Iraq’s Jobs-for-Peace Mirage

As the wisdom of President Bush’s proposed “surge” of US troops is debated across the US and around the world, another question about the US President’s new policy to avert all-out civil war there is coming to the fore. Can using US funding to reopen Iraqi state-owned enterprises get young men to abandon the insurgency and sectarian militias? The idea sounds logical: a man with a good job that enables him to build a decent life won’t want to fight Americans or his fellow Iraqis, right?

Unfortunately, that jobs strategy is unlikely to reduce the violence. Iraq’s state-owned enterprises were the cornerstone of Saddam Hussein’s economic policy. But, propped up by military contracts, those state companies were never well run or efficient; greatly overstaffed, they produced little, similar to the failed state-owned enterprises of the old Soviet Union.

Moreover, outside of the oil and electric power sectors, state-owned enterprises in Iraq have never been major employers. For example, the roughly 180 enterprises in the Ministry of Industry and Minerals, which controls all state-owned manufacturing companies, never employed much more than 100,000 workers in a nation of roughly 27 million people.

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