http://news.bbc.co.uk/2/hi/7936004.stm
With a majority of its population under the age of 30, the Middle East is the youngest region in the world. Understanding the pressures that this “youth bulge” exerts on the labor market can help us gain a better understanding of a viable economic approach that responds to the needs of a growing young population in search for work.One pillar of any viable economic approach must be how to weed out corruption. A recent article in the Daily Star, the pan-Middle East English language newspaper edited in Beirut, noted that corruption denies job opportunities in labor-exporting MENA countries such as Lebanon, Egypt, Yemen, Syria and Iraq, who, unsurprisingly are also the top corruption offenders according to Transparency International’s 2009 Corruption Perceptions Index.
Corruption in these states and others in the Middle East and North Africa can partly be attributed to the excessive dependence on employment in the public sector. A young adaptive workforce that is more focused on obtaining private sector jobs would be better able to take advantage of the demographic “window of opportunity” that could lead to higher economic growth rates. It would also allow for a greater realization of the benefits of government reform efforts.
If MENA governments could introduce a new social contract in which public sector work is seen as a temporary public service rather than a life-long entitlement, the economic and social payoff of embarking on a more ambitious private sector-led growth agenda could be immense.
The lack of private employment in the Middle East has its origins in Arab socialism for Arab countries and the Islamic Revolution in Iran. These movements have given rise to the misguided perception that large private enterprises are exploitative. In reality, government will eventually not be able to create the jobs for a young and increasingly well educated labor force that is looking for opportunities to use their skills and creativity. Sooner or later these jobs will have to come from the private sector and the future prosperity and social cohesion of the MENA region rests in great part on the ability of governments to enable the private sector to respond to this job creation challenge.
The severity of demographic pressures has strained public sector employment and even if these institutions could accommodate the youth bulge, they are not well suited in a world where innovation and entrepreneurship are the drivers of economic growth. A more vibrant private sector in MENA would thus contribute to greater economic integration of the region, allowing for a conducive business environment where new entrepreneurs can emerge to reap the benefits of reform efforts.
Published Date: February 12, 2010