Shafaq News

Iraq’s labor market is undergoing a quiet transformation—driven not by government initiatives or corporate investments, but by the individual choices of women, students, and young professionals.

Across Baghdad and other cities, home-based ventures are multiplying, while a parallel trend—dubbed “digital migration”—allows skilled workers to sell their expertise abroad without leaving the country. Together, these shifts are redefining how Iraqis view work, income, and professional identity, moving away from rigid, formal employment toward flexible, technology-driven livelihoods.

The change has been years in the making, but accelerated after the COVID-19 pandemic forced Iraqis to seek income during lockdowns and economic uncertainty. By late 2024, internet penetration had risen to nearly 83% of the population, compared to just 44% in 2019. Expanded connectivity opened doors to global marketplaces, social media commerce, and remote job platforms—creating a new layer of economic activity unimaginable a decade ago.

For many, these platforms are more than a convenience—they are a survival strategy. They bypass the gatekeepers of traditional employment and allow direct access to customers or employers, offering autonomy in a labor market where options have long been constrained.

Women and youth, historically sidelined in Iraq’s formal economy, are at the forefront. Female labor-force participation remains among the lowest globally—just over 10%—while youth unemployment pushes students and graduates toward part-time, flexible arrangements they can balance with studies or caregiving duties.

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Farah Ahmed, a 30-year-old lawyer, spent years navigating Baghdad’s courtrooms for clients, often returning home without work. “I would wait for long hours… and often return without any work,” she recalled. Frustrated, she turned to online commerce, launching a small clothing business on TikTok with her husband’s support. Daily livestream sales now generate a steadier income, though she still offers legal services to friends and acquaintances. The work comes with its own hurdles—fraudulent orders, prank buyers, and sudden cancellations—but it gives her greater control over her time and earnings.

Students are also carving out niches in the informal online economy. Saja Alwan, 19, a Fine Arts Institute student, began offering fitness coaching and diet plans on social media after completing online training courses. The work allows her to finance her studies without disrupting them, though she faces challenges such as late payments, unrealistic client expectations, and the constant need for self-promotion.

At the higher end of the skills spectrum, improved broadband and remote-work platforms have expanded “digital migration,” enabling Iraqis to work for foreign employers from home. University of Technology graduate Hassan Farouq left a local telecom job with low pay and poor treatment to join a foreign software company, earning in dollars and avoiding long commutes. Engineer Hassan Mustafa had a similar experience, citing higher pay, professional respect, and better work-life balance from his role with an international firm that deposits his salary into a local bank.

Legally, Iraq has had the framework for e-commerce for over a decade. The 2012 Electronic Signature and Electronic Transactions Law recognizes digital contracts, while the 2010 Consumer Protection Law outlines rights for buyers and sellers. But enforcement remains weak—e-signature certification is inconsistent, dispute resolution is underdeveloped, and existing consumer protections do not fit the fast-paced, cross-platform nature of livestream selling.

To address these gaps, the government introduced E-Commerce Regulation No. 4 in 2025, aiming to license online businesses, mandate clear disclosures, and create compliance mechanisms. The challenge now lies in fair enforcement and ensuring that small sellers can register without being buried in bureaucracy.

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Economists note that these micro-enterprises absorb unemployment and broaden participation in the economy, especially for women and youth. Yet, because most remain unregistered, they contribute little to tax revenue. Policymakers face the task of integrating these businesses into the formal economy without deterring participation—through simplified registration, tax exemptions for low turnover, and microcredit linked to formalization.

According to digital business consultant Mohammad Awada, in the remote-work sector, clearer recognition of freelance contracts and banking reforms to facilitate foreign currency payments could help turn digital migration into taxable, sustainable income.

“While the government continues to expand broadband infrastructure, partnerships with civil society, universities, and business chambers could provide digital-literacy training in pricing, record-keeping, dispute handling, and fraud prevention. International bodies like UN Women and the ILO could bolster this shift with micro-grants and targeted training for women and youth,” he told Shafaq News.

If embraced, Awada argued that this transformation could yield a more dynamic small-business sector, higher household incomes, and greater inclusion in Iraq’s labor market. If neglected, it risks remaining fragile—dependent on global platforms, vulnerable to fraud, and invisible to policymakers.

As Hassan Mustafa put it, “The virtual world is more real than we imagine.”

Written and edited by Shafaq News staff