LABOUR MARKET OPPORTUNITIES AND CHALLENGES

Baiji, Governorate

IOM – 2019

This programme is supported by: Labour Market Opportunities and Challenges

IOM Disclaimer List of Acronyms

The opinions expressed in the report are those of BEP Business Expansion Package the authors and do not necessarily reflect the views BSP Business Support Package of the International Organization for Migration (IOM). The designations employed and the presentation of material CIP Community Implementation Plan throughout the report do not imply the expression of any CoC Chamber of Commerce opinion whatsoever on the part of IOM concerning the CoI Chamber of Industries legal status of any country, territory, city or area, or of its authorities, or concerning its frontiers or boundaries. CRC Community Resource Centre ESP Employment Support Package IOM is committed to the principle that humane and FGD Focus Group Discussion orderly migration benefits migrants and society. As an intergovernmental organization, IOM acts with its partners FT Farming Training in the international community to: assist in meeting the IDP Internally Displaced Person operational challenges of migration; advance understanding ISIL Islamic State in Iraq and the Levant of migration issues; encourage social and economic development through migration; and uphold the human IOM International Organization for Migration dignity and well-being of migrants. JP Job Placement LMA Labour Market Assessment Contact: For more information on the Return and Recovery Unit (RRU) programme and current activities taking place in NFI Non-Food Items Iraq, please contact: [email protected] MoLSA Ministry of Labour and Social Affairs OJT On-the-Job Training Main Office in UNAMI Compound DIWAN 2 SME Small and Medium Enterprise International Zone, Baghdad, Iraq. VT Vocational Training Tel: +3908 3105 2600 ext. 5857/5928 E-mail: [email protected]

2 International Organization for Migration

Table of Contents

IOM Disclaimer 2 List of Acronyms 2 1. Executive Summary 4 1.1. Introduction 1.2. Key Findings 1.2.1 Challenges and Opportunities Facing Jobseekers 1.2.2 Challenges and Opportunities Facing Job-seekers 1.2.3 Challenges and Opportunities Facing Youth 1.2.4 Challenges and Opportunities Facing Consumers 1.3. Overall Recommendations 2. Location and Study Overview 5 2.1. Introduction 2.2. LMA Overview 2.3. Overview 5 2.3.1. Location and Demographics 2.3.2. Security and Displacement 2.3.3. Local Concerns 6 2.4. LMA Methodology Overview 2.3.1. Key Informant Interviews 2.3.2. Youth Focus Group Discussions 2.3.3. Job-seeker Surveys 2.3.4. Employer Surveys 2.3.5. Consumer Surveys 3. Findings 7 3.1. Key Informant Interviews 3.2. Youth Needs and Priorities 3.3. Job-seeker Needs and Priorities 3.4. Employer Needs and Priorities 3.5. Consumer Needs and Priorities 8

4. Conclusions 9

3 Labour Market Opportunities and Challenges

1. Executive Summary

1.1. Introduction 1.3.2. Challenges and Opportunities facing Jobseekers • Vulnerable persons with skills were identified as the high With sub-offices across Iraq, jointly managed Community Resource priority candidates for livelihood assistance; Centres (CRCs), and a presence within the Ministry of Labour • Oil, construction and health sectors-were noted to be most and Social Affairs’ sub-offices, IOM’s field presence allows for a likely to hire persons aligned with political parties and local community-driven approach to recovery and development. Under authorities; its livelihoods programming, IOM works through a system of • Most jobseekers mentioned a preference to own their own community engagement that has been refined through an iterative business; and learning process and relies on stakeholder consultation throughout • The primary reason (100 % of respondents) for not having the design of sustainable livelihood activities. In order to inform already started their own business was lack of financial means. the design of market-led development interventions, a series of Labour Market Assessments (LMAs) were conducted. Salah al-Din Recommendations: Governorate, the Baiji district was selected as one of the eight Explore Business Support Package (BSP) for those wishing LMAs conducted this round (June 2019). to enter services such as mechanics, plumbing, water and electricity. 1.2. Study components 1.3.3. Challenges and Opportunities facing Employers • Surveyed employers consistently noted the shortage of This LMA consisted of 95 individual interviews and four youth electricity as their biggest operating challenge; Focus Group Discussions (FGDs) with roughly 40 participants, • Rising prices on the supplier side was noted by 16% of conducted over a two-month period between December 2018 respondents; and and January 2019. The LMAs are made up of both quantitative • Unpaid debts on the client side was mentioned by 33% of and qualitative exercises consisting of Key Informant Interviews, respondents. FGDs which targeted young people and household surveys which targeted jobseekers, employers and consumers..The LMA focused Recommendations: on the Hay Al-Risala and the Al-Asry Al-Jnoby communities of Baiji. If providing larger grants, assess the outstanding debts A summary of key findings is included below with some analysis of and accounts of applying businesses as part of the due the findings followed by recommendations for future interventions. diligence; and Assess applications from construction-related businesses 1.3. Baiji Key Findings with caution.

1.3.1. Challenges and Opportunities facing Youth 1.3.4. Challenges and Opportunities facing Consumers • Sewing, hairdressing, cultural awareness courses and courses • The average monthly salary from work for consumers on the risks of Unexploded Ordnance (UXO) were mentioned surveyed was 269 dollars (USD); and as training courses that are easily available and repeated • Most consumers (70%) mentioned that their biggest wish for often; and their market would be for it to be developed or rehabilitated. • Youth suggested that blacksmithing, carpentry, painting

houses, plumbing, PVC production, electricity, ceramics and Recommendations: construction skills were in demand in the area. Encourage programming that would have spillover effects Recommendations: such as the Enterprise Development Fund (EDF). Avoid offering Vocational Training (VT) related to hairdressing; 1.4. Overall Recommendations Provide VT in niche construction services such as painting and plumbing; and Sectors to Carpentry, niche construction services, mechanical target: services, electrical services, water-related services. Explore how to support municipal service rehabilitation and development, including electricity and water Profile Youth, women, university graduates and vulnerable services. to target: households.

• Avoid providing grants for agriculture or block factories as these may be oversaturated; and • From a conflict-sensitivity standpoint, Notes: construction, oil and health may be elite- dominated sectors that IOM may wish to avoid or take care to remain neutral about supporting.

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2. Location and Study Overview about the midpoint between a main road from Baghdad to . It is also an important junction of Iraq’s rail network, linking the governorates of Salah al-Din, , Anbar and Mosul.1 With 2.1. Introduction its central location, Baiji was once envisioned as a linchpin to the Iraqi economy, in part thanks to its massive oil refinery. At the Recognizing that the private sector is an engine for growth, IOM time it was inaugurated in 1982, the refinery was the largest one works to create inclusive markets at the individual, community in Iraq, capable of producing nearly one-third of Iraq’s domestic and institutional level. At the individual level, IOM has prioritized energy needs, and “gave rise to a host of ancillary industries support to micro enterprises, including providing business including fertilizer and vegetable oil factories and a power plant.”2 development services (for example business advisory services) The vast majority of inhabitants are Sunni Arab, as Baiji was the and BSPs (including in-kind and cash support), all of which aim to northernmost point of the “.”3 Prior to the Islamic increase income generation at the household level. State of Iraq and the Levant (ISIL) crisis, Baiji was believed to have For those individuals who need capacity development support or had a population of approximately 200,000 people, of whom about who have specific backgrounds such as agriculture, IOM provides 180,000 lived in the city of Baiji. However, the city and district have specialized skills development and training through Vocational been in grave condition since 2011, as outlined below.

Training (VT), Farming Training (FT) or On-the-Job Training (OJT), accompanied by employability assistance inclusive of in-kind items 2.3.2 Security and Displacement tailored to enhance individual employability. For beneficiaries Baiji and its refinery’s valuable oil were frequent targets of the who already possess relevant education or training and need sectarian violence that followed the (2003-2011). to gain hands-on work experience, IOM job placement and job Insurgents would “hijack tankers, bleed pipelines, or bribe officials” matching initiatives link participants with businesses in growth for oil, making away with as much as 70% of its production in the sectors, and pays their salaries partially or fully for 3 to 6 months. years around 2008 before the area stabilized in 2012. However, the area and the refinery became targets of ISIL in 2014. In the At the community level, IOM provides support to slightly larger 16 months that followed ISIL’s initial occupation of the area, both businesses – small and medium enterprises (SMEs) – to support ISIL and Iraqi forces launched at least 10 major offensives on the long-term job creation and the expansion of local production area, before ISIL’s ouster from the area in October 2015.4 Baiji capacities. district and city were devastated by the ISIL occupation and their subsequent recapture by Iraqi forces. The area has been relatively IOM also targets the infrastructure needed to support markets, stable since then, but some accounts report incidences of violence, linking support to livelihoods with support for the enabling particularly at night, and the ongoing presence of undiscovered and environment. For example, in agricultural communities IOM may active improvised explosive devices (IEDs).5 support irrigation projects. At the institutional level, IOM also provides capacity building to national and local authorities, including Since then, there are differing accounts as to the extent of damage market assessments that seek to promote institutional change that and displacement in Baiji. Some call Baiji city a “devastated ghost would support local livelihoods. city.” In late 2017, a local council member remarked that “90 percent of Baiji is destroyed and the people have still not returned,” while another said that it is “the most destroyed place in Iraq after west 2.2. Labour Market Assessment Overview Mosul.” A local militia commander said that Baiji was “destroyed This and other IOM LMAs are intended to provide actionable and the houses are uninhabitable.” Agence France-Presse reported recommendations for individual livelihood assistance that IOM that there was no traffic to be seen along the area’s “wrecked main provides in multiple districts throughout Iraq. This LMA focuses highway,” and that “life is nowhere to be seen” beyond the scattered 6 on Baiji, a district in the Salah a-l Din Governorate northwest of military checkpoints in the area. Thousands of families have been Baghdad. displaced from here since 2014, and there have been few returns given the general destruction of housing and infrastructure in the area. By contrast, IOM’s rapid needs surveying of the communities 2.3. Baiji District Overview of Hay Al-Risala and Al-Asry Al-Jnoby, both considered part of downtown Baiji city, has uncovered a less bleak but still alarming 2.3.1. Location and Demographics picture for the area. Fewer than half of all displaced families have returned in the two studied communities, with 300 of 600 Baiji is a district in the Salah al-Din Governorate northwest of displaced families returning to Hay Al-Risala, and approximately Baghdad. It is approximately 200 km northwest of Baghdad, at 1100 of 2500 displaced families returning to Al-Asry Al-Jnoby.

1 Al Shahid Witness Staff, “Baiji In Urgent Need Of Reconstruction,” Al Shahid Witness, October 16, 2017, Accessed 4 May 2019 (https://alshahidwitness.com/baiji-reconstruction-isis- destruction). 2 Bulos, Nabih, “Iraqi forces took Baiji from Islamic State, but the former boom town may be doomed,” Los Angeles Times, June 11, 2016, Accessed 4 May 2019 (https://www.latimes.com/ world/middleeast/la-fg-iraq-baiji-20160611-snap-story.html). 3 Hashim, Ahmed. Insurgency and Counter-insurgency in Iraq. Ithaca, New York: Cornell University Press, 2005. 4 Bulos, “Iraqi forces took Baiji from Islamic State, but the former boom town may be doomed.” 5 Oxfam Iraq Country Humanitarian Team, “Multi Sectoral Assessment, Oxfam Iraq, July 18, 2018, Accessed 5 May 2019 (https://www.humanitarianresponse.info/sites/www.humanitarianresponse. info/files/assessments/hay_risala_report.pdf). 6 AFP Staff, “‘The city is destroyed’: Baiji was home to Iraq’s largest oil refinery but two years after IS left it’s a ghost town, Agence France-Presse, reported in South China Morning Post, December 11, 2017, Accessed 4 May 2019 (https://www.scmp.com/news/world/middle-east/article/2123792/city-destroyed-baiji-was-home-iraqs-largest-oil-refinery-two). 5 Labour Market Opportunities and Challenges 2.3.2. Local Concerns 2.4.1. Key Informant Interviews Beginning in December 2017, Iraqi government and private Five key informant interviews (KIIs) were conducted throughout international efforts have sought to rebuild the Baiji refinery and Baiji, all with government officials. These included representatives power plant, but relatively little has been done to address the needs from the mayor’s office, the Baiji municipality, the local council and of the citizens.7 Similarly, in contrast to more general, international the agriculture department. news accounts, IOM assessments have uncovered extensive but not complete damage to the studied areas. In Hay Al-Risala, about 2.4.2. Youth Focus Group Discussions 25% of houses were reported completely destroyed or partially FGDs were designed to identify bottlenecks to youth employment damaged, and in the more central Al-Asry Al-Jnoby, about 10% and training preferences. The discussions were conducted by of houses were completely destroyed while another 40% were requesting participation from members of each of the studied partially damaged. In both areas, the partially damaged houses can communities. Four FGDs were held in Baiji, including three in be rehabilitated. One problem with the destruction of so many Hay Al-Risala and one in Al-Asry Al-Jnoby, with participants aged houses has been the destruction of important non-food items between 15 and 25 years, and sought to include a diverse group (NFIs). Returnees have difficulty affording needed NFIs. Markets in of youth. Baiji and nearby Tikrit have food and supplies, but many residents lack sufficient funds, particularly for NFIs. 2.4.3. Job-seeker Surveys In addition to housing problems, infrastructure remains a major Twenty-nine Employer surveys were also conducted in Baiji, in problem. The unified Baiji water station serves most communities in order to provide a sample as representative as possible of the local the area but is providing unfiltered water unsuitable for drinking and market. Employers were initially provided an advance copy of the does not provide a constant supply. UNDP has taken on a project handout materials and later contacted for follow-up interviews. to rehabilitate the station. Electricity infrastructure is damaged and The map below shows the locations of the surveyed employers. insufficient and many families rely on private generators. Healthcare is provided by a hospital in the centre of the city, but it needs 2.4.4. Employer Surveys much rehabilitation, staff, supplies and equipment, and has only Thirty-nine Employer surveys were also conducted in Soran, to one ambulance for the entire district. The very few operational provide a sample as representative as possible of the local market. schools are overcrowded, and other damaged schools are badly Employers were initially provided an advance copy of the handout in need of rehabilitation to alleviate overcrowding. Recovery and materials and then later contacted for follow-up interviews. The rebuilding are possible but will be time-consuming and expensive. map below shows the locations of the surveyed employers. Consumer Spending Snapshot • Key Weekly Expenses: The typical consumer in Baiji reported spending an average of 77.3 United States dollars (USD) per week on food. • Key Monthly Expenses: 58% of survey respondents reported having a monthly transportation expense, averaging USD 60.6 per month; 87.1% of survey respondents reported having a monthly combustibles expense, averaging USD 55 per month; 45.2% of respondents also reported a monthly water expense averaging USD 21 per month; 83.8% of respondents reported monthly expenses on temptation goods, such as tobacco and alcohol, averaging USD 81.8 per Figure 1. Location of employers surveyed in BAIJI month. and35.5% of respondents reported monthly rent expenses averaging USD 117 per month. 2.4.5. Consumer Surveys The Consumer survey was designed to triangulate data related to demand, income and vulnerability. In Baiji, 31 respondents A more thorough breakdown of consumer expenditure based participated in the survey. The respondents were identified by on the collected data is presented in the Findings section below. approaching general members of the public who were present in commercial or industrial areas of the district. There were no 2.4. LMA Methodology Overview restrictions on the demographic profiles of participants, but IOM The LMA process took two months to complete and focused sought diversity to the extent possible. primarily on the communities of Hay Al-Risala and Al-Asry Al-Jnoby, Tools No. Conducted both part of central Baiji city. After a two-day training, surveyors Key Informant Interviews 5 interviewed key informants, jobseekers, average consumers, youth ns 4وYouth Focus Group Discussio and local businesses. Jobseeker Surveys 30 Below is an explanation of the surveys conducted: Private Sector Employer Surveys 29 Consumer Surveys 31

7 Financial Tribune Staff, “Iraq Begins Rebuilding Largest Crude Refinery,” Financial Tribune, Table 1. Surveys conducted in baiji for Labour Market analysis December 16, 2017, Accessed 5 May 2019 (https://financialtribune.com/articles/energy/78047/ iraq-begins-rebuilding-largest-crude-refinery). 6 International Organization for Migration

3. Findings Painting 1 Marketing 3 3.1. Key Informant Interviews Key informants indicated that farming, oil refining, construction and Plumbing 1 agriculture were the main productive sectors in Baiji prior to the crisis in 2014. Key informants felt that these sectors had all been destroyed, and that only few businesses within these sectors had Blacksmithing 1 Carpentry 3 restarted or recovered. They mentioned that the largest employers in the city were the construction sector and municipality, albeit with short-term, daily paid jobs. They also mentioned that micro businesses were strong sources of employment. Key informants Figure 3. Requested Training Subjects for Male Youth by Mention described the trade sector, agriculture and block factories as oversaturated. Key informants also felt that there are sectors 3.3. Job-seeker Needs and Priorities such as trade, small business, hospitality, construction and greenhouses that have strong growth potential. They indicated Respondents of the Jobseeker Survey felt that the unemployment that the government is encouraging development in agriculture, rate in Baiji was around 68%, comparable to the perceived rates construction and infrastructure, and that the private sector in other Iraqi districts surveyed for other IOM LMAs conducted appeared willing to invest in trade and construction. Finally, they in 2019. By and large, jobseekers felt that women were the least pointed out several agencies, including IOM and likely to be employed, and that vulnerable persons with skills should UNDP, as well as nongovernmental organizations, were working be prioritized for livelihood assistance. Graduates, unemployed, in this area. women, and youth were also mentioned as good candidates for livelihood assistance. Microbusinesses such as food shops, clothing 3.2. Youth Needs and Priorities shops, grocery stores, and carpentry workshops were the most commonly noted successful business types. However, jobseekers All youth FGD participants agreed that there were issues of indicated that the largest hiring sectors – oil, construction and health insecurity in their community. In two of the FGDs, participants – were highly likely to hire only those who were favorably aligned mentioned that youth had a role to play through volunteering in and connected with local political parties and authorities. Most their community to contribute to stabilization. In the remaining jobseekers mentioned a preference to have their own business, but FGDs, it was felt that the lack of employment was directly related all (100%) of those who reported not having their own business to a lack of government funding. Across all FGDs it was felt that indicated that the primary hindrance was lack of financial means. an increase in economic opportunities would reduce engagement with armed actors. One discussant mentioned how “many youth [here] join the military because they have no other choice! And 3.4. Employer Needs and Priorities the military or ‘Hashid’ are the only actors that have jobs and can offer salary.” Surveyed employers consistently noted the lack of electricity as their biggest operating challenge. This is consistent with other accounts Sewing, hairdressing, cultural awareness courses and courses about how electricity shortages in Baiji affect many aspects of daily on the risks of UXO were mentioned as training courses easily life. Another challenge noted by employers included prices and available and repeated often. As an alternative, youth suggested debt that led to liquidity constraints. For example, rising prices that metalworking, carpentry, painting houses, plumbing, PVC, from suppliers was noted as a problem by 16% of respondents, electricity, ceramics and construction as skills were in demand in while unpaid debts by clients and consumers was mentioned as a the area. The figures below outlines the vocational and other job- problem by 33%. related training courses that FGD discussants mentioned would be Business types with good demand, interested in having apprentices, desirable. Of note is that marketing was mentioned by several male and had difficulty finding skilled workers included only carpentry, and female discussants which may benefit from JP and OJT. In terms of demand, some business types reported mixed demand Hairdressing 1 within their own sector. For example, one block maker self- reported good demand, while another reported poor demand. This was the same issue for construction materials businesses. Marketing 3 Pastry Making 1

Tailoring 1

Figure 2. Requested Training Subject for Female Youth By Mention

7 Labour Market Opportunities and Challenges

Cafeteria 1 3.5. Consumer Needs and Priorities

Carpenter 1 The average monthly income for consumers surveyed in Baiji Block-maker 1 was 269 USD. Four respondents mentioned having savings. The most frequently mentioned service as hard to find was medical Construction materials 2 services, mentioned by 63%. Other mentions of goods that are hard to source locally include car repairs, high-quality clothes, Figure 4. Businesses reporting good demand public transportation, carpentry, and some foods. A total of 73% of respondents mentioned that they had to travel outside their community to purchase or pay for medical goods or clothing and Construction materials 1 70% of respondents mentioned that their biggest wish for their local market would be for it to be developed or rehabilitated. Baker 1

PVC 1 Consumers were not found to spend significantly different amounts of income on rent, food, electricity or gas in Baiji than in other Block-maker 1 surveyed areas of Iraq, suggesting that these sectors may not be experiencing any price hikes or drops at the moment. Blacksmith 2 Spending patterns are shown in the table below:8 Figure 5. Businesses reporting low demand

% of participants in Baiji Average local expense Average national expense Period Expense reporting yes to expense (USD) reported in Baiji (USD)9 type Week Food 100% 77.3 97.05 Rent 35% 117 151.02 Combustibles 87% 55 58.38 Transport services 58% 60.6 49.43 Month Temptation goods 83% 81.8 64.32 Recreation 6% 1271 75.10 Water 45% 21 20.51 Phone, cable and internet 100% 36.5 37.90 Education 67% 591 372.36 Medical expenses 90% 782 496.91 Repairs 71% 1940 485.92 Year Household appliances 25% 336 215.83 Purchase of vehicle such as 25% 5745 1604.91 car, bike, motorbike Family events 38% 3855 808.82

Table 2. Consumer spending averages in Baiji

8 Please note that this data is self-reported and therefore subject to some isolated calculation errors and information bias.

9 The average national expense (USD)consists of results gathered via 22 LMAs conducted between December 2018 and January 2019.

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4. Conclusions

Based on the surveys conducted and data collected, IOM developed a draft list of potential community interventions, or Community Implementation Plans (CIPs) in Baiji to help address various identified livelihoods and community engagement issues. Because of the number of infrastructure needs in Baiji, several projects were recommended including electrical network repair, water network rehabilitation, rehabilitation of numerous schools, and expansion of medical consultation facilities in the Baiji hospital.

Livelihoods recommendations for this area were diverse and broad. Business Support Package (BSPs) and Employment Support Package (ESPs) were recommended for several businesses in both the studied communities. Temporary On-the-Job Training (OJTs) were suggested for skilled entrepreneurs in certain trades to learn the necessary skills to open their own businesses. Finally, vocational training was suggested for a number of trades in which the Ministry of Labour and Social Affairs and the Directorate of Vocational Training have an interest, including mobile phone repair, carpentry and metalworking.

9 IOM-IRAQ MISSION LABOUR MARKET OPPORTUNITIES AND CHALLENGES

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