ILO and Iraqi Federation of Industries Launch Workshop to Strengthen Enterprise Formalization in Iraq

ILO News – Baghdad, Iraq – The International Labour Organization (ILO), in collaboration with the Iraqi Federation of Industries, organized a two-day workshop on 27–28 May 2025 in Baghdad. The workshop is part of ongoing efforts to address the challenges of the informal economy and promote enterprise formalization within Iraq’s labour market.

Informality remains a major challenge in Iraq, with more than half of the workforce engaged in informal employment, particularly in sectors such as construction, agriculture, manufacturing, and retail trade. According to ILO estimates, approximately 5.73 million Iraqis work without formal contracts, social protection, or decent working conditions.

The workshop served as a dialogue platform that brought together representatives from the Iraqi Federation of Industries, the Kurdistan Region Chambers of Commerce Union, and the Erbil Chamber of Commerce and Industry. Discussions focused on identifying root causes of informality, exploring strategies for formalization, and strengthening cooperation with employers to advance decent work and sustainable development.

The agenda addressed the impact of informality on workers and enterprises, examined legal and regulatory reforms, and explored incentives and support services that could help enterprises transition to the formal economy.

Adel Akkab, President of the Iraqi Federation of Industries, stated: “The informal economy is a major obstacle to sustainable development. Integrating it into the formal economy requires legal reforms, simplified registration procedures, and safer working environments. While the transition is challenging, it is essential for building a more balanced and resilient economy.”

In her remarks, Maha Kattaa, ILO Country Coordinator in Iraq, said: “We are pleased to welcome our partners from the Iraqi Federation of Industries and the Kurdistan Chambers of Commerce. Enhancing cooperation with employers is vital to advancing social protection and enabling a transition to a more inclusive and formal economy in Iraq.”

José Manuel, Senior Employers’ Specialist at the ILO, added: “This workshop represents a significant step in supporting employers’ organizations to tackle informality and promote decent work. Together, we can develop practical solutions that foster enterprise growth and facilitate sustainable formalization.”

The workshop was grounded in ILO Recommendation No. 204 on the transition from the informal to the formal economy, emphasizing the need for integrated strategies to address the structural drivers of informality in Iraq, with a particular focus on the challenges faced by small and medium-sized enterprises in improving their formal status and working conditions.

This initiative marks an important step towards building consensus and strengthening employers’ capacity to confront informality and enhance the business environment in Iraq.

The workshop is part of the PROSPECTS project, a global partnership aimed at improving access to education, social protection, and decent work for host communities and forcibly displaced persons. Supported by the Government of the Netherlands, the partnership brings together the International Finance Corporation (IFC), the International Labour Organization (ILO), the UN Refugee Agency (UNHCR), the UN Children’s Fund (UNICEF), and the World Bank. It seeks to transform how governments and partners, including the private sector, respond to forced displacement situations.