The new Prime Minister of Libya, Mahmoud Jibril, was given an emotional standing ovation as he was introduced to a packed plenary session on the first morning of the World Economic Forum’s Special Meeting on Economic Growth and Job Creation in the Arab World.
“I did not believe that I would live to see this day,” he told the delegates, who included many leading politicians of the Arab world, such as the meeting’s host, King Abdullah of Jordan, Qatar Prime Minister and Foreign Minister Shaikh Hamad Bin Jasem Al Thani, Palestine Prime Minister Salam Fayyad; as well as leaders from outside the region like President Asif Zardari of Pakistan and King Juan Carlos of Spain.
Jibril outlined Libya’s needs with much more clarity than seems possible, having been watching the chaos of the fighting on TV every night for the past six months. Impressively, he did not dwell on the past as he focused on three targets — two more immediate — like the requirement to restore stability and collect the arms which are all over the country; and to start a national reconciliation process bringing together all sections of the country to participate in building a new Libya.
His third target was much longer-term, which was to define how to replace oil in the Libyan economy as more than 60 percent of the country’s oil reserves have been used up, leaving the country with only 20 years to prepare for a non-oil economy. He emphasised that this needed a new legal and investment framework, but most importantly also a new educational model to give the Libyans the skills they will need in the future. Jibril called for better Arab cooperation, and disagreed with speakers who spoke of the need for some kind of an Arab “Marshall Plan” in the aftermath of the Arab Spring. “The problem is not money, but the management of money,” he said, pointing out that only 7 to 10 percent of Arab trade is within the Arab world.
Need to create jobs
The WEF Special Meeting is focusing on the need to create millions of new jobs in the Arab world as around 100 million people are due to join the workforce in the next 10 years. “Knowledge is the core” said Jibril, echoing a key theme that better education is the answer to the challenge. In his address, Shaikh Hamad of Qatar was brutal in his condemnation of many Arab governments which had failed to use years of strong economic growth to create new jobs.
“The momentum of growth was wasted on building industries like oil, tourism and real estate, which do not succeed in building employment.” Shaikh Hamad spoke of the Arab world’s desire for social justice, and criticised “many countries which have not paid attention to social building, and despite achieving broad economic success they still permit wide gaps of poverty and wealth.”
Commenting on the region’s political turmoil, Shaikh Hamad was clear that Arab governments have to be ready for change, and that government is a covenant between the rulers and the people, in which both sides have to be engaged. “You cannot fight your people to stay in power,” he said. “People are more valuable than staying in power, and it you start killing your people, even if you win, you will lose in the end.”
The Special Meeting is looking at what steps are needed to increase productive employment in the Arab world, and is discussing a wide range of issues which will help build an effective workforce that all governments agree is urgently needed. A major part of this is to offer better education, encouraging people to think for themselves, and learn more vocational skills. But better legal frameworks are needed to allow people to invest with confidence and perhaps the most difficult step is to encourage a spirit of entrepreneurship in society.
Exchange of ideas
The Special Meeting brings together leaders from both government and business, and allows them to exchange ideas. HSBC is an example of a major company looking on how to build its employment of nationals as it employs over 11,000 people in 14 countries in the Middle East and North African region, and its customers employ many millions more. But just as it is looking at how to employ more nationals in each country, it is struggling to match the effect of 20 to 50 percent wage inflation in the public sector as some governments have started spending more money as a result of the Arab Spring. A lot of the debate at the Special Meeting is on how to move the creation of new jobs away from the public sector into the private sector.
In most countries, the private sector is the main generator of employment, and by definition have to be productive since their employers are there to make a profit.
Economists and politicians agree that the danger of public sector employment in the Gulf states is that the governments can afford to keep paying inflated work forces with possibly inflated salaries for decades.