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Frank Guenther: So can edit the economy of Iraq pitfalls

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Source: The Australian - 20/11/2009


Frank Guenther: So can edit the economy of Iraq pitfalls

Thought, Professor of Economics Co-Frank Guenther, 51% of the Iraqi workforce is either unemployed to work in whole or in part. Believes that the decline in oil prices, and the depletion of cash reserves, and account to pay for bloated government sector will lead to prevent the creation of jobs in the public sector. While the private sector will not succeed in providing part of the required functions. It also will increase the rapid growth of the numbers of unemployed young people, who are being targeted to work with terrorist groups. He emphasized that without making a radical change, will increase unemployment and worsen corruption.


In his opinion column in The New York Times, the U.S., "said Frank Guenther, a professor of economics at the University Co-Lehigh, and one of the most prominent economic adviser to the civilian coalition forces in Iraq between 2008 and 2009, the Iraqi economy needs to measures had to edit it. As he argues, despite the progress made in the country at the political level, but the country's economic future is still bleak.


It stresses that, without causing a radical change, will increase rates of unemployment and the accompanying atmosphere of instability, corruption will worsen while on a large scale. Also finds that Iraq is not only suffering a severe shortage of jobs, but also suffers a glut in the number of job seekers.


Gunter believes that political and security gains that have worked to achieve American and Iraqi blood and money, will be at risk, pointing out that 51% of the Iraqi workforce is either unemployed to work in whole or in part, as the figure is increasing employment for the young. Attention Gunter as well as in the context of his speech that the Iraqi government remained the main source of employment over the past three decades.


Also bore the salaries of nearly half the labor force in the country, through earnings from oil exports. With the exception of the agriculture sector, it is believed Gunter - according to his calculations - that the private sector employment is a legitimate labor small, as estimated at 6% of the workforce. The rest are either unemployed to work, or work in the so-called "underground economy".


While acknowledging that Gunter sharp rise in oil revenues and an improved level of security may have contributed to an economic recovery, together, with the government to provide a sufficient amount of new jobs in the public sector to accommodate some 250 thousand young men break into the labor market every year, but it He stressed that the economic boom did not last long. He pointed out that, after a drop in oil prices by nearly $ 100 a barrel earlier this year, the Government has imposed a freeze on jobs, and its impact on unemployment rates began to rise.


Then, Gunter goes on to note a lack of understanding the local labor market for the growing numbers of unemployed, who have narrowed their ways to find jobs, the inability of the private sector to employ many of them, because possession of the country and one of the most hostile regulatory environments in the world. (And draws the paper in this context to solve the Iraq ranked No. 153 in the list of States, of the 183 countries classified by the World Bank's ease of doing business). Making it more difficult the possibility of starting a business legally, or access to credit, or trade at the international level in Iraq. Where the owners have most of the business as a result, either to hide in the underground economy, or accept bribes to provide a plethora of government officials.


Gunter and expected to see the Iraqi government in a difficult situation in 2010, where he sees that the decline in oil prices, and the depletion of cash reserves, and account to pay for bloated government sector will prevent the creation of jobs in the public sector. While the private sector will not succeed in providing part of the required functions. It also will increase the rapid growth of the numbers of unemployed young people, who are being targeted to work with the rebels, politicians and fundamentalist terrorist groups and criminal gangs, which means the growing climate of instability are almost certain.


Gunter points out that the main problem in the Iraqi commercial law lies in the incredible complexity, and long delays in dealing with applications for licenses and the high cost. Gunter proposed in this regard that the government ousted the law, and adopt another, less restrictive, and the degree of acceptance regionally, such as the Law on Saudi Arabia .. Or make it more easier to use by allowing, for example, for employers to deal with one ministry, rather than twelve and ministry.


Gunter believes that the government could take other steps as well, with the exception of tax collection and international trade regulations, you can transfer the responsibility for regulating the private business of the Ministries of Baghdad to the governorates of the country's eighteen provinces. Encouraging provinces to compete for jobs in the private sector will lead to the creation of regulatory environments in the warmer throughout the country, just as is the case in the United States.

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