The Iraqi People as the Greatest Resource

3. Executive Summary

Iraq enters this discussion of human resources in a stronger position than a decade ago, but remains far from turning population size into full productive capacity. The final results of the 2024 census put the population at 46,118,793: 35.9% were under fifteen, 60.4% were aged 15-64 and 3.6% were aged 65 and over. The total dependency ratio was 65, while young people aged 15-29 numbered approximately 13.08 million, or 28.36% of the population, according to the first National Human Capital Report. This structure means that Iraq has entered a genuine demographic window, but it is a time-bound opportunity rather than a guaranteed return. ¹²

Size alone is insufficient. The latest coherent national and international assessment of human capital still draws on the World Bank's 2020 index, which gave Iraq a score of 0.41: a child born under the conditions measured by the index was expected to achieve approximately 41% of their potential productivity under full education and health. Adjusting for human capital utilisation in the labour market lowers the index to approximately 0.16, showing how weak employment and participation compound shortcomings in education and health. This value is relatively old and must not be presented as a measurement of conditions in 2026. Its value lies in revealing a structural gap whose measurement needs updating, not in being an immutable number for Iraq. ³

The labour market confirms that the problem is not simply “unemployment”, but low utilisation of capabilities. The 2021 Labour Force Survey estimated unemployment at 16.5%, youth unemployment among those aged 15-24 at 35.8%, and the share of young people not in education, employment or training at 36.7%; the latter reached 52.3% among young women, compared with 22.1% among young men. In 2025, the World Bank presented a more recent estimate of unemployment at 13.5% and labour force participation at 38%, with young people aged 15-29 accounting for approximately 29% of the population. These series cannot be combined directly because their years and definitions differ, but they agree that the economy is not making sufficient use of the available population. ⁴⁵

Conversely, Iraq's circumstances should not be reduced to a permanent “human crisis”. The 2025 National Human Development Report announced that the Human Development Index reached 0.712 in 2024, placing Iraq in the high human development category for the first time according to that national report, with life expectancy approaching 74 years and poverty falling to 17.5%. This does not contradict the Human Capital Index score of 0.41: the two indicators measure different things in different years. The Human Development Index describes attainment in income, education and health, while the Human Capital Index estimates the next generation's productivity in light of learning quality and health. ⁶

The strategic risk is time. United Nations reports project continued rapid population growth, with Iraq approaching 74.5 million people by 2050. If the economy, education, health and labour market continue expanding more slowly than the population, the demographic window will become pressure on schools, housing, water, employment and public finances. If the state raises people's capabilities and their utilisation, the population becomes a market, a workforce, savings, innovation and productive demand. ⁷

The chapter's central argument is that human capital is not a social sector separate from the economy, but the foundation that determines the ceiling of every economy and state. The Vision therefore proposes a national framework without creating a new agency: the Ministry of Planning leads human capital measurement and data integration; sectoral ministries own outcomes within their mandates; the Ministry of Finance links funding to outcomes; and governorates are held accountable for geographical gaps. Reform begins by closing the data gap and updating the human capital and utilisation indices, then moves to budgets and programmes measured by outcomes across the life course, rather than solely by the number of buildings, employees or beneficiaries.

4. The Central Question and the Chapter's Scope

The central question is: how can Iraq, between 2027 and 2045, turn a young, growing population into human capital of high quality and utilisation, so that population growth becomes a source of productivity, income, innovation and cohesion rather than permanent pressure on the budget, services and employment?

What the chapter settles

• Defining human capital and distinguishing the accumulation of capability from its utilisation in the labour market and society.
• Establishing the demographic baseline from the 2024 census and describing the window of opportunity without assuming that it automatically becomes an economic dividend.
• Adopting the life course, location, gender and vulnerable groups as necessary dimensions of measurement, without entering into detailed sectoral policies.
• Turning investment in people from a slogan into a financing and monitoring system that links expenditure to learning, health, skills and utilisation outcomes.
• Defining the productive citizen as someone capable of learning, working, taking initiative and accepting responsibility, rather than merely an employee or salary recipient.

What is left to subsequent chapters

• V2-D05-C02 — Quality Education: learning, schools, teachers, curricula, learning outcomes and the connection between education and work.
• V2-D05-C03 — Training and Work: technical and vocational education and training, youth unemployment, the transition to work and the value of work.
• V2-D05-C04 — Women and Productive Capacity: women's participation and economic, social and administrative barriers.
• V2-D05-C05 — Health and Human Capital: care, prevention, illness, quality of life and productivity.
• V2-D05-C06 — Brain Drain and Recovering Expertise: retaining talent, return and Iraqi networks abroad.

5. Operational Glossary and Measurement Rules

Measurement rules are mandatory. The Human Capital Index score of 0.41 refers to data/methodology dating to approximately 2020 and must not be called the “2026 index”. The 2021 Labour Force Survey is not a substitute for the 2024 census, and the census does not measure every labour market concept in the same way. Nor should the Human Development Index score of 0.712 be compared directly with the Human Capital Index score of 0.41: they are different indicators. Every value must be recorded with its year, definition and coverage. ²³⁴⁶

6. The Demographic Baseline: Iraq's Window of Opportunity

These figures change what planning means. When more than a third of the population is under 15, decisions made in 2027 about childhood, schooling, health and nutrition will affect the labour market in the thirties and forties of this century. A policy that defers investment until unemployment occurs will already have lost the years of accumulation offering the highest returns.

A total dependency ratio of approximately 65 also means that every hundred working-age people correspond to a large number of children and older people outside the conventional working age. Lower dependency in future could raise household and public savings and investment, but this may fail if a large proportion of working-age people remain outside employment or in low-productivity activities. The Vision therefore uses “economic dependency” alongside demographic dependency: not everyone of working age is actually working.

7. Young People: The Largest Cohort and the Hardest Test

Young people aged 15-29 make up approximately 28.36% of the population, according to the first National Human Capital Report, drawing on the census results. They are not a “group” to be managed through a separate youth programme; they constitute almost a third of the country and will determine the nature of its economy and society in 2045. ²

The problem is not that there are too many young people, but that the path from childhood to economic independence is fragmented. The 2021 Labour Force Survey found that 36.7% of young people were not in education, employment or training and that unemployment among those aged 15-24 reached 35.8%. These figures must not be generalised to 2026, but they provide a documented baseline revealing the scale of the risk: years of life best suited to building skills and experience can pass without either learning or work. ⁴

The Vision addresses young people through four transitions that must be measured: from school to usable skills; from skills to a first job; from a first job to a career path with rising income and productivity; and from family dependence to economic independence that permits family formation, investment and saving. The details of each transition belong in subsequent chapters, but the success of this entire part is measured by how smoothly this sequence works.

8. Human Capital: What Has Iraq Actually Accumulated?

The World Bank's Human Capital Index gives Iraq a score of 0.41 for 2020: a child born under the education and health conditions measured by the index was expected to achieve only 41% of their potential productivity in adulthood. The report indicates that the child was expected to complete 6.9 years of schooling, equivalent to only approximately 4 years after adjustment for learning quality. Adult survival from age 15 to 60 was also below the regional average. ³

These figures do not mean that Iraqis are inherently “less capable”, but that the system developing their health, learning and skills does not realise their full potential. Nor do they mean that improving one indicator is enough. Human capital is cumulative and interconnected: weaknesses in early childhood later appear in learning; weak learning appears in skills; illness or unsupported disability reduces participation; and a weak labour market wastes what education has accumulated.

In 2026, the Ministry of Planning launched the first National Human Capital Report, having established a platform and forum to monitor life-course indicators. This is an important institutional development because it moves the issue from intermittent international reports towards national ownership of measurement. The Vision does not, however, assume that the report's existence makes the baseline complete. Regular updating is needed to connect demographic, educational, health and labour market data in a single dashboard comparable across time and place. ⁸

9. The Utilisation Gap: When Capability Does Not Become Production

The second problem after human capital accumulation is its utilisation. A World Bank review estimated the utilisation-adjusted Human Capital Index at approximately 0.16, compared with a basic index of 0.41. The idea matters more than the number itself: even the health and education that Iraq develops do not all become value, because employment and participation rates are low. ³

For the 2024 census, the 2025 Voluntary National Review reported the economically active share of the population aged 15 and over at 41.61%, while the World Bank gives a labour force participation estimate of 38% for 2025. The two values must not be conflated; differences in definition, year and methodology may explain part of the gap. The right decision is for Iraq to build a consistent series through a regular post-census labour force survey, reconciling definitions and publishing the differences. ⁵⁹

The utilisation gap takes three forms: people with skills who cannot find opportunities; people working below their capability level; and people remaining outside the labour market despite being able and willing to work because of institutional, social or geographical barriers. Informal or low-productivity employment adds to these problems. A goal of “reducing unemployment” is therefore insufficient if people move into precarious jobs that build neither experience nor income.

10. Human Development and Human Capital: Different Indicators, Not a Contradiction

The 2025 National Human Development Report announced that Iraq's Human Development Index reached 0.712 for 2024, entering the high human development category. This is a positive result reflecting improvements in longevity, education and income under the national report's methodology. At the same time, the latest internationally comparable Human Capital Index remains 0.41, using older data. ⁶

There is no contradiction. The Human Development Index measures broad achievements in health, education and income, while the Human Capital Index focuses on the next generation's productivity in light of child survival, actual learning and health, and can then be adjusted for utilisation. The Vision therefore adopts a multi-indicator dashboard: HDI to measure well-being and general capabilities; HCI to measure human capital accumulation; U-HCI or a national alternative to measure utilisation; and labour market indicators to explain the transition to production.

Editorial rule: improvement in one indicator must not be used to dismiss a problem revealed by another. Iraq can improve life expectancy and poverty while still facing a crisis of learning or economic participation. Good policy asks: which dimension improved, which did not, and what explains the difference?

11. Why Invest in People Before Buildings?

“People before buildings” does not mean halting infrastructure. Schools, hospitals, water, electricity and the internet are physical assets essential to human capital formation. It means evaluating investment decisions by what they do for people, rather than the number of buildings. Building a school may be necessary, but if learning remains weak, adding buildings alone will not deliver the outcome. A hospital may likewise be necessary, but prevention and primary care may yield a greater health return than a large building used inefficiently.

The National Development Plan 2024-2028 made “strengthening investment in human capital and building society” a major programme, and the Ministry of Planning established a monitoring system for the plan. The Vision builds on this direction rather than replacing it: every major human development project must state its baseline, intended outcome, total cost and the entity responsible for the outcome, rather than merely reporting the percentage of construction completed. ¹⁰¹¹

Capital allocation rule

• A physical asset is funded not because it is a “project”, but because it addresses a documented gap in learning, health, access or productivity.
• Operating, maintenance and staffing costs are calculated before construction; a building without operations is an idle asset.
• Where a lower-cost regulatory, digital or preventive alternative can deliver the same outcome, physical infrastructure is not the default choice.
• Geographical equity is measured: the governorate or district with the greatest gap receives higher priority where implementation capacity is available.
• Service quality must not be sacrificed to increase numbers; quantitative expansion that lowers quality can weaken human capital.

12. The Life Course: Accumulation Begins Early and Never Stops

The first National Human Capital Report stresses that accumulation occurs throughout the life course, and that the highest returns begin in early childhood, when cognitive and physical capabilities grow most rapidly. ⁸ The state should therefore not divide a person into a “child file”, then a “student file”, then an “unemployed file” and finally an “employee file” without connecting the data and policies.

The purpose of the life-course framework is not to create a sensitive central database on every individual, but to ensure that stage-specific indicators connect logically: poor early nutrition is visible in learning, learning in skills, and skills in employment and income. Without these connections, the state pays later to address a problem that began years earlier.

13. Place and Equity: A National Average Is Not Enough

Approximately 70.2% of Iraqis live in urban areas and 29.8% in rural areas, but the national average conceals wide differences between governorates and districts in schooling, health, water, employment and connectivity. For the first time in decades, the 2024 census gave Iraq a geographical foundation for building a more accurate map of gaps. ¹

Human capital is affected by birthplace and residence. A child who takes longer to reach a school or health centre, a young person in a low-investment governorate, and a woman in an area with weak transport or childcare provision do not face the same “capability” conditions even where rights are equal. The Vision therefore adopts a governorate/district dashboard, not solely a national one.

Geographical differences must not be turned into social or cultural stigma. An indicator is used to identify a service or opportunity gap amenable to intervention. Every geographical comparison must distinguish population structure, rural and urban conditions, displacement, income, the effects of conflict and local institutional capacity.

14. The Productive Citizen: A Definition Broader than Employment

The first chapter of the national foundation part established that the citizen is not a spectator; this part adds the dimension of capability. The “productive citizen” in Vision 2045 is not merely someone with a government job or certificate, but someone with knowledge, health, skills, discipline and the ability to turn their time and work into value for themselves, their family, society and the economy.

Production here is both economic and social. Entrepreneurs, workers, engineers, teachers, farmers, researchers and professionals are productive, as are those providing unpaid care essential to sustaining families and society. Economic policy must, however, distinguish social value from measurement in output and the labour market. The Vision does not use “productive” to deprive people of their right to rest, care or protection, but to affirm that the state should give them the capability and opportunity to contribute.

Characteristics of the productive citizen in 2045

• Masters literacy, numeracy, digital and lifelong-learning skills appropriate to their times.
• Can move between occupations and technologies rather than relying on a single lifelong path.
• Understands the value of time, quality, safety, contracts, taxes and public money.
• Has the health needed to participate and access to prevention and treatment when needed.
• Can establish a business or join a formal private sector without government employment being the only rational choice.
• Participates in society, respects the law and can hold the state accountable, because human capital without social capital and trust remains less effective.

15. Shared Responsibility: The State, Family, Market and Society

The state does not “produce” human capital alone. Families determine nutrition, care, stimulation and educational decisions; schools and health centres provide essential services; the private sector creates jobs and on-the-job training; society supplies networks of trust and support; and individuals learn, work and make decisions. The state's role is to guarantee minimum rights and quality, correct unequal opportunities, finance public goods and regulate markets that may undermine quality or exclude lower-income groups.

This allocation prevents two mistakes: the state becoming the sole employer and provider of every service, and the state withdrawing on the grounds that families or markets are responsible. In 2045, the private sector will be a partner in education, training, health and employment within standards and oversight, and families will be partners rather than substitutes for a public right.

16. From Expenditure to Outcomes: A Human Capital Budget

Iraq needs a fiscal vision for human capital, rather than simply adding together education, health and labour budgets. Spending can rise without outcomes improving if it goes to pay unrelated to performance, buildings without operations, or support that fails to reach its intended group. Equally, a low-cost regulatory reform may improve outcomes more than a large project.

The Vision therefore proposes “human capital tagging” within the budget: not a separate financial account, but a classification showing which expenditure targets accumulation or utilisation, the age group, governorate, baseline, outcome and unit cost. This layer integrates with the programme and performance budgeting pathway established in the previous chapter, without creating a parallel budget system.

Mandatory questions before funding

• Which human capital gap does the programme address?
• Who is the intended beneficiary, defined by age, location and social circumstances?
• What is the outcome within 3-5 years, and which indicator will demonstrate it?
• Is there a lower-cost or higher-impact intervention?
• Does funding include operations, maintenance, staffing and evaluation?
• Who owns the outcome and who owns the data?

17. The Data and Monitoring System

Iraq now has assets unavailable a few years ago: the 2024 census, the 2021 Labour Force Survey, the household socioeconomic survey, education and health reports, the human capital platform and the first National Human Capital Report. The next problems concern frequency, integration and definitions.

The Ministry of Planning, through the Human Development Directorate and the Statistics Authority, leads a “National Human Capital Ledger”: a limited set of indicators, not a personal data file. It is updated annually where data are available, includes definition, source, year, sex, age and location, and shows where data gaps remain. Every four years, the 2045 trajectory undergoes a comprehensive review.

The Vision does not create a “composite Iraqi index” from dozens of values before establishing baselines. Numerical aggregation can conceal the problem. A dashboard of clear dimensions is preferable; a composite index can be considered later if it serves decision-making and has a published methodology.

18. International Comparisons: A Demographic Window, Not a Ready-Made Formula

East Asian experience shows that the demographic dividend arises not from age structure alone, but from declining dependency coinciding with education, health, job creation and productive expansion. UNFPA explains that the window is time-limited and can be lost if young people are not healthy, educated and empowered, and cannot find decent work. ¹²

Iraq cannot transplant the “Asian Tigers” model in terms of scale, political system or stage of industrialisation. What can be transferred is the mechanism: early investment in people, alignment of skills with economic transformation, greater women's participation, a shift from the quantity of schooling to learning, and fiscal discipline to protect human investment through oil cycles.

The second comparison concerns countries that improved human development without sufficient human capital utilisation. They are a reminder that schooling and health are insufficient without productive jobs. This part therefore connects directly to the preceding economic part: developing human capability and creating productive demand for it must advance together.

19. The Iraqi Citizen in 2045

By 2045, Iraq will have moved from a state that measures its population by numbers and basic services to one that measures capabilities and trajectories. Children enter school ready to learn; students leave with usable skills; young people find several pathways into work, training and entrepreneurship; women can participate without illegitimate barriers; workers update their skills as technology changes; and citizens access preventive and curative care that preserves their capacity to live and work.

Government employment will no longer be the sole measure of social success. The productive private sector, independent professions, start-ups and technical work will gain weight, and movement between them will become less costly. Gaps will be identified geographically, and funding will follow the weakest outcome rather than the loudest institution. Human capital data will become part of budgetary, industrial investment and spatial decisions.

Most importantly, population growth will not mean a decline in opportunity per person. Every new generation will enter a system able to expand learning, work and production faster than population growth. This is the practical meaning of “the Iraqi people as the greatest resource”.

20. Stages of Transformation, 2027-2045

21. Indicator and Target Dashboard

Numerical targets are not filled in automatically. Many indicators in this chapter need an updated post-census baseline and a new labour force survey. The dashboard therefore distinguishes an established value, a directional target and a target to be determined after the first measurement.

22. The Implementation Programme Package

Programme 1: The National Human Capital Compact

A 2027-2045 framework led by the Ministry of Planning that turns education, health, employment, women and youth objectives into a small number of shared outcomes. It creates no new authority, instead using the Human Development Directorate, the development plan monitoring system and the Statistics Authority, with an annual meeting to approve the outcome dashboard and address conflicts.

Programme 2: The National Human Capital Ledger

A unified annual dashboard of demographic, learning, health, utilisation and geographical indicators. It begins by reconciling the census with household and labour force surveys, and discloses data gaps instead of filling them with undocumented estimates.

Programme 3: Human Capital Budget Tagging

A classification within programme and performance budgeting that identifies programmes building or utilising human capability, the age group, location and outcome. Its purpose is to redirect expenditure towards impact, not establish an independent financial fund.

Programme 4: The Human Development Gaps Atlas

A governorate/district map showing gaps in access, learning, health and economic participation, linking them to project and service priorities while preventing the indicators from being used to stigmatise communities.

Programme 5: Human Return Reviews for Major Projects

Every major infrastructure or investment project explains its effects on access to employment, schooling, health, skills, time and productivity. “People before buildings” thus becomes a decision test rather than a slogan.

Programme 6: A Human Capital Review Every Four Years

A methodologically independent national report measuring progress from 2027 to 2045, updating HCI/utilisation or national alternatives, and comparing outcomes with funding and policies, not only with other countries.

23. Implementation, Cost and Financing Matrix

This chapter does not give an aggregate cost for “developing people”, because the true cost is distributed across education, health, employment, protection and supporting infrastructure, and will be estimated in the relevant chapters. What can be estimated here is the cost of governance and data, which is far smaller than sectoral costs and must not be used to justify a new agency.

24. Risks and Safeguards

25. Conclusion and the Bridge to Quality Education

Iraq has enough to justify great ambition for its people: more than 46 million inhabitants, approximately 60% of working age, nearly 13 million young people aged between 15 and 29, and a recent improvement in the Human Development Index. It also has a clear warning: the latest comparable Human Capital Index is low, capability utilisation is low, and millions of young people entered this decade unemployed or outside education, employment and training. This is not a demographic problem; it is a problem of conversion.

The human resources part therefore begins neither with “building more schools”, “employing more young people” nor “raising expenditure” in isolation. It begins with a system that sees people throughout their lives, measures capability, utilisation and location, then connects every dinar and policy to an outcome. Demography can then become national strength rather than merely a large population count.

The next chapter, V2-D05-C02 — Quality Education, takes up the first detailed driver in this sequence: how Iraq moves from years of schooling and seats to actual learning, personal development and skills connected to the world of work. It does not revisit “why people are the greatest resource”, but starts from the conclusion established here: educational quality is the largest reformable determinant of human capital accumulation, and must be measured by what students learn rather than the years they spend in school.