Khanaqin, Diyala

LABOUR MARKET OPPORTUNITIES AND CHALLENGES

IOM Iraq – April 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 CoC Chamber of Commerce designations employed and the presentation of material throughout the report do not imply the expression of any CoI Chamber of Industries opinion whatsoever on the part of IOM concerning the CIP Community Implementation Plan legal status of any country, territory, city or area, or of its CRC Community Resource Centre authorities, or concerning its frontiers or boundaries. 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 FT Farming Training Intergovernmental organization, IOM acts with its partners 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 IOM International Organization for Migration development through migration; and uphold the human dignity and well-being of migrants. JP Job Placement LMA Labour Market Assessment Contact: For more information on the Return and Recovery NFI Non-Food Items Unit (RRU) programme and current activities taking place in Iraq, please contact: [email protected] MoLSA Ministry of Labour and Social Affairs OJT On-the-Job Training Main Office in Baghdad SME Small and Medium Enterprise UNAMI Compound DIWAN 2 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. Study Components 1.3. Khanaqin Key Findings 1.3.1 Challenges & Opportunities Facing Youth 1.3.2 Challenges & Opportunities Facing Jobseekers 1.3.3 Challenges & Opportunities Facing Employers 1.3.4 Challenges & Opportunities Facing Consumers 1.4. Overall Recommendations 2. Location and Study Overview 5 2.1. Introduction 2.2. LMA Overview 2.3. Khanaqin District Overview 2.3.1 Location and Demographics 2.3.2. Security, Displacement, and Returns 2.3.3. Local Concerns 2.4. LMA Methodology Overview 2.4.1. Key Informant Interviews 2.4.2. Youth Focus Group Discussions 2.4.3. Jobseeker Surveys 2.4.4. Employer Surveys 2.4.5. Consumer Surveys 3. Findings 7 3.1. Key Informant Interviews 3.2. Youth Needs and Priorities 3.3. Jobseeker Needs and Priorities 3.4. Employer Needs and Priorities 3.5. Consumer Needs and Priorities 3.6. Community Implementation Plan (CIP) Recommendations 4. Conclusions 9

3 Labour Market Opportunities and Challenges

1. Executive Summary 1.3.3. Challenges & Opportunities Facing Employers • The most pressing challenge mentioned was security, including 1.1. Introduction damaged infrastructure, delays due to transportation issues, and the instability in the region; With sub-offices across Iraq, jointly managed Community • 10 out of 17 businesses visited mentioned interest in having or Resource Centres (CRCs), and a presence within Ministry of experience with training apprentices; Labour and Social Affairs (MoLSA’s) sub-offices, IOM has a field • Service and trading related businesses remarked on difficulty presence that allows for a community driven approach to recovery finding skilled workers; and and development. Under its livelihoods programming, IOM works • Goods that were hard to find in the market included chemical with a system of community engagement that has been refined products, electrical devices, construction materials, and through an interactive learning process, and relies on stakeholder aluminum. consultation throughout the design of sustainable livelihoods activities. In order to design market-led development interventions, Recommendations: a series of Labour Market Assessments (LMAs) were conducted. Look into grants for chemical, electrical, construction, and In Diyala Governorate, the Khanaqin district was selected for in- metal businesses. depth study.

1.2. Study Components 1.3.4. Challenges & Opportunities Facing Consumers This LMA is based on 77 individual interviews and two youth Focus • Consumers spend significantly more in surveyed areas of Group Discussions (FGDs) with roughly 20 total participants, Khanaqin district on food, indicating a possible hike in prices conducted over a two-month period between December 2018 due to agricultural production decreases; and January 2019. Survey tools included a mix of quantitative and • The most frequently mentioned good that was hard to find qualitative exercises, conducted with key informants, jobseekers, include fuel, electricity, and water, mentioned each 66% of the youth, consumers, and employers. It focused on two communities time; and of Khanaqin – Jalawla and Al-Sadiya. Some of the data for this LMA • Only 10% of the participants or their family members has also comes from Baqubah district, a neighboring area to the west saving, and their average monthly saving for that respondent and the capital of Diyala governorate. A summary of key findings is was 10% of their salary. below, followed by a fuller analysis and explanation. Recommendations:

1.3. Khanaqin Key Findings Use cash based interventions to help the food sector and reduce price hikes of food. 1.3.1. Challenges & Opportunities Facing Youth Target the agricultural sector to reduce the price • Youth in Jalawla felt that leadership and training courses were and increase the supply of food. oversaturated in their community; • Desirable job types included working with computers and as humanitarians; and • Two female participants in Al-Sadiya especially remarked on 1.4. Overall Recommendations the desire to teach. Sectors Services, trading, agriculture and food, chemical, 1.3.2. Challenges & Opportunities Facing Jobseekers to target: electrical, construction, and metalworking. • Jobseekers felt that graduates and low income people should Profile Graduates, vulnerable persons, widows, and war be a priority for livelihoods assistance, in addition to widows, To target: affected persons. people most affected by the war, the unemployed, and • Check for food price hikes; entrepreneurs; • Focus On-the-Job Training (OJT) and Job • There was very low confidence in local government Notes: Placement (JP) on service industry jobs; and representatives and the government of Iraq to create long • Grant to the agricultural/food sector. term and sustainable income in the communities where surveying was done; and • 40% of jobseekers responded that they would like to work for someone else, a higher than average rate for this.

Recommendations:

More job placement can be provided here. If possible, service industry businesses such as in markets and trading could be matched with Job Placement (JP) beneficiaries. Target graduates, vulnerables, widows, and war affected persons. 4 International Organization for Migration

2. Location and Study Overview 2.3. Khanaqin District Overview 2.3.1. Location and Demographics 2.1. Introduction Khanaqin is a district in the Diyala governorate. It is Diyala’s second Recognizing that the private sector is an engine for growth, IOM largest district and as of 2011 had a population estimated at works to create inclusive markets at the individual, community 300,000 in 2017. Its administrative centre is the city of Khanaqin and institutional level. At the individual level, IOM has prioritized but its large landmass comprises several other towns and numerous support to micro enterprises. This has included providing business more villages. The district’s population is largely Shia Kurd, with a development services (including business advisory and counselling sizeable number of Turkmen and some Shia Arabs as well. For services) and business support packages (including in-kind and cash example, Jalawla has been known as “Little Iraq” for the way that support), all of which aim to increase income generation at the these 3 ethnic groups blended and represented the population of 1 household level. the country on the whole.

For those individuals who need capacity development support or 2.3.2. Security and Displacement who have more specific backgrounds like agriculture, IOM provides specialized skills development and training through Vocational Khanaqin underwent an “Arabization” policy under Saddam Hussein Training (VT), Farming Training (FT) or On-the-Job Training (OJT), in the 1970s on, which displaced many Shia Kurds and Turkmen accompanied by employability assistance inclusive of in-kind items while bringing in Shia Arab families. With the fall of the Hussein tailored to enhance individual employability. For beneficiaries who regime, many of the originally displaced sought to return. Further, already possess relevant education or training and need to gain during the ISIL occupation and attacks on of parts of North- hands-on work experience, IOM job placement and job matching western Iraq, numerous people fled to Khanaqin and surrounding initiatives link participants with businesses in growth sectors, and areas. During this period Khanaqin city’s mayor did not indicate agrees to pay their salaries partially or fully for 3-6 months. any major housing, displacement or population-related concerns2. However, some of the studied areas in the district fared far worse At the community level, IOM provides support to slightly larger than Khanaqin city during the ISIL occupation: 85,000 Jalawla businesses – small and medium enterprises (SMEs) – to support residents fled during ISIL’s occupation of the city between June and long term job creation and the expansion of local production November 2014. Many families have returned to places like Jalawla, capacities. while Khanaqin continues to try to accommodate those IDPs who remain.3 Security however remains a concern in villages dotting the IOM also targets the infrastructure needed to support markets, district as ISIL-claimed attacks ramped up in 2018 and early 2019 linking livelihoods with support for the enabling environment. across rural areas despite ISIL’s lack of territorial control.4,5 For example, in agricultural communities IOM may support irrigation projects. At the institutional level, IOM also provides capacity building to national and local authorities, including market 2.3.3. Local Concerns assessments that seek to promote institutional change that would Different areas of Khanaqin district face different challenges. While support local livelihoods. Khanaqin city is in need of general infrastructure improvements, it is relatively stable, largely in good condition, and provides residents 2.2. LMA Overview and IDPs with a range of services. However, Jalawla is in worse condition, for example. Without assistance from the central or This and other IOM LMAs are intended to provide actionable local government, some citizens here restored electric power and recommendations for the individual livelihood assistance that IOM water service in 2017, but more rehabilitation is needed. Power provides, for multiple districts throughout Iraq. This LMA focuses lines, transformers, and plants have been damaged or destroyed on Khanaqin, a district in Diyala Governorate east of Baghdad near and have not yet been repaired, while water and sewer lines have the Iraq-Iran border. been damaged by numerous bombs and remain so. Further, the local hospital was raided of supplies by ISIL and remains challenged to meet demand. Additionally, dozens of damaged or destroyed area primary and other schools have yet to be repaired, rebuilt, or reopened, creating crowding in those that remain, or leaving numerous youth without educational opportunities.6

1 Abdul-Hakeem, Hussein and Gilgamesh Nabeel, “Iraqi Residents Worry About Rebuilding After ISIS is Gone,” USA Today, April 8, 2017, Accessed April 16, 2019 (https://www.usatoday.com/story/news/world/2017/04/08/iraq-islamic-state-jalawla-reconstruction-isis/99843836/). 2 Ebdullah, Hemin, “Khanaqin, Once Known As ‘City Of Tolerance,’ Still Open To Arab Refugees,” Rudaw, Mach 12, 2004. Accessed April 15, 2019 (http://www.rudaw. net/english/kurdistan/03122014). 3 Abdul-Hakeem, Hussein and Gilgamesh Nabeel, “Iraqi Residents Worry About Rebuilding After ISIS is Gone.” 4 Basnews English Staff, “IS Kills Mayor of a Village in Diyala,” Basnews, February 5, 2018, Accessed April 16, 2019 http://www.basnews.com/index.php/en/news/( iraq/412527). 5 Ali, Sangar. “Villagers around Iraq’s Khanaqin, Jalawla evacuate as ISIS attacks increase,” Kurdistan 24, January 18, 2019, Accessed April 16, 2019 (http://www. kurdistan24.net/en/news/a7eb02ec-bda4-4998-a4e7-7cc2aed53f26). 6 Abdul-Hakeem, Hussein and Gilgamesh Nabeel, “Iraqi Residents Worry About Rebuilding After ISIS is Gone.” 5 Labour Market Opportunities and Challenges

Below is an explanation of the surveys conducted: Consumer Spending Snapshot Key Weekly Expenses: 2.4.1. Key Informant Interviews • The typical consumer in Khanaqin district reported Eight key informant interviews were conducted with representatives spending an average of 83.6 USD on food expenses per of the Ministry of Labour and Social Affairs, the Ministry of week. Migration and Displacement, and local government. The Chamber of Commerce, a private sector representative, and a social worker Key Monthly Expenses: also participated. • 86.7% of survey respondents reported having a monthly transportation expense, averaging 36.7 USD per month; 2.4.2. Youth Focus Group Discussions (FGDs) • 100% of survey respondents reported having a monthly Youth FGDs were designed to identify bottlenecks to youth combustibles expense, averaging 49 USD per month; employment and training preferences. FGDs also seek local • 96.7% of respondents also reported a monthly water opinions on current employment opportunities, desirability, and expense, averaging 13 USD per month; they were conducted by soliciting participation from members of • Only 56.7% of respondents reported monthly expenses each of the studied communities, including Jalawla and Al-Sadiya. on temptation goods, averaging 65.8 USD per month; 2.4.3. Jobseeker Surveys and • Finally, 43.3% of respondents reported monthly rent The jobseeker survey is designed to identify preferences of expenses averaging 158.5 USD per month. unemployed and underemployed workers. In Khanaqin, 22 jobseekers were identified and surveyed. The survey purpose was A more thorough breakdown of consumer expenditure based outlined for each jobseeker survey, and informed consent was on the collected data is presented in the Findings section obtained from those surveyed. below. 2.4.4. Employer Surveys 17 Employer surveys were also conducted in Khanaqin district, all in Jalawla, in order to provide a representative sample of the 2.4. LMA Methodology Overview local market. Employers were initially provided an advance copy of the handout materials and then later contacted for follow-up The LMA process took two months to complete. two communities interviews. The map below shows the locations of the surveyed in Khanaqin district were selected for surveying in depth – Jalawla employers. and Al-Sadiya. Some of the data for this LMA also comes from Baqubah district, a neighboring area to the west and the capital of Diyala governorate. After a two-day training, surveyors interviewed key informants, jobseekers, average consumers, youth, and local businesses. Where possible, surveys were collected evenly across these three locations. Below is an explanation of the surveys conducted:

Tools No. Conducted Key Informant Interviews 8 Youth Focus Group Discussions 2 Jobseeker Surveys 22 Private Sector Employer Surveys 17 Consumer Surveys 30 Table 1. Surveys Conducted in Khanaqin for LMA Figure 1. Khanaqin Surveyed Employer Locations 2.4.5. Consumer Surveys The consumer survey was designed to triangulate data related to demand, income, and vulnerability. In Khanaqin, 30 respondents were identified by approaching members of the public in commercial or industrial districts and asking to speak with them. There were no restrictions on the demographic profiles of participants, but IOM sought diversity of groups within the population to the extent possible.

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3. Findings 3.3. Jobseeker Needs and Priorities In Khanaqin, the most frequently cited source of information about 3.1. Key Informant Interviews hiring was internet and social media, followed by official government announcements and word of mouth as equally important sources Seven out of eight key informants reported that agriculture was of information. There did seem to be a job centre that was the largest employer in Kanaqin district before the crisis, and recognized as accessible by most participants, which jobseekers the majority (62.5%) felt that around 50% of businesses have agreed should offer vocational training courses. recovered or restarted in the previous three years. Currently, most respondents however reported that the Jobseekers felt that graduates and low income people should be private sector was now the largest employer for the local a priority for livelihoods assistance, in addition to widows, people population, suggesting a shift from agriculture that has most affected by the war, the unemployed, and entrepreneurs. likely been affected by ISIL occupation and destruction. Many (81%) respondents mentioned that labour migration was common, including to Baghdad, Erbil, Sulaimaniyah, and Kalar; or Both agriculture and the private sector were estimated to be wherever it is politically stable. likely to be high growth potential and currently underdeveloped, Meanwhile, a number of industries were mentioned as currently although it was acknowledged that the government is investing in hiring, including household goods stores, restaurants, mechanics, agriculture in the area. International programs were also frequently grocery stories, and even the oil sector. 96% of jobseekers indicated cited as active in supporting local development, including UNDP, that these were desirable jobs, although a majority also mentioned UNHCR, HANDICAP MERCY CORP, IOM, UNFPA and SAVE that jobs tended to be dominated by a particular community or the children, to name a few. demographic (no further explanation is available). Also, 40% of jobseekers responded that they would like to work for someone 3.2. Youth Needs and Priorities else, a higher than average rate for this. The top recommended business projects for the community Youth were invited to participate in FGDs in Jalawla and Al-Sadiya. included grocery stores, carpentry, sewing, the maintenance of Youth in both FGDs felt that there were not currently issues of mobile phones, computer maintenance, and other small industries. insecurity in their community. Youth in Jalawla felt that leadership and It was generally felt that micro businesses were most successful in training courses were oversaturated in their community, in addition the area. to sewing courses, and that’s computer, english classes lessons, and interpersonal skills are currently in demand for the workforce. There was very low confidence in local government representatives and the government of Iraq to create long term and sustainable While the largest current employer for youth appeared to be the income in the communities where surveying was done. Confidence local government, FGD participants also mentioned that most was even lower, however, in tribal leaders, with 100%of respondents youth they knew were actually involved in construction work, rating their confidence in tribal leaders’ ability to create long term haircutting, and hairdressing. Desirable job types, meanwhile, sustainable income as a zero out of ten. included working with computers and as humanitarians. two female participants in Al-Sadiya especially remarked on the desire to teach.

Overwhelmingly, computer skills, was the most requested training subject, with english classes lessons, sewing, and pastry-making also mentioned.

Khanaqin Male Youth Khanaqin Female Youth Computer skills 60% Sewing 13% English Language 6% Pastry making 13%

Table 2. Youth-Requested Training Courses by Mention

7 Labour Market Opportunities and Challenges

3.4. Employer Needs and Priorities Goods that were hard to find in the market included chemical products, electrical devices, construction materials, and aluminum. Many employers surveyed (46%) reported having no issues with suppliers, with those that did have issues noting delays, taxes and checkpoints most often. Client side issues, on the other hand, Chemical products included debts and paying debts, the general economic situation, and a lack of quality control. Electrical devices Asked specifically about demand, factories and business related to construction needs tended to be most likely to report low demand. Construction materials Those most likely to report good demand for their products and services included agricultural and kitchen machinery suppliers, Aluminum children’s clothing and toy sellers, and those working in IT. Skilled labourers are listed below: 0 1 2 3

Figure 3. Hard to Find Goods Stagnant, barely Very Enough to sustain profitable 3.5. Consumer Needs and Priorities My own needs successful 35% it is expanding The average monthly income in Khanaqin is 361.6 USD a month. 12% Only 10% of the participants or their family members have saving, and their average monthly saving for that respondent was 10% of their salary.

Profitable/ Most consumers travelled out of their city sometimes to purchase Successful, but not something, but consumers were not found to not spend enough to significantly more on rent in Khanaqin than in other market areas Grow further surveyed in Iraq on transportation. Neither were they found to 53% spend significantly more on rent or gas and electric costs. However, log-linear regression analysis indicated that consumers spend Figure 2. Self-Described Business Status significantly more in surveyed areas of Khanaqin district on food, 10 out of 17 businesses visited mentioned interest in having or indicating a possible hike in prices due to agricultural production experience with training apprentices, and service and trading decreases in the area. The most frequently mentioned goods that related businesses remarked on difficulty finding skilled workers. was hard to find include fuel, electricity, and water, mentioned each The most pressing challenge mentioned was security, including 66% of the time. damaged infrastructure, delays due to transportation issues, and the instability in the region. One employer noted how there are a Spending patterns are shown in the table below7: lack of processors in the region due to the collapse of the region and lack of confidence in security forces. % Participants With Average Local Expense Period Expense Average National Expense (USD) Expense (USD) Week Food 100.00% 100 97.05 Rent 10% 126.6 151.02 Combustibles 100% 48.5 58.38 Transport services 80% 38.9 49.43 Monthly Temptation goods 46% 62.8 64.32 Recreation 0% 0 75.10 Water 70% 36.6 20.51 Phone, cable and internet 97% 47.5 37.90 Education 87% 276.9 372.36 Medical expenses 85.3% 134.3 496.91 Repairs 100% 600 485.92 Year Household appliances 0% 0 215.83 Purchase of vehicle such as car, 3% 8000 1604.91 bike, motorbike Family events 30% 205.5 808.82 Table 3. Average Consumer Spending- Khanaqin District

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

3.6. Community Implementation Plan (CIP) Recommendations

Based on the surveys conducted and data collected, IOM developed an initial list of potential community interventions, or Community Implementation Plans (CIPs) in Khanaqin to help address various identified infrastructure and livelihoods issues.

Infrastructure recommendations included electrical infrastructure repairs and new installations of transformers and power lines in both Jalawla and Al-Sadiya, as well as the establishment of an electric substation to supply power more efficiently to Al-Sadiya. Additional suggested projects included the cleaning and dredging of the canal between Jalawla and Al-Sadiya to improve the water supply for irrigation, as well as rehabilitation of several village public wells and water pumps.

Livelihoods recommendations included a series of Business Support Packages (BSPs) and Employment Support Packages (ESPs) to a number of business profiles including food preparation, electronics repair, hairdressers and barber shops, grocery stores, and several others.

Community engagement recommendations included rehabilitation of public parks and recreation spaces, rehabilitating parts of damaged schools, and installing solar-powered lighting in the Jalawla marketplace to help increase safety and potentially extend business hours.

4. Conclusions

Khanaqin is a district marked by very recent insecurity and the lingering effects of instability, including decreased investor confidence at all levels. Due to both historical and recent inaction by authorities to support the area, civilians do not have trust in local authorities nor government authorities to create or initiate jobs. Businesses are largely operating underneath the margin of profitability that would allow for an expansion or the addition of new revenue streams. In such as context, innovation can become stifled. This has led to a serious thinning of the market, including a lack of processors for traders to rely on.

In addition, the agricultural sector has been decimated by the political events of 2014-2017. Agriculture, previously the largest employer in the area, is no longer the largest source of employment in the area. Private sector jobs, including service and retail jobs, are more and more common. However, high spending averages on food indicate the consequences of the deterioration of local agriculture. IOM would do well to find businesses that involve both trade and agriculture, or services and food, as these are seen as desirable, and to be open to working in businesses whose products are hard to find locally. These include chemical product companies, aluminum, and electronics, to name a few.

9 IOM-IRAQ MISSION LABOUR MARKET OPPORTUNITIES AND CHALLENGES