Complex Made Simple

Arab youth unemployment: Is there a way out?

Turn on the news, browse the web, or enter any café in an Arab country and you will often hear something along the lines of this:

“Our youth are more educated than ever, but they just can’t find any jobs!”

General sentiment in the region is that of despair as universities graduate thousands upon thousands of young men and women every year and open the gates of the job market to them, yet these young people, who we can classify as Arab Millennials, have very little success in securing a job interview even.

In fact, the MENA region has the highest rate of youth unemployment in the world at 25%, according to the IMF, the World Bank and the Organization for Economic Cooperation and Development (OECD).

In comparison, European countries are seeing their lowest unemployment rates since the turn of the century, Statistics Netherlands (CBS) reports.

At this year’s Dubai’s World Government Summit, it was revealed that 5 million Arab young men and women will enter the labor market this year.

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How did we get here?

It’s easy to blame things like the economy and the political situation in the region for all of our youth’s troubles. For the most part, these accusations are not misplaced. The global financial crisis in 2008, followed shortly by the Arab Spring in 2011, utterly destabilized the region with civil and economic unrest, war and famine. It’s not easy for the region’s economy to stabilize following such a succession of upheavals.

However, if one looks at the larger picture, it is clear that there are several other factors at play here.

The years between 1980 and 2000 saw an unprecedented rise in the number of babies being born, with the population nearly doubling. It was akin to a 2nd wave of baby boomers, the US generation boom directly following World War 2.

This Arab baby boomer phase could be attributed to a large influx of immigration in the region, with the oil industry creating plenty of opportunities in the GCC. Jordanians, Lebanese, Egyptians, and others had flown east to the GCC in search of a better life; and with a better life came greater income and an improved quality of life, which in turn meant that couples were likely to have more children. The GCC is known for providing the best salaries in the region, which explains the influx of expats.

Hampering the youth quest for jobs are a number of other contemporary factors such as weak private sectors, mismatched skills and a region-wide overreliance on the public sector, geopolitical intelligence platform Stratfor explains.

Is the GCC safe from these issues and challenges?

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High unemployment in oil-rich GCC?

Contrary to popular belief, like the rest of the MENA region, GCC countries suffer from youth unemployment as well, despite their oil-supported burgeoning nations.

Countries like Saudi Arabia exhibit a high youth unemployment rate.  In 2017, the estimated youth unemployment rate in the kingdom was 34.66%, according to estimates by the International Labor Organization (ILO). The IMF reports that the unemployment rate for young Saudi women is 62%. That could change as Saudi women are allowed to drive and seek employment opportunities.

Similarly, the estimated youth unemployment rate in Kuwait in 2017 was 15.49%.

These troubling figures have forced governments to take drastic nationalization schemes such as Kuwaitization and Saudization. These plans have caused many jobs in these countries to be forbidden to expats. In a more drastic action, some of these countries have resorted to firing expat employees to give a chance to nationals.

Yet, the Saudi Gazette daily explains that, “88% of jobs created in 2015, totaling 416,000, were taken by non-Saudis because the majority of jobs created did not spark the interest of Saudi youth or there are no Saudis who are specialized in them.”

The reason is GCC nationals often seek high-paying, public sector jobs, and discount private sector opportunities even when they could lead to upward mobility later on.

This brings into question a very interesting point not often considered in the unemployment debate: young GCC nationals are not always interested in the jobs currently occupied by expats, or they are not trained for them. In the Gazette’s opinion, “to increase Saudization, we should train Saudis in the jobs on demand.”

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Is there a light at the end of the tunnel?

At this current point in time, a clear answer to this endemic problem does not exist. The region will have to undergo extensive restructuring which will require strong, positive government action to take effect.

One of the best paths available to youth at this moment in time are technology-centric ventures. The West has proven that technology itself is the ultimate equalizer. Be it Silicon Valley companies, trendy startups like Uber and Airbnb, or a simple Apple App store application or YouTube channel: technology has opened doors that have never been available before to any generation. The region’s ultra-popular so-called ‘influencers’ are proof of this, reigning in the social media world, be it on Instagram or Twitter.

It has probably never been this difficult to find a job in the Middle East, yet to a young man or woman looking for work, the entrepreneur spirit remains as valuable as ever before in this newly connected world.

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