Cablegate: Unemployment in Fallujah

VZCZCXYZ0009
PP RUEHWEB

DE RUEHGB #2605 2300608
ZNR UUUUU ZZH
P 170608Z AUG 08
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC PRIORITY 8874
INFO RUCNRAQ/IRAQ COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY

UNCLAS BAGHDAD 002605

SIPDIS

E.O. 12958: N/A
TAGS: ECON ELAB IZ
SUBJECT: UNEMPLOYMENT IN FALLUJAH

1. (U) THIS IS AN ANBAR EPRT REPORTING CABLE.

2. (U) SUMMARY: ACCORDING TO THE LOCAL BUSINESS SCHOOL AND
THE GOI, FALLUJAH DISTRICT'S 15.9 PERCENT UNEMPLOYMENT RATE
IS LOWER THAN EXPECTED, AND MAY REFLECT A NORMALIZING
ECONOMY. ON THE OTHER HAND, THE RATE ALSO REFLECTS A 15
PERCENT INCREASE IN LOWER-PAYING AGRICULTURAL WORK IN RURAL
AREAS AT THE EXPENSE OF URBAN INDUSTRIAL JOBS. EPRT FALLUJAH
HOPES TO HELP ADDRESS THIS IMBALANCE BY PROMOTING PRIVATE
SECTOR-ORIENTED UNIVERSITY TRAINING. END SUMMARY.

3. (U) SINCE EARLY MARCH, EPRT FALLUJAH HAS WORKED WITH DR.
KHALIL KHALAF JASSAM, DEAN OF THE BUSINESS SCHOOL, AL ANBAR
UNIVERSITY FALLUJAH CAMPUS AND HIS FACULTY ON QUANTIFYING THE
LEVEL OF UNEMPLOYMENT IN FALLUJAH DISTRICT. ASSISTANT
LECTURER, GHAYDAA, SADIQ SALMAN AL-ASWAD, WHO WORKED CLOSELY
WITH THE GOI TO GATHER INFORMATION ON THE UNEMPLOYMENT ISSUE,
HAS BEEN INSTRUMENTAL IN THE STUDY.

4. (U) FOR THE PURPOSE OF THIS STUDY, THE IRAQIS COMPARE
THEIR ECONOMY TO ONE OF A DEVELOPED COUNTRY AND DEFINE
UNEMPLOYMENT AS THE "STATUS OF AN INDIVIDUAL WHO IS PRESENTLY
OUT OF WORK AND ACTIVELY LOOKING FOR WORK." FALLUJAH DISTRICT
CONSISTS OF THE FOLLOWING CITIES AND TOWNS: FALLUJAH CITY,
AMIRIYAH-FERRIS, KARMAH, SAQLAWIYAH AND HABBANIYAH TOURIST
VILLAGE.

5. (U) BASED ON THEIR PRELIMINARY DATA, FALLUJAH DISTRICT
UNEMPLOYMENT WAS 15.9 PERCENT FOR THE FIRST QUARTER CALENDAR
QUARTER OF 2008 SUGGESTING A NORMALIZING ECONOMY AND
BETTER-THAN-EXPECTED JOB GROWTH. FOR COMPARISON, JORDAN'S
UNEMPLOYMENT RATE WAS 13 PERCENT DURING THE LAST QUARTER OF
CALENDAR YEAR 2007. GIVEN THIS IS PRELIMINARY DATA, THE
FINAL NUMBER WILL LIKELY DIFFER WHEN RELEASED AFTER THE
MUSLIM HOLY MONTH OF RAMADAN (SEPTEMBER-OCTOBER 08).

6. (U) ACCORDING TO THE PRELIMINARY STUDY, THOSE BETWEEN THE
AGES OF 15 AND 24 YEARS ACCOUNT FOR FIFTY-THREE PERCENT OF
THE UNEMPLOYED. MANY YOUNG IRAQIS IN FALLUJAH ARE EITHER OUT
OF WORK OR UNDER-EMPLOYED BECAUSE THE EDUCATIONAL SYSTEM HAS
FAILED TO PREPARE THEM FOR THE PRIVATE SECTOR. THIS PROBLEM
IS MAGNIFIED BY THE FACT THAT IRAQ HAS ONE OF THE WORLD'S
YOUNGEST AND FASTEST GROWING POPULATIONS. THE EPRT IS
CONCENTRATING EFFORTS AT THE UNIVERSITY LEVEL IN BUILDING
CAPACITY TO TRAIN STUDENTS IN BUSINESS AND OTHER PRIVATE
SECTOR SKILLS.

7. (U) IN GEOGRAPHIC TERMS, UNEMPLOYMENT RANGES FROM 14.6
PERCENT IN THE RURAL AREAS TO 16.9 PERCENT IN THE URBAN
OUTSKIRTS TO 21.5 PERCENT IN THE URBAN CENTERS. DR. KHALID
EXPLAINED THE MIGRATION OF WORKERS AND BUSINESSES FROM THE
CENTER OF THE CITIES TO THE RURAL AND OUTSKIRTS AREAS DUE TO
SECURITY, ACCESS AND JOB GROWTH EXPLAINS THE DIFFERENCE AMONG
THE AREAS. THE HIGHEST PERCENTAGE OF PEOPLE WITH INCOME AND
NOT WORKING IS IN THE RURAL AREAS AND THAT NUMBER IS FIVE
PERCENT, ACCORDING TO GHAYDAA,.

8. (U) IRAQ'S TUMULTUOUS PAST THREE DECADES AND REDUCED RAW
MATERIAL IMPORTS DUE TO INTERNATIONAL SANCTIONS HAVE
NEGATIVELY IMPACTED THE AREA, SHIFTING JOBS FROM INDUSTRY AND
MANUFACTURING TO LOWER PAYING AGRICULTURE, ACCORDING TO DR.
KHALID. AS A RESULT, AGRIBUSINESS, WHICH HISTORICALLY
ACCOUNTED FOR 15 PERCENT OF EMPLOYMENT, NOW EMPLOYS NEARLY 30
PERCENT OF THE WORKING POPULATION. (GOI PAYMENT OF THE $87.45
MILLION FOR APPROXIMATELY 3,000 INDIVIDUAL INDUSTRIAL
COMPENSATION CLAIMS IN FALLUJAH WOULD GO FAR IN CORRECTING
THIS IMBALANCE.)
CROCKER

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