Abu Dhabi: Middle East and North Africa region is grappling with rising youth unemployment. The aggregate GCC unemployment rate is expected to increase from 12 per cent to 16 per cent between 2015 and 2020. In the non-GCC region, about 8 million people will enter the labour force over the next five years. Under current growth projections, and using historical growth — employment elasticities, the average unemployment rate would increase from 14 per cent to 15.5 per cent. In practice, the increase could be much higher, because cash-strapped governments will not be able to maintain the pace of public sector hiring.
Clearly, the private sector will have to take over from the public sector as the main source of job creation. However, the expansion of the private that are needed to absorb the growing workforce have so far proven elusive. Adding to the growing challenges faced by the region are the ever growing security breakdown in many countries and a big slowdown in oil price. Mohammad Al Ississ, Professor of Economics at the American University in Cairo, a participant at the Summit on the Global Agenda 2015 talks about the structural issues faced by the regional economies and what is the way forward.
Are we any nearer to solving the region’s youth unemployment crisis?
Youth unemployment in the Arab world is not a business cycle issue, it is a structural problem which requires comprehensive reform, starting with reframing the educational system, which currently is not fit for this age. Doing this will require reversing the pay scale to attract high calibre educators; building curricula around the core values of entrepreneurship and citizenship, rather than patriarchy and obedience and strong collaboration of the private sector. Currently, the masses of young graduates dream of a government job, but governments can no longer meet their end of the post colonialism social contract. A private sector that is formalised, financed and protected against anti competitive practices can grow and absorb the young graduates. These are all long term, complicated reforms that sadly many Arab governments are not focusing on as they search for quick placebo solutions to appease the masses.
Economic reform is key to driving development in the MENA region: who is doing this right in the region?
The region is currently facing two core complicated crises, first is security breakdown and implosion of the modern state due to lack of institutional legitimacy. The second is the shallowness of it’s development reforms. Few are making achievements here. On the first front Tunisia is the only credible candidate. As for the reforming the development agenda, Jordan and UAE come to mind due mainly to their commitments to human capital development.
What one innovation in the region has impressed you most in the past 12 months?
Edraak, is the Arab massive open online course platform developed by Queen Rania foundation. The portal is set up in cooperation with Harvard and MIT’s Edx platform endogenously in Arabic using leading Arab scholars. Through harnessing the power of technology, it delivers high quality higher education in Arabic to learners across the world. In it’s first year of operation, over a million educational videos were viewed. It is a smart, low cost investment that makes large impact on one of the most binding constraints facing the region; education. I’m proud to have supported its establishment and taught its first course on a pro bono basis.
What is our economic outlook for MENA in 2016?
The state of uncertainty will remain the name of the game in 2016. Massive immediate challenges face the Arab world, security and collapse of the state, low and sustained oil prices and unemployment. While, business will grow cautiously in stable states, resilience not growth is the name of the game in the short term.
If you could help your council achieve one thing in its 2-year term, what would it be?
Establish actionable, innovative, and non-threatening models for parallel education. The region is the youngest globally with three quarters of its population below the age of thirty. In the midst of the current instability, it’s easy and understandable to not prioritise education. This however would be a grave mistake that jeopardises the future of the Arab world. This where our council can play a constructive role to support overwhelmed leaders, overstretched states, and their overcommitted resources.