Karbala District, Karbala 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

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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 13 Labour Market Opportunities and Challenges

EXECUTIVE SUMMARY

IOM conducts livelihood programming in 15 out of 18 • Employers reported that working hours averaged 9.3 governorates in Iraq. As part of the Returns and Recovery hours per day (half reported 9 hours and/or above per Unit programming, the International Organization for day). Except in one case, no business owner mentioned Migration (IOM) undertook a labour market assessment having a written contract with workers. (LMA) in Karbala district in January of 2020. • Average salaries for skilled workers was about 335 United LMAs have been conducted in over 30 locations across Iraq States dollars, and USD 214 for unskilled workers. and give insights on the state of the local market in a given • Women-owned businesses include grocery shops, area, the hiring preferences of employers and the available cosmetics sale; handicrafts manufacturing; private teaching; skills and aspirations of jobseekers, among others. dairy production; services (beauty salons, hairdressing and sewing); agribusiness and livestock (poultry, dairy); food STUDY COMPONENTS processing; and tourism in addition to various jobs in the LMAs consist of both qualitative and quantitative exercises: banking sector; these businesses were noted to be mostly Key Informant Interviews (KIIs), multisectoral community profitable. The relative openness of the district to women workshops and surveys with jobseekers, employers and working and running businesses is worth noting, as it is consumers. uncommon in southern parts of Iraq.

This LMA focused specifically on Karbala district, Karbala • Multistakeholder workshops suggested vocational training governorate. for men in maintenance and installation of irrigation pumps A summary of key findings is included below, followed by and other agricultural equipment, as these skills were recommendations for future interventions. reported as missing. Skills related to greenhouse farming, livestock, dairy production and horticulture are also KEY FINDINGS needed, in addition to skills in handicrafts manufacturing, smithery and carpentry. In terms of skill gaps among • Seventy-six per cent of participants noted a preference women, handicrafts, food preparation, hairdressing and for owning their business. While 76 per cent of jobseekers sewing, including of traditional clothes, were reported as reported that people are not comfortable paying for needed in the surveyed communities. goods and services in cash, save for a few exceptions, most jobseekers reported preferring cash support over • A third of jobseekers reported that sectors that have in-kind assistance. Only 19 per cent of key informants difficulties in finding adequately trained employees include: felt that cash support would cause inter-household and general trade (especially with groceries), construction, community conflict. handicrafts making, followed by daily paid workers (in various sectors), agriculture, livestock, carpentry and • Agriculture, agribusiness, livestock, dairy, brick services such as secondary ceilings and painting (in more manufacturing, handicraft manufacturing, grocery shops, urbanized areas). and waged jobs, were among the main economic sectors in the surveyed communities, in addition to hospitality, • Some businesses that took apprentices in the past, services and other sectors active in more urbanized areas also mentioned that it was difficult to find qualified of the district. All these businesses were considered as employees. The businesses were in: general trade, trade providing desirable jobs. in construction material, tourism in general, hotel services, carpentry, mechanics , and barbering. • Key informants also reported that the sectors currently employing the highest number of people in the district • Looking more closely into businesses with high demand and were the agricultural sector and agribusiness (grains, that pay higher than average salaries, trade with groceries seeds, vegetables), livestock, daily paid jobs in various scores high followed by carpentry, the automotive sector sectors, manufacturing (carpentry, PVC, aluminium), (mechanics services), coffeeshops, home appliances repair transportation, food processing, textile, hospitality, and hotel services. However, mechanics services for cars construction, governmental jobs, trading with grocery and motorcycles and trade with groceries are also found items and furniture making. among businesses experiencing lower demand and that pay lower than average salaries.

4 IOM IRAQ Labour Market Opportunities and Challenges

Recommendations

Key informants and workshop participants suggested agriculture/livestock (dairy, honey, horticulture, dates, agribusiness, livestock breeding, poultry), manufacturing (smithery, carpentry, CNC, aluminum, handicrafts), food processing, services (transportation, SECTORS TO TARGET painting, IT, tailoring), and construction (quarries sand, gravel and stone). While trade with groceries was reported as having bad demand and paying low salaries, higher demand and higher salaries were reported for the same businesses (in addition to a tendency to take apprentices), which suggests the latter should be targeted too.

KIIs mentioned sectors where there is fierce competition, mostly businesses in more SECTORS TO AVOID urbanized areas, including clothes, imported furniture, hospitality, private education, services such as taxis and potable water bottling.

• Business support packages and business expansion support packages – in handicrafts making, horticulture, fruit processing, welding, plumbing, mechanics services, electrical installations, in addition to sewing (especially of traditional clothes), hairdressing and food processing for women

• Vocational training (VT) in maintenance and installation of water pumps, pipes,

ACTIVITIES TO TARGET and agricultural equipment; handicrafts making; in addition to sewing (of traditional clothes, as these are not available in the market), food processing and hairdressing for women.

• Farming training in dairy, greenhouse farming, livestock breeding, horticulture

• On-the-job training in handicrafts manufacturing, blacksmithing, carpentry, along sewing and hairdressing for women

VT in welding, plumbing, mechanics, and electrical installation as these skills were ACTIVITIES TO AVOID reported as available in the community

CFW is recommended, as about two thirds of consumers reported not having any savings and about 20% reported having debts. Based on the multistakeholder workshop CASH FOR WORK (CFW) in Al-Safia, CFW could include installing a smaller metal bridge on the river; cleaning waste; installing water pipes in areas that have limited access to water; and planting trees and flowers in the school’s garden (pending school construction approval)

Cash is preferable as job-seekers reported preferring cash support and key informants UNRESTRICTED CASH mentioned that cash support would not cause tensions in the community

Youth, graduates, unskilled workers, female-headed households, internally displaced PROFILES TO TARGET persons, persons with disabilities, and less mentioned groups such as returnees and older people

NOTES Presence of qualified people for conducting FT

Table 1. Recommendations

IOM IRAQ 5 Labour Market Opportunities and Challenges

STUDY INTRODUCTION

IOM recognizes that the private sector is an engine for growth; community also resides in the governorate. More than 15,000 therefore, it strives to create inclusive markets at the individual, individuals remain displaced in Karbala district alone as of community and institutional levels. At the individual level, IOM October 2019.1 has prioritized support to micro enterprises, including providing Al-Safia is a village located in the Al-Hurr subdistrict of Karbala, business development services (for example business advisory with approximately 6,000 inhabitants of whom 15 per cent to services) and Business Support Packages (BSPs), including 20 per cent are internally displaced persons (IDPs). While the in-kind and cash support, all of which aim to increase income area relied on agriculture in the past, because of shortages of generation at the household level. irrigation water, access to livelihoods has been limited. Some For those individuals who need capacity development support farms are deserted; while some farmers have managed to or who have specific backgrounds such as agriculture, IOM dig wells, these do not provide sufficient water. Many needs provides specialized skills development and training through exist, including setting up/rehabilitating the irrigation system Vocational Training (VT), Farming Training (FT) or On-the-Job and creating job opportunities. KIIs stressed that due to budget Training (OJT), accompanied by employability assistance shortages, the government never supported the community. – inclusive of in-kind items tailored to enhance individual Schools were reported as lacking in the community, and employability. For beneficiaries who already have relevant children have to walk long distances, which causes high education or training and need to gain hands-on work numbers of school dropout; incidents on the way to school experience, IOM’s job placement and job matching initiatives were also reported. Lack of writing and reading skills among link participants with businesses in growth sectors, and pays the younger generation was raised as a major concern. Water their salaries partially or fully for three to six months. is accessible for only two to three hours per day. To ensure At the community level, through the Enterprise Development water tanks are filled, families have their own water pumps Fund (EDF), IOM provides support to slightly larger businesses running on power. However, electricity is rarely available. The – small and medium enterprises (SMEs) – to support long- community does not have a health centre or maternal health term job creation and the expansion of local production services. A workshop participant reported that the community capacities. IOM also targets the infrastructure needed to also lacks a regular market. support markets. For example, in agricultural communities IOM may support irrigation projects. At the institutional level, CONSUMER SPENDING SNAPSHOT IOM provides capacity building to national and local authorities, • Key weekly expenses: The typical consumer in Karbala including market assessments that seek to promote institutional district reported spending an average of USD 126 per change in support of local livelihoods. week on food for their household.

LABOUR MARKET ASSESSMENT OVERVIEW • Key monthly expenses: 62 per cent reported monthly expenses on temptation goods, such as alcohol and IOM’s LMAs are intended to provide actionable tobacco, averaging USD 70 per month. recommendations for the individual livelihood assistance that IOM provides in multiple districts throughout Iraq. This ASSESSMENT AND METHODOLOGY OVERVIEW LMA focuses on the communities of Al-Hurr and Karbala sub-districts of Karbala district, and includes interviews and The LMA process began in late December 2019, after a two community workshops conducted in the community of two-day training on labour market assessment objectives and Al-Safia. the tools for data collection. Following the training, community- level workshops with youth, women and local residents were DISTRICT OVERVIEW organized in December 2019 and January of 2020, followed by KII, jobseeker, employer and consumer surveys. The governorate of Karbala, one of Iraq’s smallest governorates southwest of the country, is subdivided into three districts: Karbala, Ain Al-Tamur and Al-Hindiya. Shia Arabs are the dominant ethnoreligious group in Karbala but a small Sunni

1 IOM, DTM Matrix, 31October 2019

6 IOM IRAQ Labour Market Opportunities and Challenges

Multisectoral Community Workshops Consumer Surveys

Two multisectoral workshops were conducted in the The consumer survey was designed to triangulate data community of Al-Safia (mostly host community members, related to demand, income and vulnerability. In commercial including 10 women,28 men and 6 male IDPs) in Al-Hurr or industrial districts in Karbala district, members of the public sub-district. After introducing IOM and its programming, were approached and 32 of them identified as respondents. staff explained IOM’s plan to work closely with community There were no restrictions on the demographic profiles of members in implementing future programmes. participants, but IOM sought diversity to the extent possible.

The table below outlines the types and number of surveys Key Informant Interviews conducted for Karbala district. Eleven KIIs were conducted with representatives of the TOTAL NO. business community in Karbala district. KIIs seek to establish MALE FEMALE TOOLS OF SURVEYS RESPONDENTS RESPONDENTS trends and observations about the business community, CONDUCTED sectors and businesses currently hiring, ongoing public and Multi- private investment, and key emerging sectors capable of sectoral 34 10 44 generating employment. Community Workshops Jobseeker Surveys Key Informant 11 0 11 Jobseeker surveys are designed to identify preferences of Interviews unemployed and underemployed workers. In Karbala district, Jobseeker 30 jobseekers were identified, mostly from Al-Hurr with four 28 2 30 Surveys from Markaz Karbala. The survey’s purpose was outlined for Private each jobseeker survey, and informed consent was obtained Sector from those surveyed. 29 1 30 Employer Surveys Employer Surveys Consumer 26 6 32 Thirty Employer surveys were also conducted in Karbala Surveys district, mostly in Al-Hurr (and four in Markaz Karbala), to Table 2. Surveys Conducted in Karbala for provide a sample as representative as possible of the local Labour Market Analysis market. Employers were initially provided an advance copy of the handout materials and then were later contacted for follow-up interviews.

IOM IRAQ 7 Labour Market Opportunities and Challenges

FINDINGS

ATTITUDES TOWARDS ENTREPRENEURSHIP AVERAGE SALARY AVERAGE SALARY AND CASH AREA FOR SKILLED FOR UNSKILLED WORKERS WORKERS Seventy-six per cent of participants noted a preference Al-Hurr USD 310 USD 201 for owning their business, suggesting a preference for sub-district entrepreneurship in the community on the whole. Only 19 Markaz per cent of KIIs felt that cash would cause inter-household Karbala (only 4 USD 500 USD 300 and community conflict. While 76 per cent of jobseekers employers) reported that people are not comfortable paying for goods All USD 335 USD 214 and services in cash; save for a few exceptions, most jobseekers reported preferring cash support over in-kind assistance. All Consumers noted average monthly incomes of USD 503 per these findings suggest that cash support by an international month. organization could be potentially safely introduced in Karbala Employers reported no preference as to which gender should district. fill different positions. Women-owned businesses, as reported TYPES OF JOBS AVAILABLE by KIIs, generally included trade with groceries and cosmetics, handicrafts making, education, dairy, services (beauty salon, Multistakeholder workshop participants did not discuss the hairdressing, and sewing), agribusiness, livestock (poultry, dairy), jobs currently available in Al-Safia but rather highlighted how food processing, tourism and banking; these businesses were the construction of a water course that is connected to the noted to be mostly profitable. Jobseekers noted that women main water source would improve the irrigation system owned-businesses were mostly focused on agriculture and and stimulate the agricultural sector in Al-Safia. Agriculture, livestock (among the most mentioned sectors) followed by agribusiness, livestock, dairy, brick making, handicraft making, food processing, trade and services, and these businesses trade with groceries, and daily paid jobs, were among the earned on average USD 267 per month. However, women main economic sectors available in the surveyed communities, mostly did not contribute to household income, with 21 per in addition to hospitality, services, and other sectors active in cent doing so, based on the consumer survey. more urbanized areas of the district; all jobseekers but two considered these businesses’ jobs desirable. No particular SKILLS GAPS group dominated these jobs. Jobseekers also did not highlight Multistakeholder workshops suggested VT for men in any particular jobs that were currently available, and that they maintenance and installation of irrigation pumps and other would not like to perform. agricultural equipment as these skills were reported as missing. Key informants also mentioned that the agricultural Skills related to greenhouse cultivation, livestock, dairy, and sector (grains, seeds, vegetables), livestock, daily paid jobs, horticulture are also needed, in addition to skills in handicrafts manufacturing (carpentry, PVC, aluminum), transportation, making, smithery and carpentry. As for skill gaps among food processing, textile, hospitality, construction, governmental women, handicrafts making, food preparation, hairdressing jobs, trading with groceries (but also furniture), and agribusiness and sewing, including of traditional clothes, were reported as are the sectors currently employing the highest number of needed in the surveyed communities. people in the district. A third of jobseekers mentioned that in their opinion, sectors Employers reported that working hours averaged 9.3 hours that had difficulty in finding adequately trained employees per day (half reported 9 hours and/or above per day). Except included general trade (especially with groceries), construction in one case, no business owner mentioned having written and handicrafts making, followed by daily paid workers, contracts with workers. agriculture, livestock, carpentry and services such as double ceilings and painting – in the more urbanized areas. See Table 3. Average wages for unskilled and skilled workers among the businesses surveyed in Karbala ranged from USD 100 to 500 and USD 150 to 1000, respectively.

8 IOM IRAQ Labour Market Opportunities and Challenges

NUMBER OF Tools and assets most commonly requested by businesses SECTORS EXPERIENCING JOBSEEKERS WHO included machinery and equipment related to the respective DIFFICULTIES TO FIND SKILLED MENTIONED THE EMPLOYEES businesses, and generators. Business owners were also asked SECTOR what they would do were they to receive a cash grant, and General trade – grocery, general 10 only a small number mentioned hiring new employees (in trade, home appliances an open-ended question), with the most common response Construction 7 being acquiring the required tools/machinery and expanding Manufacturing – handicrafts 5 their shop/business.

Daily workers 4 RECRUITMENT MECHANISMS Agriculture - in general, 4 vegetables While jobseekers mostly did not know of a job centre they Livestock – in general, dairy 4 suggested that job centre services could be offered in the centre of the community (without further specifications). Except Carpentry 3 for three employers, most reported personal connection as Secondary ceilings 3 their main hiring mechanisms. Employers were mostly open Blacksmith 2 to hiring through more formal channels, which is not common compared to findings in other governorates. Only few thought Painting 2 hiring through more formal channels was not a good idea. Hospitality 1 The area is prone to labour migration, with half respondents Sewing 1 mentioning that people tend to migrate for economic reasons Plumbing 1 outside of the community.

Electrical installations 1 SUPPLY-SIDE BOTTLENECKS Mechanic (also motorcycles) 1 The most common challenge facing employers was lack of cash, Transportation 1 (mentioned by 47% of employers), including unemployment Water purification/bottling 1 among people and general stagnation; lack of services such as electricity, irrigation water, roads, but also education, health Table 3. Sectors and number of jobseekers reporting sectors with (mentioned by a third of employers) followed by an increased difficulties in finding adequately trained employees number of IDPs, which was mentioned by one employer, and check-points by another. Almost all business owners reported Some businesses also mentioned that it was difficult to find having multiple potential suppliers for their raw materials, qualified employees. Among these, many also tend to provide whereas 78 per cent reported being able to respond to an trainings. See Table 4. increase in demand. Those who reported not being able to BUSINESS MENTIONING DIFFICULT TO TRAINING OF respond to an increase in demand included a mechanic, two FIND EXPERIENCED WORKERS APPRENTICES groceries traders , a construction materials trader, shoes trader, General trade (grocery) (4) 2 Yes (and 2 No) and a hotel owner. Bicycle parts and electrical installation Trade construction material Yes material were reported (by 2 employers) as being more

Tourism company Yes expensive locally than in other areas of Iraq, whereas other businesses purchase their raw materials locally. Hotel Yes

Carpenter Yes DEMAND-SIDE BOTTLENECKS Mechanic (3) 1 Yes (and 2 No) Challenges in dealing with clients mostly included debts and Barber (2) 1 Yes (and 1 No) low purchasing power, mentioned by 62 per cent of employers, with a third not reporting any challenge. Coffee-shop No Businesses mentioning an overall average demand for their Fast food No products were reported by 28 per cent of employers. The Maintenance home appliances No average salary for reported average demand among employers was USD 322 for skilled workers. Businesses with higher Table 4. Businesses reporting challenges in identifying skilled workers demand pay the highest salaries, although only two businesses and their experience in training of apprentices

IOM IRAQ 9 Labour Market Opportunities and Challenges

reported having high demand. Most businesses reported experiencing poor demand for their products/services (62%).

TYPE OF BUSINESS

GOOD DEMAND POOR DEMAND

Trade with food, including soft drinks (2) Mechanics – motorcycles, bikes, and trailers (4)

Trade with construction and building materials (3)

Car mechanics (3)

Barber (2)

Trade electrical material (2)

Grocery (2)

Fast food

Tourist agency

Shoes trader

Average salary USD 900 Average salary USD 284

Table 5. Average salaries among businesses with high and poor demand

Examining salaries by business in detail (Fig. 1), the highest salaries are mostly found in the same businesses mentioned above, in addition to barbering, car/bike/motorbike mechanics services, hotel services, tourist services, coffeeshops, and maintenance of home appliances. However, car/bike/motorbike mechanics are also found among the lower paying salaries.

10 IOM IRAQ Labour Market Opportunities and Challenges

Fig.1 Average salary – skilled workers

An attractiveness matrix can be applied to measure and above the average of all salaries), trade with groceries scores contrast the varying measures of demand as reported by high, followed by carpentry, the automotive sector (mechanics local businesses – and to compare them with the salaries services), coffeeshops, home appliances repair, and hotel these businesses reported paying their skilled workers – to services. However, mechanics services for both cars and get a better understanding of what types of jobs could be motorcycles, in addition to trade with groceries, are also found both sustainable and decently remunerated. Looking into in the low demand/lower salaries quadrant. high demand businesses that pay higher salaries (or salaries

IOM IRAQ 11 Labour Market Opportunities and Challenges

Poor Demand Average Demand High Demand

Carpenter

Barber (2) Mechanic Higher Trade with Tourist agency Coffeeshop Salaries groceries (2) Bike, motorcycles, and generators repair Home appliances repair

Hotel

Bicycle maintenance

Mechanic (2)

Mechanic motorcycle

POTENTIAL FOR IMPACT POTENTIAL Transport motorbike Lower Trade construction material (3) Grocery (4) / Salaries Trade electrical material (2)

Fast food

Grocery (2)

Trade with shoes

POTENTIAL FOR GROWTH

Table 6. Cross-tabulation demand and salaries paid to skilled workers

12 IOM IRAQ Labour Market Opportunities and Challenges

CONCLUSIONS

In Karbala, EDF has potential for expanding many small and medium sized businesses, which could also absorb different population groups requiring livelihood assistance, especially IDPs (present in high numbers) into the workforce. Irrigation infrastructure development is also a priority, pointed out on several occasions.

OTJ trainings were suggested in addition to VT for a variety of sectors, including FT, which were reported as experiencing shortages in skills. Most jobseekers also mentioned a preference to own their business; therefore exploring BSP for those wishing to enter manufacturing, horticulture, fruit processing, welding, plumbing, mechanics services, electrical installations, in addition to sewing (especially of traditional clothes), hairdressing, and food processing for women, would be appropriate.

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. Since people do not have savings, CFW targeting community priorities such as a small bridge construction and waste management, would greatly benefit the area, especially Al-Safia.

IOM IRAQ 13 V`

LABOUR MARKET OPPORTUNITIES AND CHALLENGES

IOM IRAQ

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