Business leader diagnoses MENA woes

Friday 29/05/2015
Omar Alghanim

Southern Shuneh, Jordan - Bring more Arab women into the workforce, invest in “bite-sized” infrastruc­ture projects and get the private sector more in­volved in training young job seek­ers — these are the prescriptions of a leading Gulf entrepreneur for growing Middle Eastern economies and combating rampant youth un­employment.
Decision-makers long seemed paralysed by the sheer size of the re­gion’s economic problems but atti­tudes have changed in recent years, said Omar Alghanim, co-chairman of the recent World Economic Fo­rum (WEF) conference in Jordan and a leader of private sector efforts to tackle youth unemployment.
“When you talk to government officials about this, they are a lot more turned on to these issues and I think they acknowledge the size and significance of these issues,” Alghanim said on May 22nd. “As compared to five years ago, I see a lot more attention — which is great.”
The Middle East and North Af­rica have the world’s highest rate of youth unemployment, at 29.5%, up 2 percentage points from a dec­ade ago, according to the Interna­tional Labour Organization (ILO). Unemployment is particularly high among young women, in part because of constraints placed on them by traditional societies in the region. Alghanim said that the presence of more women in the workforce would dramatically spur economic growth.
Citing figures by the International Monetary Fund (IMF), he said the gender gap in the Middle East is three times bigger than in most de­veloping economies. If the gap were narrowed by one-third, regional gross domestic product (GDP) would grow 6% — $1 trillion a year, said Alghanim, a former investment banker who heads Alghanim Indus­tries, one of the largest privately held companies in the Gulf.
“So there’s a real economic cost here to the gender gap and find­ing women to get more engaged in the economy is crucial for us as a region, crucial for our competitive­ness as a region,” said Alghanim, who heads the Regional Business Council, a group with 30 member companies trying to help reduce youth unemployment. Alghanim did not say how cultural constraints can be overcome but suggested change needs to be gradual.
One of the causes of youth unem­ployment is a disconnect between the skills young people acquire in schools and universities, where learning by rote tends to be the norm, and what modern private companies look for in potential em­ployees. Alghanim said the private sector must get more involved in training young job seekers and en­courage future entrepreneurs.
Nine of the business council’s member companies participate in a programme aimed at affecting the lives of 100,000 young people in the region over a two-year pe­riod. In one effort, volunteers go into schools and universities to hold entrepreneurship contests in which participants set up small compa­nies, he said. The programme is on track, he said, adding that many of the winning ideas for new compa­nies come from young women.
Experts agree that growing the region’s economies will put more young people to work — a tough challenge at a time of low oil prices and protracted conflict in Syria, Iraq, Libya and Yemen. The World Bank has predicted tepid growth for much of the region, including wealthy oil exporters in the Gulf.
Alghanim said governments need to invest more in infrastructure pro­jects to spur growth and increase productivity. The region spends 5% of GDP on infrastructure, compared to 15% in China, he said.
Some infrastructure projects move slowly because they are too ambitious and “not bite-sized,” he said. “What happens is that the plans get a bit too grandiose and then it becomes difficult to execute them.”