Dubai: An entire generation is at risk from rising unemployment, both in the developed and the developing world, a Dubai conference was told on Tuesday.

Dimitris Tsitsiragos, vice president of Eastern and Southern Europe, Central Asia and the Mena region, International Finance Corporation (IFC), said that while the Mena region has the highest unemployment figures in the world, "it is becoming a crisis even in the developed world".

"Latest data indicate that youth unemployment is high and rising across the globe, placing an entire generation at risk," he said.

Tsitsiragos shared World Bank predictions that between 2005 and 2020, more than 700 million jobs must be created to halve the global unemployment rate. The IFC is part of the World Bank Group.

Youth unemployment in the Mena region stands at 25 per cent, with female unemployment even higher at 30 per cent. Labour force participation in the region is also among the lowest in the world at 35 per cent in comparison to the global 52 per cent, he said.

It is estimated there are 77 million unemployed youth in the world, Tsitsiragos said.

Direct opportunity cost

He added the direct opportunity cost of youth unemployment to the Arab world is around $40 billion (Dh146.92 billion)-$50 billion annually. It is estimated the region needs to create 50-75 million jobs over the next decade to absorb new labour force entrants and reduce unemployment.

Among the factors which cause unemployment are insufficient economic growth and private sector activity as well as rising population, Tsitsiragos said. However, he said the lack or mismatch of skills among youth and the demand for highly skilled labour in a technology-driven work environment are emerging as the key reasons for unemployment.

"As a result of these changing patterns, it is no longer sufficient to have a primary or secondary education as in the past, with which youth could gain access to mostly public sector jobs or low-skilled manufacturing or manual work." This is particularly the case among countries in the Mena region.

Tsitsiragos cited a recent study by McKinsey Global Institute which shows that between 2007 and 2011 in the US, there was a decline of three million jobs for high school graduates while there was a 1.6 million increase for college graduates.

Skills gap

In the Mena region, the skills gap, especially in soft skills, is a major obstacle to growth, Tsitsiragos said.

To address the high unemployment in the Mena region, the IFC established the Education for Employment (E4E) project in August 2010. The initiative aims to develop a private sector agenda to address the need to enhance education options and entrepreneurship opportunities for youth in the Arab world, Tsitsiragos said.