Dead Sea, Jordan: The Middle East and North Africa (Mena) region with more than half of its population under 25 years is seen as both an advantage and a challenge for the region’s governments according to experts attending the World Economic Forum.
With the region facing the world’s highest regional youth unemployment rate the demographic ‘youth bulge’ is both an opportunity and a challenge for MENA. Today, only 19 per cent of the working age people in MENA have formal jobs.
According to the World Economic Forum, the region stands at a critical juncture as the youthful populace can turn into either a ‘youth dividend’ or a ‘youth liability’, contingent upon the region’s ability to create an enabling environment in which young people’s aspirations can be fulfilled.
While the impact of the financial crisis on job creation are still lingering on the region there are two additional structural factors that a inhibiting job creation in the region. First, the institutions that support employment and business creation are often not as efficient as in other countries. Second, there is a growing mismatch between the skills that youngsters have and the vacancies that employers want to fill.
Expert also say the region’s job markets are also distorted because of the limited dynamism of the private sector attractive job conditions offered by the public sector relatively rigid labour regulations that restricts the development of relevant skills.
Labour regulation in Mena differs with a more restrictive in North-African and relatively flexible GCC countries, but the region as a whole has a heavy public sector. The design of social insurance systems also influences the dynamics of labour markets: very generous, costly pension systems cover a small minority of largely public sector workers, while the lack of well-functioning unemployment insurance and poverty-targeted social safety nets makes job losses extremely costly for people that do have access to formal employment.
