Government attempts to stimulate more private sector employmentc.
The Kurdish globe By Hemn Baban According to Dr. Mohammed Karim, chairman of the Kurdistan Economic Forum, as per international standards the rate of public employees should ideally not be higher than 9% of the total labor force of a country.
A member of the Iraqi Council of Representatives, on the other hand, argues that Kurdistan Region has more government employees compared to the central government.
According to the most recent statistics compiled by the KRG, there are 662,444 government employees in Kurdistan and more than 1 million people have a government salary.
This year 100,000 new employees will be hired by the government of Iraq, 17,000 of which will be hired in Kurdistan Region.
According to the approved Kurdistan Region budget of 2012, the KRG Ministry of Finance and Economy will distribute the vacancies in cooperation with other relevant institutions with priority for those who are currently working at government institutions on a contractual basis.
Contrary to the initiative, parliament has added an article in the budget that encourages people to leave their government jobs.
According to this article, if a government employee completely abandons his job and joins a private company, the government will pay 50% of his salary for 5 years. Last year this assistance was for three years but it was extended to five years to encourage more people to move from the public sector to the private sector. Moreover, those who have more than 15 years of public service can retire.
According to the report by the finance committee of the Kurdistan Region's Parliament, out of the entire population of Iraq, which is estimated at 33,259,741, the number of Iraqi public sector employees, including those of KRG, is 2,750,322 people.
Out of the population of 4,189,702 in the Kurdistan Region, its regional government has 662,444 employees. Hence out of the 29,070,039 people in other parts of Iraq, only 1.7% are government employees, while in Kurdistan this rate reaches 8.15%, i.e. 16 out of a 100 people are government employees.
Dr. Karim argues that both the KRG and the central government have a large number of employees.
"There is no standard for the number of public sector employees, but it is generally accepted the public sector employees should be between 5% and 9% of the country's workforce.
According to both the Iraqi and the KRG 2012 budgets, the population of Kurdistan is estimated to be 12.6% of the country's population. However, KRG Ministry of Planning officials believe that the actual number is significantly higher than this, and they refer this issue back to the failure of conducting a general census in the country.
Dler Mahmoud, member of the Kurdish parliament's Finance and Economy Committee, argues that in the past employment has been "random and unplanned." "Employment in the public sector has become a culture since in the past the Region did not have a labor code that could solve the employee and labor issues in the private sector such as social security and retirement," explained MP Mahmoud. "If people realize that in the private sector they will have the same benefits as the public sector, they will seek employment at the private sector." The level of public employees is estimated against the total number of the workforce rather than the population, and higher private sector employment is generally acquainted with higher standards of living and a healthier economy.
Ali Hama Salih, head of the Gorran Movement's economic study department, claims that the number of people paid by the government in Kurdistan reached 1,520,000, which constitutes 51% of the region's voters.
Salih believes that the factor behind this is the abnormal situations in the region and the competition among the political parties.
"This is a huge burden on the region's budget," Salih told the Kurdish Globe. "Government should solve this issue by encouraging people to work in the private sector and have serious plans for reducing disguised unemployment in the government institutions." There are more than 10 thousands private companies in Kurdistan Region, a large number of which are foreign companies. However, economic experts believe that the region still does not have an active private sector.
Turkish Economy Minister Zafer A'ay-layan said at the opening of the International Investment Congress in Nineveh on May 5th, 2012, there are 1200 Turkish companies in Iraq, 1020 of which work in the Kurdistan Region.
Dr. Hassan Ahmed Chawsheen, member of the Iraqi Parliament's Finance and Economy Committee on the Kurdistani Alliance Bloc, argues that KRG has more employees than the central government in terms of percentage of the population.
"There are people in Kurdistan who still get two salaries without working anywhere," argued MP Chawsheen. "This has increased disguised unemployment in Kurdistan that will have big negative impact on the economy." MP Chawsheen added that this situation can be addressed by developing the private sector further and supplying a larger workforce.
"Additionally big industrial and agricultural projects should be implemented." Kurdistan Region's operations budget in 2012 is 70.48% of the total budget, while the investment budget is only 29.52%. Moreover, 63.97% of the operations budget goes to pay for the salaries of government employees.
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