Shafaq News- Baghdad

Iraq cannot tackle unemployment through government hiring alone or by directing graduates to the private sector without first reforming the business environment, economic and parliamentary experts told Shafaq News, as high youth unemployment and a steady influx of university graduates intensify pressure for jobs.

Prime Minister’s financial and economic adviser Mudher Mohammed Saleh linked the problem to an economic model under which the state has remained the country’s largest employer for decades, even as labor-market entrants increasingly exceed the public sector’s capacity to absorb them.

For thousands of graduates seeking government jobs, the response should not be limited to “hiring everyone” or “rejecting everyone,” Saleh said. His proposed alternative combines paid training tied to employment, temporary state-funded wage support, low-interest loans for small businesses, and priority for skills the economy needs.

Such measures would allow the government to bear part of the cost of graduates’ transition into employment without creating permanent public-sector salaries. “State recruitment, however, may temporarily ease unemployment, but cannot resolve it.”

Saleh described the broader goal as “less state involvement in employment and a stronger role in regulation and investment,” supported by a larger, more productive private sector and an economy less dependent on oil, with jobs created through growth and productivity rather than administrative decisions.

Parliamentary Finance Committee member Jamal Kocher stressed that reducing reliance on state employment does not mean eliminating government recruitment, as laws require certain categories and specialties needed by public institutions to be hired.

Read more:Iraq: 250K graduates annually amid 20% youth unemployment

Doctors and the top three graduates from each graduating class are among those Kocher believes the country should retain, particularly amid technological developments and healthcare challenges. In his view, the government should absorb those it can while facilitating opportunities for others outside the public sector.

“There is no government in the world that can employ every graduate,” Kocher said, arguing that success should instead be measured by the availability of jobs across both sectors.

He listed uncontrolled weapons, political interference in economic activity, regional instability, inadequate investment budgets, and heavy government borrowing from banks among the obstacles restricting private investment and job creation. Weak loan repayment, inadequate oversight, and poor implementation of regulatory findings have compounded those problems, leaving the private sector in what he described as a state of “clinical death.”

Economic expert Safwan Qusai proposed linking business regulations and investment incentives more directly to local employment, with companies and other enterprises required to hire degree-holders whose specialties correspond to their work.

His proposal covers businesses such as restaurants, banks, pharmacies, hospitals, and maintenance workshops. Company license and professional permit renewals could depend on compliance, while tax exemptions or other incentives could reward businesses that formally recruit qualified workers.

A similar requirement could apply to government investment projects, with investors obliged to employ Iraqi graduates so projects contribute to the labor market alongside capital and revenue.

Read more: Classroom to street corner: Degree holders stranded in Iraq's job drought

Iraq’s Planning Ministry put the unemployment rate at around 13% in 2025. Youth unemployment is considerably higher, at 35.8%, according to the Strategic Center for Human Rights, citing UN and International Labour Organization data. Meanwhile, nearly 250,000 graduates enter the labor market each year from public universities and institutes alone, according to Planning Ministry estimates.

Against this backdrop, hundreds of graduates have repeatedly demonstrated in Baghdad and several provinces, demanding appointments to state institutions and jobs matching their academic qualifications.

Read more: Youth in despair, no jobs to share: Iraq’s workforce hanging in the air