Arab Region Has the Highest Unemployment Levels in the World
/The UN Economic and Social Commission for Western Asia (ESCWA) and the International Labour Organization issued a report stating that the Arab region had the highest levels of unemployment worldwide, especially among women and young people. 14.3 million people were already unemployed before the COVID-19 pandemic, but the pandemic has increased pressure on Arab labor markets, causing more than 39 million individuals in hard-hit sectors to have reduced wages/hours of work or being laid off.
The recent COVID-19 pandemic has further exposed the weaknesses of the education system in the region, at least in terms of infrastructure, access to technology, and teachers’ skills. Even the attempt to shift to e-learning has been a challenge for the Arab region.
The report also states that skills mismatches in the Arab world likely occur for the following reasons:
Poor quality of education and irrelevance of educational and training systems to the labor market. According to ESCWA calculations based on data from the World Bank’s Enterprise Survey, almost 40% of firm owners claim that the inadequately educated workforce is an obstacle in the Arab region;
Lack of career guidance and orientation towards relevant fields of education;
Individual preferences for working in the public sector and investing in skills suitable for public-sector jobs, irrespective of the skills needed by the private sector;
Unfair access to education: many individuals cannot afford access to quality education that would enable them to get value-added jobs in the labor market;
Imperfect information in the labor market: suitable workers and firms have difficulties finding each other;
Creation of low-quality jobs requiring low skills and minimal education, influenced by the growth of informal non-productive jobs.
Rola Dashti, the Executive Secretary of ESCWA, stressed the lack of gender equality in Arab labor markets, as women hold few top management positions and have lower shares as business owners. The increase in female labor participation rate was 2.76% between 2000-2020 but was matched with an average growth of 3.4% in female unemployment.
In Arab, 64% of the total employment is also informal, which means own-account workers (without hired workers) that operate an informal enterprise. Meanwhile, political unrest and conflicts remain a primary obstacle in the region, impairing enterprise performance, affecting investor and consumer confidence, and subsequently limiting investment and consumption.