IMF chief tells Morocco con­fer­ence record un­em­ploy­ment lev­els could stoke po­lit­i­cal un­rest in the re­gion


Speak­ing at an IMF con­fer­ence in Marrakesh, Morocco, she said 27 mil­lion young peo­ple would join the work­force in Arab coun­tries in the next five years in a re­gion that has the high­est rate of youth un­em­ploy­ment in the world at 25 per­cent.

Although Arab states are pro­gress­ing with re­forms, they must move away from be­ing "state em­ploy­ers" and fo­cus on im­prov­ing so­cial safety nets, La­garde said.

Dur­ing the two-day con­fer­ence on in­clu­sive growth, La­garde said the pub­lic dis­sat­is­fac­tion that is “bub­bling up” in sev­eral coun­tries is a re­minder that even more “ur­gent ac­tion” is needed.

In Tu­nisia, vi­o­lent demon­stra­tions broke out again this month as anger mounts over IMF-backed mea­sures that in­clude sub­sidy cuts and tax in­creases.

Chris Doyle, director of the Coun­cil for Arab-Bri­tish Un­der­stand­ing (CABU), told Arab News: “Frus­tra­tions across the Arab world are growing.”

Doyle said: “The re­gion must ur­gently de­ploy more re­sources to tackle youth un­em­ploy­ment and these re­sources must be de­ployed far more ef­fec­tively.”

The director said Mid­dle East­ern gov­ern­ments must take ac­tion to end its “many con­flicts and crises” to un­lock the re­gion’s po­ten­tial.

Doyle urged the re­gion to look at re­design­ing its ed­u­ca­tion sys­tem to en­sure it pro­vides the right skills for a 21st-cen­tury jobs mar­ket.

“The re­gion needs to look at skilling up for the dig­i­tal econ­omy,” he said. “How­ever, be un­der no il­lu­sion, it’s a mas­sive chal­lenge.”

The CABU ex­pert said that Egypt rep­re­sents a par­tic­u­larly press­ing chal­lenge due to its cen­tral lo­ca­tion and large and growing pop­u­la­tion.

“( Job­less­ness) will have an im­me­di­ate im­pact on the coun­try and it’s not rosy,” he warned.

“We may well wit­ness more protests and dis­con­tent. Gov­ern­ments should be re­ally aware that (protests) rep­re­sent gen­uine eco­nomic weak­nesses and re­flect the lev­els of cor­rup­tion in the re­gion.”

Wes Sch­walje, COO of GCC re­search firm Tah­seen Con­sult­ing, agreed that re­gional ed­u­ca­tion sys­tems are strug­gling to pro­duce na­tional work­forces with the skills that meet “the needs of knowl­edge-based eco­nomic de­vel­op­ment and the Fourth In­dus­trial Rev­o­lu­tion.”

Sch­walje told Arab News: “A youth­ful, growing la­bor mar­ket can be ben­e­fi­cial to eco­nomic de­vel­op­ment if it is ac­com­pa­nied by job cre­ation. Without job cre­ation, the coun­ter­fac­tual is youth be­com­ing un­em­ployed, dis­cour­aged, or en­ter­ing the in­for­mal econ­omy.

“Dis­con­tent among youth is par­tic­u­larly sig­nif­i­cant since there is a strong link be­tween youth bulges ex­pe­ri­enc­ing eco­nomic hard­ship and po­lit­i­cal vi­o­lence. If the pub­lic sec­tor is un­able to cre­ate suf­fi­cient jobs for Arab youth, the only other op­tion is pri­vate sec­tor job cre­ation.”

High lev­els of pub­lic sec­tor em­ploy­ment in the Arab world have been crit­i­cized as “per­pet­u­at­ing low pro­duc­tiv­ity, lack of eco­nomic di­ver­si­fi­ca­tion, and high pub­lic sec­tor wage bills,” Sch­walje said.

He said: “Mar­ket re­forms will need to re­ori­ent Arab youth to­wards pri­vate sec­tor jobs… A num­ber of Arab coun­tries are pi­lot­ing am­bi­tious la­bor mar­ket re­forms, such as un­em­ploy­ment ben­e­fits, min­i­mum wages, fees on for­eign work­ers, and in­creased mo­bil­ity of for­eign work­ers, but their suc­cess is far from cer­tain.”

LON­DON: Arab coun­tries need to do more to cre­ate pri­vate sec­tor jobs and bol­ster in­clu­sive growth amid growing youth un­em­ploy­ment and re­gional dis­sat­is­fac­tion, Chris­tine La­garde, man­ag­ing director of the In­ter­na­tional Mon­e­tary Fund (IMF), said on Tues­day.

Chris­tine La­garde, man­ag­ing director of In­ter­na­tional Mon­e­tary Fund, right, speaks to Morocco’s Prime Min­is­ter, Saad-Ed­dine El-Oth­mani, left, dur­ing the open­ing ses­sion of the Op­por­tu­ni­ties For All eco­nomic con­fer­ence in Mar­rakech, Morocco, on Tues­day....

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