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Close Skills Gaps and Gender Gaps to Prepare MENA for the Future of Jobs

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[yt_dropcap type=”square” font=”” size=”14″ color=”#000″ background=”#fff” ] T [/yt_dropcap]he Middle East and North Africa (MENA) is endowed with a young, growing and increasingly well-educated population, which, if skilled for tomorrow’s jobs and offered new and productive employment opportunities, has the potential to significantly enhance the region’s growth.

However, with 31% of young people unemployed, new and urgent action is needed to realize this potential. In addition, even when skilled talent is present – particularly educated women – it is not being deployed effectively in the workforce.

The analysis in the new report, Future of Jobs and Skills in MENA: Preparing the Region for the Fourth Industrial Revolution, released today, also finds that there is no room for complacency. Few of MENA’s economies are fully prepared for the impending disruption to jobs and skills brought about by technological change. The crucial question for the region, therefore, is how to capitalize on this short-term demographic and technological window of opportunity and prepare its working-age population as well as today’s schoolchildren for the future of work. The report aims to serve as a practical guide for business, government, civil society and education leaders.

Key findings from the report, which uses new data from LinkedIn, include:

Young people are almost five times more likely to be unemployed than their adult counterparts in the region. However, in contrast to global patterns, graduates make up nearly one-third of the total pool of unemployed in the region.

The United Arab Emirates, Egypt, Jordan and Saudi Arabia lead the way in the local availability of high-skilled jobs. Common forms of high-skilled employment in the MENA region include commercial bankers, accountants, school teachers and academics, engineers and information technology consultants, according to LinkedIn’s data. Tracking trends in the growth and decline of roles in MENA labour markets reveals a growing demand for health, education, care, personal services as well as creative, travel and tourism professionals.

As the region already faces a skills gap according to business leaders, the region will need to prepare current and future workforces for the future of jobs, particularly high-skilled roles, to remain competitive. Analysis suggests that 41% of all work activities in Kuwait are susceptible to automation, as are 46% in Bahrain and Saudi Arabia, 47% in the UAE, 49% in Egypt, 50% in Morocco and Turkey, and 52% in Qatar. Reskilling and upskilling sections of the workforce that are likely to be affected will also be critical for the region to manage the transformations underway in the labour market.

Often having higher levels of educational attainment and workplace skills, women in MENA represent significant human capital potential. However, workforce gender gaps remain wide, ranging from just over 40% in Kuwait and Qatar to nearly 80% in Algeria and Jordan. Integrating more female talent will be a key pathway for workforce planning in the region.

“The data show that, to prepare for the future of work, the region must take action to invest in talent, close skills and gender gaps and create high-value-adding jobs to unlock the potential of a young population and to equip economies to tackle the challenges of the 21st century,” said Saadia Zahidi, Head of the Education, Gender and Work System Initiative and Member of the Executive Committee at the World Economic Forum.

Action is underway to meet these jobs and skills challenges and opportunities in MENA. As part of the broader efforts of the World Economic Forum’s System Initiative on Shaping the Future of Education, Gender and Work, projects to advance skills and gender parity in the region are being scaled up and will be further developed at the World Economic Forum on the Middle East and North Africa, to be held in Jordan on 19-21 May.

To prepare workforces for the future of jobs, the New Vision for Arab Employment (NVAE) project serves as a platform providing new insight and bringing together business efforts to address future-oriented skills development. The project also supports constructive public-private dialogue for urgent and fundamental reform of education systems and labour policies.

“Our region, with its young population, stands ready to gain from its enormous human potential – but we need to do our part to make it happen. We need to do more to skill the population for jobs, now and in the future, and to provide the high-value employment this region needs to excel through the Fourth Industrial Revolution. The New Vision for Arab Employment contributes to this goal and is committed to creating a lasting impact on the MENA region,” said Omar K. Alghanim, Chief Executive Officer, Alghanim Industries and Chair of the NVAE.

The NVAE has garnered commitments from businesses across MENA to provide employability skills to 250,000 people in the region. The project is inviting businesses, in partnership with government, civil society and the education and training sectors, to scale this action and contribute to broader targets to skill, upskill or reskill 1 million people by 2018 and 5 million people by 2020 in MENA, Africa and other regions.

To help close workplace gender gaps, the Gender Parity Task Force model brings public- and private-sector leaders together to better understand the barriers to women progressing in the workplace and to take action to accelerate progress. The task force model – previously piloted in four countries and now being scaled across the world – focuses on shifting stereotypes about women in work, increasing female participation in the labour market at all levels, and closing the gender wage gap. Bahrain will be the first country in MENA to implement this enhanced model, acting as a trailblazer in the region for this collaborative action on gender parity.

“With relatively high rates of female education, Bahrain stands to make significant economic gains from integrating more women into the workforce. Progress is already underway in the country and we look forward to building on this through a new Gender Parity Task Force, working across the public and private sectors to accelerate change,” said Khalid Rumaihi, Chief Executive of the Bahrain Economic Development Board.

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Structural Reforms Needed to Put Tunisia on Path to Sustainable Growth

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Decisive structural reforms and an improved business climate are essential to put Tunisia’s economy on a more sustainable path, create jobs for the growing youth population and better manage the country’s debt burden, according to the Winter 2021 Edition of the World Bank’s Tunisia Economic Monitor.

Titled “Economic Reforms to Navigate out of the Crisis” (in French, “Réformes économiques pour sortir de la crise”), the report estimates a slow economic recovery from COVID-19, with projected growth of 3% in 2021. Weighing on this recovery is rising unemployment, which increased from 15.1% to 18.4% in the third quarter of 2021, affecting the youth and people in the western regions hardest.

The report outlines how the weak recovery puts pressure on Tunisia’s already strained public finances, with the budget deficit still elevated at 7.6% in 2021, despite a small contraction from 9.4% in 2020.  The budget deficit is projected to gradually decline, reaching 5% to 7% of GDP in 2022-23, helped by lower health-related expenditures and provided that the moderately positive trajectory of spending and revenue are maintained. However, Tunisia’s rising public debt will be hard to finance without decisive public finance and economic reforms, the report noted.

“Just like everywhere else, COVID-19 has adversely affected Tunisia’s economy and the report strongly highlights the need to address longstanding challenges to sustainable growth, including improving the business environment,” said Alexandre Arrobbio, World Bank Country Manager for Tunisia. “To emerge from this crisis, Tunisia needs to adopt decisive reforms to promote private sector development, boost competitiveness and create more jobs, especially for women and youth.”

The first chapter of the report analyzes potential reasons behind Tunisia’s slow economic recovery and highlights two specific factors: the country’s reliance on tourism and transport services; and the rigidity of the business climate, including restrictions on investments and competition which constrain the reallocation of resources in the economy.

The second chapter elaborates on key barriers to competition, arguing that Tunisia’s current regulatory environment restricts competition and discourages the development of new businesses. Looking ahead, the report recommends that policy reforms to ensure a level playing field in every sector are essential in order to boost employment for Tunisians and to increase purchasing power.  

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Lebanon’s Crisis: Great Denial in the Deliberate Depression

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The scale and scope of Lebanon’s deliberate depression are leading to the disintegration of key pillars of Lebanon’s post-civil war political economy. This is being manifested by a collapse of the most basic public services; persistent and debilitating internal political discord; and mass brain drain. Meanwhile, the poor and the middle class, who were never well served under this model in the first place, are carrying the main burden of the crisis.

According to the World Bank Lebanon Economic Monitor (LEM) Fall 2021 “The Great Denial”, Lebanon’s deliberate depression is orchestrated by the country’s elite that has long captured the state and lived off its economic rents.  This capture persists despite the severity of the crisis –one of the top ten, possibly top three most severe economic collapses worldwide since the 1850s; it has come to threaten the country’s long-term stability and social peace. The country’s post-war economic development model which thrived on large capital inflows and international support in return for promises of reforms is bankrupt. In addition, the collapse is occurring in a highly unstable geo-political environment making the urgency of addressing the dire crisis even more pressing.

The LEM estimates real GDP to decline by 10.5 percent in 2021, on the back of a 21.4 contraction in 2020. In fact, Lebanon’s GDP plummeted from close to US$52 billion in 2019 to a projected US$21.8 billion in 2021, marking a 58.1 percent contraction—the highest contraction in a list of 193 countries.

Monetary and financial turmoil continue to drive crisis conditions, under a multiple exchange rate system which poses valuable challenges on the economy. The sharp deterioration in the Lebanese Lira persisted in 2021, with the US$ banknote rate and the World Bank Average Exchange rate depreciating by 211 and 219 percent (year-on-year), respectively, over the first 11 months of the year. Exchange rate pass through effects on prices have resulted in surging inflation, estimated to average 145 percent in 2021—ranking 3rd globally after Venezuela and Sudan. Inflation is a highly regressive tax, disproportionally affecting the poor and vulnerable, and more generally, people living on fixed income like pensioners. Food inflation remains concerning as it forms a larger proportion of the expenses incurred by poorer households who are struggling to make ends meet with their deteriorating purchasing power.

Government revenues are estimated to almost halve in 2021 to reach 6.6 percent of GDP, marking the 3rd lowest ratio globally after Somalia and Yemen. The expenditure contraction was even more pronounced, led partially by drastic cutbacks in primary spending, which has reinforced the economic spiral. Meanwhile, gross debt is estimated to reach 183 percent of GDP in 2021, taking Lebanon to the 4th highest ratio in the world preceded only by Japan, Sudan and Greece.

A rare relative bright spot in 2021 has been tourism, which helped hold the current account deficit-to-GDP ratio steady.

Starting Spring 2021, a disorderly termination of the foreign exchange (FX) subsidy commenced and was in full force by the summer. The path authorities followed to the subsidy removal was opaque, inadequately coordinated and lacked timely pro-poor alleviation measures. As a result, subsidy removal mostly benefited importers and smugglers while precious and scarce FX resources were drained.

“Deliberate denial during deliberate depression is creating long-lasting scars on the economy and society. Over two years into the financial crisis, Lebanon has yet to identify, least of all embark upon, a credible path toward economic and financial recovery,” said Saroj Kumar Jha, World Bank Mashreq Regional Director. “The Government of Lebanon urgently needs to move forward with the adoption of a credible, comprehensive and equitable macro-financial stabilization and recovery plan and accelerate its implementation if it is to avoid a complete destruction of its social and economic networks and immediately stop irreversible loss of human capital. The World Bank reconfirms its readiness to continue to support Lebanon in addressing the pressing needs of its people and challenges affecting their livelihoods.”

As detailed and called for in previous issues of the LEM, this strategy would be based on: (i) a new monetary policy framework that would regain confidence and stability in the exchange rate; (ii) a debt restructuring program that would achieve short-term fiscal space and medium-term debt sustainability; (iii) a comprehensive restructuring of the financial sector to regain solvency of the banking sector; (iv) a phased, equitable, fiscal adjustment to regain confidence in fiscal policy; (v) growth enhancing reforms; and (vi) enhanced social protection.

Particularly, initiating a comprehensive, well-structured and swift reform of the electricity sector is critical to address the long-standing and compounding challenges of this sector which is at the center of Lebanon’s economic and social recovery. In addition, Lebanon needs to step-up efforts to ensure efficient and prompt delivery of social protection assistance to the poor and vulnerable households struggling under the continuing economic crisis.

The Special Focus section of the LEM “Searching for the External Lift in the Deliberate Depression” examines the reasons for the weaker than expected increase in exports considering the Lebanese Lira’s sharp depreciation; it analyzes the failure thus far for the external sector to sufficiently benefit from increased price competitiveness and become a more robust driver of growth. The Special Focus finds that Lebanon’s exports are inhibited by three factors (outside of the crisis itself): (i) (pre crisis) economic fundamentals; (ii) global conditions; and (iii) political/institutional environment.

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Nearly half of City GDP at Risk of Disruption from Nature Loss

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Cities contribute 80% to global GDP – but they also account for 75% of global greenhouse gas emissions. Integrating nature-positive solutions can help protect cities from growing risks associated with extreme weather while driving sustainable economic growth.

In collaboration with the Alexander von Humboldt Institute and Government of Colombia, the World Economic Forum’s BiodiverCities by 2030 Initiative published a report addressing the urgency of cities’ untenable relationship with nature. The Initiative’s goal is to reverse this existential global threat and move forward with a plan that will result in cities and nature co-existing in harmony by the end of the decade.

The report is a call for multistakeholder action to integrate nature as infrastructure into the built environment. In making the economic case for BiodiverCities, Nature-based Solutions (NbS) for infrastructure and land-sparing are found to be cost-effective ways for cities to innovate and meet current challenges. Spending $583 billion on NbS for infrastructure and on interventions that release land to nature could create more than 59 million jobs by 2030, including 21 million livelihood-enhancing jobs dedicated to restoring and protecting natural ecosystems.

“In the conventional paradigm, urban development and environmental health are like oil and water,” said Akanksha Khatri, Head of Nature and Biodiversity, World Economic Forum. “This report shows that this does not have to be the case. Nature can be the backbone of urban development. By recognizing cities as living systems, we can support conditions for the health of people, planet and economy in urban areas.”

The report finds that by incentivizing investments in natural capital, cities can unlock the benefits of nature. Nature-based Solutions are on average 50% more cost-effective than man-made alternatives and deliver 28% more added value. This capitalization, in turn, instils and nurtures nature-positive values and fosters bio-inspired innovations that will ultimately optimize economic competitiveness and prosperity.

“As cities think about building for the post-pandemic future, they have a priority to provide their citizens with a more equitable and prosperous quality of life by protecting their natural resources,” said Mauricio Rodas, Co-Chair of the Global Commission on BiodiverCities by 2030 and former mayor of Quito, Ecuador. “In this report, we offer actionable solutions to heal the relationship between cities and nature. We need all stakeholders to invest in urban nature.”

“Cities don’t need to be concrete jungles in conflict with nature in and outside their boundaries,” said Jo da Silva, Arup Global Sustainable Development Leader. “They should be places where all people and nature co-exist and thrive together. Nature-based solutions offer wider benefits than traditional engineered ‘grey’ solutions – such as improving resilience, increasing citizens health and wellbeing and moving cities to net zero. Using powerful new digital mapping tools to help us understand cities as complex systems, we are increasingly adopting nature-based solutions in our projects – this needs to be accelerated on a global scale.”

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