Out of a group of 125 graduates in the class of 2007 at Baghdad University's economics department, three landed ministry jobs and four enlisted in the Army. The rest are unemployed.
This year, the outlook for the 2,800 students graduating from the university's economics and business school is not much better. An estimated 1 percent will find jobs related to their fields, says Thaer al-Ani, an economics professor at the school.
As the security situation improves, polls show that Iraqis are more optimistic than they've been at any time since 2005. Oil revenues are sloshing into the government coffers, providing the government with a record $70 billion budget this year. Iraq's prime minister led a delegation to Europe last week and left with promises of new investment by several German firms. US military officials say they are now focused more on rebuilding than on combat.
Yet as promising as the broader economic trends appear, the view for most Iraqis hasn't improved much – if at all yet.
As the Baghdad University graduating class shows, most good jobs are found in the military, police, and intelligence forces. And many of those jobs are only attained through family ties or payoffs, say Iraqis interviewed.
"Our sole goal is to get a government job…. There aren't other ways for getting ahead," says Asfar Jihad surrounded by her classmates at Baghdad University on a recent morning.
"And the only way you achieve that: pull and connection or bribes," adds her friend Elaf Ahmed.
In 2006, the latest official data available, Iraq's jobless rate was 42.7 percent, according to the Ministry of Planning. But that figure is low, say Mr. Ani and another Iraqi economist, Ahmed al-Wazzan. The unemployment rate doesn't count the "nonproductive workforce" – the tens of thousands of state employees who receive a salary but do little or don't show up for work at all. Unemployment rates are the highest among new graduates, say the two economists
One of the biggest problems, say experts, is that despite the best of intentions, the government continues to be plagued by corruption, mismanagement, and cronyism at every level.
Iraq's main political actors, both in the central and local governments, use their positions and budgets to dole out jobs or simply cash to boost their political leverage. For example, Iraq's Ministry of Youth and Sports is headed by a Shiite. In addition to ensuring that Shiites dominate the ministry, the minister is accused of sabotaging the work of the country's National Olympic Committee once headed by a Sunni. This was one of the reasons cited last week for the International Olympic Committee's ban on Iraqi athletes from participating in the coming Beijing Olympics.
All the main political parties, which tend to be oriented by sect or ethnicity, follow a similar path, creating a recipe for more conflict and turf battles. When one group attains power, the money flows to its supporters only.
Last month, US-backed Iraqi forces launched an operation in the province of Maysan against militia groups linked to Shiite cleric Moqtada al-Sadr. There was little resistance, but dozens of top local officials associated with Mr. Sadr were arrested.
Plans are under way to purge the provincial police force of any militia or Sadrist influence. Tribal leaders beholden to rival parties, such as the Islamic Supreme Council of Iraq (ISCI), were told to furnish lists of candidates for 5,000 new jobs in the security forces. Replicating what was done in other parts of the country this year after military operations against the Sadr's Mahdi Army, Prime Minister Nouri al-Maliki tasked a committee to spend $100 million in Maysan Province to provide emergency relief for the poor and unemployed, and to improve services.
Bribe for a job: $1,250
But not all poor are treated equally.
Nadhim Salman and seven members of his family squat in a crumbling two-room structure, part of a former Army barracks in one of the poorest neighborhoods in Maysan's capital Amara.
Mr. Salman, a former soldier, has been unable to collect a pension. The whole family lives on the 6,000 dinars ($5) earned daily by his son Aqeel as a bus driver. His other son Walid wants to join the security forces but was told that since he had no tribal leader to vouch for him, he had to pay a bribe of 1.5 million dinars ($1,250) to join the army or 3 million dinars ($2,500) for the police.
The family used to get occasional handouts of cash, flour, or bags of groceries from Sadr's movement, which has been known to help the neediest throughout Iraq. But this came to an abrupt end with the government offensive in the province.
In Baghdad's slum of Sadr City, Ahmed Abbas has a similar story. He's a school dropout in his early 20s. He has been an on and off fighter with the Mahdi Army over the years. He has held odd jobs ranging from selling ice, eggs, and cooking gas to pushing carts at the central market.
Mr. Abbas has tried to get a job as a street sweeper but was told "the applicant lists were full." Jobs with the security forces he says required up-front bribes.
Baghdad's police chief Maj. Gen. Kadhim al-Mahamadawi denies that any bribes are taken for hiring at any level. He says the force is simply "overwhelmed" by applicants.
Col. Shelia Bryant-Tucker, outgoing inspector general with the US military command tasked with training and equipping Iraqi forces, says although she has not personally encountered the phenomenon of up-front bribes for security jobs, she would not be surprised, given the prevalence of other corrupt practices within the Army and police.
"It's going to take a whole paradigm shift, a whole generation…. It's a huge problem," she says.
American officials say they have learned their lesson from the "mismanagement" of the past and that the focus of the US effort – military and civilian – is now on promoting private sector growth and helping the government function better.
Last year's surge in US troops, which has largely wound down now, was intended to create the right conditions for economic revival.
Shop owners were handed cash payments, starting at $2,000, to reopen shuttered markets. Unemployed youth and former insurgents were hired for neighborhood watch programs and community cleanup drives. Prominent tribal sheikhs and community figures were given cash and the opportunity to get involved in reconstruction projects.
Military provincial reconstruction teams (PRTs) are working in concert with local governments on longer-term initiatives too. USAID and the PRTs have so far funded nearly $5.5 billion worth of projects in Iraq.
For example, the US is now spending $8 million to set up four municipal outposts known as public works substations in mostly Sunni neighborhoods in western Baghdad. The US is buying all the equipment, hiring the Iraqi staff, and paying their salaries. Municipal officials must promise to match the numbers hired by the Americans and take over the whole program after one year. The idea is to bring services and create jobs in parts of the city where authorities may be hesitant to operate because of sectarian or security considerations.
"You get two for one.... People need to see an example of government working.... That's the thrust," says Lt. Col. Curt Carson, a US commander in western Baghdad.
The US military is also hiring more Iraqis on its bases and directing more procurement contracts to Iraqi companies as part of what it calls its "Iraq First" drive.
The military estimates that at least 75,000 Iraqis are employed now as a result of $3.3 billion worth of contracts with Iraqi-owned firms since January 2007.
An additional 3,700 Iraqis are employed at 60 US military bases across the country, 1,400 are involved in businesses on or near bases, and some $182 million has been directed to Iraqi vendors over the past nine months as part of the $4-billion-a-year military contract for food and services handled primarily by Halliburton's KBR unit, according to Maj. Gen. Tim McHale, director of personnel, logistics, and resources.
The Pentagon's task force to improve business and stability in Iraq is headed by Deputy Undersecretary Paul Brinkley, who says he wants to spur economic growth by assisting foreign investors with "the logistics of going back to Baghdad."
Mr. Brinkley told Al Jazeera television on July 16 that there are already commitments for $500 million worth of foreign investments in Iraq "with billions of dollars [more] in the pipeline...."
Clearer rules, more investors
US diplomats say they continue to push the Iraqi government for more transparent rules in the hope that this will encourage more private initiative and investment, and eventually more jobs. "The system of government is opaque. It's very hard to find out what you are supposed to do to be in compliance with the law.... That system lends itself to corrupt bureaucrats," says Lawrence Benedict, the US Embassy's coordinator for anticorruption.
But the elaborate system of patronage – a hallmark of the previous regime – seems to be reestablishing itself now, Mr. Benedict says. "Iraqis expect benefits from their leadership and for that they are expected to be loyal. To us that looks a lot like corruption. I am not sure it does so much to Iraqis."
One crude example of how this works was evident in Baghdad earlier this month when Iraq's prime minister visited a restaurant. While he ate, the prime minister's aides stopped passing motorists who were driving old vehicles. They were quizzed about their income and jobs. Those deemed poor enough, were given 500,000 dinars ($416). One recipient of the cash handout, Salah Ali, said the government gift represented three-quarters of what he usually made in a month from holding three jobs: government employee, air conditioning technician, and taxi driver.