A fifth of the Kurdish population living on government handouts!
What is making the Kurdish labor unproductive? Could it be the free oil money! Out of a population of nearly five million Kurds, there are one million who receive a wage from the government, irrespective of whether they are productive or not!
This huge number of people on the government payroll is crippling the Kurdish economy. The painful reality emerged almost a year ago when tension between Baghdad and Erbil escalated and as a result Baghdad stopped the share of Kurdistan from the national income which is around 15 billion dollars per annum or 17% of Iraq>s total budget.
How can this economic problem be solved? The government needs to invest heavily in the private sector in order to provide substitute employment for government employees. It needs to offer alternative securities that a government job offers. Until now, college graduates dream of a stable government position. The easy wage, the short working hours, the pension plan; these economic temptations are keeping people from moving to the private sector.
With government regulation of the private sector, provision of a decent pension and certain job securities, the private sector can be a realistic alternative for the government jobs. The funding is not a problem as the huge oil revenues can be redirected towards supporting the burgeoning private sector, by provision of grants and loans. Joint private-public partnerships are a good option where the government provides the financing and the private company manages and runs the business. This has been applied with some success in the education sector where PrivatePublic partnership schools have been opened by the SABIS® educational network.
There is a desperate need to encourage a spirit of enterprise and entrepreneurship in the country. The government has to provide the necessary skills through quality education and vocational courses. This way, the Kurdish labour force can become more efficient and productive.
Unless painful reductions are made in the number of public sector employees, the Kurdistan economy will continue to bleed and remain non-productive. The current situation is unsustainable economically because the average Kurdish person is getting used to turning to the government for free handouts to survive!