The government’s leading role in employment means that it sets wages and controls the labor market. Many of these workers have no real position, and exist to maintain support for political parties, and keep people off the streets in an attempt to control social unrest. This is similar to many developing countries, especially ones based upon oil since the industry is not labor intensive, so the government ends up creating jobs with the profits. The problem with Iraq is that the number of public employees keeps on increasing each year. That will eventually drain the budget unless priorities are changed. Unfortunately, Baghdad doesn’t seem to have any urge to do so, and will likely continue on with the current path as petroleum revenues are expected to rise with the added production from deals made with foreign companies.
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