Let's start by just becoming familiar with the numbers. One in four Arab youth aged 15 to 24 who are looking for a job face the frustration and disappointment of not being able to find one. This is twice the global average. Among young female jobseekers, the situation is even more alarming, with 1 in 3 finding naught for their efforts.
And these rates only consider the youth actually looking for jobs. The region's labour force participation rates are among the lowest globally, currently standing at around 35 per cent, compared to the global average of 52 per cent. This is both a function of low female participation and youth frustration with job prospects.
An aspiration of bringing the Arab region to global average labour participation levels would require over 85 million jobs over the next ten years — that is equal to the total population of Egypt.
Moreover, the economic loss of youth unemployment is estimated to cost $40 to $50 billion (Dh183 billion) annually — equivalent to the GDP of countries such as Tunisia or Lebanon.
None of this is news or would surprise the Arab youth, nor the plethora of not-for-profit grassroots initiatives filling out the civil society landscape in the region.
As youth dissatisfaction with economic opportunities and disillusionment with prospects for equitable growth seemed to boil over this past year, one would wonder if this was news to policymakers. It also seems to be a reality that education providers have not been fully embracing in the region.
When asked, employers in nine Arab countries noted that only one of three new graduates is ready for the work place when they get hired.
On the other hand, about a third of graduates either from universities or vocational training felt that what they had studied would enable them to find a job. In other words, formal education institutions have failed the ever-increasing number of youth streaming out of them. Over one third of those surveyed say they would be willing to pay for their education if this were to lead to better job prospects.
Turning the Arab youth bulge into an economic growth opportunity is on top of the agenda.
Creating jobs with a more competitive private sector requires investment climate reform, technology, infrastructure, trade, and a steady supply of skilled labour. Providing the market with the needed skills to meet the demands of a hopefully growing private sector means focusing on education, or to be more precise, relevant education.
Public spending on education in the Arab world, both as a percentage of GDP and per pupil, is higher than in Latin America and East Asia (World Bank 2007). And access to education has increased rapidly. However, the education and skills delivery system does not produce graduates with skills that are relevant to the needs of the emerging private sector. And the much awaited government job is not coming.
When speaking to potential employers in the region, one often hears that the youth just don't have the "soft skills" they need.
Wage employment is not the complete solution either. Unfortunately, becoming self-employed is not that much easier. Most youth do not have the social network, business skills and equity to start up a business, nor the assets that might serve as collateral. Nor does the regulatory environment necessarily support a budding entrepreneur. The ability of the youth to move into self-employment is affected by access to finance and networks, the business environment, and, perhaps most important, education.
Despite high demand, supply of high quality, relevant post-secondary education is nascent in the Arab world.
Education in the region remains heavily public-sector financed, centralised and outcome-driven and, as a whole, as indicated by employers, is unresponsive to market needs.
Overall, only 15-20 per cent of students are enrolled in private institutions compared to 75 per cent in Brazil and 50 per cent in Malaysia. To address this supply challenge four main components need to be considered: the quantity of education services available, its mix, its relevance, and the quality of delivery.
At the same time critical enablers such as standards and independent quality assurance, financing mechanisms for students, and information transparency and matchmaking between employers and students are missing, resulting in systemic weaknesses.
Moreover, educational systems are less responsive to market signals due to several related factors, including:
- Competition in the education market is poor, resulting in limited scale-up of innovative education methods and creative business models;
- In many countries, national policies concerning the role of the private sector in the education system have not been fully developed.
- There are regulatory barriers that limit the ability of private educational institutions to enter a number of Arab educational markets, and to operate as for-profit entities, including setting tuition fees at market rates.
- In the case of vocational education, there is an absence of partnership between government, relevant industry, and education providers whether public or private. This leads to irrelevant low quality curriculum and delivery methods;
- Quality assurance mechanisms are absent, have limited capacity, or lack credibility as they are not independent. Enforcement is poor, so that there is no level playing field based on performance.
- There is limited alignment between national and international accreditation, and global industry standards are largely not reflected in the curriculum of skill delivery institutions;
- Information transparency and matchmaking between employers and students is poor;
- Finally, there is stigma attached to vocational jobs, and surveys indicate that a lack of awareness of the higher returns to vocational training.
Although not necessarily a complete fix to the challenge, the private sector has a major role to play, both in creating jobs, and in providing quality education. In this context, the IFC and the Islamic Development Bank commissioned an in-depth review of the role of the private sector in education in the Arab world, including surveys of over 1,500 respondents and over 200 interviews in nine Arab countries.
From this was born the e4e Initiative for Arab Youth, which aims to demonstrate the viability of private sector investment in employment-driven education, especially in the post-secondary level, and bring public and private partners together to improve the quality and relevance of the skills youth bring into the work force in order to increase their chances of employment. This is not merely an IFC initiative, that of the World Bank Group, or even that of its main partners. This is an initiative that many are already working towards.
E4E is an objective that we hope all will be able to embrace and deliver on.
Dahlia Khalifa is regional head of the e4e Initiative for Arab Youth of the International Finance Corporation, World Bank Group.
