Young, educated and unemployed
Arab countries as a region have the highest unemployment levels in the world. Paradoxically, the poor are less affected than the educated
Marwa Hussein, Friday 14 Jan 2011
If you are a university or higher institute graduate, at least in the Arab world, you will most probably end up unemployed.
High unemployment rates have recently appeared a threat to political regimes in the region. The scene of Tunisian youth confronting tanks on the streets best illustrates best the risk.
Indeed, in recent weeks protests over unemployment led to a number of deaths, with many wounded and detained in two Arab countries — Tunisia and then Algeria.
The protests were triggered also by high food prices. In Jordan, the government had to slash taxes on fuel and foodstuffs and offered public sector jobs to avoid a Tunisian-like uprising.
The Arab world has the highest unemployment rate worldwide by region, with an average of 14.5 per cent in 2007/2008, according to the latest figures published by the Arab Labour Organisation (ALO), compared to an international average of 5.7 per cent in the same year.
Unemployment has also been on the rise in recent years, and is not linked with poverty alone but also involves oil-rich states.
On 9 January, a group of 250 unemployed Saudi university graduates staged a sit-in in the capital Riyadh, for the second time in less than six months. Unemployment hit 10.5 per cent in the wealthy kingdom in 2009, according to the latest official figure published.
Among the youth and fresh graduates, one in three is unemployed, versus an international standard of one in 10.
In Tunisia, unemployment among university graduates reaches 20 per cent. according to Lahcan Achy, senior economist at Carnegie Middle East, and 43 per cent by other estimates.
“The same phenomenon is reproduced in Morocco, Algeria and Syria. Mohamed Bouazizi, the young Tunisian who set himself on fire last month and triggered protests all across the country, was a university graduate who accepted to work as vegetable seller. The anger is increasing in this segment," said Achy.
“Unemployment rates for the illiterate in most Arab countries are the lowest. The rates rise among high school and university graduates, to reach 10 times the rate among illiterates in Egypt, and fives times the rate in Morocco,” notes an ALO report. “That’s what created the anger in Tunisia,” Achy argues.
The similarity of the situation in other Arab countries raises fears of spreading riots; especially that Algeria and Tunisia are not the poorest countries in the region. Per capita income was $3,959 in Tunisia and $4,916 in Algeria in 2008, almost double the levels of Syria ($2,677), Morocco ($2,632) and Egypt ($2,192) according to ALO figures.
In general, growth is not linked to employment in most of the Arab countries. In the pre-global financial crisis period, the high level of growth witnessed in some Arab countries was not accompanied by corresponding cuts in graduate unemployment.
During the “International Conference on the Unemployment Crisis in Arab Countries” that was held in March 2008, in Cairo, a study presented by Imad Mousa from Monash University concluded that growth in the Arab countries has failed to deliver jobs. This is in contrast to the results found in advanced economies.
Mousa interprets this contradiction as “structural unemployment” which results when improvements in the education and training are not matched by improvements in the economy.
“After some years of seeking an appropriate job, the young accept any job offer, even if it’s below their qualifications," notes Achy. "In most cases, these jobs are underpaid. If we let figures talk, we know that 30 to 65 per cent of Arab workers work in the informal sector. This means work with low salaries, long working hours and definitely not any kind of social insurance."
The service sector is the main employer in the Arab world, absorbing six employed out of 10, according to ALO figures. Industry only hires 15 per cent of manpower in the Arab world, falling to the third largest employer after services and agriculture.
In the services sector, the jobs are “mainly small jobs in the retail sector that can’t offer a decent living for qualified workers,” explains Achy. After the service sector, the agricultural sector absorbs one quarter of total manpower. This sector is known for irregularity in terms of working days and hours, and for low wages.
Underemployment, a serious problem
Not only are unemployment rates high in Arab countries, but many of those employed are effectively underemployed. That many are not counted as unemployed in Arab countries doesn’t mean they are not job seekers.
The method used to calculate labour statistics has been criticised many times by the International Labour Organisation. The question asked to ascertain employment statistics in a country like Egypt is, “Have you done any paid work during the last week?” If the answer is yes, the person is not counted as unemployed.
“It’s the same in many other Arab countries,” says Achy. But this standard produces a distorted picture of the reality of employment, unemployment and underemployment in the Arab world.