Iraq Private Sector Stalls, Public Hiring Fills Gap

Economy driven by single employer sparks financial concerns
By Matt Cantor,  Newser User
Posted Aug 11, 2008 11:05 AM CDT
People shop at a marketplace in north Baghdad, July 23, 2008. Iraq's private sector has struggled under the weight of the war's effects.   (AP Photo/Hadi Mizban)
camera-icon View 2 more images

(Newser) – With private business slow to take root in post-invasion Iraq, the government is picking up the slack by hiring a vast army of employees, the New York Times reports, creating an economy far different from what the US had foreseen. Government jobs will account for about 35% of employment this year, a source of concern for analysts who argue that a flourishing free market is what the country needs.

Most private industry that existed under Saddam Hussein failed after his fall, the victim of cheap Chinese imports and unreliable electricity, the Times reports. Recent salary hikes for government employees, a boon to nascent businesses, were suspended after the first few paychecks on fears of spiking inflation. “The private sector does not exist now,” says a frustrated politician, “because there is no infrastructure.”