Arab labour woes seen worsening

Arab states are reeling under alarming unemployment rates and the problem can deteriorate further and snowball into social unrest following the September 11 attacks in the United States, the United Nations warned yesterday.

While the fallout from the bombings and ensuing Western travel restrictions on Arab migrants will have little impact on Gulf oil producers, they are also hit by joblessness because of slackening economic growth coupled with rapid population increases, rising numbers of graduates and job layoffs in short-term reform programmes.

According to the UNDP, the problem is far worse in the low and middle income Arab League members as they are gradually deprived of a major source of jobs in the Gulf region given its plans to ease reliance on non-nationals.

"The short-term contractions resulting from reform programmes along with the decline in labour exports to the Gulf have had a serious effect on unemployment in middle income Arab countries," it said in its 2002 Arab Human Development Report.

"Over the long-term, while the labour export employment cushion may continue ameliorating domestic rates of unemployment and extreme poverty for perhaps another decade or so, signs of labour market saturation in the Gulf indicate that exports of labour services from middle income countries will face greater challenges and yield lower returns.

"The prospects for greater emigration to other destinations have been reduced since September 2001, with the probability of more stringent regulations being introduced by Europe and the United States.

"Declining prospects for remunerative emigration will be reflected in higher unemployment rates, lower remittances to middle income countries, creating strains on domestic economies and potentially adversely affecting poverty and perhaps reducing investment and consumption unless major international and national development programmes are put in place to accelerate investment and stimulate growth."

The report said it was difficult to obtain precise data on joblessness in the Arab world but added most of them are suffering from two-digit unemployment rates.

Member states hit by wars and internal turmoil such as Iraq, Somalia, Sudan and occupied Palestine have much higher unemployment rates while the problem in Gulf states is in its initial stages.

But estimates by the Kuwait-based Arab Fund for Economic and Social Development showed around 19 million people in the Arab countries were jobless at the end of 2000, accounting for nearly 20 per cent of the total Arab work force.

It said around 100 million or 35 per cent of the total Arab population is in the labour market and the figure is set to grow to 123 million in 2010 given the high number of the 15-year-plus age group which is about to join the work force.

Ibrahim Kuwaidir, Director General of the Arab Labour Organisation (ALO) said: "The Arab unemployment problem is set to get worse and can develop into social upheaval unless Arab governments take efficient measures to deal with the situation, including achieving political and economic stability as a start."

The ALO figures showed the UAE had the lowest unemployment rate in the Arab world in 1995, standing at only 2.6 per cent. In 2000 and 2001, it was as high as 51 per cent in occupied Palestine, 29.9 per cent in Algeria, 17.8 per cent in Morocco, 17 per cent in Sudan, 15.6 per cent in Tunisia, 15 per cent in Saudi Arabia and 14.4 per cent in Jordan.

The UNDP warned that the Gulf states can plunge into a deep unemployment problem without intensified economic reforms and incentives for the private sector to employ more nationals.

It noted that the public sector has become saturated due to the slow economic growth of around 1.2 per cent and the high population growth of 3.4 per cent between 1980 and 2000.

"The challenge of attacking unemployment and poverty in the Arab world by creating productive and gainful jobs for today's openly unemployed plus those newly entering the labour force is enormous but is also critical for the Arab countries. It must be addressed now because otherwise, the problem will only worsen."

Its estimates showed the labour force will grow by two to three per cent annually and this requires the creation of 50 million jobs by 2010.

"If current rates of unemployment persist, the size of unemployment will almost double by then. If unemployment is to be reduced to a manageable level by 2010, a minimum of five million jobs will have to be created every year."