Government must intervene to create jobs for the Middle East’s biggest demographic
Arab youths will struggle to find work unless Middle Eastern governments invest in education and the private sector to tackle the region’s surging unemployment.
Dr Sheikh Mohammad Sabah Al-Salem Al-Sabah, Kuwait’s former Deputy Prime Minister and Minister of Foreign Affairs, stated that millions of jobs were needed to support the growing youth population.
“There is a need to create close to 100 million new jobs by 2020, doubling the current level of employment in the region,” he said during his keynote speech at London Business School’s 14th Middle East Conference.
“The youth of today make up 65 per cent of the Arab population with over 30 per cent (100 million) between the ages of 15 and 29 – this is the highest proportion in the region’s history.”
Several major challenges have contributed to the youth unemployment dilemma over recent decades. In particular, Dr Al-Sabah believes governments have struggled to reform the public sector.
“The MENA (Middle East and North Africa) region has the highest government wage bill in the world, amounting to 9.8 per cent of GDP compared with the global average of 5.4 per cent,” he said.
“Public sector wages in MENA were on average 30 per cent higher than those in the private sector. At this [cost] rate, the public sector cannot absorb the influx of youth workers.
“The private sector must be encouraged to create new jobs and diversify, but without tangible incentives to do so by their governments, companies cannot be expected to provide employment for the masses. Governments need to encourage entrepreneurship and recognise the need for more privatisation.”
Other factors have led to the increase in youth unemployment. The Middle East is second only to Africa for having the fastest growing workforce in the past decade, while its education system needs developing to produce more highly skilled people.
Strict labour laws making it difficult for companies to hire and fire people have also had an impact.