A new study by the International Labour Office (ILO) has indicated that youth unemployment in the region is the highest in the World. MENA has a growing young population, with 37 per cent of the population below the age of 15 years in 2000, and 58 per cent below the age 15.
According to this report, on average, the working age population increases by 3 per cent a year. Youth unemployment is already a major challenge for the region with an unemployment rate of 25.6 per cent in 2003.
In addition, there is increasing concern that population growth will outpace economic growth, despite the region’s resource wealth, threatening future economic development.
The region is characterized by a deep inequality in the distribution of wealth, which implies that the majority of people have not benefited from the vast oil wealth generated over decades by many countries.
Compared to other regions productivity gains have been rather low with an average annual growth rate of 0.1 per cent and an increase of 0.9 per cent over the past ten years. In three economies – Algeria, Jordan and Saudi
Arabia – labour productivity in 2002 was lower than in 1993. Labour productivity however increased steadily during this period in Egypt, the Islamic Republic of Iran, Sudan, the United Arab Emirates and Yemen.
"The main challenge for the Middle East and North Africa will be to address
the unemployment situation, particularly the high unemployment among
youths, as well as to make sure that the share of people working but still not
being able to lift themselves and their families above the US$2 a day poverty line will decrease faster than during the 1990s and the early part of the new millennium," the report said. "To halve unemployment by 2015, the Middle East and North Africa would need GDP growth rates much higher than the historical growth rate of 3.5 per cent. At the same time higher growth rates would also help to reduce US$2 a day working poverty considerably."