The Gulf governments are actively pushing entrepreneurship among its youth and have launched — and promoted — a number of schemes designed to encourage startups and the launch of more SMEs. The question is, however, are they doing enough? And are they doing it fast enough?

It is important that the GCC steps up efforts supporting entrepreneurial backing due to a number of geopolitical and economic reasons that have led to a rather unpleasant spectre of unemployment and which has started to envelop our region.

If unemployment maintains its current rate, the Arab region, which is expected to have a population of 598 million in 2050, will have 149.5 million without jobs. The region is also bordering sub-Saharan Africa, an area of the world where the population aged between 15 to 59 years will increase from 455 million today to over 1 billion by 2050. This dramatic population growth coupled with Africa’s poverty and massive unemployment could further destabilise the continent pushing its population to neighbouring Arab countries in search of better living conditions.

So, for GCC governments, not only do they have the responsibility to cater to their own projected unemployment figures, but they should also consider the potential impact a swelling sub-Saharan Africa job-hungry populace could inflict on their stability and plan accordingly.

As an Omani national, I have been fortunate to have benefited from my government’s policies and access to competitive funding which helped me with my own ventures in Muscat. However, this encouragement is not freely available to anyone with a good business plan as it is limited to nationals through a fund called Al Raffad, set up by the government as an initiative to encourage entrepreneurship.

Funding schemes designed to encourage startups for nationals are available in the key GCC states. From the UAE to Saudi Arabia and beyond governments have introduced a number of opportunities for young Arab entrepreneurs.

Abu Dhabi set up the Khalifa Fund for Enterprise Development, whereas Dubai-based schemes include an equity fund and other financial help by Dubai SME — Dubai’s government agency for small and medium businesses. Funding opportunities through the Mohammad Bin Rashid Establishment for Young Business Leaders — a government incubator — are also on offered.

Governments are usually complemented by NGOs such as Young Arab Leaders (YAL), an independent, not for-profit organisation, founded in 2004 at the World Economic Forum.

However, 11 years later, Arab attendees of the same Swiss forum heard that the Arab world saw investments in the digital economy — the most prolific in terms of start-up activity globally — to be significantly less than in other regions, This was despite the fact that the sector has massive potential and could solve problems related to the region’s youth unemployment, which currently stands at 25 per cent.

One of the reasons could be that nongovernment related funding is scarce or too expensive to sustain a self-funded venture. Simply put, the setting up, trade and working capital funding for start-up companies in the GCC doesn’t come cheap. UAE-based banks for example will lend entrepreneurs starting capital or cash to boost expansion, but at interest rates that range from 7 per cent all the way up to 15 per cent.

Compare that with the lending rates available for established family businesses that dominate the corporate spectrum and it is no surprise that starting a business in this region is not exactly sustainable unless you can self-fund it for a protracted period of time.

Put that into a global context in terms of private SME funding and what you get is a growing chasm between the Middle East and the rest of the world: The Arab region has circa 10 times less than India, 15 times less than China, 35 times less than Europe and 200 times less than the US invested in venture capital per capita per annum.

That is in spite of the growing realisation that SME growth will only help boost job creation for Arab youth in a region where governments are growing uneasy with the status quo which they themselves helped create by offering highly paid civil servant salaries to their populace as a means of staving off ballooning unemployment figures.

The writer is an Omani entrepreneur. Follow him on Twitter @Qaisalkhonji