Shatt Al-Arab District, Basra Governorate

LABOUR MARKET OPPORTUNITIES AND CHALLENGES

IOM Iraq – May 2020

This programme is supported by: List of Acronyms

BEP Business Expansion Package BSP Business Support Package CIP Community Implementation Plan CoC Chamber of Commerce CoI Chamber of Industries CRC Community Resource Centre ESP Employment Support Package FGD Focus Group Discussion FT Farming Training IDP Internally Displaced Person ISIL Islamic State in Iraq and the Levant IOM International Organization for Migration JP Job Placement LMA Labour Market Assessment NFI Non-Food Items MoLSA Ministry of Labour and Social Affairs OJT On-the-Job Training SME Small and Medium Enterprise VT Vocational Training

IOM Disclaimer

The opinions expressed in the report are those of the authors and do not necessarily reflect the views of the International Organization for Migration (IOM). The designations employed and the presentation of material throughout the report do not imply the expression of any opinion whatsoever on the part of IOM concerning the legal status of any country, territory, city or area, or of its authorities, or concerning its frontiers or boundaries.

IOM is committed to the principle that humane and orderly migration benefits migrants and society. As an intergovernmental organization, IOM acts with its partners in the international community to: assist in meeting the operational challenges of migration; advance understanding of migration issues; encourage social and economic development through migration; and uphold the human dignity and well-being of migrants.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the publisher. TABLE OF CONTENTS

List of Acronyms 2

IOM Disclaimer 2

Table of Contents 3

Executive Summary 4

Study Introduction 6

Labour Market Assessment Overview

District Overview

Assessment and Methodology Overview

Findings 8

Attitudes Towards Entrepreneurship and Cash

Types of Jobs Available

Skills Gaps

Recruitment Mechanisms

Supply-side Bottlenecks

Demand-side Bottlenecks

Conclusions 10 Labour Market Opportunities and Challenges

EXECUTIVE SUMMARY

IOM conducts livelihood programming in 15 out of 18 • The average salary for skilled workers is 221 United States governorates in Iraq. As part of the Returns and Recovery dollars (USD) and USD 131 for unskilled workers. Unit programming, the International Organization for • Women-owned businesses generally include livestock Migration (IOM) undertook a labour market assessment raising, tailoring, hairdressing, food preparation (especially (LMA) in Shatt Al-Arab from November of 2019 to February sweets), beauty salon services, retail in clothing and make 2020. up, in addition to jobs in agriculture and administration. All LMAs have been conducted in over 30 locations across Iraq these jobs were considered profitable with the exception and give insights on the state of the local market in a given of harvesting. area, the hiring preferences of employers and the available • However, women mostly do not contribute to household skills and aspirations of jobseekers, among others. income, with only four consumers mentioned they do.

STUDY COMPONENTS • Workshop participants mentioned that skills in farming were needed. Jobseekers, on the other hand, mentioned LMAs consist of both qualitative and quantitative exercises: that no specific sector had difficulty in finding adequately Key Informant Interviews (KIIs), multisectoral community trained employees. Farmers mentioned that it was not workshops and surveys with jobseekers, employers and difficult to find qualified employees. consumers. • While jobseekers mostly did not know about a job centre, This LMA focused specifically on the district of Shatt Al-Arab, they suggested that job services could be offered in the Basra Governorate. centres of the respective communities. A summary of key findings is included below, followed by • Farmers reported personal connection and word of recommendations for future interventions. mouth as their main hiring mechanism. Farmers were KEY FINDINGS mostly against hiring through more formal channels.

• Sixty-nine per cent of jobseekers noted a preference • The most common challenge facing farmers was water for owning their business, suggesting a preference for salinity, followed by buffalos walking on the cultivated areas entrepreneurship in the community. and destroying crops (reported by about one third of farmers). • Workshop participants mentioned that most jobs available in the communities were in farming and livestock. • Consumers reported travelling outside community, mostly to buy clothes, followed by electrical devices and • Jobseekers, on the other hand, added jobs in the oil household appliances. industry, construction (also tools and material), and less mentioned sectors such as groceries, trade, and industry • Overall, 14 per cent of farmers experience poor demand, in general. A small number mentioned that there were 66 per cent average and 20 per cent high. However, 87 no jobs. per cent of the farmers also described a rather poor business situation. Only 13 per cent reported making • Key informants also mentioned that agriculture, some profits. manufacturing (aluminum, wood, decorations), handicrafts, construction, a foreign electricity provider (employing 300 • Farms with high demand pay their skilled workers the workers in the district), and the government are currently highest salaries, followed by farmers with average and employing the highest number of people in the district. poor demand.

• Farmers reported that working hours averaged 7.4 hours per day. Farmers do not have written contracts with workers.

4 IOM IRAQ Labour Market Opportunities and Challenges

Recommendations

Agriculture and livestock, industry (aluminum, fertilizers, paper), construction and health. Carpentry was also mentioned as having potential for growth because imported SECTORS TO TARGET furniture is apparently not sold (no further details were given), according to one key informant

Shops and food trade, taxi driving, block manufacturing and imported goods in general were reported as oversaturated and should be therefore avoided. The metal sector, SECTORS TO AVOID/TARGET carpentry, manufacturing of PVC and aluminum were also mentioned as sectors WITH CAUTION with potential for growth (above) and as sectors to avoid. These should be therefore targeted with caution

• Farmer training was suggested, but further details were not provided

• While owning their business was preferred by jobseekers - which makes business support package and expansion support package appropriate - no further details were provided ACTIVITIES TO TARGET • Vocational training was not mentioned and jobseekers did not think any skills were difficult to find by employers

• On-the-Job training is suggested, as most employers have had apprentices in the past and almost 90% are interested in providing apprenticeships

ACTIVITIES TO AVOID N/A

The vast majority of consumers do not have savings and more than half have debts. While CFW was not suggested explicitly, building bridges for pedestrians to ease CASH FOR WORK transportation issues in the community, and pedestrian movement, was mentioned as needed in the surveyed communities

While key informants though that cash support would not cause community conflicts, half of jobseekers prefer cash and the other half in-kind assistance. According to half of UNRESTRICTED CASH the jobseekers surveyed, people are comfortable paying for purchases in cash, whereas the other half thinks that people are not comfortable with it. Therefore both cash and in-kind assistance are appropriate.

PROFILES TO TARGET Graduates, youth, older people, unskilled workers, female-headed households

• Ploughs, water pumps, greenhouses, modern irrigation systems, crop cover, fertilizers, seeds, pesticides, transportation for distribution were reported as needed by farmers

NOTES: • The farmers’ association is not active • Maintenance of irrigation water gates is required

• In terms of livestock, vaccines, vet services, and dealing with stray dogs were reported as requiring attention

Table 1. Recommendations

IOM IRAQ 5 Labour Market Opportunities and Challenges

STUDY INTRODUCTION

IOM recognizes that the private sector is an engine for growth; Basra’s location at the Shatt Al-Arab and its vast oil reserves therefore, it strives to create inclusive markets at the individual, makes it one of the economically most important governorates community and institutional levels. At the individual level, IOM of the country. The massive oilfields of Basra produce two has prioritized support to micro enterprises, including providing thirds of Iraq’s oil output. Nonetheless, the once-called Venice business development services (for example business advisory of the Middle East is today a showcase for the virtual absence services) and Business Support Packages (BSPs), including of public services, which have been decaying since 2003. Basra in-kind and cash support, all of which aim to increase income was also a battleground in both the Iran-Iraq war and the generation at the household level. two Gulf Wars, damaging the economic infrastructure and leaving a host of mines and unexploded ordnances littered For those individuals who need capacity development support throughout the governorate, which hampered economic or who have specific backgrounds such as agriculture, IOM development. The agricultural sector in particular is hindered provides specialized skills development and training through by these leftover explosives.1 Vocational Training (VT), Farming Training (FT) or On-the-Job Training (OJT), accompanied by employability assistance The United Nations (UN) sanctions, imposed after the – inclusive of in-kind items tailored to enhance individual Iraqi invasion of Kuwait in 1990 and only lifted after the employability. For beneficiaries who already have relevant occupation of Iraq in 2003, crippled the Iraqi economy and education or training and need to gain hands-on work public infrastructure in general but hit the oil industry especially experience, IOM’s job placement and job matching initiatives hard.2 Furthermore, corruption, crime and years of militant link participants with businesses in growth sectors, and pays violence and sabotage following the 2003 invasion also had a their salaries partially or fully for three to six months. negative impact on the governorate’s economic development.3 The receding level of the Tigris and Euphrates Rivers increased At the community level, through the Enterprise Development salinization, and insufficient waste water treatment capacity Fund (EDF), IOM provides support to slightly larger businesses hampers agriculture in the governorate. Heavy rains that began – small and medium enterprises (SMEs) – to support long- in October and continued through April in 2019, reduced the term job creation and the expansion of local production high salinity levels – one factor that some believe reduced the capacities. IOM also targets the infrastructure needed to number of water-borne illnesses in 2019 compared to the crisis support markets. For example, in agricultural communities in 2018 – but the rain also brought major flooding to Iraq. In IOM may support irrigation projects. At the institutional level, the southern provinces, including Basra, thousands of families IOM provides capacity building to national and local authorities, were forced to flee their homes.4 including market assessments that seek to promote institutional change in support of local livelihoods. According to a recent livelihoods assessment conducted in Basra, agriculture has been halted in Abu Khaseeb, Basra, LABOUR MARKET ASSESSMENT OVERVIEW Al-Fao and Shatt Al-Arab in the south of Basra, as farmers in these districts lack alternative water sources for irrigation IOM’s LMAs are intended to provide actionable (it remains limited in Al-Zubair).5 Areas of marshlands and recommendations for the individual livelihood assistance that fertile terrain will be further reduced due to continued water IOM provides in multiple districts throughout Iraq. This LMA shortages and the informal rezoning of agricultural land to focuses on the communities of Al-Zregi and Al-Saddah located residential areas. According to the UN, an estimated 250 km² in the district of Shatt Al-Arab, and includes interviews and a of fertile land is lost annually to desertification.6 The livestock community workshop conducted in two communities. sector has also suffered, as a lack of animal feed and clean water has resulted in livestock deaths, particularly among DISTRICT OVERVIEW buffalos. Communities reported that they can no longer Shatt Al-Arab is a district in of Basra Governorate bordering sustain feeding their herds due to the prohibitively high cost Iran; its administrative centre is in the village of Al-Harita. of animal feed and clean water processed through reserve

1 NCCI, Basra, Governorate Profile, n. g., https://www.ncciraq.org/images/infobygov/NCCI_Basra_Governorate_Profile.pdf 2 Ibid. 3 Ibid. 4 Lizzie Porter, “In Iraq, water woes and corruption gripes signal trouble in key city”, https://www.thenewhumanitarian.org/news-feature/2019/09/09/ Iraq-Basra-water-pollution-competition-mismanagement 5 Moi Peter Elia, Livelihoods and Market Assessment Basra, NRC, 2018, https://reliefweb.int/sites/reliefweb.int/files/resources/Basra%20Livelihoods%20 Technical%20Assessment%20FINAL.pdf 6 Moi Peter Elia, Livelihoods and Market Assessment Basra

6 IOM IRAQ Labour Market Opportunities and Challenges osmosis plants.7 It is estimated that up to four million Iraqis community were interviewed). After introducing IOM and its will be forced to migrate from their homes during the next programming, staff explained IOM’s plan to work closely with eight years as a result of the ongoing water crisis, as large community members in implementing future programmes. numbers of farmers and seasonal workers currently do not Key Informant Interviews have any livelihood opportunities.8 This situation has triggered significant population movements from rural to urban areas in Ten KIIs were conducted with representatives of the business the region, as people seek alternative livelihood opportunities. community in different communities of Shatt Al-Arab district. The majority of these displaced persons lack appropriate skills KIIs seek to establish trends and observations about the to secure formal employment. Women are more adversely business community, industries currently hiring, ongoing public affected in securing alternate livelihood options, as they and private investment, and key emerging sectors capable of are rarely found to work in local markets, due to cultural generating employment. constraints.9 Almost 500 individuals were displaced in Shatt Jobseeker Surveys Al-Arab district as of late December 2019.10 Jobseeker surveys are designed to identify preferences of The communities of Al-Zeragi and Al-Saddah located in Shatt unemployed and underemployed workers. In Shatt Al-Arab Al-Arab are no exception to this situation. While water is district, 29 jobseekers were identified and surveyed. The sufficient in winter, it is not during summer. Drinking water survey’s purpose was outlined for each jobseeker survey, and needs to be purchased at USD 20 per month. There is a informed consent was obtained from those surveyed. reverse osmosis unit in the water station, but it is not functional and needs maintenance. As a result of all of the above, the Farmer Surveys agricultural sector in Shatt Al-Arab suffers from ack of Thirty surveys with farm owners were also conducted in Shatt government support and modern agricultural equipment, Al-Arab, to provide a sample as representative as possible of in addition to lack of seeds and pesticides. Farmers grow the local market. Farmers were initially provided an advance vegetables in these areas. Farms suffered from salinity and copy of the handout materials and then later contacted for high water levels, with floods reported. Livestock breeders follow-up interviews. complain of the high prices of fodder and a lack of vaccines, in addition to the lack of government support and of veterinary Consumer Surveys services (which are in the district’s centre is far away from the The consumer survey was designed to triangulate data communities). related to demand, income and vulnerability. In commercial CONSUMER SPENDING SNAPSHOT or industrial districts in Shatt Al-Arab, members of the public were approached and 30 of them identified as respondents. • Key weekly expenses: The typical consumer in Shatt Al-Arab There were no restrictions on the demographic profiles of reported spending an average of USD 49 per week on food participants, but IOM sought diversity to the extent possible. for their household. The table below outlines the types and number of surveys • Key monthly expenses: Almost half reported monthly conducted for Shatt Al-Arab District. expenses on temptation goods, such as sweets and tobacco, averaging USD 34 per month. TOTAL NO. MALE FEMALE TOOLS OF SURVEYS RESPONDENTS RESPONDENTS ASSESSMENT AND METHODOLOGY OVERVIEW CONDUCTED Multi-sectoral The LMA process began in November 2019, after a Community 28 0 28 two-day training on labour market assessment objectives Workshops and the tools for data collection. Following the training, Key Informant community level workshops with youth, women and local 10 0 10 Interviews residents were organized in January and February of 2020, Jobseeker Surveys 27 2 29 followed by KII, jobseeker, farmer and consumer surveys. Private Sector 30 0 30 Employer Surveys Multisectoral Community Workshops Consumer 25 5 30 Multisectoral workshops were conducted in Shatt Al-Arab, Surveys covering Al-Zregi and Al-Saddah (28 men from the host Table 2. Surveys Conducted in Shatt Al-Arab district for Labour Market Analysis 7 Ibid. 8 Ibid. 9 Ibid. 10 IOM, DTM, December 31, 2019. IOM IRAQ 7 Labour Market Opportunities and Challenges

FINDINGS

ATTITUDES TOWARDS ENTREPRENEURSHIP farm owners who are also employers in Shatt Al-Arab AND CASH ranged from USD 30 to 500 and USD 30 to 350, respectively. Sixty-nine per cent of jobseekers noted a preference for owning However, the low values are likely due to data filling mistakes so their business, suggesting a preference for entrepreneurship in we could therefore assume that the average salaries are slightly the community (including all the women surveyed). Jobseekers higher – if these values are not included in the calculations.

mentioned that lack of capital prevented them from starting AVERAGE SALARY FOR AVERAGE SALARY FOR their own activity. SKILLED WORKERS UNSKILLED WORKERS

Only one key informant felt that cash support would cause USD 228 USD 131 inter-household and community conflict; the remaining Consumers noted average monthly incomes of USD 318 per thought that cash support would be beneficial, and noted month. how these should be properly advertised and distributed. About half of the jobseekers reported that people are not Farmers reported no preference as to which gender should fill comfortable paying for goods and services in cash; half of different positions in their farms. Women-owned businesses, the jobseekers reported preferring cash assistance and the as reported in KIIs, generally included livestock, tailoring, other half in-kind assistance. All these findings suggest that hairdressing, food (especially sweets), beauty salons, retail in opinions are rather divided on whether cash support could clothing and make up, in addition to jobs as agricultural workers be potentially safely introduced in Shatt Al-Arab district by an (harvesting of alfalfa crops) and administrative jobs. All were international organization. considered profitable with the exception of harvesting. Jobseekers noted that women owned-businesses mostly TYPES OF JOBS AVAILABLE focused on hairdressing, tailoring, teaching, with a small number Workshop participants noted that most jobs in the community mentioning fish mongering and working for the government. were in farming and livestock. Jobseekers, on the other hand, Women earned on average USD 225 (and more, as some added jobs in the oil industry, construction (also tools and respondents provided earning ranges) per month. However, material), and less sectors mentioned such as grocery shops, women mostly do not contribute to household income as only trade and industry in general. A small number mentioned four consumers mentioned that they do. that no jobs were available. Almost one third of jobseekers reported that these sectors were dominated by specific SKILLS GAPS groups, particularly the oil sector, reported as being dominated Workshop participants mentioned that skills in farming were by mukhtars or community leaders and their family members, needed. Jobseekers, on the other hand, mentioned that no and specific parties. This finding was also confirmed by another specific sector had difficulty in finding adequately trained recent study, which underscored how little has changed in employees. Farmers mentioned that it was not difficult to find Basra since the period of sectarian violence, when formal and qualified employees. Seventy-seven per cent of farmers are informal employment and income providers came under militia interested in providing apprenticeships and the vast majority and party control.11 Jobseekers did not highlight any particular have experience in doing so. currently available jobs that they would not like to perform. Tools and assets most commonly requested by businesses Key informants mentioned that agriculture, manufacturing included machinery and equipment related to farming, (aluminum, wood, decorations), handicrafts, construction an in addition to seeds, plastic sheets and chemical fertilizers. electricity company (employing 300 workers in the district), Business owners were also asked what they would do were and the government are currently employing the highest they to receive a cash grant (in an open-ended question), with number of people in the district. the most common response being acquiring needed tools/ Farmers reported that working hours averaged 7.4 hours per machinery and expanding the land for cultivation. No one day. Farmers do not have written contracts with workers. mentioned hiring workers. Average wages for skilled and unskilled workers among the

11 J. Mac Skelton, Zmkan Ali Saleem, The Politics of Unemployment in Basra: Spotlight on the Oil Sector, IRIS Public Policy Report, 2019, https://www. kas.de/documents/266761/4421641/The+Politics+of+Unemployment+in+Basra+-+Spotlight+on+the+Oil+Sector.pdf/3083a071-12c1-e020-e2e7-c52a b216ccdf?version=1.0&t=1561714163695

8 IOM IRAQ Labour Market Opportunities and Challenges

RECRUITMENT MECHANISMS BUSINESS SITUATION PERCENTAGE OF FARMERS

While jobseekers mostly did not know about a job centre, Losing money 13% fWhile jobseekers mostly did not know about a job centre, Stagnant, barely enough they suggested that job services could be offered in the 74% to sustain own needs centres of the respective communities. Farmers reported Profitable but not enough personal connections and word of mouth as their main hiring 13% to grow further mechanism, and were mostly against hiring through more formal channels. The area is prone to labour migration, with Table 3. Business situation half of the respondents mentioning that people tend to migrate Farms with high demand pay their skilled workers the highest outside the community (to Basra) for economic reasons, while salaries, followed by farms with average and poor demand. many also mentioned emigration. POOR AVERAGE HIGH SUPPLY-SIDE BOTTLENECKS DEMAND DEMAND DEMAND

12 13 In line with the findings from the desk review, water salinity USD 237 USD 257 USD 266 represents a major challenge for farmers, and was noted by 43 per cent of respondents. Twenty per cent of farmers also reported buffaloes walking on the cultivated areas and destroying crops. Lack of government support, lack of water, a market and pest control, flooding, thieves stealing crops at night, and competition among farmers (as some reported that the same crops are cultivated by several farmers) were also reported by a smaller number of farmers. All farmers purchase raw materials locally.

DEMAND-SIDE BOTTLENECKS

Challenges in dealing with clients mostly included debts, in addition to issues such as buying cheaper crops. The majority (57%) mentioned not having any challenges with clients. Consumers reported travelling outside the community mostly to buy clothes, followed by electrical devices and household appliances.

Overall, 14 per cent of farmers experience poor demand, 66 per cent average, and 20 per cent high. However, 87 per cent % of the farmers also described a rather poor business situation. Only 13 per cent reported having some profits.

12 Outliers, which are likely filling mistakes were not included in the average calculation 13 Outliers, which are likely filling mistakes were not included in the average calculation

IOM IRAQ 9 V`

Labour Market Opportunities and Challenges

CONCLUSIONS

In Shatt Al-Arab, the EDF has potential for expanding small and medium-sized businesses, especially in the agricultural sector, which could also absorb many into the workforce. Because there are no written contracts between employers and employees, and workers do long hours, IOM has an opportunity to improve the formality of work through the EDF. OJT trainings and VT were not mentioned, with the exception of farmer trainings. Nonetheless, farmers reported an interest in having apprentices (and the majority had already had some in the past).

Most jobseekers mentioned a preference to own their business and the primary reason for not having already started their own business was lack of financial means; therefore, exploring BSP is appropriate. However, no entry points were provided although jobseekers have experience in a variety of sectors.

10 IOM IRAQ V` V`

LABOUR MARKET OPPORTUNITIES AND CHALLENGES

IOM IRAQ

International Organization for Migration www.iraq.iom.int The UN Migration Agency - Iraq Mission Main Office in Baghdad [email protected] UNAMI Compound (Diwan 2) International Zone, Baghdad, Iraq

IOM-IRAQ MISSION