Rapid Market Assessment in Erbil Governorate · 2020. 8. 23. · Erbil governorate. In June 2020, Optimum Analysis was commissioned to conduct a rapid market assessment in order to

Rapid Market Assessment in Erbil Governorate

July 2020

Rapid Market Assessment in Erbil Governorate – July 2020

2 Optimum Analysis Iraq Research Design, Data Collection, and Analysis

Acknowledgment This research was made possible with the support of the United Nations Development Programme (UNDP) with generous funding from Germany’s Ministry for Economic Cooperation through Kreditanstalt für Wiederaufbau. The support and assistance of Islamic Relief staff in Erbil, moreover, were crucial for the successful completion of this research project. Amongst others, Islamic Relief staff provided Optimum Analysis with input on the data collection tools, support during fieldwork, and input on the final report. In specific, Optimum Analysis would like to express its gratitude to the following Islamic Relief staff for their help and support throughout all phases of this project: ▪ Akram Sadeq Ali

Head of Programmes ▪ Abdullah Abdulrahman Abdullah

Training Officer Optimum Analysis would like to extend its gratitude to community members and stakeholders in Erbil for their participation in this research project as respondents and enumerators.

Team Structure This research project was executed by Optimum Analysis. The following individuals made a significant contribution to the research design, data collection, analysis, and report writing: ▪ Sarah Nijholt

Lead Evaluator ▪ Zara Valentinova Pashova

Research Officer ▪ Mahran Alhayek

Fieldwork Manager ▪ Sarmad Amjad

Team Leader DISCLAIMER This report was produced under the United Nations Development Programme’s Iraq Crisis Response and Resilience Programme (ICRRP) with the generous funding of the Government of Germany. The study was commissioned to Optimum Analysis through a partnership with Islamic Relief. The views expressed in this publication are those of the author(s) and do not necessarily represent those of the United Nations, including UNDP and the UN Member States. Copyright © 2020 UNDP. All rights reserved.

Map of Iraq Kurdistan Region of Iraq highlighted in grey.



Table of Contents Acknowledgment ...................................................................................................................................................................... 2 Table of Contents ...................................................................................................................................................................... 4 List of Figures .............................................................................................................................................................................. 5 List of Tables ................................................................................................................................................................................ 5 Abbreviations.............................................................................................................................................................................. 5 Executive Summary ................................................................................................................................................................. 6 1. Introduction ............................................................................................................................................................................ 8 2. Methodology ........................................................................................................................................................................ 10

2.1 Desk Review ................................................................................................................................................................... 10 2.2 Qualitative Interviews ............................................................................................................................................... 10 2.3 Quantitative Surveys .................................................................................................................................................. 11 2.4 Data Collection and Analysis .................................................................................................................................. 12 2.5 Limitations ..................................................................................................................................................................... 12

3. Desk Review ......................................................................................................................................................................... 14 3.1 Context ............................................................................................................................................................................. 14 3.2 Economy and Labour Market ................................................................................................................................. 14

4. Results ..................................................................................................................................................................................... 16 4.1 Market Opportunities Assessment ....................................................................................................................... 17

4.1.1 Existing Businesses .............................................................................................................................................. 17 4.1.2 Expansion Opportunities ................................................................................................................................... 22

5. Youth Skills Assessment ............................................................................................................................................... 25 5.1 Youth and Women ....................................................................................................................................................... 26 5.2 Employment Opportunities .................................................................................................................................... 28 5.3 Training Opportunities ............................................................................................................................................. 30

6. Conclusion ............................................................................................................................................................................ 33 7. Recommendations ........................................................................................................................................................... 35 Annex 1: Qualitative Data Collection Tools ............................................................................................................ 37

KII with Islamic Relief ....................................................................................................................................................... 37 KII with Business Owners ............................................................................................................................................... 38 KII with Ministry of Labour and Social Affairs ....................................................................................................... 40 KII with Vocational Training Center ........................................................................................................................... 41 FGD with Youth .................................................................................................................................................................... 42

Annex 2: Quantitative Data Collection Tools ......................................................................................................... 45 Market Opportunity Survey............................................................................................................................................ 45 Youth Skills Survey ............................................................................................................................................................. 53



List of Figures Figure 1. Educational Attainment, by Gender (n=50) ............................................................................................... 17 Figure 2. Vocational Training Attainment, by Gender (n=50)............................................................................... 18 Figure 3. Types of Businesses, by Gender and Community Status (n=50) ...................................................... 18 Figure 4. Hair Salon ................................................................................................................................................................. 19 Figure 5. Monthly Profit in IQD (x1000) (n= 43) ........................................................................................................ 20 Figure 6. Employment of Staff, by Business Type (n=50) ....................................................................................... 22 Figure 7. Likelihood of Hiring Staff with Traineeship Experience (n=45) ....................................................... 22 Figure 8. What is Preventing You from Better Meeting Your Customers' Needs? (n=16) ........................ 23 Figure 9. Factors That Make a Business Successful, by Type of Business (n=50) ........................................ 24 Figure 10. Skills Needed to be a Successful Business Owner, by Type of Business (n=50) ...................... 24 Figure 11. Sewing Shop .......................................................................................................................................................... 25 Figure 12. Educational Attainment Among Youth, by Gender and Community Status (n=154) ............ 26 Figure 13. Employment Rates, by Gender and Community Status (n=154) ................................................... 27 Figure 14. Income in IQD (x1000), by Gender, Community Status, and Employment Status (n=130) 27 Figure 15. Ability to Gather 100,000 IQD in a Week in Case of Emergency (n=154) .................................. 28 Figure 16. Skills Needed to be a Successful Business Owner (n=154) .............................................................. 29 Figure 17. Vocational Training Attainment, By Type (n=38) ................................................................................ 30 Figure 18. Vocational Training Attainment, by Employment Status and Gender (n=107) ....................... 31 Figure 19. Participation in Apprenticeships, by Employment Status and Gender (n=107) ..................... 32

List of Tables Table 1. Methodology ............................................................................................................................................................. 10 Table 2. Profit Before & During COVID-19 in IQD (x1000), by Gender and Community Type (n=43) 20 Table 3. Impact of COVID-19 Public Health Measures (n=50) .............................................................................. 21 Table 4. Ten Most Profitable Businesses Before and During COVID-19 in IQD (x1000) ........................... 21

Abbreviations

FGD Focus Group Discussion IDP Internally Displaced Person IQD Iraqi Dinar KII Key Informant Interview KRI Kurdistan Region of Iraq MOS Market Opportunities Survey UNDP United Nations Development Programme YSS Youth Skills Surveys



Executive Summary Introduction Since its establishment in 1984, Islamic Relief has been working to provide lasting routes out of poverty by empowering people to transform their lives. A key component of Islamic Relief Iraq’s present strategic approach is youth empowerment and capacity building. To this end, Islamic Relief Iraq started a livelihood project in Erbil in October 2019. Funded by UNDP, the Sustainable Livelihoods Through Small Business Grants and Vocational Training, Kurdistan Region of Iraq, project aims to contribute to employability and economic growth in some of the most marginalized communities in Erbil governorate. In June 2020, Optimum Analysis was commissioned to conduct a rapid market assessment in order to assess the current labor market conditions in Erbil governorate in order to provide Islamic Relief with recommendations for its current and future livelihood projects. Data collection took place in June and July 2020. Aside from a thorough desk review, a total of 50 Market Opportunity Surveys (28 men and 22 women) and 154 Youth Skill Surveys (83 women and 71 men) were conducted in Daratu, Mamzawa, Shawes, and Qushtapa. Additionally, Optimum Analysis conducted 12 key informant interviews and four focus group discussions. Existing Businesses Aside from one larger business, the businesses included in the sample were small and employed no or few staff. Men were more likely to be involved in businesses selling goods and were allowed to start any type of business. Women, on the other hand, were mostly involved in three types of service-providing businesses, namely sewing shops, hair salons, and beauty salons. The main reason for this is that it is not considered suitable for women to own businesses that have a men-dominated customer base. Existing businesses were hard-hit due to the COVID-19 public health measures implemented by the government. Many businesses had to close for some time and saw fewer customers spending less money on their products/services. Women who owned businesses were more severely impacted by the public health measures, which is likely because a large proportion of women are running businesses that require human contact (hair salons and beauty salons). Business owners, furthermore, reported challenges to maintain their supplies in order to meet consumer demand, mainly due to a lack of capital and high transportation costs, mostly to and from Erbil city, from where most business owners procured stock and inputs. Other obstacles included the high costs for rent and electricity, and power outings. Training and Apprenticeships Among business owners, demand for trained employees was high and there was a need for more advanced training that targets individuals who already possess basic knowledge. Among youth, moreover, access to training was limited, regardless of their community status. This is unfortunate as training and apprenticeships were found to contribute to increased employability among youth. At the same time, some youth who participated in training or apprenticeship programs did not seek employment after completing the program, thus reducing the effectiveness of such programs. Youth who did not seek for employment after completing an apprenticeship program were predominantly women. Almost half of the surveyed business owners, moreover, had trained interns and/or apprentices in the past and most business owners were willing to train interns and/or apprentices in the future. Among service-providing business owners, there was a clear preference to recruit employees with internship or apprenticeship experience over those without that experience. Employment Unemployment rates among respondents were high, especially among women. This is due to local traditions, according to which women are not allowed to work or only allowed to work in specific



types of employment perceived as suitable for them. Unemployment among youth was mainly attributed to a lack of available employment opportunities and a lack of capital to start their own business. There was a mismatch between the types of employment aspired by youth and the jobs that were in high demand. Women were mostly looking for jobs in sewing, handicrafts, and hairdressing. Men, on the other hand, most often wanted to work as barbers, mechanics, and/or as restaurant staff. However, most of these sectors were reported to be already saturated. In addition, youth with technical skills were reported to be most sought after. For example, there is high a demand for electricians and experts in the maintenance of electrical equipment, such as computers, mobile phones, and security cameras. There is also a demand for photographers, experts in solar power, and translators and interpreters. However, available jobs in these sectors were reportedly mostly located in urban areas, mainly in Erbil city. Agriculture, lastly, was identified as a sector with a high potential for future growth. Future Expansion Most business owners were planning to expand their businesses. In most cases, this would require hiring additional and trained staff. Owners of businesses that sell goods mostly required training in marketing, whereas those who provide services demanded skills closely related to the type of service they offered. Despite plans to expand, business owners often did not have opportunities to access credit or loans except from informal sources, including family and community members. This formed a serious obstacle for business owners seeking to expand. Recommendations Based on the above, Optimum Analysis provides the following recommendations for future programming: • Provide counseling to families of women participating in any of the activities aimed at increasing

their employability. The counseling should focus on the importance of employment for women. • Conduct a study to assess the demand for other innovative types of businesses with a women-only

customer base (e.g. women-only tea house, women-only electronic repair store). • Provide more advanced vocational training opportunities to business owners and workers with

basic knowledge. • Increase opportunities for small loans and credit for business owners in order to stimulate

business investments. To ensure this is in line with religious beliefs, this can be done through village-savings and loan associations.

• Support trading in inputs (different depending on the type of business) so as to create more employment opportunities and to meet the demand of local businesses for more affordable inputs.

• Establish networks of business owners who can work together to decrease the cost of sourcing inputs from outside of Erbil.

• Include a module on emergency preparedness in business training for future business owners in order to make businesses more resilient to possible shocks that may occur as a result of COVID-19 public health measures.

• Provide business grants to women to start a home-based business or business with a women-only customer base.

• Raise awareness among youth on the most demanded skills and experience in the targeted locations to encourage youth to pursue skills and experience that are highly sought after.

• Provide more training opportunities for youth in the sampled communities, with a specific focus on IDPs and refugees.

• Invest in additional apprenticeship/ internship opportunities with business owners who are willing to hire the apprentice/intern if he or she completed the internship/apprenticeship successfully.

• Develop stringent selection criteria for youth who are accepted in vocational training programs, including the obligation to apply for at least three employment opportunities at the end of the training.



1. Introduction Iraq’s extremely volatile domestic and regional climate, together with its high vulnerability to natural hazards, has been hampering the country’s recovery from the protracted humanitarian crises in which it has been immersed for decades. As of April 2020, a total of 4,1 million people in Iraq are still in need of humanitarian assistance and nearly half of them are in acute need.1 Although these figures show a decrease in the number of people in need compared to previous years, the current COVID-19 pandemic threatens to reverse the progress made and to exacerbate socio-economic vulnerabilities among Iraqis even further. Unemployment has long been an issue of concern for the country’s political and social stability. Iraq’s labor force participation rate is among the lowest in the world and is likely to reduce even further as a result of the current crisis.2 Youth, women, Internally Displaced Persons (IDPs) and refugees are most likely to be unemployed. Furthermore, despite being considered an upper-middle-income country3, poverty in Iraq has been rather high (18.9%4) and is expected to rise to up to 40% in the following months, as the Iraqi economy is projected to shrink considerably.5 Islamic Relief has been implementing initiatives that address a variety of humanitarian and development challenges in Iraq. A key component of Islamic Relief Iraq’s present strategic approach is youth empowerment and capacity building. To this end, Islamic Relief Iraq started a livelihood project in Erbil in October of 2019. The project is called: Sustainable Livelihoods Through Small Business Grants and Vocational Training, Kurdistan Region of Iraq. The project is funded by the UNDP and aims to create sustainable income opportunities and employment, particularly for refugees, IDPs, and vulnerable host communities. In addition, the project focuses on improving the skills and employability of vulnerable populations, supporting small businesses through market linkages, and facilitate long-term income generation in the Kurdistan Region of Iraq. Optimum Analysis was commissioned to conduct a rapid market assessment in Erbil governorate, Iraq, in order to provide clear information for the current and future livelihood projects in Erbil. The objectives of the rapid market assessment are listed below: - Outline and update economic and cultural context with regards to IDPs, refugees, and host

communities in Erbil governorate; - Outline the trending sectors in Erbil governorate; - Outline a problem analysis including target group and stakeholder analysis; - Assessing the market supply and demand with small and medium business mapping in

combination to opportunities; - Assessment of the livelihood needs with particular focus on to vocational training or on-the-job

training for low-skilled job seekers, distribution of toolkits or small business grants for long term income-generating activities for IDPs, Syrian refugees, and host communities in Erbil to identify:

o Vocational training ▪ Relevant vocational training demanded by the market; ▪ Relevant vocational training demanded by youth; and

1 OCHA. 2019. Iraq Humanitarian Needs Overview 2020. OCHA. Available at: https://data2.unhcr.org/en/documents/details/72926. 2 Vilardo, Valeria. 2018. Gender Profile - Iraq. Oxfam. https://oxfamilibrary.openrepository.com/bitstream/handle/10546/620602/rr-gender-profile-iraq-131218-en.pdf?sequence=1&isAllowed=y. 3 ILO. 2020. World Employment and Social Outlook. Geneva: International Labour Office. https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_734455.pdf. 4 The World Bank. 2020. Poverty & Equity Brief. Iraq. The World Bank Group. Available at: https://databank.worldbank.org/data/download/poverty/33EF03BB-9722-4AE2-ABC7-AA2972D68AFE/Global_POVEQ_IRQ.pdf. 5 UN. 2020. "Political will ‘fundamental’ to realizing a more just and prosperous Iraq: UN envoy." UN News. May 12. https://news.un.org/en/story/2020/05/1063772.



▪ The efficiency of vocational training in Erbil to provide a source of income for later on for the targeted population.

o Apprenticeship ▪ Best approaches to attract business owners ▪ Most demanded positions in the market; and ▪ Minimum skills required to be recruited by companies.

o Toolkits/small business grants: ▪ Types of toolkits or business grants demanded by the market; and ▪ Types of skills required to start small or medium-sized enterprises.

- On the basis of rapid assessment, formulate recommendations for the project activities. Data collection for this rapid market assessment took place in June and July 2020. A total of 154 Youth Skills Surveys (YSS) and 50 Market Opportunity Surveys (MOS) were conducted in four communities in Erbil governorate, namely Daratu, Mamzawa, Shawes, and Qushtapa. 83 women and 71 men were surveyed under the YSS, whereas the MOS targeted 28 men and 22 women. To complement quantitative data, Optimum Analysis conducted 12 KIIs and 4 FGDs. All FGDs and KIIs conducted with business owners took place in the communities of Darato, Mamzawa, and Shawes. Two FGDs were conducted with youth from the host community (women and men, separately), while the remaining two targeted IDPs and refugees (again, women and men separately). Two KIIs with staff from vocational training centers and one with a representative of the Directorate of Labor and Social Affairs were held in Erbil city. All interviews were conducted in-person, except for the KII with a staff of Islamic Relief, which, due to the COVID-19 pandemic, had to be conducted by telephone. This report provides an overview of the main findings.



2. Methodology In order to best address the objectives of this study, Optimum Analysis used a mixed-methods (qualitative and quantitative) approach, utilizing a variety of interviewing techniques, including a desk review, qualitative interviews (KIIs and FGDs) and quantitative surveys. Table 1. Methodology

Method Source/Respondents Quantity

Preliminary Research

Desk Review ▪ Relevant secondary literature, including project

documents, on livelihoods and markets in Erbil N/A

Research Methods

Youth Skills Survey Erbil ▪ Men and women (age 18 to 35) at local markets

154 Surveys Total

Market Opportunity Survey

Erbil ▪ Business owners

50 Surveys Total

Key informant Interviews

Erbil ▪ Islamic Relief staff (1 in total) ▪ Business owners (8 in total) ▪ Directorate of Labour and Social Affairs (1 in total) ▪ Vocational Training Center (2 in total)

12 Total

Focus Group Discussions

Erbil ▪ Youth - Women (IDP and refugee) (1 in total) ▪ Youth - Men (IDP and refugee) (1 in total) ▪ Youth - Women (host community) (1 in total) ▪ Youth - Men (host community) (1 in total)

4 Total

2.1 Desk Review A comprehensive desk review of secondary literature on livelihoods and markets in Erbil governorate was conducted by Optimum Analysis’ Lead Researcher to increase understanding of the local context. The results of this review were used to design the qualitative and quantitative research tools and were incorporated into this report.

2.2 Qualitative Interviews Qualitative interviews were deemed highly appropriate for the purpose of this study as they are expected to provide rich and in-depth information considering the context and objectives of this study. Qualitative interviews are especially useful to gain an understanding of underlying reasons, opinions, and motivations among a group of people with regards to the topic under research. Qualitative interviews were conducted by the Fieldwork Manager (KII with Islamic Relief) and Team Supervisor (all other KIIs and FGDs). Before the start of data collection, a two-day training (one day for qualitative and one day for quantitative data collection techniques) was held in order to train the Team Supervisor on informed consent, qualitative research methods, qualitative interviewing techniques, and the interview guides. To ensure the quality of the data, the Team Supervisor was required to submit notes from interviews on a daily basis. The Lead Researcher reviewed the notes and provided the Team Supervisor with feedback. The Lead Researcher would ask for additional information related to the research questions



and, where needed, additional questions were added to the interview guides for future interviews. All interviews, except for the interview with an Islamic Relief staff, took place in-person.

2.3 Quantitative Surveys Optimum Analysis conducted two quantitative surveys utilizing computer-assisted personal interviewing (CAPI) methodology. This methodology follows an approach by which surveys are programmed onto mobile phones. This allows for the insertion of skipping patterns as well as near real-time uploading of data onto Optimum Analysis’ database. The near real-time uploading allows for daily quality control to occur. Following the completion of the survey tools, Optimum Analysis’ Fieldwork Manager scripted and programmed the surveys, uploading them to smartphones using Ona mobile data collection software. The Team Supervisor was responsible to lead quantitative data collection. The Team Supervisor recruited six local enumerators from a roster of previously vetted individuals with experience in data collection. The Team Supervisor together with the Fieldwork Manager led a one-day enumerator training on-site in order to learn the survey, sampling methodology, respondent selection, and review smartphone data collection techniques. As part of the training, the Team Supervisor and enumerators reviewed the survey content and agreed on standard translations into local languages. Following the training, the enumerator teams piloted the survey to rectify any complications such as the wording or translation of a question. The Team Supervisor provided on-the-ground quality assurance checks and oversight throughout data collection. As surveys were conducted on smartphones using mobile data collection technology, our National Researcher was able to upload data daily from the field to our secure server. This allowed the Lead Researcher to provide a secondary level of data quality assurance and fieldwork supervision remotely and in near real-time. The following quantitative surveys were conducted: Youth Skills Surveys The YSS determines the current level of skills of local youth as well as young men and women’s desire and interest in training and support. In addition, this survey examined reasons for unemployment and economic instability. YSSs were collected semi-randomly with youth at local markets.

KEY INFORMANT INTERVIEWS KIIs are an effective method to access a population of stakeholders who have first-hand knowledge about the researched topics. For this study, selected KII respondents were assumed to have in-depth knowledge about livelihoods and markets in Erbil. Through the use of open-ended questions, the Team Supervisor was able to document detailed descriptions, opinions, and sentiments with regards to the above-mentioned topics. Participants for the KIIs were identified in collaboration with Islamic Relief. The Team Supervisor took appropriate measures to ensure that respondents were safe during the KIIs. This included wearing a mask and socially distancing from the respondent during the entire duration of the interview.

FOCUS GROUP DISCUSSIONS FGDs are especially useful to learn the social norms of a community or subgroup. FGDs were conducted as open discussions between the Team Supervisor and the participants. This allowed for the gathering of more in-depth opinions about the research topics from a small, purposefully selected group of people. FGDs were separated based on gender in order to ensure the honest and full participation of respondents. Participants for the FGDs were identified by Optimum Analysis. The Team Supervisor took appropriate measures to ensure that respondents were safe during the FGDs. This included wearing a mask and socially distancing from the respondents and ensuring the respondents would socially distance from each other during the entire duration of the FGD.



Market Opportunity Surveys The MOS provided insight into consumer dissatisfaction, according to business owners. The MOS also determined whether and what kind of business development services and training would impact existing micro-businesses. Enumerators used systematic random sampling, with sampling intervals determined in each market by the number of market stalls.

2.4 Data Collection and Analysis Once the Lead Researcher completed cleaning the dataset, she performed statistical analysis using Stata. Stata is a complete, integrated statistical software package that provides options for data visualization, statistics, and reproducible reporting. The analysis focused on identifying trends and significant findings as they relate to the aforementioned research objectives. Quantitative data were analyzed using descriptive statistics and inferential statistical tests appropriate to the structure of the data and the research question. Qualitative field notes were analyzed thoroughly to extract patterns of thought, outliers, and key quotes. During qualitative analysis, the Lead Researcher read manually through each interview in order to increase understanding of the general attitudes of the respondents towards the (labor) market, vocational training, and business development. This initial read through also helped to inform the systematic coding of the interviews. Once the interviews were manually coded, the Lead Researcher was able to systematically draw out key trends and quotes without losing any nuance, that only a comprehensive read through and manual analysis can provide.

2.5 Limitations There are a number of limitations to this study:

1. The COVID-19 pandemic and consequent public health measures (movement restrictions, full lockdowns, etc.) have severely impacted livelihoods, markets, and the overall economy. It is likely that the situation around COVID-19 has had a severe impact on the perceptions of respondents towards employment and business development opportunities. At the same time, the surveys and interviews included a number of questions related to the situation before COVID-19 public health measures were taken.

2. YSSs were conducted at pre-determined local markets and not randomly. As such, the sample of YSS respondents should not be seen as representative of youth in Erbil as those youth who frequent markets are likely overrepresented in the sample.

3. Some MOS respondents were reluctant to share information on their income, which complicated the analysis of incomes for business owners. At the same time, most business owners were willing to provide information on whether their profit had changed since the start of COVID-19 public health measures.



Photo: Grocery Shop



3. Desk Review

3.1 Context Iraq’s economy has been under high pressure in the past years and is currently experiencing what might become its worst economic crisis since 2003.6 The impact of the COVID-19 pandemic highlights the fragility of Iraq’s economy, which is expected to shrink by 9.7% by the end of 2020.7 Without having fully recovered from the United States invasion in 2003, the humanitarian situation in Iraq has been further exacerbated in recent years by internal and external conflict. The Islamic State of Iraq and the Levant insurgence in Iraq resulted in one of the worst humanitarian crisis in recent years, causing the displacement of three million Iraqi people across the country and forced another 260,000 to seek refuge in other countries.8 The Kurdistan Region of Iraq (KRI) hosts many of the IDPs who were displaced during previous crises. In addition, the KRI hosts most of the about 250,000 Syrian refugees who have sought refuge in Iraq. In total, Erbil governorate hosts 175,730 people, including refugees, IDPs and members of the host community, in need of humanitarian assistance. In addition, 122,020 people are in acute need, which is a 64% drop compared to 2019.9

3.2 Economy and Labour Market With a Gross Domestic Product (GDP) of 235 billion US dollars,10 Iraq’s economy is considered medium-sized and, like most Middle-Eastern countries, is predominantly state-run.11 It almost exclusively depends on the oil sector, which makes up 65% of the country’s GDP. This makes it specifically vulnerable to fluctuations in oil prices, like those experienced during the COVID-19 pandemic. Moreover, the largest non-oil sectors include transport, storage, information and communication, public sector construction, wholesale and retail, and real estate.12 Iraq is highly dependent on imports when it comes to both food and non-food items. 13 The economy of KRI represents about 11% of Iraq’s non-oil GDP14 and a considerable part of Iraq’s oil reserves.15

6 UN Iraq. 2020. Iraq: Structural Reforms Critically Needed to Manage a Multi-Faceted Crisis. May 5. http://www.uniraq.com/index.php?option=com_k2&view=item&id=12265:iraq-structural-reforms-critically-needed-to-manage-a-multi-faceted-crisis&Itemid=605&lang=en. 7 Ibid. 8 UNCHR. n.d. Iraq Emergency. https://www.unhcr.org/iraq-emergency.html. 9 OCHA. Nov 2019. Iraq Humanitarian Needs Overview (HNO) 2020; OCHA. Jan 2020. Iraq Humanitarian Response Plan 2020; UNHRC (2020) Iraq: Syria Refugees Statistics. https://data2.unhcr.org/en/documents/download/77532 10 The World Bank, World development indicators, 2019. GDP (current US$) 11 UNESCO. 2019. Assessment of the Labour Market & Skills Analysis: Iraq and Kurdistan Region-Iraq. UNESCO. https://unesdoc.unesco.org/ark:/48223/pf0000371377. 12 Ibid. 13 World Bank. 2019. Iraq Economic Monitor. Turning the Corner: Sustaining Growth and Creating Opportunities for Iraq's Youth. World Bank Group. http://documents1.worldbank.org/curated/en/848371571505101026/pdf/Iraq-Economic-Monitor-Fall-2019-Turning-the-Corner-Sustaining-Growth-and-Creating-Opportunities-for-Iraq-s-Youth.pdf; UNESCO. 2019. Assessment of the Labour Market & Skills Analysis: Iraq and Kurdistan Region-Iraq. UNESCO. https://unesdoc.unesco.org/ark:/48223/pf0000371377. 14 Ibid. 15 Mills, Robin. 2016. Under the Mountains: Kurdish Oil and Regional Politics. The Oxford Institute of Energy Studies, University of Oxford.

Vulnerable Groups in Erbil9

117,240 refugees 15,981 IDPs in camps 170,000 IDPs out of camps 36,000 returnees

https://data2.unhcr.org/en/documents/download/77532http://documents1.worldbank.org/curated/en/848371571505101026/pdf/Iraq-Economic-Monitor-Fall-2019-Turning-the-Corner-Sustaining-Growth-and-Creating-Opportunities-for-Iraq-s-Youth.pdfhttp://documents1.worldbank.org/curated/en/848371571505101026/pdf/Iraq-Economic-Monitor-Fall-2019-Turning-the-Corner-Sustaining-Growth-and-Creating-Opportunities-for-Iraq-s-Youth.pdfhttp://documents1.worldbank.org/curated/en/848371571505101026/pdf/Iraq-Economic-Monitor-Fall-2019-Turning-the-Corner-Sustaining-Growth-and-Creating-Opportunities-for-Iraq-s-Youth.pdf



The employment situation in Iraq remains precarious, as the country is reported to have one of the lowest labor force participation rates in the world (42.7%).16 Of all 10, 5 million people who compose Iraq’s labor force only one percent are employed by the oil sector.17 In the KRI, the active labor force comprises over 40% of the population between 15 and 63 years old.18 While labor force participation among men is relatively high (70%), women and youth are much less likely to be a part of the active labor force (15%).19

Lastly, at over 40 million, Iraq’s population continues to grow at a steady pace and is expected to reach over 45 million by 2030.20 Youth under 24 years old represent nearly 60% of the population, making Iraq one of the most youthful countries in the world.21 With such a high amount of inactive youth, risks of social unrest, like what was experienced in Iraq at the end of 2019, are high. However, young populations can also actively contribute to the development of a country if provided with the necessary education and employment opportunities.

16 Vilardo, Valeria. 2018. Gender Profile - Iraq. Oxfam. https://oxfamilibrary.openrepository.com/bitstream/handle/10546/620602/rr-gender-profile-iraq-131218-en.pdf?sequence=1&isAllowed=y. 17 UNESCO. 2019. Assessment of the Labour Market & Skills Analysis: Iraq and Kurdistan Region-Iraq. UNESCO. https://unesdoc.unesco.org/ark:/48223/pf0000371377; Vilardo, Valeria. 2018. Gender Profile - Iraq. Oxfam. https://oxfamilibrary.openrepository.com/bitstream/handle/10546/620602/rr-gender-profile-iraq-131218-en.pdf?sequence=1&isAllowed=y. 18 2018. Demographic Survey: Kurdistan Region of Iraq. IOM. https://reliefweb.int/sites/reliefweb.int/files/resources/KRSO_IOM_UNFPA_Demographic_Survey_Kurdistan_Region_of_Iraq.pdf. 19 Ibid. 20 World Bank. April 2020. "Iraq's Economic Update." http://pubdocs.worldbank.org/en/527001554825517687/mpo-irq.pdf; UNICEF. 2019. MENA Generation 2030. https://data.unicef.org/resources/middle-east-north-africa-generation2030/#:~:text=Egypt%20will%20experience%20the%20largest,16%20million%20up%20to%202030). 21 Vilardo, Valeria. 2018. Gender Profile - Iraq. Oxfam. https://oxfamilibrary.openrepository.com/bitstream/handle/10546/620602/rr-gender-profile-iraq-131218-en.pdf?sequence=1&isAllowed=y.

Labour Force (12 to 64 years) in Erbil18

Out of Labour force: 36.6% Searched for work last month: 4.9% Worked last week: 57.5% Unemployment rate: 7.7%


Both Genders


https://unesdoc.unesco.org/ark:/48223/pf0000371377http://pubdocs.worldbank.org/en/527001554825517687/mpo-irq.pdf



Photo: Greengrocer’s Shop



4. Results

4.1 Market Opportunities Assessment 4.1.1 Existing Businesses In total, 50 business owners were surveyed in four communities in Erbil governorate, namely Daratu, Mamzawa, Shawes, and Qushtapa. 56% (n=28) of the business owners were men and 44% (n=22) were women. This relatively high percentage of women who own a business indicates that there are more opportunities for women to be involved in business compared to other parts of Iraq. The average age of respondents was 32 years old (men: 32; women: 31), with a range from 21 to 53. Most business owners identified as part of the host community (66%, n=33), while the remaining said they were refugees (20%, n=10) or IDPs (14%, n=7). As such, vulnerable groups including refugees and IDPs have managed to start their own business in Erbil governorate. Figure 1. Educational Attainment, by Gender (n=50)

Educational attainment among respondents was high with 88% (n=46) of respondents having completed some type of education (See: Figure 1). However, nearly a quarter of all women who owned a business (23%, n=5) had not attained any education compared to only 3% (n=1) of men. Women were also less likely to have attained education at higher levels. This is in line with research indicating that girls and women in Iraq are still found to be underrepresented in schools and universities and tend to drop out at a

higher rate.22 Furthermore, all IDPs and refugees in the sample had attained some level of education whereas 18% (n=6) of those who belong to the host community had not. Literacy rates follow a similar pattern, with 15% (n=5) of host community members claiming not being able to read and write. Illiteracy is also considerably higher among women (23%, n=5) than among men (4%, n=1). In addition, 44% (n=22) of all respondents had received vocational training in the past (See: Figure 2). This percentage was higher among women who own a business (73%, n=16) which might be a result of the efforts of development actors who have placed women’s empowerment and capacity building central to their strategies. Moreover, some training programs specifically targeting women were taking place in some of the studied communities during data collection.23 Moreover, respondents who identified as IDPs (71%,

22 UNICEF. 2016. The Cost and Benefits of Education in Iraq. UNICEF. https://www.unicef.org/iraq/sites/unicef.org.iraq/files/2018-12/TheCostOfEducationInIraq-EN%281%29_0.pdf. ; 2020. Global Gender Gap Report. Geneva: World Economic Forum. http://www3.weforum.org/docs/WEF_GGGR_2020.pdf. 23 KII with Woman - Business Owner in Shawes (1); KII with Woman - Business Owner in Shawes (2)

66% host

community 14% IDPs 20% refugees

3%

23%18%

27%

57%

41%

18%

9%4%

0%0%

10%

20%

30%

40%

50%

60%

Men Women

No formal education Primary school

Secondary school University

Technical or Trade School

“I participated in a training about how to open a business. This was very useful for me. Currently, I think there are some training opportunities for

women who want to work in sewing or hairdressing.”

Woman – Business Owner – Shawes



n=5) had had better access to vocational training opportunities compared to refugees (40%, n=3) and members of the host community (39%, n=13). The data does not provide a particular reason for this and it is unclear whether IDPs had received training before or after being displaced. However, the relatively low representation of both IDPs and refugees in the sample makes it difficult to draw firm conclusions on this topic. Figure 2. Vocational Training Attainment, by Gender (n=50)

Those who had received training expressed high satisfaction with the usefulness of the training content, assessing it as either “very useful” (86%, n=19) or “useful” (14%, n=3). Most business owners who participated in qualitative interviews and had received training in the past also described their experience as positive and useful for their current business.24 However, it was

reported that the available training programs mostly target individuals without previous knowledge even though there is a pressing need for more advanced level training for individuals who want to further advance their knowledge and skills.25

Figure 3. Types of Businesses, by Gender and Community Status (n=50)

Slightly more business owners (56%, n=28) provide services compared to those selling goods (44%, n=24) (See: Figure 3). Women, moreover, were much more likely to run businesses that provide services compared to men. Similarly, IDPs were more likely to provide a service while refugees and host community members were more likely to sell goods.

Among business owners who sell goods, the most often sold goods include food and household products (35%, n=8)26 and clothes (17%, n=4).27 Respondents also sold fabrics for clothing (9%, n=2),

24 KII with Woman - Business Owner in Shawes (3); KII with Woman - Business Owner in Shawes (2) 25 KII with Woman - Business Owner in Shawes (1) 26 Groceries and household products (14%, n=3), fruit and vegetables (9%, n=2), bread (9%, n=2), baklava (4%, n=1), pickled vegetables (4%, n=1). 27 Women’s clothes (9%, n=2), children’s clothes (4%, n=1), second-hand clothes (4%, n=1).

21%

73%79%

27%

0%

50%

100%

Men Women

Yes No

64%

18%

55%60%

29%36%

82%

45%40%

71%

0%10%20%30%40%50%60%70%80%90%

Men Women Hostcommunity

Refugees IDPs

Selling goods Providing services

“I received training in sewing provided by an NGO. However, I did not find it particularly useful, because I already had most of the skills that were included in the training. In the future, I would like

to receive training in fashion design, so that I can gain new skills and become a designer.”

Women – Business Owner – Shawes

“I have never heard of a training taking place in my community. I know there are training opportunities in Erbil, but this is too far away for me and I cannot afford the transportation costs.”

Man – Business Owner –Darato



live poultry (9%, n=2), electric materials and electronic devices (9%, n=2), women’s shoes (4%, n=1), mu'assel (4%, n=1),28 and cosmetics (4%, n=1). Service providers mostly were running beauty salons (22%, n=6),29 hair salons (19%, n=5), barbershops (11%, n=3), sewing shops (19%, n=5) and restaurants (7%, n=2). Others services offered included changing car engine oil (7%, n=2), installing of window panels (4%, n=1), air conditioning repairing (4%, n=1), embroidery and knitting (4%, n=1), and real estate brokering (4%, n=1). Women who own a business were involved in a much less diverse range of trades compared to men who own a business. Nearly three-quarters of all women were running either a beauty salon (27%, n=6), a hair salon (23%, n=5), or a sewing shop (n=23%, n=5). This was confirmed by FGD participants who explained that local traditions prevent women from working altogether30 or prevent women from working in specific sectors.31 Women who worked in sectors deemed inappropriate were exposed to harassment by men and were reported to bring shame upon their families.32 Types of businesses that were generally considered ‘suitable’ for women included businesses with a women-only customer base. Figure 4. Hair Salon

During the 30 days prior to data collection, business owners had earned on average 197 thousand Iraqi Dinar (IQD). According to most (88%, n=44), this is less than what they made before COVID-19 public health measures were in place. Indeed, in the month prior to the implementation of COVID-19 public health measures, respondents made on average 479 thousand IQD. This suggests that most small businesses in the area have been severely affected by the COVID-19 public health measures. In

28 Tobacco mix smoked in a shisha/argileh. 29 Beauty salons (15%, n=4) and bridal beauty salons (7%, n=2). 30 FGD with Women - Youth (Host Community); FGD with Men - Youth (IDPs and Refugees); KII with Woman -Business Owner in Shawes (2); 31 FGD with Men - Youth (Host Community); FGD with Men - Youth (IDPs and Refugees); 32 Ibid.

“Women cannot work in all types of businesses. In fact, most women who do have a business, run their business from home. For example,

I know some women who run a sewing shop.”

Woman – Business Owner –

Shawes



fact, some service-providing business owners interviewed through KIIs reported that they generated no income at all during some parts of the COVID-19 pandemic because they had to close their business completely.33 The decrease in profit was considerably more evident among women (See: Table 2). The most significant losses were experienced by women with IDP status (81%) and refugees (75%). Figure 5. Monthly Profit in IQD (x1000) (n= 43)

Among business owners, 45% (n=22) reported that their current income allows them to meet their and their household’s basic needs such as food and shelter. Moreover, 22% (n=11) earned enough to meet their basic needs and pay for medical care and school fees. Finally, 8% (n=4) said they were able to meet their basic needs and save part of their income. This information was later compared with data obtained on respondents’ savings capacity before the COVID-19 crisis. It was reported that, back then, 42% (n=21) of all business owners were able to save a part of their income, suggesting a 62% decrease in savings capacity among business owners. Table 2. Profit Before and During COVID-19 in IQD (x1000), by Gender and Community Type (n=43)

Host community Refugees IDPs

Men Women Men Women Men Women

Before COVID-19 569 364 392 750 350 480

After COVID-19 267 162 179 188 200 90

Difference -53% -56% -54% -75% -43% -81%

Respondents were also asked to provide information on the specific impact COVID-19 public health measures had on their businesses. The most common consequences were having to close down for a period of time (70%, n=35), a decrease in the number of customers (56%, n=28), and a decrease in the average spending per customer (32%, n=16). Interestingly, owners of service-providing businesses reported being less affected compared to those selling goods (See: Table 3). This contradicts earlier data that those providing a service experienced greater income losses. In addition, this contradicts qualitative data that the purchasing power in the studied communities had decreased, causing people to limit their consumption to basic products, like food and medicines.34

33 KII with Man - Business Owner in Mamzawa; KII with Woman - Business Owner in Shawes (3); 34 KII with Woman - Business Owner in Shawes (2); KII with Woman - Business Owner in Shawes (3); KII with Man -Business Owner in Mamzawa (2); KII with Man - Business Owner in Shawes (1); KII with Man - Business Owner in Shawes (2);

479 498 460 467535

443478 479

197238

149222

183121

229171

0

100

200

300

400

500

600

General Men Women Hostcommunity

Refugees IDPs Goods Services

Before COVID-19 After COVID-19

“The regulations from the government during this time of corona are presenting a challenge. This is especially the case

because their regulations always come unexpectedly.”

Man – Business Owner – Mamzawa



Table 3. Impact of COVID-19 Public Health Measures (n=50)

Selling goods Providing services Close down 77% (n=17) 64% (n=18) Less customers 64% (n=14) 50% (n=14) Less spending by customers 45% (n=10) 21% (n=6)

While there are indications that due to the shift in focus from households to purchase basic goods only, business owners selling basic goods may enjoy a higher income compared to other businesses selling non-basic goods, the data does not support this. In fact, businesses selling basic goods were earning slightly less (207 thousand IQD) than businesses selling other items (242 thousand IQD). This could indicate that people in these areas mostly spend their income on basic needs regardless of COVID-19. Moreover, COVID-19 also resulted in lower purchasing power and may have resulted in a situation in which families spend less on their basic needs compared to what they would usually do. Then, there are some reports that households are currently focused on preparing most of their food themselves instead of buying prepared foods. Bakeries, for example, reported that their profit had decreased because many people were making bread at home.35 An overview of the businesses that generated the highest profit before and after the pandemic is provided in Table 3. Table 4. Ten Most Profitable Businesses Before and During COVID-19 in IQD (x1000)

Before COVID-19 During COVID-19

Business Profit Business Profit

Mu'assel36 900 Real estates37 1,000

Barbershop 750 Mu'assel 900

Clothes shop 638 AC repairs 600

Cosmetics shop 600 Baklava shop 500

Hairdressers 560 Cosmetics shop 500

Grocery shop 500 Medical services 400

Installation of PVC windows and doors 500 Pickled vegetables 400

Medical services 500 Bakery 350

Bakery 450 Electric materials and electronic devices 200

Beauty salon 433 Clothes shop 200

Most business owners said that they offer products/services directly to customers, mainly women (60%, n=30) or men (38%, n=19) from within their community (48%, n=24) or from within the region (32%, n=16). Some business owners also had clients from other areas of Iraq (16%, n=8). Importantly, businesses run by women did not have any men as customers. Most businesses (62%, n=31), moreover, did not employ staff (See: Figure 6). Over half of all businesses providing services (54%, n=15) were more likely to employ staff compared to businesses selling goods (17%, n=4). At the same time, businesses selling goods that hired staff were more likely to employ more staff (3.0) compared to businesses providing services (1.7). In line with expectations, business owners who did not employ staff reported lower profits prior to COVID-19 (459 thousand IQD) compared to those who did employ staff (506 thousand IQD). On the other hand, businesses without employees appear to have been less affected by COVID-19 public health measures as they earned nearly double (243 thousand IQD)38 the profit compared to businesses with staff (127 thousand IDQ) during the COVID-19 pandemic. Businesses with staff employed on average 1,9 staff

35 KII with Woman - Business Owner in Shawes (2) 36 Tobacco mix smoked in a shisha/argileh. 37 Information on the profit made in this trade before the pandemic was not provided. 38 242,500 IQD compared to the 126,471 IDQ of business owners who had staff.

“It is very difficult to find trained staff. When we do find qualified women, we sometimes face that

their families do not allow them to work here. Therefore, we mostly train new staff on-the-job.”

Woman – Business Owner – Shawes



and 79% (n=15) of their staff had received vocational training before being hired. The demand for trained staff was found to be high among those who employed staff regardless of the type of business.39 Figure 6. Employment of Staff, by Business Type (n=50)

Businesses most likely to employ staff were hair salons (80%, n=4), barbershops (67%, n=2), beauty salons (67%, n=4), and sewing shops (40%, n=3). Interestingly, many of those were women-owned businesses. Owners of businesses that sell goods and had employees said that they mainly need staff with marketing skills

(75%, n=3). On the other hand, the skills required by those who ran businesses that offer services were more diverse and closely related to the type of services provided. Some of them also required relevant working experience (16%, n=3). Figure 7. Likelihood of Hiring Staff with Traineeship Experience (n=45)

Almost half of the business owners (42%, n=21) had trained trainees, interns, and/or apprentices in the past (11 on average). Due to the nature of their business, those providing services were more likely to have done so (50%, n=14) compared to those who sell goods (32%, n=7). In addition, 76% (n=35) of the

respondents said that they would be willing to take on trainees in the future. Among those, 91% (n=31) would also be willing to hire those trainees if they successfully completed the traineeship. Furthermore, a considerable part of the respondents (67%, n=30)40 said that they would be more likely to hire staff who had completed a traineeship in a similar business rather than someone without any prior knowledge in their sector (See: Figure 7). This was more often the case for businesses providing services. The main reason for this has to do with the knowledge and experience acquired by the trainees (30%, n=9). Among those who said that they would not hire someone with a completed traineeship in a similar business to theirs (33%, n=15)41, the most frequently given reason for not be willing to hire such a person was that they do not need extra staff (47%, n=7) or that they do not earn enough profit to pay them (20%, n=3).

4.1.2 Expansion Opportunities 84% (n=41) of all business owners were planning to expand their business in the next few years. Among those, 85%, (n=37) said that they would need to hire new workers in order to be able to do so. Potential future demand for staff was higher among businesses that provide services (95%, n=20), compared to those who sell goods (83%, n=15). Furthermore, the vast majority (95%, n=37) of those who had intentions of hiring new staff said that staff had to be trained before starting their job. In most cases, the required training should be closely related to the type of business. For example, a hair salon

39 Businesses selling goods: 83% (n=3); businesses providing services: 76% (n=12); 40 “Much more likely”: 33% (n=15); “somewhat more likely”: 33% (n=15); 41 “Somewhat less likely”: 7% (n=3); “much less likely”: 27% (n=12);

5%

61%

45%

22%

50%

17%

0%

20%

40%

60%

80%

Selling goods Providing a service

Much more likely Somewhat more likely Not more likely

18%

54%

82%

46%

0% 20% 40% 60% 80% 100%

Selling goods

Providing services

Have employees Do not have employees

“I seek for staff who have skills in customer care and social media. However, if I want to hire staff

with those skills, this costs more.”




would require someone with training in hairdressing. For business owners selling goods, moreover, there was also a large demand for training in marketing (53%, n=9). Opportunities and challenges for business development were also identified. To this end, business owners were asked to identify potential gaps in the market. Most business owners (80%, n=39) said that they rarely ever felt that they could not satisfy their current or potential customers’ needs.42 Service providers were more often confident about this (85%, n=23) compared to sellers of goods (74%, n=16). Business owners who said that they could not meet their clients’ needs (20%, n=10)43 mostly said this was due to high prices (63%, n=6) and a lack of supply (38%, n= 4). Answers to the question of what prevented them from better meeting their customers’ needs were largely in line with this (See: Figure 8). Additional challenges identified in qualitative interviews were high rents44, high electricity costs45 and electricity cuts46, and unavailability of appropriate equipment47. Moreover, business owners interviewed through KIIs also reported on the lack of capacity building opportunities as an important factor that hinders their business development.48 Figure 8. What is Preventing You from Better Meeting Your Customers' Needs? (n=16)

In addition, 80% (n=39) of respondents claimed feeling able to compete with other businesses that offer similar goods/services.49 The remaining 20% (n=10) said that better access to capital (62%, n=8), to better goods/products (38%, n=5), and to more skilled workers (23%, n=3) would help them be more competitive. In line with earlier findings on demand for training that target business owners and workers, 78% of respondents (n=39) said that they would be interested in additional training for their staff. Access to credit or loans for small businesses in the studied areas was found to be limited. 46% (n=23)50 of all business owners said that there were no sources to obtain loans or credit from. Women (68%, n=15) were considerably more likely compared to men (29%, n=8) to be unaware of sources. Among those with access to loans and/or credit, most said they could rely on family members (40%, n=20) and community members (28%, n=14). Only 4% (n=2) said that they could borrow money from

42 “Somewhat rarely”: 12% (n=6); “rarely”: 67% (n=33); 43 “Somewhat often”: 12% (n=6); “very often”: 8% (n=4); 44 KII with Directorate of Ministry of Labour and Social Affairs; KII with Woman - Business Owner in Shawes (2); KII with Woman - Business Owner in Shawes (1); KII with Man - Business Owner in Mamzawa (2); KII with Man - Business Owner in Shawes (1); 45 KII with Woman - Business Owner in Shawes (1); KII with Man - Business Owner in Mamzawa (2); KII with Man -Business Owner in Shawes (1) 46 KII with Woman - Business Owner in Shawes (2); 47 KII with Woman - Business Owner in Shawes (1); 48 KII with Woman - Business Owner in Shawes (1): KII with Woman - Business Owner in Shawes (2); KII with Man -Business Owner in Mamzawa (1); 49 “Somewhat able to compete”: 27% (n=13); “very much able to compete”: 53% (n=26); 50 Host community: 48% (n=16); refugees: 50% (n=5); IDPs: 29%, n=2;

Lack of capital to buy stock (69%, n=11)

Not having enough sources to buy inputs from (50%, n=8)

High transportation costs (25%, n=4)

Lack of money to buy more stock (25%, n=4)

Not having enough staff (13%, n=2)

“Some time ago, I decided to check what my chances of receiving a loan from a formal source were. I was told that it would be difficult because, as a refugee, I would need to provide additional

documentation. I do not have this documentation.”




banks in the area. Business owners interviewed through KIIs also reported that they would only be able to borrow money from friends and family.51 Respondents were then asked how easy they thought it was to acquire capital from the sources they identified as available. Nearly half of them (48%, n=13) said that it was not at all easy for them to access a loan, whereas the rest of the respondents said that this was somewhat easy (41%, n=11). Only 11% (n=3) reported that it was very easy. These findings were confirmed by qualitative data. Moreover, refugees were reported to encounter additional obstacles due to loan requirements that they would not be able to meet.52 Moreover, 40% of all respondents were aware of existing trade associations or cooperatives that, according to them, provided technical (60%, n=9) or financial assistance (29%, n=5). Figure 9. Factors That Make a Business Successful, by Type of Business (n=50)

Then, business owners were asked to report which factors were most important to make a business successful (See: Figure 9). Access to capital was the most reported factor (68%, n=34), followed by offering in-demand products/services (38%, n=19). Owners of

businesses that provide services were more likely to think that having skilled workers is an important factor (33%, n=9). Furthermore, respondents were also asked about the skills they considered relevant for a business owner to be successful (See: Figure 10). Business (70%, n=35), language (60%, n=30) and trade (34%, n=1) skills were considered most valuable. Interestingly, numeracy (20%, n=10) and literacy skills (20%, n=10) were generally deemed less important. Figure 10. Skills Needed to be a Successful Business Owner, by Type of Business (n=50)

According to business owners, the most successful businesses in their communities included shops for food and household products (28%, n=14), bakeries (10%, n=5), restaurants and shops that sell prepared food (8%, n=4), sewing shops (6%, n=3), vegetable shops (6%, n=3), and clothes shops (6%, n=3). However, qualitative data suggests that some of these sectors are already saturated, including bakeries53 and sewing shops.54 In addition, some businesses that were considered most successful by some were considered least successful by others, including restaurants and shops that sell prepared food (10%, n=5), clothes shops (6%, n=3), and language schools (4%, n=2). Other businesses considered least successful were cafés (6%, n=3) and jewelry shops (6%, n=3).

51 KII with Man - Business Owner in Mamzawa; KII with Man - Business Owner in Darato; KII with Man - Business Owner in Shawes; KII with Man - Business Owner in Mamzawa (2); KII with Man - Business Owner in Shawes (1) 52 KII with Man - Business Owner in Mamzawa; 53 KII with Woman - Business Owner in Shawes (2); 54 KII with Woman - Business Owner in Shawes (1);

0%

27% 27% 27%41%

50% 45%

25%14% 14%

25% 29%

68%

89%

0%

20%

40%

60%

80%

100%

Computerskills

Literacy Numeracy Connections Trade skills Languageskills

Business skills


59%

75%

41%36%

9%

36%

5% 7%

0%

20%

40%

60%

80%


Access to capital In-demand products/services

Skilled workers Good transport networks



Figure 11. Sewing Shop

Participants in qualitative interviews revealed potential opportunities for future businesses. For example, participants in FGDs55 expressed dissatisfaction with the price and quality of the available clothes offered by businesses in their communities, saying that shops sold clothes that were outdated and too expensive. This might be explained by the fact that most business owners procure inputs for their businesses from Erbil56 (most frequently from the Grand Bazaar), which are higher priced than inputs from border areas in the KRI and this increases the final price of outputs.57 Other goods identified as unavailable in the market were spices,58 baby clothes, and cosmetics.59 Some participants also expressed dissatisfaction with the available electronic appliances, due to their high price and low quality.60 Moreover, while most food products were reported to be available, FGD respondents said that some grocery shops would sell expired food items to refugees and IDPs at a lower rate to reduce their profit losses.61 Lastly, some businesses like jewelry and furniture shops were reportedly unavailable, but this was attributed to the low purchasing power in the studied communities.62

55 FGD with Women - Youth (IDPs and Refugees) in Mamzawa; FGD with Men - Youth (IDPs and Refugees) in Mamzawa FGD with Men - Youth (Host Community) in Darato 56 KII with Woman - Business Owner in Shawes (2); KII with Woman - Business Owner in Shawes (3); KII with Man - Business Owner in Mamzawa (1) 57 KII with Woman - Business Owner in Shawes (1); KII with Woman - Business Owner in Shawes (3); KII with Man - Business Owner in Mamzawa (2); KII with Man - Business Owner in Shawes (1) 58 FGD with Men - Youth (IDPs and Refugees) in Mamzawa; FGD with Women - Youth (IDPs and Refugees) in Mamzawa 59 FGD with Women - Youth (Host Community) in Darato; 60 FGD with Men - Youth (IDPs and Refugees) in Mamzawa 61 FGD with Men - Youth (Host Community) in Darato; FGD with Women - Youth (Host Community) in Darato 62 FGD with Women - Youth (IDPs and Refugees) in Mamzawa; KII with Woman - Business Owner in Shawes (3)

“The good that are being sold at the market here are of low quality. This is because people buy them from

the market in Erbil city”

Women – Youth – Host Community – Darato



5.1 Youth Skills Assessment

5.1.1 Youth and Women The Youth Skills Survey (YSS) targeted 154 young women (54%, n=83) and men (46%, n=71) in four communities in Erbil, namely Daratu, Mamzawa, Shawes, and Qushtapa. The average age of the respondents was 25 years old (men: 24; women: 26). The sample consisted of 42% (n=64) IDPs,63 32% (n=50) refugees,64 and 26% (n=40) host community members.65 Educational attainment among respondents was high. 88% (n=135) of respondents had at least attained some level of education (See: Figure 12). Most respondents had attained secondary (43%, n=66) or primary school (25%, n=39). Again, there were large differences between men and women, with women being more likely to have attained no education. Literacy rates were in line with educational attainment (literate: 89%, n=137). Figure 12. Educational Attainment Among Youth, by Gender and Community Status (n=154)

In line with information provided during qualitative interviews66, unemployment among respondents was high (45%, n=69), and affected youth regardless of their educational attainment. In fact, the highest rates of unemployment were found among youth that had attained no education at all (63%, n=12) and those who were university graduates (62%, n=18). Qualitative data suggest that unemployment among IDPs and refugees is lower because they are willing to work for low salaries.67 Nevertheless, refugees and IDPs were more often unemployed among the survey respondents (See: Figure 13). Women (58%, n=48), furthermore, were much more likely to be unemployed compared to men (29%, n=21).

63 25 men and 39 women. 64 26 men and 24 women. 65 20 men and 20 women. 66 FGD with Men - Youth (Host Community) in Darato; FGD with Men - Youth (IDPs and Refugees) in Mamzawa; KII with Vocational Training Centre (1) 67 KII with Vocational Training Centre (2); KII with Islamic Relief Staff

26% host

community 42% IDPs 32% refugees

2%

21%

5% 6%

22%25% 25%

22%26% 26%

52%

35%

50%54%

30%

20% 19% 20%14%

22%

1% 0%3%

0% 0%0%

10%

20%

30%

40%

50%

60%

Men Women Host community Refugees IDPs

No formal education Primary school Secondary school University Technical or Trade School

“There are almost no employment opportunities in the communities on the outskirts of Erbil. This is because

most big businesses and firms in the region are concentrated around Erbil city. Poverty in these areas has increased considerably as a result of the COVID-19

pandemic.”

Vocational Training Centre Staff



A quarter of the employed had a full-time permanent job (35%, n=38), whereas 21% (n=33) were casual workers and 9% (n=14) had a part-time permanent job. Only two respondents reported owning a business. On average, employed respondents worked 8.4 hours a day68 and 5.9 days a week.69

The main reasons for unemployment were the unavailability of jobs (36%, n=25) and a lack of capital to start their own business (26%, n=18). Importantly, slightly over a quarter of those who were unemployed said that had never tried to access employment (28%, n=19). Among those, 84% (n=16) were women. Figure 13. Employment Rates, by Gender and Community Status (n=154)

Moreover, the data suggest that the COVID-19 pandemic had a limited impact on unemployment rates among youth. Only 5% of respondents were not employed currently but were before COVID-19 public health measures were taken (unemployment rate before pandemic: 40%, n=61). Figure 14. Income in IQD (x1000), by Gender, Community Status, and Employment Status (n=130)

Youth were also asked about their monthly income (See: Figure 14). In the month prior to data collection respondents earned on average 195 thousand IQD. Of all groups, IDPs earned the most (228 thousand IDQ). This is interesting as they also reported the highest unemployment rates. Moreover, youth who had a full-time permanent job had the highest income (416,061 IDQ). Women, on the other hand, reported lower incomes than men regardless of their community status and the type of employment, except for casual labor. Gender differences were most noticeable among the host community (61% lower income) and IDPs (53% lower income). A considerable difference was also reported among part-time permanent laborers (52% lower income). Over half of the youth, lastly, said this income was lower than before the COVID-19 pandemic (55%, n=62).

68 Women: 6.5; men: 9.7. 69 Women: 6.1; men: 5.8.

58%

30%

40%

46%

47%

21%

23%

26%

22%

20%

2%

17%

8%

12%

8%

19%

31%

30%

20%

25%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Women

Men

Host community

Refugees

IDPs

Unemployed Casual labor Part-time permanent job Full-time permanent job

255 260

177

334

130162

261

427

141101

139 159

36

166125

401

0

100

200

300

400

500

General Hostcommunity

Refugees IDPs Unemployed Casual labor Part-timepermanent

job

Full-timepermanent

job

Men Women



In line with high unemployment rates, youth were not very resilient. Only 7% (n=11) said they would certainly be able to gather 100,000 IQD in a week in the case of an emergency (See: Figure 15). 60% (n=92) they would not be likely to

gather this amount.70 Women and unemployed youth were found to be much less resilient compared to men and those with full-time permanent labor. Youth who deemed it possible to gather such amount of money would mostly rely on income from work (61%, n=38). Other sources were household savings (13%, n=8) and loans from extended family (8%, n=5) or the community (6%, n=4). 10% (n=6) would be able to rely on support from their family. Figure 15. Ability to Gather 100,000 IQD in a Week in Case of Emergency (n=154)

5.1.2 Employment Opportunities A large part of the respondents (55%, n=83) were seeking for a job, with few differences based on employment status71 or community status.72 Young women (40%, n=31) were less likely to seek for employment compared to young men (75%, n=53). To gather information about the most desired types of employment, youth were asked which trades they would most like to work in. The answers provided by respondents were diverse, making it impossible to identify clear trends. However, certain options were mentioned a bit more frequently. For instance, sewing (29%, n=19), handicrafts (18%, n=12), and hairdressing (11%, n=7) were mostly preferred by women. Men, on the other hand, most often wanted to work as barbers (14%, n=9), mechanics (10%, n=6), and/or as restaurant staff (10%, n=6). When asked why they wanted to work in that trade, most said that they would enjoy the work (49%, n=75), that they had previously worked in that trade (14%, n=22), or that the trade pays well (12%, n=18). Then, youth were also asked which factors prevented them from working in that trade. 45% (n=70) said a lack of employment opportunities was the primary reason. Similarly, when respondents were asked about the trades they would least like to work in, they provided a variety of answers. However, a large proportion of women said that they would least like to work as housemaids/cleaners (23%, n=17) and/or teachers (19%, n=14). Other women said that they would not like to work in sewing (11%, n=8) or outside their home (11%, n=8). In this regard, it should be noted that working women often do not have separate workspaces, but work from home.73 Lastly, two women said that they would not like to work alongside men. This, suggests that while jobs with a men-customer base are not considered suitable for women, women also do not always feel

70 “Somewhat likely” was the answer selected by the remaining 31% (n=20) of the surveyed. 71 Unemployed: 55% (n=36); casual workers: 63% (n=20); part-time permanent workers: 71% (n=19); full-time permanent workers: 49%, (n=18); 72 Host community: 56% (n=22); refugees: 67% (n=32); IDPs: 49% (n=30); 73 FGD with Men - Youth (IDPs and Refugees) in Mamzawa

8% 6% 7% 3% 0%

13%

46%

22% 20%

30%

64%

47%45%

72% 72%67%

36% 39%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Men Women Unemployed Casual labor Part-timepermanent job

Full-timepermanent job

Very likely Somewhat likely Not at all likely

“Women are being discriminated against by employers. This is because employers think that as soon as women get married, they will have children and stop working.”

Woman – Youth – Mamzawa



comfortable working in those jobs. Men, moreover, most frequently did not want to work as casual workers (14%, n=9), mechanics (11%, n=7), in agriculture (9%, n=6), and/or in carpentry (8%, n=5). The main reasons for not wanting to work in those trades were that they did not enjoy the work (34%, n=50), that the work was too hard (26%, n=39) and that the respondent did not have any existing knowledge in that trade (16%, n=24). Trades and jobs predominantly preferred by youth do not seem to match the demand in the labor market and often are focused on sectors that are already saturated.74 While in the studied communities there is room for developing businesses like clothing factories and shops,75 and barbershops,76 youth should seek to acquire more technical skills if they want to improve their chances of finding employment.77 For example, in the region overall there is high a demand for electricians and experts in the maintenance of electrical equipment, such as computers, mobile phones, and security cameras.78 There is also a demand for photographers,79 experts in solar power,80 and translators and interpreters.81 Agriculture, lastly, was identified as a sector with a high potential for future growth.82 Figure 16. Skills Needed to be a Successful Business Owner (n=154)

Of all employed respondents, those who had a job (and not a business) were also asked if they would be willing to start a business. Most of them (82%, n=62) answered affirmatively. In order to achieve this, most would need capital (92%, n=57). Others said that they would need vocational training (16%, n=10) and experience (8%, n=5). Information obtained during qualitative interviews confirms this.83 When respondents were asked which they thought were the most determining factors that make a business successful, moreover, most of them said that those were access to capital (68%, n=105) and availability of skilled staff (27%, n=42), followed by in-demand products/service (16%, n=24). Some respondents (8%, n=12) also said that the economic situation of Iraq is an important factor.

74 This mismatch was also confirmed during a KII with Islamic Relief staff. 75 KII with Vocational Training Centre (1); KII with Vocational Training Centre (2) 76 KII with Vocational Training Centre (1) 77 KII with Islamic Relief Staff, KII with Vocational Training Centre (1); KII with Vocational Training Centre (2) 78 KII with Vocational Training Centre (2) 79 Ibid. 80 Ibid. 81 KII with Vocational Training Centre (1) 82 KII with Islamic Relief Staff 83 FGD with Women - Youth (IDPs and Refugees) in Mamzawa; FGD with Men - Youth (IDPs and Refugees) in Mamzawa FGD with Women - Youth (Host Community) in Darato; FGD with Men - Youth (Host Community) in Darato

12%19%

27% 29%

46%52%

75%

0%

20%

40%

60%

80%

Numeracy Computerskills

Literacy Trade skills Languageskills

Networkingskills

Business skills

Skill

“Our community is very conservative when it comes to women in the labour market. Women are only allowed to work in certain trades, including sewing. It is not acceptable for women to work as

taxi drivers, waitresses, or any other job traditionally done by men. Working in such jobs is

considered to bring shame to the family.”

Men – Youth – Shawes



Furthermore, business skills (75%, n=115) were identified as the most important skills for a successful business owner, followed by connections (52%, n=79) and language skills (46%, n=71) (See: Figure 16). These findings were largely supported by qualitative data. For example, speaking multiple languages, namely Arabic, English, Sorani, and Kurmanji84, was frequently mentioned as a highly demanded skill among participants in FGDs.85 Moreover, staff at training centers said that having a good network of contacts is a crucial factor for employability. Youth were also inquired on available funding opportunities for new businesses. 43% (n=66) of them said that no institutions in the studied communities provided such funding. This percentage was the lowest among refugees (36%, n=18) and highest among host community members (48%, n=19). Among those who did have access to loans and credit, most reported family members (41%, n=63) and other community members (22%, n=34) as the available sources. Access to funding from those sources was also assessed. 55% (n=43) of the respondents said that getting a loan was somewhat easy, whereas 40% (n=31) said that it was not at all easy. Overall, access to funding was considerably more limited among refugees86 and IDPs87 compared to members of the host community.88 Lastly, unlike business owners, youth were largely unaware of existing trade associations and cooperatives. Only 12% of them reported being aware of such institutions. The existing associations and cooperatives were mainly known for providing technical assistance (53%, n=8) and training (33%, n=5).

5.1.3 Training Opportunities Vocational training was received by about a third (31%, n=47) of all youth, with no considerable differences between gender and community status. Interestingly, training rates were lowest among unemployed youth (22%, n=15) and casual workers (24%, n=8). Moreover, vocational training was much more common among respondents who engaged in permanent labor, especially among those who had a full-time position (50%, n=19). This suggests that receiving training does increase opportunities for stable employment. Figure 17. Vocational Training Attainment, By Type (n=38)

84 Varieties of the Kurdish language. 85 FGD with Woman - Youth (IDPs and Refugees) in Mamzawa; KII with Man - Business Owner in Shawes (2); KII with Man - Business Owner in Darato 86 “Very easy”: 4% (n=1); “somewhat easy”: 48% (n=13); “not at all easy”: 48%, (n=13) 87 “Very easy”: 7% (n=2); “somew

Documents

Rapid Market Assessment in Erbil Governorate · 2020. 8. 23. · Erbil governorate. In June 2020, Optimum Analysis was commissioned to conduct a rapid market assessment in order to