Youth unemployment rates in the MENA Region are the highest globally

Published June 11th, 2013 - 10:22 GMT
Infrastructure investment and reform of labour markets and education systems will all be needed to tackle the issue
Infrastructure investment and reform of labour markets and education systems will all be needed to tackle the issue

With an average of 25 per cent of the MENA region's youth unemployed, and over 40 per cent inactive, 85 million additional jobs will be required in the next 10 years just to reach the global average.

Infrastructure investment and reform of labour markets and education systems will all be needed to tackle the issue, says Majid Jafar, CEO of Crescent Petroleum and Vice-Chairman of the Global Agenda Council on Youth Unemployment at the World Economic Forum.

The crisis of youth unemployment is a major challenge facing many parts of the world today, but unemployment rates among young people in the Middle East North Africa (MENA) region are the highest globally. On average over 25 per cent of the region's youth are currently unemployed, and the figure is rising - expected to exceed 30 per cent within 5 years, and already exceeding 50 per cent in some countries, according to a media statement.

85 million additional jobs will be required in the region the coming decade just to reach global average unemployment and participation rates, according to the World Bank. Also, over 40 per cent of the region's youth are inactive according to the International Labour Organisation - meaning they are not in employment, education or training, according to the International Labour Organisation.

Not enough has been done to create jobs and tackle the issue of unemployment, which is severely affecting the younger generation in many countries across the region, said Majid Jafar, Chief Executive Officer of Crescent Petroleum, and Vice-Chairman of the Crescent Group, speaking at the World Economic Forum Middle East Summit at the Dead Sea in Jordan.

"What used to be a chronic problem that we have been talking about for the past decade has now become an acute crisis. The political instability in many parts of the region over the past two years has actually worsened the employment situation for millions of young people across the region, but many new governments have failed to address the single most important demand for young people according to opinion polls, which is a well-paying job." said Jafar.

Majid Jafar addressed the topic of youth unemployment in the MENA Region as a speaker on the plenary session to the entire summit of the World Economic Forum last week in Jordan, on a panel that was introduced by Her Majesty Queen Rania and included Mr. Mohammed Al-Madythe CEO of SABIC from Saudi Arabia, and Mrs. Ellen Kullman the CEO of Dupont Chemicals from the United States. This year the summit focused on employment issues, infrastructure, and strengthening regional economic cooperation, and was attended by 1,000 government and corporate leaders from across the region and internationally.

Jafar is also Vice-Chairman of the Global Agenda Council for Youth Unemployment at the World Economic Forum, and a Founding Board Member of the "New Vision for Arab Employment" Project which has been initiated by the Forum in partnership with regional business leaders and international experts, to tackle the challenge of youth unemployment in the Arab World.

"Failure to employ our youth doesn't just mean lower economic growth today; it threatens our tomorrow as well," said Jafar. "Low growth, rigid labour markets and a mismatch between education and skills required by the workplace are deep-rooted causes of youth unemployment in many regional economies. Everyone agrees that extremism and instability are the common enemy, and the youth unemployment crisis is a major driver of that," Jafar continued.

Infrastructure Investment

Majid Jafar also highlighted that regional cooperation focusing on major infrastructure investments could be an important solution to rapid job creation in large numbers. According to the World Bank, the Middle East region needs $75-100 billion per year in infrastructure investment, he said. "Though some countries like the UAE have developed advanced infrastructure which enhances long-term competitiveness, the region as a whole is below where we should be in terms of infrastructure spending according to international norms."

The transportation, energy, telecoms, health and education sectors all require infrastructure spending. "Only five per cent of government spending in this region goes on infrastructure, compared to over 15 per cent in China. Infrastructure spending in China is the biggest driver behind that country's economic growth and its government invests continuously regardless of what happens with the global economy," Jafar observed.

Investing $1bn on infrastructure could create 100,000 jobs according to World Bank figures, particularly in oil-importing countries, he said." This means $100 billion investment, which is not a large amount given the capital available in the region in both governments and the private sector, could create 10 million jobs, and that would be a game-changer."

Female participation

On the subject of female participation in the economy, Jafar called for more female role models in the Arab corporate world. Youth unemployment is over 40 per cent on average for women in this region, he noted. "A recent World Bank report shows there has been some improvement in female participation levels in the workforce of our region, but it has been very slow, and it would take 150 years for the region to catch up with global averages."

"This is a fundamental economic and social issue. If we are not educating and enabling proper participation of our female population, we are cursing the education of our next generation. They are the mothers and we will not be able to tackle birth rates, which are the main driver behind the 'youth-quake' facing the region. We're stunting our future growth. This is a wake-up call, and while increasing female participation starts culturally, it is also a policy issue," Jafar said.

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