Tunisian workers and miners block the entrance to the Labour Ministry HQ in Tunis in April, 2012
© AFP
Tunisian workers and miners block the entrance to the Labour Ministry HQ in Tunis in April, 2012
Last updated: July 16, 2013

An emerging world of unemployment

Banner Icon In the wake of financial crisis that harmfully hurt the developed economies and spilled over globally, enormous pressure has been imposed upon job markets worldwide.

It has become much harder for both governments and the private sector to tackle the task of creating more jobs, especially for young people. The global trend of unemployment has steadily risen over the last five years. According to the International Labour Organization (ILO), the deteriorating consequences of the economic slowdown have left some 197 million people without a job in 2012. This trajectory, ILO shows, is expected to continue over 2013, adding more than 5.1 million to the accumulated total of unemployed people.

Yet, there is a distinct feature in such trajectory; the uneven distribution of unemployment rates through the world. While a quarter of the increase in global unemployment in 2012 has been in the developed economies, the three quarters are visible across other regions.

Strikingly, the Middle East and North Africa are among the significant contributors to the red numbers globally. According to ILO, the Middle East together with North Africa is the only region in which the aggregate unemployment rate exceeds 10 per cent. For some countries, especially oil-importers, the scene is even gloomier with unemployment rate reaching 15 per cent.

In both Egypt and Tunisia, the governments are struggling

However, most pressure is certainly imposed on youth and females. The Middle East, as a recent report by the World Bank shows, has the highest youth unemployment in the world; 28.3 per cent in 2012 and expected to rise to 30% in 2018. Women, moreover, have been faced with the overwhelming burden of a rate at 19.3 per cent in 2012, more than twice the unemployment among men. The situation seems catastrophic when it comes to young women; in certain countries, such as the Gulf States, the unemployment reaches over 70 per cent while it is more than 30 percent in North Africa and the rest of the Middle East. 

Practically, for the unemployment problem to be addressed, economic growth is needed. However, the expectations regarding the Middle East’s economic recovery in the next few years are still relatively poor. While advanced economies’ governments are taking austerity measures and loose monetary policies to stimulate the economy and thus create more jobs, the governments in the Middle East are being challenged by an array of different approaches to deal with such issues.

Tackling the economic challenges in the Middle East, especially after the Arab Spring revolutions is not a technical task but rather a political one. To be sure, the social uprisings that have successfully overthrown dictators and pushed others to the fringe were mainly sparked by the frustrated and excluded youth. Politically, people were deprived from right of expression, political participation and collective actions, while, on the other hand, the majority dropped into poverty due to liberal economic policies that neglected social services and reasonable living standards.

Mohammed Bouazizi, the famous Tunisian vendor, whose death after a dispute with the police ignited the upheavals across the Arab countries, is just an epitome of the economically excluded Arab generations. Unsurprisingly, as more and more people were being excluded, the shadow economy (informal economy that operate outside all governmental regulations) has become much larger, contributing to about 30% of the national income in a country like Egypt.

In both Egypt and Tunisia, the governments are struggling to handle the battery of economic problems by borrowing more from abroad. Such measures are ignoring the very lessons from authoritarian regimes’ experiences that adopted the same policies but ended up with entrenching the anger and frustration among people. More importantly, adopting those policies by current incumbents does not take into account the politicization process that the uprisings ignited through the grassroots. In such unprecedented cases reforming the economy is a highly political issue. In the Middle East, the long-standing grievances are not likely to be addressed by technical means but rather by rewriting the social contract. It’s not only about the economy today.   

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Rami Khrais
Rami Khrais is a graduate in Economics and commentator on Middle Eastern politics.
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