Rising unemployment among youth in the GCC: Insights on Saudi and UAE stats
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Rising unemployment among youth in the GCC: Insights on Saudi and UAE stats

Rising unemployment among youth in the GCC: Insights on Saudi and UAE stats

The Middle East & North Africa (MENA) region has the largest youth population in the world, with more than half of residents under the age of 25. Problem is many are unemployed

  • The UAE can generate an additional 43,000 jobs by 2030 by closing the skills gap
  • The MENA has the world’s highest youth unemployment rate
  • By closing the skills gap, the UAE will gain $4.3 billion in GDP

A survey by the International Labor Organization (ILO) found that 1 in 6 young people have stopped working since the onset of the COVID-19 pandemic,

 while nearly half reported delays in their studies. The resulting impacts of these challenges will have tremendous consequences on young peoples' earnings, their career trajectories, and the economies of nations.

The Middle East & North Africa (MENA) region has the largest youth population in the world, with more than half of residents under the age of 25. 

The UAE can generate an additional 43,000 jobs by 2030 by closing the skills gap, the World Economic Forum said recently.

By closing the skills gap, the UAE will gain $4.3 billion in GDP, the Forum said in its latest report “Upskilling for Shared Prosperity” launched in cooperation with PwC.

In order to advance skills, the UAE launched the Accelerator program to highlight skills gaps and formulate new business models to close the gap. 

MENA

The MENA region has the world’s highest youth unemployment rate, standing at 27.2% in the Middle East and 29% in North Africa, according to the World Bank.

This is partly the result of an inadequate labor market to which 2.8 million young job seekers are added every year.  

The countries of the GCC have a youth bulge (% under 25) and it ranges from 25% in Qatar to 50% in Oman. In the UAE it stands at 34%, while it is 35% in Bahrain, 40% in Kuwait, and 46% in Saudi Arabia.

Governments in the GCC region have had difficulties turning this potential into an actual dividend. 

Youth unemployment is 28.7% in Saudi and 10% in the UAE. Bahrain, Kuwait, and Oman have youth unemployment rates of around 20%. Qatar has a youth unemployment rate of just 1.5%.

The report said many oil-based economies, such as the GCC countries, face bigger challenges because capital and skilled nationals are heavily employed in sectors that are not the most innovative or subject to high long-term growth primarily because of a mismatch in jobs and an unbalanced economy made up of a dominant public sector and underdeveloped private sector.

“Youth unemployment stands at 30% throughout the MENA region, twice the global average. This can distort incentives to acquire relevant skills as young workers with some formal education prefer well-paid public-sector jobs,” the WEF said.

It is estimated that upskilling could lead to the net creation of 5.3 million new jobs by 2030. 

Read: Save your job by upskilling and reskilling. This is what companies want and need today

Saudi unemployment

Unemployment in Saudi Arabia fell in the third quarter of 2020 to 14.9% from 15.4% in the second quarter," the General Authority for Statistics said.

The government has been pushing to create millions of jobs and reduce unemployment to 7% by 2030. 

"The impact of COVID-19 pandemic continues to affect the Saudi labor market and the economy," the General Authority for Statistics said.

It said total participation in the labor market was 59.5% in the three months from July to September 2020.

The unemployment rate among Saudis dropped to 14.9% in Q3, 2020 from 15.4% in Q2, 2020.

Q1 2020 unemployment was at 11.8%. 

The unemployment rate among males and females stood at 7.9% and 30% respectively. 

Meanwhile, the unemployment rate among all residents (15 years and above) dropped from 9% to 8.5% by end Q3, 2020. 

The total number of employed persons across the Kingdom stood at 13.5 million in Q3 2020. Males accounted for 82%, or 11 million of the total labor force, while females represented 18%, or 2.5 million. 

Meanwhile, employed expatriates accounted for nearly 10.2 million, representing 75.8% of the total employees, while nationals accounted for 24% or 3.25 million.

Read: Bad economy and fake jobs: India’s growing job employment scams

UAE’s employment prospects

The UAE can generate an additional 43,000 jobs by 2030 by closing the skills gap, the World Economic Forum said recently.

By closing the skills gap, the UAE will gain $4.3 billion in GDP, the Forum said. 

In order to advance skills, the UAE launched the Accelerator program to highlight skills gaps and formulate new business models to close the gap.

Based on projections from the Central Bank of the UAE (CBUAE), the national economy should grow by around 2.5% overall and 3.6% for non-oil sectors in 2021, after shrinking by around 6% in 2020 and 5% for non-oil. 

The UAE is facing imminent improvement for incoming tourism, as pent-up travel demand and the country’s successful management of the COVID-19 virus converge to make the UAE a potentially top destination this year. 

The Dubai EXPO’s rescheduling to open in October 2021 will add further strength, employment opportunities, and an improvement in tourism, retail, and real estate activity. 

In 2020, the unemployment rate in the UAE was at 2.45% of the total labor force. The unemployment rate depicts the share of a country's labor force without jobs but available and actively seeking employment.  

In the UAE, the youth bulge stands at 34%.

Author
Hadi Khatib

Hadi Khatib is a business editor with more than 15 years' experience delivering news and copy of relevance to a wide range of audiences. If newsworthy and actionable, you will find this editor interested in hearing about your sector developments and writing about it. [email protected]

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