September 21st, 2012
01:06 PM GMT
Share this on:

Almost two years on from the Arab Spring and youth unemployment remains the Middle East and North Africa (MENA) region’s biggest problem, according to Saud Masud, chief executive of consultancy group SM Advisory.

Labor force participation rates are much below the global average, he said, with Middle East and North Africa at around 46 percent versus the global average of around 66 percent.

One of the main challenges, according to Masud, is a lack of essential skills among the region’s labor markets.

“The real issue here is that you can’t generate jobs by throwing money at it and you can’t generate jobs buy just subsidising any type of on demand job generation programme. The real challenge is skills mismatch,” he told CNN’s John Defterios.

“What you have here is people graduating from schools and colleges but they don’t have the marketable or the employable skills to really compete globally or even domestically.”

Governments, particularly among the wealthy Gulf states, are still relying on foreign workers to plug their countries’ skills gap, Masud said, a situation which can hide the problem of a lack of local talent.

“Saudi Arabia for example is looking to advance its economy, to build its infrastructure, to really look at an evolution of the market itself, [but] it is really still relying on foreign talent, [and] a lot of the foreign resources, because the local talent doesn’t have the skill set as of yet,” said Masud

“We’ve had decades and decades of wealth accumulation and surpluses in economies which are characterised as high income economies but fundamentally there has been a mismatch between what the true potential of the country can be, and what the local talent is being trained to do. So that really is the key friction point as we stand today.”

Adding to the crisis of a lack of skills is overbearing governments crowding out the development of the local private sectors with higher wages, said Masud.

“IMF data suggest that the central government wages bill is about 9.8 percent for Middle East and North Africa, versus about 5.4 percent for the rest of the world average.

"What that tells you is that if you’re in the public sector, lets say in the oil sector, the private sector can’t compete in terms of wages, and that disparity has to normalise…you’ve got to allow the private sector to come in and participate and it goes beyond just giving them tax incentives or subsidies, it also comes down to having some sort of levelling out of public wages and private wages.”

However with governments across the MENA region increasingly aware or their youth unemployment problem - and putting in place schemes to address the issue –- why is there  such a lag in youth job creation?

According to Masud, security risks, part of the ongoing fallout from the Arab Spring, are adding another layer of complexity to the problem of job creation in the Mena region.

“What’s happening right now is you’ve got security risks that are layered on top of the structural issues. Women are not really part of the workforce as they should be. [Put] these structural challenges on top of the recent security risks and your just not able to tap into that local reserve immediately and that is what’s keeping the employment number fairly high right now."

“Programmes are announced and by the time they are implemented on the ground, you really are in a scramble to get the right human resources to feed into them…because really you don’t want just anybody, you want the best talent to be able to get out of this situation.”

Filed under: BusinessGlobal Exchange

soundoff (9 Responses)
  1. yourblueprinttosuccess

    Reblogged this on Your BluePrint to Success and commented:
    Americans find ( a way to overcome unemployment.. They are trying to lower the percentage of unemployment all over the world.

    September 22, 2012 at 1:23 am |
  2. tangoargentino3

    Reblogged this on tangoargentino3's Blog.

    September 22, 2012 at 10:50 am |
  3. tory burch tote bags

    four. Searching for Outside Assist. If that problematic boss would not listen to reason, suppose outdoors the oneonone or section box:
    tory burch tote bags

    November 25, 2013 at 10:33 am |
  4. Billy Burnsed

    Not clear on what you may have in mind, Laila. Can you give us some more information?

    January 6, 2014 at 8:04 pm |
  5. How to get white teeth in a week

    This blog post is worth everyones attention. How could I find out more?

    January 25, 2014 at 5:55 am |
  6. Maria Coatley

    The other day, admiring the pictures taken for the duration of our current trip to rural Malawi with my new DLSR camera, the honest simplicity in the locals' existence got me thinking. Nigel Slater's dumbing-down of cookery indicates he rarely makes use of any of your interesting components in my local deli. But that's the fallout from obtaining PM Bliar to get a decade!|

    January 27, 2014 at 7:36 am |
  7. Davis Mcmanaway

    I usually don't reply lying on web pages except you boast various good quality comprehensible article.


    February 11, 2014 at 1:22 am |
  8. Matt Maez

    Good Post. it was interesting to read this.

    March 2, 2014 at 12:33 am |
  9. μπομπονιερες βαπτισης

    I really love your website.. Excellent colors & theme.

    April 12, 2014 at 8:54 pm |

Post a comment


CNN welcomes a lively and courteous discussion as long as you follow the Rules of Conduct set forth in our Terms of Service. Comments are not pre-screened before they post. You agree that anything you post may be used, along with your name and profile picture, in accordance with our Privacy Policy and the license you have granted pursuant to our Terms of Service.

About Global Exchange

Global Exchange explores how emerging markets are impacting and influencing the global financial community, at a time when business is a vital driver of the international news agenda.

Global Exchange is presented live from Abu Dhabi by emerging markets editor, John Defterios, who will be joined by CNN correspondents from around the world.

Global Exchange also includes the “GX20,” a global hotlist of some of the world’s biggest economic thinkers. The GX20 will be drawn from the key emerging markets, from across China, Russia, India and South Africa, contributing to the show and this blog.

Watch on CNN International Sunday to Thursday:

1100 ET
1600 GMT
1700 CET

Follow the show on Twitter @CNNGlobalEx and use the #CNNGlobalEx hashtag to join the conversation.

Powered by VIP