Professional Documents
Culture Documents
Summative Assessment
Name (s)
Course Code
Date of Submission
Global Business Environment, Management, and the Economy 2
Table of Contents
Component 1: Position Paper on Poverty and Inequality in Iraq...........................................................4
Current Situation in Iraq............................................................................................................................4
Potential Causes of Poverty and Inequality in Iraq....................................................................................5
Consequences of Poverty and Inequality...................................................................................................6
Role of Government and Businesses.........................................................................................................6
References......................................................................................................................................................8
Appendix 1 – Figures of IDP Camp Conditions in Iraq................................................................................9
Component 2: Position Paper on Youth Unemployment in Iraq..........................................................10
Current Situation of Youth Unemployment in Iraq.................................................................................10
Potential Causes of Youth Unemployment..............................................................................................11
Consequences of High Youth Unemployment........................................................................................12
Role of Government and Businesses.......................................................................................................13
References....................................................................................................................................................14
Appendix 2 – Unemployment Rates Among Iraqi Educational Groups (Iraqi Ministry of Planning,
2019)........................................................................................................................................................15
Component 3: Position Paper on FDI and Country Attractiveness in Iraq.........................................16
Current Situation regarding FDI Inflows and Attractiveness in Iraq.......................................................16
Potential Causes/Sources of the Problem in Iraq.....................................................................................17
Consequences of low FDI inflows in Iraq...............................................................................................18
How Governments and Businesses could help Reduce Low FDI inflows in Iraq...................................19
References................................................................................................................................................20
Appendix 3 – FDI Inflows to Iraq and Competitor Countries (2005-2018)............................................21
Conclusion..................................................................................................................................................22
References...................................................................................................................................................23
Global Business Environment, Management, and the Economy 3
Summative Assessment
Poverty and income inequality have reached concerning levels in Iraq in recent years
according to recent data. The latest estimates from 2018 indicate that 22.5% of Iraqis, or over 5
million people, live below the national poverty line on less than $3.20 per day (World Bank,
2019, p.1). Poverty has risen the most in rural areas, where lack of economic opportunities and
access to basic services have left over 30% of the rural population in poverty (UNDP, 2019, p.5).
Vulnerable internally displaced persons (IDPs) and refugees returning to their areas of origin
also face extreme poverty, with over 50% estimated to be living below the poverty line due to
loss of assets, livelihoods and difficulty integrating into local communities still recovering from
According to many experts, these trends in poverty are coupled with growing income
inequality across Iraqi society. Income inequality as measured by the Gini coefficient, which
ranges from 0-1 with higher numbers indicating more concentrated wealth, has grown sharply
from 0.27 in 2004 just after the invasion to around 0.37 based on recent household surveys,
signifying a widening rich-poor divide (Elgaili, 2019, p.10). The top 20% of income earners now
control around 10% more of national income compared to 2004, while the bottom 20% of
earners have lost a proportional share of income. This signals an uneven experience of poverty
reduction efforts and post-conflict economic growth that largely benefits more affluent groups.
The sharp rise in poverty and inequality in Iraq can be traced to multiple interconnected
factors stemming from decades of conflict and instability. The 2003 US-led invasion and
Global Business Environment, Management, and the Economy 4
subsequent armed conflict from 2004-2017 displaced millions within Iraq and to neighboring
countries, severely disrupting livelihoods, access to services, and social networks critical for
poverty alleviation (World Bank, 2019, p.15). Vast destruction of public infrastructure like
schools, healthcare centers, water and electricity networks impaired the delivery of basic services
for years. The loss of lives and limbs of primary breadwinners also swelled poverty levels across
More recently, areas under ISIS control such as Mosul and the Nineveh plains between
2014-2017 endured untold violence and devastation, with entire villages and towns left in ruins
after their liberation. Hundreds of thousands of displaced families returning to these isolated
places struggled to find intact shelter, re-establish livelihoods, or access functioning public
services in their trauma (UNHCR, 2019, p.25). Corruption also remains pervasive in Iraq,
siphoning off billions in public wages, pensions, reconstruction contracts and social program
funds that could otherwise support poverty reduction efforts (UNDP, 2018, p.10). The oil-
dependent economy, while an important source of state revenues, has failed to generate sufficient
employment opportunities at scale in other sectors to absorb Iraq's substantial population growth
Widespread poverty and rising inequality threaten to undermine Iraq's stability and
from accessing basic health and education services, perpetuating intergenerational cycles of
disadvantage. Data shows Iraqi children from the poorest households are twice as likely to
experience stunting due to malnutrition and three times more likely to miss receiving critical
vaccinations compared to wealthier families (UNICEF, 2019, p.30). Higher unemployment and
Global Business Environment, Management, and the Economy 5
fewer opportunities in impoverished areas also correlate with increased crime rates as hopeless
youth engage in illicit activities (UNODC, 2017, p.20). Poverty additionally renders some
The protracted living conditions and social exclusion faced by over 1.5 million IDPs
concentrated in camps throughout Iraq also erodes prospects for long-term stability. With over
half estimated to be living in absolute poverty with little access to livelihoods, education or
safety, growing frustrations could boil over into unrest if the sizable displaced population is left
meanwhile, increases social tensions that armed groups can exploit for recruitment and divide
communities. This fragile security environment deters the foreign direct investment vital for
private sector growth capable of reducing unemployment, currently less than 1% of GDP inflows
to Iraq (UNCTAD, 2019, p.30). Without concerted action, cascading social and economic costs
The Iraqi government has an important leadership role to play in coordinating a complex
national poverty reduction strategy. Expanding targeted social assistance programs like
conditional cash transfers to vulnerable families and individuals can deliver immediate relief
while encouraging human capital investments over the long-term (Schwab and Zahidi, 2020).
Increased public spending on basic infrastructure, healthcare centers, schools and utilities in
deprived areas also aims to sustainably lift whole communities out of poverty. Meanwhile,
energy and food subsidy reforms that redistribute savings to those most in need through direct
assistance programs can pave way for greater resources to fund critical pro-poor programs over
the medium-term (World Bank, 2018, p.25). In this regard, engaging the private sector is also
Global Business Environment, Management, and the Economy 6
key as businesses create the jobs and wealth that strengthen public finances supporting anti-
poverty efforts.
On the other hand, companies can also contribute through corporate social responsibility
initiatives focusing on technical skills training, microfinance access, and job placement services
for unemployed youth in impoverished communities (UNGC, 2015, p.30). Advocating for
continued legal and regulatory reforms promoting transparency, competition and rule of law
helps level the playing field for businesses of all sizes to flourish and for their tax revenues to
uplift livelihoods. International development organizations also bring technical expertise to help
local authorities improve budget planning and public service delivery while battling corruption
deterring investment (UNDP, 2020, p.15). With multiple stakeholders playing complementary
References
https://www.economywatch.com/economies-in-transition/inequality-and-poverty-in-
iraq.html
Schwab, K. and Zahidi, S., 2020. The Global Competitiveness Report 2020 How Countries are
https://www.iq.undp.org/content/iraq/en/home/operations/projects/democratic_governanc
e/Tackling-Corruption-in-Iraq.html
http://www.iq.undp.org/content/iraq/en/home/library/AssessingPovertyinIraq2018-
19.html
http://documents1.worldbank.org/curated/en/764781556915492037/pdf/Iraq-Poverty-
Global Business Environment, Management, and the Economy 8
economic prospects, disproportionately impacting the country's large youth population. Official
Iraqi government statistics indicate alarming unemployment rates of over 25% among young
people aged 15-24 years who are active participants or seeking entry into the labor force (ILO,
2019, p.10). However, most labor market experts believe the real joblessness level is
significantly higher due to lack of comprehensive data collection in post-conflict areas and
among vulnerable IDP communities (UNESCWA, 2017, p.5). Each year, over half a million
Iraqi youth reach working age yet face extremely limited formal work opportunities. Those from
On the other hand, while educational attainment has improved markedly among younger
Iraqis such that current youth cohorts on average possess higher educational qualifications than
generations prior, this rising human capital is paradoxically failing to translate into adequate
employment opportunities. With over 60% of Iraq's total population being under the age of 25
years old according to UNFPA statistics, this translates to millions of new youth seeking
livelihoods in the labor force each passing year. However, weaknesses in technical skills
training, a still-recovering private sector unable to create jobs at the pace demanded, and
outmoded curriculum have all contributed to a mismatch preventing the absorption of this
educated workforce. Unless urgent and coordinated efforts are made between government,
qualifications of Iraqi youth, the risks of rising instability due to hopelessness and potential
Global Business Environment, Management, and the Economy 10
exponentially. The scale of unemployment facing young people represents immense risks to
crisis in Iraq. Firstly, the weak private sector investment and development over decades,
exacerbated by turmoil after 2003, have meant insufficient labor-intensive jobs are being created
at the scale needed to absorb the rapid influx of young jobseekers each year (World Bank, 2015,
p.12). As a result, the public sector remains the biggest formal employer by default yet is unable
to expand participation rates enough to dent overall unemployment trends (ILO, 2019, p.20).
Separately, despite rising education levels, outdated primary and secondary curricula focus
largely on theoretical classroom learning rather than equipping Iraqi youth with technical or
impaired human capital development for many Iraqi youth. Over five million citizens were
forced to flee violence in their homes between 2006-2017, disrupting livelihoods, professions
and the social networks vital for career guidance (UNHCR, 2018, p.15). Even adolescents who
remained in-country and continued school saw quality of education diminish as teachers and
facilities struggled under stressful conditions. Employers also report many young jobseekers lack
essential "soft" skills such as communication, teamwork and problem-solving due to this
tumultuous background, diminishing their competitiveness for available roles (ILO, 2019, p.25).
These mutually reinforcing factors underlie the persisting high barriers Iraqi youth face in the
labor market.
Global Business Environment, Management, and the Economy 11
The consequences of sustained youth joblessness are serious and multidimensional for
Iraq. With few hopeful prospects, unemployed and marginalized youth represent a pool of
recruits vulnerable to exploitation by violent extremist groups who offer financial rewards and
purpose through militia membership (UNESCWA, 2017, p.15). Criminal networks also typically
prey on idle youth as willing operatives, undermining broader stability efforts. Rising
disillusionment among educated youth has already contributed to a "brain drain" problem as the
most talented individuals emigrate in search of better livelihoods elsewhere, robbing Iraq of
Within communities, social issues linked to poverty and lack of purpose like increasing
crime rates, drug abuse problems and domestic instability tend to multiply when large portions of
the youth demographic are economically disenfranchised long-term (UNODC, 2019, p.20). From
an economic viewpoint, the productivity losses incurred by underutilizing the skills and labor of
millions of young Iraqis currently out of the workforce represents an immense drag on national
development potential, risking stagnation at low income levels rather than graduating to upper
middle income status. Unless the "youth bulge" is productively absorbed into education and
Tackling youth unemployment in Iraq demands a coordinated response from both public
and private sectors. With regard to the role of government, prioritizing strategic investment in
technical and vocational education programs directly tied to labor market needs can enhance
workforce skills and employability (ILO, 2019, p.40). Incentivising the private sector to offer
apprenticeships, traineeships and hiring quotas for youth supports this long-term human capital
Global Business Environment, Management, and the Economy 12
formation approach. Moreover, complementary labor law reforms easing rigidities also
encourage SME growth and entrepreneurship essential for job generation at a large scale (World
Bank, 2015, p.30). Additionally, targeted public financing instruments such as startup grants and
subsidized loans distributed through credible programs further catalyze youth business creation
and large-scale employment in strategic industries like infrastructure, renewable energy, and
technology where future demand lies (UNESCWA, 2017, p.25). Coordination and monitoring
under a national youth employment strategy ensures coherence across diverse initiatives.
Educational institutes too have a role, by integrating career guidance and internship placement
into curricula assisting youth’s transition into the labor force (ILO, 2016, p.20). With
References
ILO. 2019. Youth employment in Iraq. ILO Country Office for Iraq.
https://www.ilo.org/beirut/countries/qatar/WCMS_724153/lang--en/index.htm
Iraqi Ministry of Planning (2019). Study on Employment and Unemployment in Iraq. Baghdad:
UNESCWA. 2017. Youth in Iraq: Facts and figures. UN Economic and Social Commission for
Western Asia.
https://www.unescwa.org/sites/www.unescwa.org/files/events/files/youth_in_iraq_facts_
and_figures_2017_english_0.pdf
http://documents.worldbank.org/curated/en/159511468189788464/pdf/96412-WP-
P146833-Box391481B-PUBLIC-Iraq-YE-DiagnostiReport-English-Web-Quality.pdf
Global Business Environment, Management, and the Economy 14
Planning, 2019).
10%
24%
13%
15%
20%
17%
Global Business Environment, Management, and the Economy 15
The current situation regarding FDI Inflows and Attractiveness in Iraq is characterised by
low FDI inflows. While the Iraqi government has made efforts over the past two decades to
reform policies and liberalise key sectors to attract more foreign investment since 2003, FDI
inflows into the country have remained particularly low relative to Iraq's considerable untapped
economic potential. UNCTAD statistics reveal that net FDI was only approximately $2.7 billion
in 2018, amounting to less than 1% of Iraq's GDP that year despite efforts to cut red tape and
privatise state assets (UNCTAD, 2019). Moreover, the largest shares of foreign capital in recent
years have been channeled into extractive industries such as oil, as well as real estate,
competitiveness and the ease of doing business according to indicators published by bodies such
as the World Bank and IMF. Bureaucratic hurdles such as complicated licensing procedures,
inefficient customs processes and inconsistent regulation deter foreign entrepreneurs. Ongoing
security issues in parts of the country from militia violence and insurgent groups undermine
perceptions of stability. With dilapidated infrastructure, unreliable utilities and a higher cost of
operations overall compared to neighbouring nations also, Iraq has struggled to attract greater
investor interest away from its oil-dependent economy and towards diversifying sectors that
could leverage private sector skills and capital to boost sustainable growth and development.
Global Business Environment, Management, and the Economy 16
Chief among these is the weak rule of law as corruption permeates many levels of government
and the justice system, while the enforcement of commercial contracts cannot be reliably
guaranteed. According to Almfraji and Almsafir (2014, p.206), this erodes investor confidence in
the stability and fairness of the operating environment. Lengthy bureaucratic procedures for
undertaking projects impose high compliance costs in an already risky market. Obtaining proper
licences, approvals and dealing with customs can take months with inconsistent application of
regulations.
of the country directly increase operating expenses. With many regions only receiving
intermittent electricity and water supplies, and transport links needing modernisation, economic
productivity and competitiveness suffers. A shortage of skills matching the needs of new
industries and rigid labour laws further constrain larger businesses from scaling up operations.
Geostrategic tensions in the region and occasional militant attacks only enhance perceptions of
instability for risk-averse foreign capital. Unresolved border disagreements also stunt investment
potentials in resource-rich contested zones. Taken together, these diverse obstacles present
One of the key consequences of Iraq's inability to attract higher levels of foreign direct
investment is that it leads to missed opportunities for faster economic growth and development.
As noted by the World Bank (2015), increased FDI inflows have the potential to accelerate post-
conflict reconstruction considerably through technology and skills transfers that promote
Global Business Environment, Management, and the Economy 17
productivity and export competitiveness (p.15). This in turn helps diversify the economy away
from its reliance on oil revenues. Moreover, continued low FDI means Iraq maintains its existing
vulnerabilities due to heavy dependence on volatile oil export earnings. As UNCTAD (2019)
points out, greater FDI plays an important role in reducing budgetary reliance on oil revenues
through expanding the tax base (p.25). With non-oil revenues constrained, this limits the
among educated youth. The ILO (2019) indicates new employment opportunities generated
through FDI could help address Iraq's pressing unemployment challenges faced by its large
youth population (p.40). Prolonged difficulties finding work fuels risks of instability as
hopelessness rises. This links to another key concern which is the potential for instability if
economic issues are left unresolved. The UNESCWA (2017) warns that without alternatives for
upward mobility, conditions become ripe for civil unrest, extremism recruiting from disaffected
unemployed segments (p.15). Additionally, the skills gap grows as talented Iraqis seek work
abroad due to limited domestic prospects, representing a drain of human capital. If the barriers to
higher FDI are not addressed, Iraq risks missing out on opportunities to realize its development
How Governments and Businesses could help Reduce Low FDI inflows in Iraq
There are several ways in which governments and businesses could work to reduce the
problem of low FDI inflows in Iraq. On the government side, liberalizing restrictive sectors to
foreign investment through deregulation and targeted incentives would help improve the
investment climate (World Bank, 2015, p.30). Regulatory reforms that expedite commercial
dispute resolution and contract enforcement would strengthen the rule of law needed to provide
Global Business Environment, Management, and the Economy 18
assurance for investors (ILO, 2019, p.20). Modernizing key infrastructure such as power, water
competition and efficiency (UNESCWA, 2017, p.25). A national competitiveness strategy aimed
at developing workforce skills, facilitating trade processes, and reducing bureaucratic obstacles
could also help address structural issues deterring investment (ILO, 2016, p.40). Pursuing
regional economic integration allows Iraq to leverage its combined market size and connectivity
with government enables large infrastructure projects to be implemented utilizing private sector
project management expertise (World Bank, 2015, p.30). With infrastructure constraints
hindering operations, such partnerships present a win-win. Companies could assist with
developing technical skills in the labor force through training programs, apprenticeships and job
creation (ILO, 2019, p.20). Investing in more labor-intensive industries transfers knowledge and
newer technologies. Engaging in regional trade and investment partnerships allows Iraqi and
foreign businesses to access the deeper pools of customers, resources and suppliers across wider
markets (UNCTAD, 2019, p.15). If governments focus policy efforts on liberalizing business
environment barriers and attracting strategic foreign partnerships, while businesses supplement
this through helping build institutional capacity and integrating into regional value chains, the
between the public and private stakeholders have the greatest potential to realize Iraq's untapped
economic promise..
Global Business Environment, Management, and the Economy 19
References
Almfraji, M.A. and Almsafir, M.K., 2014. Foreign direct investment and economic growth literature
review from 1994 to 2012. Procedia-Social and Behavioral Sciences, 129, pp.206-213.
UNCTAD. 2019. World investment report 2019: Special economic zones. UNCTAD.
https://unctad.org/en/PublicationsLibrary/wir2019_en.pdf
World Bank. 2020. Doing business 2020: Comparing business regulation in 190 economies. World
Bank. https://www.doingbusiness.org/en/reports/global-reports/doing-business-2020
Arbid, G. 2019. Improving Iraq's investment climate to attract foreign direct investment. Chatham
House. https://www.chathamhouse.org/2019/01/improving-iraqs-investment-climate-attract-
foreign-direct-investment
IMF. 2018. Iraq: Staff report for the 2018 article IV consultation. IMF.
https://www.imf.org/en/Publications/CR/Issues/2018/12/13/Iraq-2018-Article-IV-
Consultation-Press-Release-Staff-Report-and-Statement-by-the-46342
Global Business Environment, Management, and the Economy 20
Conclusion
In conclusion, this portfolio has evaluated position papers on three key developmental
issues facing Iraq: poverty and inequality, youth unemployment, and low FDI inflows to promote
competitiveness and growth. While the challenges are serious, progress can be achieved through
investment reforms to realise Iraq’s strong economic potential. By prioritizing inclusive growth
that creates opportunities especially for disadvantaged groups, the long-term stability and
prosperity of Iraq and the region will be ensured. Through concerted national and international
action on the priorities outlined, Iraq can embark on a new path of sustainable and shared
development.
Global Business Environment, Management, and the Economy 22
References
Almfraji, M.A. and Almsafir, M.K., 2014. Foreign direct investment and economic growth
literature review from 1994 to 2012. Procedia-Social and Behavioral Sciences, 129,
pp.206-213.
Arbid, G. 2019. Improving Iraq's investment climate to attract foreign direct investment.
climate-attract-foreign-direct-investment
https://www.economywatch.com/economies-in-transition/inequality-and-poverty-in-
iraq.html
ILO. 2019. Youth employment in Iraq. ILO Country Office for Iraq.
https://www.ilo.org/beirut/countries/qatar/WCMS_724153/lang--en/index.htm
IMF. 2018. Iraq: Staff report for the 2018 article IV consultation. IMF.
https://www.imf.org/en/Publications/CR/Issues/2018/12/13/Iraq-2018-Article-IV-
Consultation-Press-Release-Staff-Report-and-Statement-by-the-46342
Iraqi Ministry of Planning (2019). Study on Employment and Unemployment in Iraq. Baghdad:
Schwab, K. and Zahidi, S., 2020. The Global Competitiveness Report 2020 How Countries are
https://www.iq.undp.org/content/iraq/en/home/operations/projects/democratic_governanc
e/Tackling-Corruption-in-Iraq.html
Global Business Environment, Management, and the Economy 23
http://www.iq.undp.org/content/iraq/en/home/library/AssessingPovertyinIraq2018-
19.html
UNESCWA. 2017. Youth in Iraq: Facts and figures. UN Economic and Social Commission for
Western Asia.
https://www.unescwa.org/sites/www.unescwa.org/files/events/files/youth_in_iraq_facts_
and_figures_2017_english_0.pdf
UNCTAD. (2019). World investment report 2019: Special economic zones. UNCTAD.
https://unctad.org/en/PublicationsLibrary/wir2019_en.pdf
http://documents.worldbank.org/curated/en/159511468189788464/pdf/96412-WP-
P146833-Box391481B-PUBLIC-Iraq-YE-DiagnostiReport-English-Web-Quality.pdf
http://documents1.worldbank.org/curated/en/764781556915492037/pdf/Iraq-Poverty-
Assessment.pdf
World Bank. 2020. Doing business 2020: Comparing business regulation in 190 economies.
2020