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Cablegate: Iraq Unemployment Estimated at 15.5 Percent

VZCZCXRO2589
RR RUEHBC RUEHDA RUEHDE RUEHDH RUEHIHL RUEHKUK
DE RUEHGB #2445 2531520
ZNR UUUUU ZZH
R 101520Z SEP 09
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC 4660
INFO RUCNRAQ/IRAQ COLLECTIVE
RHEHNSC/NSC WASHDC

UNCLAS BAGHDAD 002445

SENSITIVE
SIPDIS
AIDAC

STATE FOR NEA/I/ECON AND EEB/IFD/OMA

E.O.12958: N/A
TAGS: ECON EFIN EAID IZ
SUBJECT: IRAQ UNEMPLOYMENT ESTIMATED AT 15.5 PERCENT

1. (SBU) Internal figures from the Central Office for Statistics and
Information Technology (COSIT) estimate that Iraq's unemployment
rate is currently at 15.5 percent. COSIT's last published estimate
showed a 12 percent rate for the final quarter of 2008. In addition
to the overall rate, a GOI official told us on September 3 that
COSIT estimates that youth (ages 18-25) unemployment rate is 25
percent and the underemployment rate is 28 percent.

2. (SBU) The rise in unemployment from 12 to 15.5 percent since last
year can be attributed to five separate trends. First, Iraq's
economic growth has slowed due to the global economic crisis. (The
Economist Intelligence Unit's estimate for GDP growth for 2008 was
7.8 percent, while its forecast for 2009 is only 5.8 percent, which
would be a 25 percent drop.) Second, the economy is not growing
fast enough to create enough new jobs for the 240,000 young people
entering the workforce every year. Third, the drawdown of U.S.
troops has led to direct and indirect employment losses through base
closures and cutbacks in U.S. assistance to Iraq. Fourth, some
121,820 refugees and internally displaced persons have returned to
their habitual residence in Iraq since the beginning of 2009 and
many of those are now looking for work. Some of the returnees were
highly educated economic migrants who were laid off in the Gulf
states during this recession. Finally, several GOI Ministries have
drastically limited hiring because of this year's tight budget. The
GOI is Iraq's largest employer in that it employs 23.4 percent of
household heads across the country, according to the 2007 Iraq
Household Socio-Economic Survey.

3. (SBU) COSIT had planned to do an extensive economic survey in
conjunction with the nationwide census originally set for October
2009 (Note: International press reported on August 16 that Iraq's
census had been postponed indefinitely. End Note.) With the
census postponed, COSIT has dropped its plans to conduct a formal
unemployment survey this year. We will continue to encourage COSIT
to conduct formal labor force surveys and publish the results.

FORD

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