Arab joblessness is key challenge

The latest report by the International Labour Organisation (ILO) has painted a sad and scary picture for the status of employment in the world including the Middle East and North Africa (Mena) region in 2009. A situation that, if not rescued, many Arab experts warn, will lead to a combination of social, political and economic problems.

In short, global unemployment in 2009 is expected to increase over 2007 by 18 million to 30 million workers and more than 50 million if the situation continues to deteriorate because of the international financial crisis.

According to the ILO's annual report 200 million workers, mostly in developing economies, could be pushed into extreme poverty. People who are unable to earn enough to lift themselves and their families above the $2 (Dh7.34) per person, per day, poverty line, may rise to 1.4 billion, or 45 per cent of the entire world's employed, the report said.

And what gives urgency to the Mena region is the fact that in 2008 the region recorded the highest unemployment rate worldwide, according to the recently released ILO report.

"Last year, North Africa and the Middle East still had the highest unemployment rates at 10.3 and 9.4 per cent respectively followed by Central and South Eastern Europe and the Commonwealth of Independent States, Sub-Saharan Africa and Latin America," the ILO stated.

Unemployment "is the main economic, social and political" challenge for the Arab region in 2009, Ahmad Al Najar, an economic expert at the Cairo-based Al Ahram Strategic Studies Centre said. It disrupts other production elements, he added.

Unlike other elements of the production process, the labour factor is a human element that has political and social requirements. It could turn to a "disorder element" if a large part of it has been deactivated, Najar, who is also editor of Al Ahram's strategic economic report, continued.

"Therefore, increasing unemployment rates from the [present] dangerous levels threaten a political, social and economic disorder in Arab countries," Najar told Gulf News in an interview.

The international financial crisis has rubbed salt into the wounds of the unemployment problem in the Arab world.

According to the Arab Labour Organisation's last-year estimates, on top of the 17 million people unemployed, Arab nations need to create jobs for the four million young people who enter the employment market each year.

The head of the UN Development Programme's regional office, Amat Al Alim Alsowa, was quoted as saying the average unemployment rate is 15 per cent in the Arab world.

"But it reaches 40 per cent among people aged between 15 and 24, totalling 66 million out of the total Arab population of 317 million, of whom one third are under 14," she said.

No exact figures are available in the Arab region for those who have lost their jobs or are going to because of the international financial crisis, estimated to be thousands, some experts believe they don't expect to see these numbers in the near future.

"You won't find these numbers," an economic expert said privately, "because with every day that passes, we feel the impact of the international crisis [on us]."

The 2008 financial crisis has hit giant Western companies, pushed some to bankruptcy, and forced others to the brink.

As for the region, some big projects have been shelved, or some big businesses have decided to either restructure, integrate with other companies or put their expansion plans on hold.

While it looks too soon to predicate how long the downturn will last, the ILO has recommended a series of measures for governments to implement to tackle increasing unemployment and poverty worldwide. These include; wider coverage of unemployment benefits and insurance schemes; public investment in infrastructure and housing and support to small and medium enterprises.

Some of these recommendations suit the Arab world. Some don't.

What is needed, Najar strongly believes, is more concentration on the production-based economy sectors: the industrial, agricultural and services sectors in the Arab region, taking into consideration the individual characteristics of each country.

Ranging from agricultural products and industries in both Sudan and Egypt to petro-chemical products in the Gulf states, huge amounts of money can be invested in Arab countries.