Jobs challenge for Middle East as youth population rises

Posted: 23 September 2003

Arab countries must create millions of new jobs in the next decade or face growing social unrest, the World Bank has warned.

Over the next 20 years, the countries of the Middle East and North Africa must create 100 million new jobs, more than the number of jobs created in the region the last 50 years. Unemployment rates in the Middle East are nearly 50 per cent higher for women than for men.© World BankThe challenge is acute because of the high growth rate of the region's labour force, which is increasing at 3 per cent each year, amid slowing economic growth.

School leavers

The region already has an unemployment rate of 15 per cent, as many of its increasingly educated young people are unable to find jobs after leaving school.

The total labour force is expected to increase from 104 million in 2000 to 146 million in 2010 and 185 million by 2020.

"The Middle East's economic future will be determined by the fate of its labour markets," said the World Bank's vice president for the Middle East, Christiaan Poortman.

Economic reform

In its report, the World Bank calls for urgent reform of labour markets, which it says are dominated by government provision of public sector jobs - a strategy it says is inefficient and will becoming increasingly less economically viable as oil revenues fall in real terms. But it says more reforms are needed, including the diversification of Middle East economies to make them less dependent on oil, and an opening of markets to global competition. It says that so far, economic reform has been "uneven, hesitant and incomplete".

Between 1980 and 2001, the Middle East and North Africa region grew at an annual average of 3.1 per cent, compared with 3.4 per cent for developing countries as a whole, and 6.4 per cent for dynamic south-east Asia.

But taking into account population growth, the Middle East's growth rate of 1 per cent per capita was the worst of any region except Sub Saharan Africa.

Demographic boom

The World Bank says the rate of population growth is slowing in the region, from 2.5 to 2 per cent annually - but this is still much higher than the world average of 0.5 per cent.

In the short term, the growth of the economically active population - those between 15 and 64 - will continue to accelerate, faster than any other region in the world.

According to the World Bank's Tariq Yousef, this "demographic gift" offers the Middle East "an opportunity to accelerate economic growth" if it can reach near-full employment.

Education system

But the challenge of the demographic transition is the need to tackle youth unemployment, the report says.

Half of the young people in the region are without work, ranging from 37 per cent in Morocco to 73 per cent in Syria.

This provides a fertile ground for recruitment by extremist groups.

The World Bank emphasises the need for reform of the education system, which does give people the practical skills needed to function in the global economy, and calls for the greater inclusion of women in the labour force.

Read the report:

Unlocking the Employment Potential in the Middle East and North Africa: Toward A New Social Contract

Source: BBC NEWS, 19 Sept 2003.