarious business advocate with an American accent acquired during more than three decades in the U.S.

He says the sky's the limit in terms of needs here but the atmosphere is better than it has been in years. Omar's goal is to create $500 million in new Iraqi business activity and 10,000 new jobs this year. He says that's not as ambitious as it sounds when you consider how much work is currently being outsourced.

Mr. RAAD OMAR (CEO, Iraqi-American Chamber of Commerce and Industry): For example, KBR, they do about $500 million worth of material for the coalition forces. And they import all of it, 100 percent, from Dubai, right? So they get half of that through Iraqi business. You know, every single generator that breaks down they send it to Kuwait, every single one. They got thousands of them. The Iraqis could do it.

KENYON: Thirty-year-old Kais Ghazi(ph) mans a booth for Al-Eban Construction, which he owns with his brother. The booth is filled with pictures of their recent work, rebuilding police stations, hospitals and offices shattered during either the invasion or its anarchic aftermath. Ghazi says the challenges include working around roadside bombs and getting loans from dysfunctional banks. But the worst problem by far is corruption.

The civil society group Transparency International last year ranked countries against a series of corruption criteria. Out of 179 places, Iraq came in 178th. Ghazi says the planning ministry was a nightmare under Saddam and it's still bad.

Mr. KAIS GHAZI (Owner, Al-Eban Construction): (Through translator) Unfortunately, the problem is still happening even after the fall of the old regime. The first thing is always the payoff. The official says how much are you going to pay me, then we can discuss the contract.

KENYON: As it happens, the Planning Ministry has its own booth just across the way. Spokesman Abd Alzahra al-Hindawy says corruption is a problem, but it's a two-way street.

Mr. ABD ALZAHRA AL-HINDAWY (Spokesman, Planning Ministry, Iraq): (Through translator) I will not deny these problems. For sure there are corruption cases. Unfortunately, there are some contractors who also want to get contracts illegally, so there is corruption from that side as well.

KENYON: Raad Omar with the Chamber of Commerce says right now the needs vastly outweigh the resources. But he takes heart from three years of doing these trade shows up in Kurdish, northern Iraq, where security is better.

Mr. OMAR: I could just see in front of my eyes, they opened the airport in Irbil. We started the show in '05. We opened the airport in Suleymaniye and we started the show in Suleymaniye. And now I see the hotels, I see the restaurants, I see the business activity. So I don't see any difference between Suleymaniye and Baghdad.

KENYON: Anxious American politicians, homesick U.S. forces and their families and millions of Iraqis are hoping that Omar is right and that Iraq's future holds, if not peace and prosperity, at least, basic services and jobs for the able-bodied Iraqis now sitting in their homes or on street corners waiting for anyone to pay them to do something, anything.

Peter Kenyon, NPR News, Baghdad.

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