The unemployment crisis in the Middle East and North Africa (MENA) region has the potential to trigger another wave of instability if it isn’t addressed, the International Monetary Fund (IMF) has warned. Countries in the MENA must accelerate economic reforms and tackle the crises effecting women and young people in particular.
Failure to address the gender gap and youth unemployment is costing the region $1 trillion, the report published yesterday found. With 25 per cent of the youth jobless, the region’s youth unemployment is said to be the highest in the world and has “worsened significantly” since 2010 — the year before popular uprisings triggered upheaval across the Arab world.
“The time for a comprehensive reform agenda with specific policies has come,” Jihad Azour, the IMF’s Middle East director, told the Financial Times. “The aspirations of people are not yet fully met . . . the question is, should we wait until we see another explosion or should we address the root cause of the problems?”
Azour listed the essential reforms that were needed telling the FT “required reforms included improving the business environment, easing access to finance, tackling corruption and revamping expensive, inefficient subsidy systems to better serve the needy and free state funds for investment to boost growth”.
In eight MENA countries youth unemployment is already more than 30 per cent, including in the Arab world’s biggest economy Saudi Arabia, and its most populous Egypt.
The forecast for the region looks bleak. Sixty per cent of the population are already under the age of 30 and a further 27 million youths are expected to enter the labour market over the next five years.
The IMF report was released as the region struggles to grapple with lacklustre growth, wide budget deficits and rising debt. A further concern for the countries in the region is the drop in foreign direct investment. Economic and political uncertainty, the IMF said, caused foreign direct investment inflows to drop 53 per cent between 2010 and 2015.
Against this backdrop, anger is mounting over joblessness and cuts to state subsidies as governments struggle to balance their books after a prolonged period of subdued oil prices and political instability, the FT pointed out.