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Losing but
 not out Sarah Young / 19 July 2013 According to the International Labour Organisation, the plight of unemployed youth around the globe is getting worse — and the social and economic impacts could be felt for decades to come. But while the UAE sits in a region with the worst youth unemployment rate of all and experts say it has not escaped the situation entirely, youth in the country are more optimistic about the situation. As of May this year, an estimated one in four young people worldwide were not in employment, education or training. Increasingly known as the ‘lost generation’, or ‘generation jobless’, particularly in Europe where many are unemployed despite completing higher education, the youth unemployment question is becoming more and more of a worry for decision-makers the world over. The ILO Global Employment Trends for Youth 2013 report found persistent unemployment, a proliferation of temporary jobs and growing youth discouragement in advanced economies; and poor quality, informal jobs in developing countries. The long-term impact of this youth employment crisis could be felt for decades, it said. And the Middle East, which includes Bahrain, Iran, Iraq, Jordan, Kuwait, Lebanon, Occupied Palestinian Territory, Oman, Qatar, Saudi Arabia, Syria, UAE and Yemen, has the highest youth unemployment rate of all,  projected to increase from 28.3 per cent to 30.0 per cent in 2018. ILO regional employment specialist Mary Kawar said GCC countries had not escaped the youth unemployment situation, despite their oil-based prosperity and high rates of economic growth. “Their increased efforts to improve their education systems and increase youth enrollment in education did not translate into higher youth employment rates, but on the contrary, youth unemployment was still high, oscillating around 20 per cent over the last few years.” Youth had much lower chances of finding employment than adults because of their lack of work experience and occupational skills required by employers. ILO figures place overall UAE youth unemployment at more than 10 per cent. Both Kawar, and labour market expert Karim Abdallah, a senior associate at consultancy Booz & Company, point to the abundance of cheap migrant workers, and locals’ preference for the public sector, the dominant employer for nationals particularly in the UAE, as contributors to the problem.   Public and private sectors Kawar said segmentation between the public and private sectors could eventually lead to the saturation of the public sector and its inability to employ all those seeking work, and governments needed to address wage disparities between the public and private sectors, improve nationalisation policies and reduce reliance on migrant workers, especially unskilled ones. Abdallah agreed many nationals did not want to work in low-skilled jobs, and had high expectations for salaries, hours, and working environments. “(For instance), they don’t want to work in construction — there’s long hours, it’s outside, it’s dirty. “You don’t see this in other countries.” Labour-intensive industries such as construction needed to be upgraded in terms of technology and working practices, to make them more attractive to work in, he said. High dependency on oil revenues, an industry which did not supply a lot of jobs, also needed to lessen and the region needed to “start thinking about how to invest these dollars in tomorrow’s labour and industries”. “(And) from a basic economic policy standpoint, you don’t want your private sector to be dominated by non-nationals because this is the majority of your economy, this is where the growth happens.” It was more important that the “value proposition” of the private sector was seen to be as good as the public in order to attract nationals, and this included factors like work environment and career growth — not just salaries.   Education and skills Other contributors to high rates in the Middle East included large youth population’s, skill mismatches, and education systems which had not evolved as quickly as the industries around them, Abdallah said. Many in the GCC were graduating with degrees that did not align to market requirements, such as humanities, when engineering, science and management were needed.   Kawar added more needed to be encouraged into technical and vocational education. Part-time work during school vacations and internships should also be mandatory for students to help fix the lack of work experience, she said.   Future better in UAE However, despite the global doom and gloom, Abdallah says the future picture for GCC countries is slightly better. While the global unemployment crisis and the events of the Arab Spring would send even more non-national job-seekers this way — who were willing to work for less salary, benefits and less flexible hours — and potentially exacerbate local unemployment, it was also an opportunity for the GCC, and in particular the UAE, to benefit, he said. “The GCC countries this year and last year, and for the foreseeable future, are going to have strong growth and will be able to pick the best employees (from the world) because they are becoming a magnet, especially the UAE. “It’s not just a nice salary … nowadays living in the UAE has become very attractive, for (things like) lifestyle, healthcare, and education.” As long as growth remained high in the UAE the country needed “to keep the (immigration) gate a bit open”, he said. “The more capable people we bring, the faster our economy will grow.” In fact, while the future was to some degree unclear, Abdallah said he was not particularly worried about the UAE, given high growth, government investment in improving education, and a decreasing dependency on oil in Dubai which was being replaced with a focus on more job-rich industries such as service, retail and construction. “In the next few years, unemployment will not change and will remain high. In the long term, things will get better. There’s very high growth in the UAE and this will continue, in areas like education too — you can see how many international schools and universities are opening here… which really starts to close the education and skill mismatch in the country.”   Reforms needed However, there were still measures government could take in the short term to ease youth unemployment, he said. These included programmes focusing on training and retraining. “For example, you take a person who has graduated as a history major and create a programme for six months so they can get skills to work in a bank.” Other measures included job creation programmes, subsidies, a review of laws and regulations around flexible employment and part-time work to allow youth to get experience, and more support for Small Medium Enterprises (SMEs). “This is also a cultural thing we need to work on. “In the ME, people are afraid of trying something in case they fail. In the US, they see it as experience which takes you to the next venture.” Co-founder of Nabbeesh.com, an online skills marketplace focusing on freelance, part-time and contract-based jobs, Loulou Khazen Baz said youth unemployment was a significant issue. “In the UAE, many can’t get motivated enough to get a job, compared with other areas which might be war zones, or where economic growth is not so good. “The biggest problem employers complain of is that universities (here)are not producing graduates with the right degrees or skills.” Many ME youth also did not view freelance work as a mainstream option, despite this becoming increasingly so globally, she said. Khazen Baz spoke with young job-seekers at UAE university career fairs this year. “You have the expat students who are very concerned about visas and finding a job to be able to stay in Dubai. The Emiratis have different challenges. Although I don’t want to generalise, many were still leaning towards government jobs. “(Overall) I think there’s a bit of a lack of confidence. You could see how worried they were and rightly so — it’s pretty tough out there and there’s a lot of competition.” sarah@khaleejtimes.com Continue reading →