Region is not growing fast enough to create jobs
DUBAI, United Arab Emirates — The International Monetary Fund said Wednesday that nearly a quarter of the Middle East’s youth are unemployed, warning that unless deeper reforms are made, millions of young people entering the labor market each year may not find jobs.
The IMF says current levels of growth across the region will not generate a sufficient number of jobs to reduce unemployment, which was one of the main grievances behind the 2011 Arab Spring uprisings.
Economic growth for oilexporting countries in the region topped 5 percent in 2016, but slowed to 1.7 percent just a year later. The IMF predicts an upward trend of close to 3 percent this year and 3.3 percent in 2019. For the Middle East’s oilimporting nations, economic growth is expected to remain steady at well over 4 percent.
“This region is a very young region. Almost 60 percent of the population is below 30 and the level of unemployment at the youth level exceeds 30 percent,” said Jihad Azour, the IMF’s Mideast and Central Asia department director.
Azour said countries in the region must push ahead with deeper structural reforms. The IMF is urging governments to upgrade the skills of their workforce and provide the private sector with greater access to finance.
The IMF has also encouraged Mideast oil importers and exporters to reduce spending and find new sources of revenue by introducing new taxes and lifting subsidies. This year, Saudi Arabia, the United Arab Emirates and Bahrain— traditionally known for being taxfree havens— introduced a 5 percent value-added tax to most goods and services to increase state revenue.
Despite such efforts, the cumulative fiscal deficit for the six oil-exporting countries in the Gulf, plus Algeria, Iraq, Iran, Yemen and Libya, is projected to reach $294 billion over the next five years, the IMF report found.
At 50 percent, Oman has the highest percentage of youth unemployment of any Arab country. Seventy percent of women in Oman are also outside the labor force. In countries like Egypt and Saudi Arabia, more than 30 percent of youth are unemployed and close to 80 percent of women are outside the labor force.