Classroom to street corner: Degree holders stranded in Iraq's job drought - Shafaq News

Shafaq News

Each year, roughly 200,000 Iraqis
complete university and technical education, believing their qualifications
will secure them stable employment. Instead, many enter a labor market
struggling to keep pace with the growing number of graduates, leaving thousands
unable to find work despite their degrees.

For a new generation of Iraqis,
graduation no longer marks the start of professional life. It often signals the
beginning of an uncertain search for work, with many competing for a shrinking
pool of government jobs, accepting positions unrelated to their qualifications,
or looking abroad for opportunities.

The pressure continues to mount in a
country whose population is approaching 47 million, according to World Bank
estimates, while hundreds of thousands of young Iraqis reach working age each
year.

Absorbing that expanding workforce
has become one of Iraq’s biggest economic challenges. Although oil generates
about 90% to 95% of government revenue, the sector creates relatively few jobs
compared with its outsized role in the economy.

That imbalance has also narrowed the
state’s ability to remain the employer of last resort. Around 70% of public
spending is allocated to salaries and wages, according to Ministry of Finance
data, leaving limited fiscal space to expand government hiring or invest
heavily in sectors capable of generating jobs on a larger scale.

For decades, public-sector
employment offered Iraqi graduates the clearest path to financial stability.
Government jobs provided better pay, stronger benefits, and greater security
than much of the private sector. But as state payrolls expanded and fiscal
pressures intensified, that pathway steadily narrowed, forcing a growing number
of graduates to compete for fewer positions.

Universities, meanwhile, have
continued producing ever-larger graduating classes.

Over the past two decades, Iraq has
significantly expanded access to higher education, opening universities and
technical institutes across the country. Ministry of Higher Education data from
the 2024–25 academic year illustrate the scale of that expansion, with more
than 52,000 students admitted to education and basic education programs, 29,160
to science, 25,076 to administration and economics, and 21,047 to engineering,
while medicine, dentistry, and pharmacy together enrolled more than 9,300
students. Yet many graduates continue to set their sights on public-sector
employment because private companies remain too small to absorb the country’s
growing pool of job seekers.

The imbalance extends beyond the
rising number of graduates. Economists point to a widening disconnect between
what universities produce and what Iraq’s economy actually needs.

“Iraq’s efforts to reduce
dependence on oil require stronger manufacturing, technology, and service
industries, but these sectors have not expanded quickly enough to create enough
positions for the country’s growing workforce,” economic expert Mudher
Saleh told Shafaq News, adding that a university degree remains highly valued
socially, but for many young Iraqis it no longer guarantees a clear career
path.

Crude but Jobless

Despite holding some of the world’s
largest oil reserves and generating billions of dollars from crude exports,
Iraq’s petroleum sector is highly capital-intensive. It provides substantial
government revenue but cannot absorb the hundreds of thousands of people
joining the labor market every year.

The World Bank and the International
Monetary Fund (IMF) have repeatedly pointed to Iraq’s dependence on oil, weak
private-sector development and limited job creation as among the country’s most
pressing structural economic challenges.

The strain is reflected in the labor
market. Iraq’s Ministry of Planning estimated unemployment at around 13% in
2025, while other estimates placed it at 15.5% during the first half of 2026.
Youth unemployment remains considerably higher, ranging between 28% and 32%,
placing Iraq among the countries with the highest youth unemployment rates in
the region.

International economist Nawar
al-Saadi attributed Iraq’s unemployment crisis to a combination of economic,
administrative and political failures rather than a single underlying cause.

“Iraq possesses significant
financial, natural and human resources, but many institutions continue to
operate under a quota-based system rather than standards of competence and
achievement,” al-Saadi informed Shafaq News. He maintained that this approach
has slowed development projects, weakened economic planning and discouraged
investment opportunities capable of generating thousands of jobs.

The consequences extend well beyond
economic indicators.

Economic expert Ziad al-Hashemi
stressed that successive Iraqi governments have failed to establish stable
economic institutions, create an investment climate attractive to businesses or
develop legislation capable of encouraging investment and diversifying the
economy.

“Political parties bear a
significant share of the responsibility after turning ministries, government
agencies and state-owned companies into areas of influence and sources of
financial gain,” he told Shafaq News, arguing that this has expanded public-sector
employment beyond sustainable levels.

Protest over Payroll

For many young Iraqis, unemployment
has evolved from an economic challenge into a recurring source of public
frustration.

Across Baghdad and provinces
including Dhi Qar, Basra, Maysan, Najaf and other southern provinces,
unemployed graduates have repeatedly taken to the streets to demand government
hiring, recruitment opportunities and practical solutions after years of searching
for work.

Gatherings outside ministries,
provincial administrations and other government institutions have become a
familiar feature of Iraq’s public life, reflecting growing frustration among
graduates who see few pathways into stable employment.

The issue also stood at the center
of the 2019 Tishreen anti-government protests, when thousands of young Iraqis
pointed to unemployment, corruption and deteriorating public services as among
the main drivers of their anger.

The demonstrations did not end with
the Tishreen movement. Graduate protests persisted in the years that followed,
including throughout 2025 and 2026, as each new wave of university graduates
joined a labor market where opportunities remained far below demand.

Missing Engine

Successive Iraqi governments have
repeatedly presented private-sector growth as the long-term answer to the
country’s employment challenge. For many economists, however, the sector
remains too small, too reliant on public spending and too underdeveloped to
absorb the hundreds of thousands of Iraqis entering the labor market each year.

The IMF reached a similar conclusion
in its 2025 report, pointing to weak private-sector development as one of
Iraq’s main structural economic challenges and warning that limited economic
diversification has left the country heavily dependent on public employment and
oil revenues.

Much of the problem lies in the
private sector’s relationship with the state. Many businesses continue to rely
heavily on government contracts and public expenditure, limiting their ability
to expand independently and generate large numbers of sustainable jobs.

Mohammed al-Najjar, executive
director of the Iraq Development Fund, acknowledged that private companies have
created employment opportunities but maintained that much of that growth
remains tied to government-funded projects and state spending.

“The private sector’s ability to
generate more jobs will remain limited unless legislative reforms allow
businesses to operate more independently,” he conveyed to Shafaq News.

Recognizing those constraints, the
government has introduced several initiatives aimed at narrowing the gap
between education and employment. Under its “Iraq 2050” vision, Baghdad seeks
to reduce its reliance on oil while strengthening productive sectors and
expanding the private sector’s role in the economy.

The Ministry of Labor and Social
Affairs has also expanded vocational training programs while promoting the
establishment of a Higher Council for Training to improve coordination between
educational institutions and labor-market needs.

Al-Najjar, however, maintained that
training alone will not resolve the employment crisis unless Iraq also develops
industries and businesses capable of absorbing those newly acquired skills.

“Without broader economic
diversification, stronger private-sector growth and reforms that create space
for investment and job creation, Iraq’s graduate boom will continue to outpace
the country’s ability to provide employment,” he stated.

In his view, the shortage of jobs
facing Iraqi graduates reflects a broader challenge that has shaped Iraq’s
economy for years: attracting enough investment to build industries, expand
businesses and generate employment on a meaningful scale.

Former deputy head of Parliament’s
Investment Committee, Suzan Mansour, shared a similar assessment, arguing that
Iraq’s investment priorities have often favored housing developments over
productive industries capable of strengthening the economy and expanding
employment opportunities.

Urging the National Investment
Commission to redirect investment toward projects that increase production,
generate jobs, and deliver stronger economic returns, she noted that Iraq
continues to import a large share of its food and consumer goods even as farmers
struggle with rising production costs, limited access to agricultural supplies,
and difficulties reaching markets.

Expanding those productive sectors,
she added, would not only provide employment opportunities for graduates and
young workers but also reduce dependence on imports and establish the
foundation for a more diversified economy.

Unlocking the Potential

Although Iraq has secured several
major energy and infrastructure investments in recent years, a number of
high-profile projects have been delayed, suspended, or abandoned, limiting
their potential to stimulate economic growth and generate employment.

For international economist Nawar
al-Saadi, the impact extends far beyond construction delays or lost investment.
Every stalled industrial project, he maintained, represents factories that were
never built, businesses that never opened, and jobs that never materialized for
a workforce expanding year after year.

“Iraq possesses significant
financial, natural, and human resources, but many institutions are operating
below the standards needed for competence and achievement,” al-Saadi told
Shafaq News, attributing persistent project delays, weak development planning,
and missed investment opportunities to poor management and political influence
while noting that thousands of potential jobs have been lost as a result.

Several flagship projects illustrate
those challenges.

In February 2024, Iraq’s Ministry of
Industry and Minerals disclosed that Shell had withdrawn from the Nibras
Petrochemicals Project in Basra, which had been planned as one of the largest
petrochemical complexes in the Middle East.

The project was expected to produce
around 1.8 million metric tons annually and was widely viewed as a major step
toward reducing Iraq’s dependence on crude oil exports by developing
higher-value industries linked to the country’s energy sector.

Investment challenges have not been
confined to the energy industry. South Korea’s Hanwha Engineering &
Construction withdrew from the Bismayah residential city project in 2020 before
later returning after reaching new agreements with the Iraqi government over
financial and implementation issues.

As Iraq continues to confront the
challenge of creating enough opportunities for its growing workforce, thousands
of graduates are entering a job market where the path from education to
employment remains uncertain. For many, the years spent preparing for a career
are followed by a new challenge: finding where their education fits in an
economy still searching for balance.

Written and Edited by Shafaq News
Staff.

Classroom to street corner: Degree holders stranded in Iraq’s job drought – Shafaq News

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