Iraq's contract workers and unemployed graduates face unresolved employment crisis

BAGHDAD, Iraq — Iraq's Federal Public Service Council has said the absorption of contract and daily-wage public employees into permanent staff depends on available positions and funding directives, leaving the long-running issue unresolved. The country's unemployed graduate population continues to grow each year, with no comprehensive solution in place. The government has turned to alternative projects because a 2026 general budget has not been enacted, while uncertainty remains over the 2027 budget. The absence of a strong private sector, the inability to channel billions of dollars recovered in corruption cases into employment programs, and the heavy share of public salaries in the budget have kept the demand for permanent contracts stuck in a cycle without resolution. Experts have proposed using recovered corruption funds to establish a national emergency wealth fund, directing resources toward the creation of new public companies and the employment of graduates. Other proposals include requiring foreign and local companies in the oil, communications and construction sectors to hire 70 to 80 percent local workers, offering tax exemptions, and providing fund-guaranteed loans to support small and medium-sized enterprises. Additional measures under discussion include regional development funds, expanding the pension and social security law, and channeling local revenues into entrepreneurship to reduce dependence on public-sector employment.