Agriculture is the largest employer, especially in rural areas. However, the sector has suffered from low productivity, inefficiency and neglect. Poor yields and post-harvest management have made Iraq dependent on imports to meet its domestic food needs, making it a major importer of agricultural products.

To boost economic diversification in Iraq, an increase in agricultural and food productivity would lead to an overall growth in the economy that benefits the poorest. Indeed, agriculture- and food-led growth would reduce the poverty headcount ratio and inequality (Gini index) .

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The health system in Iraq has been strained in the past two decades. Infrastructure has been damaged and many of the skilled health professionals have fled the country.

Iraq is experiencing a critical shortage of health workers, with a ratio of physicians, nurses and midwives below 23 per 10,000, below the threshold level of 44.5 physicians, nurses and midwives per 10,000 population needed to advance universal health coverage.

Access to services, including health is crucial to build social cohesion, in particular in the territories reintegrated from the Islamic State of Iraq and the Levant (ISIL).

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The government currently spends an average of only 9 per cent of general government expenditure (GGE) and 3.1% of GDP on education, far below the international and regional benchmarks of 15%-20% of GGE, and 4-6% of GDP.

When comparing the female and male population with at least a secondary education, there is a persistent deficit of almost 11%.  Moreover, shortages and/or inefficiencies in the allocation of teaching staff, textbooks and learning materials pose challenges, recognizing also that a reliable education management information system to support planning is under development.

Access to services, including education, is crucial to build social cohesion, in particular in the territories reintegrated from ISIL.

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Inadequate supply of electricity in Iraq impacts daily life, development, economic growth, private sector regeneration and job creation. Prior to the emergence of ISIL, the country’s electricity sector suffered from a series of challenges, including sanctions and conflict. Recent investments in reconstruction, rehabilitation and expansion of generation, transmission and distribution infrastructure have been insufficient to cope with growing demand, leading to a dilapidated national electricity grid and poor supply reliability.

To ensure access to energy (7.1) the government aims to undertake the following: (i) accelerate the rehabilitation of all types of power plants; (ii) remove bottlenecks in the transport and distribution sector; and (iii) complete the construction of stations and projects of conversion, transmission and generation of the electrical system, and focus on solar generation, as indicated in the Ministerial Programme.

Access to services, including energy, is crucial to build social cohesion, in particular in the territories reintegrated from ISIL.

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Resilient, inclusive and sustainable growth in Iraq will require economic diversification through the development of the non-oil economy and the private sector for job creation and enhanced productivity. In addition, digitalization and improved governance will be among other critical approaches that are likely to play an important role in supporting economic transformation, export development and trade policy reform.

Faster productivity growth, particularly in the non-oil sector, is critical to economic diversification. By economic activity contributing to GDP, the commodities activities ranked first with a contribution of 55.4% of GDP in the first half of 2021, the distribution activities ranked second with a contribution of 20.7%, while the service activities ranked third with a contribution of 23.7%, according to the Ministry of Planning.

Economic productivity and innovation can be critical for achieving the nexus between water (SDG 6), energy (SDG 7) and food (SDG 2).

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Iraq's private sector, which accounts to roughly 40 per cent to 50 per cent of employment, is mainly informal. Compared to the public sector, employment in the private sector has lower average wages, job security, and often lacks formal contracts. Job opportunities for youth are more likely  in the informal sector.

In addition to reduced employment prospects for the youth, women, persons with disabilities and internally displaced persons (IDPs) also suffer from some of the highest unemployment rates. The International Labour Organization estimates that while the female labour force participation in Iraq is low – estimated at 20 per cent – Iraqi women who participate in the labour market are more likely to be underemployed or employed only part-time. Young women in particular struggle to find employment: In 2021, 65 per cent of young women aged 15 to 24 were unemployed, compared to 23.5 per cent of young men. According to the World Bank, approximately 27 per cent of IDPs are unemployed, and, within that group, the most vulnerable are women and children, 49 per cent of whom are less than 18 years old. All of these put young women at higher risk when there is a crisis or external shock.

By investing in initiatives to advance on SDG 8.5, Iraq can jointly address employment challenges, while also help close the gaps on poverty, health, well-being and inequality target indicators. For Iraq to advance to a resilient economic recovery it is important to ensure that employment and livelihood initiatives target women and dismantle long-standing obstacles, such as unequal access to knowledge, land, credit, technology, social protection and care services – all development priority areas for the government.

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Iraq was ranked 157th out of 180 on Transparency International’s 2021 Corruption Perceptions Index, which ranks countries based on indices that measure the prevalence of political, economic and administrative corruption within its various institutions.  Even though the country has the second largest oil reserves in the world, corruption remains a challenge, and has compounded a protracted economic and social crisis, with many Iraqis suffer from high unemployment, poor public services and extreme poverty.

SDG 16 - Peace, justice and strong institutions, which includes rule of law and effective public institutions and services, are a critical accelerator of the SDGs in Iraq.  Investing in Target 16.6 has multiple potential multiplier effects across several SDGs and targets that are relevant to Iraq. National and local level governance are drivers of effective basic service provision, including education, health and a just energy transition.

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