Arab Youth Unemployment Rate Highest in World

Turn on the news, browse the web, or enter any cafe in an Arab country and you will often hear something along these lines: “Our youth are more educated than ever, but they just can’t find any jobs!”

General sentiment in the (Persian) Gulf Cooperation Council region (comprising United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait) is 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 classify as Arab millennials, have very little success even in securing a job interview, Ameinfo reported.

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

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

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

It’s easy to blame things like the economy and the political situation in the region for all of the 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.

Several Factors

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 (P)GCC. Jordanians, Lebanese, Egyptians and others had flown east to the (P)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.

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.

(P)GCC Peril

Contrary to popular belief, like the rest of the MENA region, (P)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. The IMF reports that the unemployment rate for young Saudi women is 62%.

According to Business Insider, hit hard by the oil-price collapse, the oil kingdom is also experiencing a plunge in foreign investment.

Nasdaq reported that FDI inflows shrank to $1.4 billion in 2017 from $7.5 billion in 2016, according to figures from the UN Conference on Trade and Development, and which fall in line with data published in recent weeks by the Saudi Central Bank.

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 the 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.”

Seeking High-Paying Jobs

The reason is (P)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 (P)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.”

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.