UN stresses challenge of young unemployed

A quarter of under-25s have no job reveals report, as author says new figures are an alert to the region that more opportunities are needed

NEW YORK // The Middle East and North Africa will continue to have the world's highest unemployment rates this year, the UN has warned, raising the possibility of further protests linked to a lack of opportunity and rising food prices.

The region's overall jobless rate will remain steady at about 10 per cent, according to a report published today by the International Labour Organisation (ILO), a UN agency.

But unemployment among under-25s will be about 40 per cent in the Middle East and 23.6 per cent in North Africa, the report says.

Duncan Campbell, an ILO official and co-author of the 107-page report, said the figures were an alert to regional governments that they must provide young people with more job opportunities.

"From our work in Tunisia, it is quite clear that a lack of economic opportunity is a huge driver of social unrest," Mr Campbell said. "Wealth inequality and the absence of opportunity are powerful components in stirring political unrest."

While the region has been shielded from the worst of the global financial crisis - economic growth of about 4.5 per cent is predicted both this year and in 2012 - unemployment last year hit 10.3 per cent in the Middle East and 9.8 per cent in North Africa.

For young people who were not in school last year, the situation was worse. Nearly a quarter could not find work, says the report, Global Employment Trends 2011.

Many available jobs are low quality, underpaid and insecure, it adds.

The problem, according to Mr Campbell, is that economic growth in the Gulf is being driven mostly by hydrocarbon revenues and that many governments are lagging in efforts to diversify their economies, improve schools and encourage new business.

Amr Moussa, the secretary general of the Arab League, said last week that the "Arab soul" was broken by poverty, unemployment and recession. He made the remarks at an Arab economic summit in Egypt, where the uprising in Tunisia and the removal of the president, Zine El Abidine Ben Ali, dominated discussion.

Mr Campbell urged the leaders of Algeria, Morocco, Libya, Egypt and Jordan to open their economies to allow more business to flourish and create more job opportunities for young people.

A pledge by Arab League members at the summit to provide $2 billion to help small businesses is not enough to spur the growth and economic reform that is needed, he said.

"Small and medium-sized enterprises are the engines of growth but if you throw all your money into entrepreneurship you're not going to get much in return," he said. "Only an estimated 15 per cent of people across the world are genuinely interested in entrepreneurship. The rest of us want to be paid employee's wages."

The UN report also says state-run infrastructure projects and workplace nationalisation schemes in the Gulf have not been as successful as hoped.

It focuses on efforts by Saudi officials to help the 30.2 per cent of young people who were unemployed in the kingdom in 2009, a rate almost three times higher than that for the rest of the workforce. The kingdom's 4.3 million nationals in the workforce are outnumbered by 4.7 million foreign workers.

"Saudi-isation, Omanisation and others have been around for a long time without obvious progress being made," Mr Campbell said.

Government efforts to increase the Saudi-born workforce have "produced only limited results", the report said, while the private sector is not growing fast enough and civil service jobs remain the most sought by young Saudis.

"There's all kinds of structural mismatches between the education system and opportunities in the real economy," Mr Campbell said.

Big government projects have failed to create enough jobs for nationals or foster small business growth. Under a five-year plan to slash unemployment from 270,000 to 140,000 between 2005 and 2009, the number of jobless grew to more than 400,000.

"Foreign labour has been a remarkable source of value for the Gulf economies. At the same time, it has stifled economic growth and change," Mr Campbell said. "The expatriates work on contracts that limit their mobility.

"The power difference between employer and employee is huge and there is very little incentive to improve management or productivity if you have replaceable parts such as workers coming in and going out of the region."