Some of the most eminent global drivers of change, which have started a structural transformation process in economies worldwide, have policy implications for the Middle East and North Africa (MENA) region and its employment-generation potential in particular.
The importance of generating decent productive employment opportunities for all in achieving inclusive economic growth has been well emphasised by the United Nations in the UN 2030 Agenda for Sustainable Development adopted in 2015. Decent work has particularly become a priority, given UN estimates that global unemployment has reached 5.7 per cent and that over 600 million new jobs need to be created by 2030 to keep pace with the world’s fast-growing working age population.
This is in addition to the need to improve the working conditions of about 780 million people currently working but not earning sufficient amounts to make it out of poverty and often living on under $2 a day.
Such global drivers of change have led policymakers worldwide to start adapting their education, employment and labour-market policies, among others, to the ongoing changes that dictate a new pace of adjustment and demand a new set of skills. Specifically, the globalisation of markets, the rapid pace of innovation and technology diffusion, and the transition to a green economy, among others, have all initiated a structural-transformation process in both the developed and developing parts of the world.
Examples of such transformation could be the shift from one sector to another, such as from agriculture to manufacturing and services, or within the same sector from being labour-intensive to adapting high value-added technology, all of which require the development of new skills and continuous investment in human capital.
Similarly, the move to a green economy has become an integral part of both meeting the UN Sustainable Development Goals and the climate-change risk-mitigation process. This aims at protecting the environment, avoiding the degradation of scarce resources, using energy sources efficiently, and reducing carbon emissions. Such a transition would lead to shifts in both consumption and production patterns, hence affecting employment and skills requirements, a lack of which may cause a bottleneck in the path towards greener economies that are more sustainable and lower in carbon.
A skills gap has already been reported between the available skills and those needed by industries subject to greening such as, renewable energy supply, construction, agriculture and forestry.
Over the coming decades, global changes are expected to lead to the emergence of new occupations that do not exist today, while other professions may be replaced or disappear altogether. Such a dynamic process requires a more forward-looking approach to the adoption of new skills development and training strategies.
In this context, questions may arise about the readiness of the MENA region for such a transformation process and whether such policies have been adjusted and new strategies developed. This has become more necessary than ever to cater for new competencies and to empower current and future labour-market participants to face the new challenges and to better prepare for the requirements of the future.
Over the past decade, job creation has been at the heart of the reform policy agenda to renew the social contract in the MENA region that has been going through a dramatic transformation period since the Arab Spring uprisings in 2011 in countries like Tunisia, Egypt, Libya, Syria and Yemen.
These uprisings were deeply rooted in both political and economic frustrations, and this was the case despite the fact that economic growth averaged well above five per cent in these countries during the pre-global financial crisis period (2003-2008). However, this growth failed to keep pace with the aspirations of the fast-growing dynamic population in the region. Specifically, it was not inclusive, as its benefits were captured only by the privileged few. More importantly, the growth failed to generate sufficient employment opportunities in a region where youth unemployment has been estimated at about 25 per cent in Egypt and over 30 per cent in Tunisia and Morocco.
The MENA region is young, as 60 per cent of its population is under the age of 30, a strong advantage, yet also a major source of policy concern. While most countries in the industrialised world are witnessing an ageing population, the countries of the MENA region have enjoyed high fertility and population growth rates. The region’s youth bulge puts pressure on policymakers to address youth unemployment and to create new jobs so that the labour market can efficiently absorb the large number of entrants, estimated at more than 700,000 in a country like Egypt, on an annual basis.
Most countries in the region have modest education systems that have not succeeded in meeting the evolving skills requirements of their labour-market needs. Specifically, these education systems have been primarily responsible for creating and deepening the skills mismatch. Poor education outcomes have had high economic costs, as have been documented by World Bank investment climate surveys, where low skills profiles have been cited among the main constraints to doing business in some countries in the region.
To avert the risks associated with global changes, the MENA countries should work on enhancing the responsiveness of their education and training systems. Attention should be paid to the need to build bridges between the world of learning and that of work, in order to close the persistent gap created by the skills mismatch between what the education systems provide and what the market actually needs.
In doing so, higher investment in the education systems in the region has become a must to trigger a virtuous circle of innovation, higher productivity, competitiveness, productive employment generation, and more investment. To that end, education and training strategies in the region must improve their workforce’s capacities to be more creative, to communicate efficiently, to take risks and to think independently. More importantly, these strategies must enhance people’s skills to pursue lifelong learning opportunities to ensure their current and future employability in a changing world.
Moreover, it is important to maintain a high degree of coordination among the various policies, including education, vocational training, employment, social protection, industry, trade and investment, in order to ensure a smooth transformation process that will be capable of generating productive employment opportunities while safeguarding societal welfare.
The writer is a former economic advisor at the Ministry of Investment and currently an independent consultant.
*A version of this article appears in print in the 23 January, 2020 edition of Al-Ahram Weekly.