Workforce issue resists short-term remedies
Washington - Throughout the Middle East and North Africa (MENA) region, in addition to evident political turmoil, core issues of governance, transparency/corruption and equitable economic development/jobs that drove the Arab uprisings have not been addressed adequately.
While Morocco and Tunisia have new constitutions, governing structures and some new leadership, these core issues are resisting short-term remedies, an indicator that without more progress, no countries are immune to future upheavals. One underlying reality from North Africa to the Gulf Cooperation Council (GCC) is that demographic pressures persist as young people continue to be frustrated in their efforts to obtain education and training for meaningful jobs.
There may not be agreement among leaders and those-in-waiting regarding strategies to improve governance or promote effective transparency regimes but there is consensus that progress in the economic development/jobs directly affects stability and security, witness the plethora of business promotion measures being enacted in Egypt as an example.
However, ossified public education systems mean that effective remedies for reducing the education-employment gap in a market-driven economy remain elusive. Added to these constraints on upgrading the local education/training sector is the effect of external factors such as the steep decline in oil prices, subsequent downturns in the GCC economies leading to fewer Gulf investments in non-oil producing countries and the resulting challenges to growth opportunities for local and expatriate labour.
The issue of workforce development across the MENA is well-studied; what is not clear is the way forward.
Challenges in the MENA and elsewhere require solutions with actionable insights into at least four variables:
— The supply side — how is the education/training sector performing vis-à-vis the market? What are the characteristics of those in the system?
— Characteristics of the available labour force — formal and informal — and how these influence the employment sector.
— The demand side — what are employment trends in transitions from traditional to more contemporary market sectors? Are they sustainable?
— What are the internal and external forces reshaping labour demand and the condition of the eco-space for innovation and entrepreneurs?
On the supply side, generations of subsidised public education for mostly public employment has resulted in inadequately skilled labour requiring extensive retraining to perform in the private sector where skills and competencies are required.
In addition, attitudes towards certain categories of work are largely negative. It is difficult for supply to meet demand as education/training facilities outside the GCC have few skilled faculty, training material and soft skills inputs to enable new workers to view jobs as steps in a career.
National labour policies, such as the nitaqat in Saudi Arabia, are only partially successful in cajoling locals to take jobs in construction and crafts vacated by expatriates.
The informal economy, where the bulk of low-level entrepreneurism takes place, is the focus of many initiatives but regulatory regimes have yet to foster accrediting skilled informal labour and mainstreaming them into a business ecosystem that supports their financial, legal and logistical needs. And the generosity and wisdom of international donors have too often resulted in mismatched and competing efforts to upgrade labour standards and policies.
On the demand side, much emphasis has been placed on entrepreneurship although most Arab economies are labour-intensive and services/agriculture-focused. Digital technology can enhance entrepreneurial capacity to innovate regardless of the sector. For example, harnessing mobile phones to enhance home repair service delivery can give entrepreneurs in this field a competitive edge and path to greater prosperity, even though the skills provided are often basic and low-cost.
Another wrinkle is that foreign direct investment is often directed towards capital-intensive industries where project start-ups require thousands of jobs usually unrelated to the hundreds who then operate the facility. Harnessing supply chains and services for industries has had good results but the resulting employment is not adequate for the great demand throughout the region where the majority of the population is under 30 years of age.
One study noted that “the proportion of young people is considered by many observers a ticking time bomb that requires working on sound economic and social policies to accommodate these young people in the process of political, economic, and social transformation desired in the Middle East”.
Greater coordination among donors, streamlined labour regulatory regimes, respectable wage scales and conditions and inclusive hiring policies are keys to better outcomes.
World Bank Vice-President for MENA Hafez Ghanem recently met with Islamic Development Bank officials and ministers from Morocco, Jordan and Tunisia to promote an education for competitiveness initiative “aimed at supporting a renewed reform agenda for education in the MENA region, one that promotes critical thinking, creativity and innovation to contribute to inclusive growth, social development and global competitiveness”.
Without a more integrated, holistic approach to addressing labour within economic growth strategies, unrest will continue to be a factor in the public space in Arab countries.