Labour Income In Arab World Plummets by 11 Percent

Published October 4th, 2020 - 09:30 GMT
Labour Income In Arab World Plummets by 11 Percent
Arab governments must prepare its people for a rapidly-changing global economy, and that should be done today and must not be delayed. (Shutterstock)
Structural reforms needed for job industry as Covid impact hits hard

The Arab world's labour market has taken a more severe hit from coronavirus than other regions, according to the top official of the International Labour Organisation (ILO).

ILO director-general Guy Ryder said the impact of the pandemic has been absolutely devastating on labour markets worldwide, based on the calculation of actual reduction of work hours.

"Arab countries have taken a bigger hit than others. In the second quarter, work hours decreased by 17.4 per cent globally. In the Arab League countries, figures go up to 19.5 per cent. Labour income in Arab countries has also been worst hit, going down by 11 per cent, which is equivalent to four per cent of their GDP. So, there has been an enormous hit to the regional labour market from whichever angle you look at," Ryder said during a G20 conference in Saudi Arabia recently.

He highlighted that the unemployment situation in the Arab world has not been satisfactory for a long time: Arab countries have almost double the rate of unemployment compared to world average.

"In the immediate terms, countries around the world are trying to stimulate economic activity to protect viable enterprises and preserve jobs. It is logical that high-income countries are able to make much bigger effort than countries with lower level income."

Ryder called for paying attention to the most vulnerable in the labour market.

"Young people are being hit in numerous ways. They start off in a worse place, their access to labour market is also tough and they have been expelled from jobs in large numbers. Also, let us not forget migrant workers who find themselves in extreme difficulty in many labour economies of Arab countries," he added.

He also called for addressing structural transformation in the region's labour market both collectively and individually.

Kristalina Georgieva, managing director of the International Monetary Fund (IMF), said key policy action areas that Arab governments need to take are social spending, health, education, youth and women's employment, and closing digital divides.

"We must act today because the region and the world are at a transformative moment. Decisions made now will affect the lives of more than 420 million Arabs for years and decades to come. Preparing them for a rapidly-changing global economy is the work of today, and it must not be delayed," she said during a G20 virtual meeting.

Despite much progress, health and education outcomes in this region are not as good as those in similar countries elsewhere, the IMF chief said.

"There is an 'efficiency gap.' But if Arab countries get greater value for the money they are already spending, the IMF estimates the Arab world could close a third of the health and education gap without any new spending," she added.

She said the fund has extended additional credit to eight Arab countries this year with total credit of $26 billion to the region.

Ghada Waly, executive director of the United Nations on drugs and crime, stressed that the region must tackle corruption so that it doesn't affect efforts against money laundering.

"Arab countries are not in any better situation than others. The 'new normal' was not good and was very challenging. However, I am optimistic for this region. The Covid-19 crisis will push governments to invest in digital infrastructure, health, education and make bigger space for the private sector. If opportunities are given to startups and the private sector, it will help them flourish," she said during the virtual summit.

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