Government Corruption Leads to Youth Unemployment

Government Corruption Leads to Youth Unemployment

A piece of News by Priya Shah come to add to the diverse and countless woes of the MENA region. The social media buzz reflecting the general sentiment that Government Corruption Leads to Youth Unemployment is more than skin deep. It is believed that the new vaccine might eradicate the pandemic and all fossil fuels usage but not cure the peculiar condition of most with prospects of lower quality life.

The MENA region where the UAE rated the least corrupt country, per Transparency International’s Corruption Perception Index (CPI) in 2019 happen to be the least populated areas where Government Corruption appears because of local Youth low levels of Unemployment.

However, in the same region, North African tend to be in the middle of the table with Morocco’s neighbours not precisely to be in a better situation with all current socio-economic upheavals mainly resulting through a generally spread corrupt system of governance.

Algeria and Egypt being notoriously at a much higher level, with Tunisia having the lowest level of corruption could be classed as the most socially street noisy that currently were joined by Iraq and Lebanon. Syria followed by Yemen score worse with significant decliners in corruption diversity.

Government Corruption Leads to Youth Unemployment

In the Middle East, Government Corruption Leads to Youth Unemployment

20 December 2020

The Middle East boasts one of the largest youth populations in the world. However, corruption and conflict, often instigated by Iran’s influence, have caused economic decline and rampant unemployment. Indeed, the spread of the COVID-19 pandemic has further compounded these problems. Since late 2019, anti-government protests have swept across Middle Eastern nations such as Iraq and Lebanon, seeking to eradicate their corrupt leaders and give rise to a new era of progress and prosperity in the region. However, for this to happen, these conflict-ridden nations must escape from Iran’s expansive influence and invest in economic and social development.

Corruption isn’t a new phenomenon in the Middle East, especially in Lebanon in Iraq, but the rise in anti-government sentiments shows that people have grown weary with their corrupt leaders. Indeed, the struggle to overcome their corrupt institutions and their legacies is proving to be a difficult task. According to Transparency International’s 2019 Global Corruption Barometer for the Middle East and North Africa, the Lebanese people demonstrated the highest perceptions and experiences of corruption out of the six countries evaluated. 89% of these individuals reported that corruption in government was particularly an issue in the country, and 68% believed that most or all government officials were involved in corrupt practices in some way. It is, therefore, no surprise that Lebanon scored a mere 28 out of 100 in the 2019 Corruption Perceptions Index, which assesses public sector corruption. Evidently, political corruption has gradually undermined citizens’ faith in the government, eroding the notion of administrative legitimacy.

Similarly, a comprehensive opinion poll conducted in 2019 found that 82% of Iraqis were concerned or very concerned about the role corruption played at the highest levels of government, and 83% believed that corruption in the country was worsening. While both Iraq and Lebanon have survived numerous conflicts over the years, corruption remains the primary threat to prosperity and stability in the nation.

Both Lebanon and Iraq have been the subject of violent conflicts and Iran’s meddling, exacerbating their stability. Over the past few decades, Iran has sought to expand its influence in the Middle East by embedding itself in domestic affairs, often through the use of proxies. To gain greater control, it utilizes corruption to establish an incentive for those in positions of power to follow the regime’s orders. This has proven beneficial for those in positions of power while leaving ordinary citizens behind. Today, the Ayatollahs have managed to establish a strong foothold of influence in nations like Lebanon, Palestine, Yemen, Syria, and Iraq, yielding greater instability throughout the already vulnerable region.

In Lebanon, Iran has established deep roots in the country’s political system through its proxy Hezbollah, a Shiite political party and military group that has been a significant facet of the Lebanese government since 1992. While Hezbollah remains a major fixture of the Lebanese political system today, its actions prove damaging to the country’s economy. The terrorist organization has adopted many of Tehran’s geopolitical policies, leaving the Lebanese suffering under the numerous sanction regimes, which have ruined the country’s already shaky economy.

In Iraq, Iran saw the apex of the Islamic State insurgency as a prime opportunity to insert itself into the country’s domestic affairs. By aligning itself with Kataib Hezbollah, an Iraqi Shia paramilitary organization that forms the backbone of the pro-Iran Popular Mobilization Units (PMU), it has been able to obtain significant control over Iraq’s political, cultural, and economic life. The Iranian regime has also been able to embed corrupt Iranian intelligence officers in cabinet and military level leadership positions in Iraq. Today, Kataib Hezbollah has been able to establish a sub-state in the country, which undermines the legitimacy of the legitimate state to advance Iranian interests and encourage corruption.

If Lebanon and Iraq maintain corrupt regimes and systems, they will not be able to rebuild their economies and offer valuable growth opportunities for their citizens. Indeed, corruption is a major obstacle to achieving economic growth and development. Corrupt regimes and practices negatively impact areas of commerce, the public sector, and daily life including investment protocols, taxation, public expenditure operations, access to and the quality of health and education services and human capital development and retention. This illicit activity also impacts the employment opportunities that are available to a country’s youth, who are usually the backbone of the workforce. Favoritism and bribes often form the pillar of recruitment processes rather than an equitable evaluation of skill sets. For a government to effectively undo the legacies of corruption, it must invest in social and economic development programs that emphasize education in important areas such as digital skills and English language skills. Without these qualifications, a labor force cannot be competitive in the global economic market.

Corruption remains rife in Lebanon and Iraq and it is time to usher in a new era, one that is free from corrupt regimes and their legacies. However, for these renewal efforts to be successful, both Lebanon and Iraq must work to eradicate Iran’s corrupt influence. The people need leaders who invest in the growth of their citizens and who will establish critical social and economic development programs, rather than advancing their own interests.

Government Corruption Leads to Youth Unemployment by Priya Shah

Priya Shah

MENA youth’s perception of the private sector

MENA youth’s perception of the private sector

The following article titled Oliver Wyman: MENA youth’s perception of the private sector by Georgia Wilson – Leadership is worth reading to comprehend the peculiar situation of the MENA youth. In effect, the region despite having the highest youth population shares in the world, as well as the highest rates of youth unemployment, there seems to be still some sort of freedom of choice between private and public service employment.

Business Chief looks at Oliver Wyman, and INJAZ Al-Arab recently conducted research on the youth perception of the private sector. 

Across the Middle East and North Africa (MENA) region, over 2,400 young people between the age of 16 and 36 were surveyed to gain insight into the youth perception of the private sector.

“It is critical to capture the perspective of the youth and assess what they require to bolster the private sector of the future. We see a healthy inclination towards entrepreneurship, and a clear idea of what factors can facilitate lifelong learning. These are both indicators of their perception of the private sector, which is key to sustainable economic growth of their countries and the region. The youth are a key driver in the realization of economic stability, and we are proud to support INJAZ Al-Arab in helping the youth to fulfill their economic potential,” commented Jeff Youssef, Partner at Oliver Wyman.

Key findings of the youth survey:

  • 79% feel positive about the private sector’s contribution to the economy – a 41% increase from 2018
  • 75% expect the private sector to grow in the next five years – an 11% decrease from 2018
  • 55% are discouraged from working in the private sector due to lack of opportunities and lack of competitive benefits – an 8% increase from 2018
  • 50% perceive the “who you know” favouritism within organisations, to be the primary obstacle when seeking private sector employment
  • 78% see themselves working in the private sector in the near future
  • 84% feel inspired to start their own entrepreneurial venture in the near future 
  • 53% see leadership, creativity and communication as the most important skills for the private sector

“For young people today, it is extremely important that they are well equipped with skills, knowledge, and sense of entrepreneurship to enter the workforce. INJAZ’s collaboration with Oliver Wyman will further allow us to tackle the issue of youth unemployment in MENA, as we are certain that the findings are of great benefit to multiple stakeholders and that our initiative reflects on their potential to impact policy reform, program creation, and educational institution transformation,” added Akef Aqrabawi, CEO at INJAZ Al-Arab.

For more information on business topics in the Middle East, please take a look at the latest edition of Business Chief Middle East.

Follow Business Chief on LinkedIn and Twitter.

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Knowledge Oman to step up support for Vision 2040

Knowledge Oman to step up support for Vision 2040

Times-News Service of February 2, 2020, informs that Knowledge Oman to step up support for Vision 2040, is fundamentally for enhancing skills and supporting job creation for the local population.

Knowledge Oman to step up support for Vision 2040
Tariq Hilal Al Barwanni, Knowledge Oman Founder. Photo: Supplied

Muscat: Enhancing skills and supporting job creation for locals is the new goal and vision 2020 for Knowledge Oman.

Speaking about the new plans, Tariq Hilal Al Barwanni, Knowledge Oman Founder said: “Supporting job creation by enhancing the necessary skills employers require from nationals to acquire is Knowledge Oman’s 2020 new goal and direction.”

This came as an announcement of the Sultanate’s multi-award winning knowledge-sharing platform’s strategic plan to make vision 2040 a reality. Knowledge Oman begins the new year with setting attainable goals, based on past achievements, which will support His Majesty Sultan Haitham bin Tarik in maintaining a prosperous and thriving country.

“Empowering the society with the necessary knowledge that is required to build a prosperous future is our key objective going forward. We will do this by aligning with vision 2040 and supporting His Majesty Sultan Haitham bin Tarik’s leadership,” he emphasised.

Since 2008, Knowledge Oman has managed within 12 years to solidify the vision of late His Majesty Sultan Qaboos bin Said bin Taimour of transforming Oman into a knowledge based society by impacting hundred of thousands of people with 74 initiatives in the form of projects, workshops, seminars that positively impacted students from college and universities, women, entrepreneurs and professionals from various industries.

Projects were supported by over 35 partners locally and internationally attracting over 80,000 registrations and 700 volunteers across the years.

Knowledge Oman received 4 awards that includes the Outstanding contribution to the cause of education from the World Human Resource Development (HRD) Congress.

Members of the platform consist of multinational group of both locals and expatriates living in the country with the passion of creating, sharing and exchanging knowledge.

“In planning our strategy for 2020, we are focusing on three key areas to support Oman towards a society which is rich in human, economic and natural resources that aligns with the 2040 vision. We are launching Knowledge Oman Talks, refining our Knowledge Oman Seminars and collaborating with like-minded partners to deliver initiatives that benefit the society” outlined Tariq.

Knowledge Oman Talks will manage and invite experienced professionals to schools, colleges, and universities to bridge the gap between academia & industry. Knowledge Oman Seminars will be enhanced to organise periodic events that discuss contemporary issues and offer suggestions for development to society. Moreover, Knowledge Oman will invite partners to collaborate on initiatives that benefit the society.

Knowledge Oman’s mission in the past was driven by the vision of late His Majesty Sultan Qaboos bin Said bin Taimour to create a knowledge-based society.

Optimistic about the year ahead and working under the leadership of His Majesty Sultan Haitham bin Tarik, Knowledge Oman will continue to build local and international partnerships and work towards providing people in Oman with the necessary knowledge and skills to meet the Oman Vision 2040.

Challenges for Saudi jobs market

Challenges for Saudi jobs market

ZAWYA #jobs of 18 April 2019, elaborated on the slowing growth that appears to be creating challenges for the Saudi jobs market, hence:

Hiring activity in the kingdom remains ‘subdued’, according to ICAEW/Oxford Economics survey.

Slowing growth creates challenges for Saudi jobs market

Image used for illustrative purpose Members of the Chambers of Commerce in the Saudi capital Riyadh vote for a new president of the commercial body in rare elections November 11, 2008.
Image used for illustrative purpose Members of the Chambers of Commerce in the Saudi capital Riyadh vote for a new president of the commercial body in rare elections November 11, 2008. REUTERS/Fahad Shadeed By Michael Fahy, ZAWYA

Growth in Saudi Arabia’s economy will slow slightly this year, creating a challenge in terms of generating enough jobs for its citizens, an economist has told Zawya.

A new Economic Insight: Middle East Q1 2019 report published by accountancy body ICAEW (Institute of Chartered Accountants in England and Wales) and Oxford Economics said that it expects economic growth in the Kingdom to slow marginally in 2019 to 2 percent, down from 2.2 percent in 2019 as oil revenue falls due to Organization of the Petroleum Exporting Countries-mandated production cuts and “only a modest acceleration in non-oil activity” due to the challenging business environment.

The report said that although it expects growth in Saudi Arabia’s non-oil sector to grow by 2.6 percent this year, supported both by an expansionary fiscal policy and reforms aimed at boosting the private sector, hiring activity remains “subdued”.

Mohamed Bardastani, ICAEW economic advisor and Middle East senior economist at Oxford Economics, told Zawya in a telephone interview that the jobs market in Saudi Arabia has been “extremely challenging, and we don’t see it changing any time this year”.

He explained that that in the two years between the end of 2016 and the end of last year, the country’s Labour Force Survey showed that more than 1.5 million jobs were lost among expats –  a result of “the economic slowdown, various fiscal consolidation measures, but most importantly the measures that the government took in terms of applying expat levies and expat dependent fees on private sector companies”, Bardastani said.

“The private sector, historically speaking, has been relying on expat workers. Around 80 percent of the private sector is made up of expat workers. So obviously, this will have ramifications on growth,” he said.

Moreover, unemployment among Saudi nationals remains stubbornly high at 12.7 percent, considerably above the 7 percent target set under the kingdom’s Vision 2030 goals.

“Historically speaking, the public sector most of the time absorbed the new job entrants. This is one of the main challenges in Saudi right now. I think it is the most pressing challenge, where you have around a 12-7-12.8 (percent) unemployment rate and you have around 400,000 graduates (each year), and then job creation is relatively weak,” he said.

Tough choice

Bardastani said that the government faces a difficult choice, “between either absorbing those new job market entrants and increasing its spending, which will lead to higher budget deficits” or continuing to push through reforms in the expectation that they create enough opportunities for private sector companies to generate jobs.

“I think, for sure, that’s going to take some time,” he said.

The survey also stated that it expects faster non-oil growth in the United Arab Emirates, but again a limited increase in employment opportunities.

Growth in the non-oil economy is set to increase to 2.1 percent this year, up from 1.3 percent in 2018, on the back of expansionary budgets and “pro-growth government initiatives”, such as the 50 billion dirham ($13.6 billion) ‘Ghadan 21’ initiative in Abu Dhabi, but job creation has slowed in key sectors, including services and manufacturing.

Bardastani said firms that have seen input costs rising have been unable to increase selling prices due to competitive pressures.

“So you have this squeeze in profitability margins. Many firms are becoming more efficient in terms of producing the output – they have to do more with less resources. That’s why job creation has been weak.”

A jobs survey also published on Wednesday by recruitment firm Michael Page was more upbeat on the prospects for Saudi jobseekers, stating that 64 percent of respondents were positive about the current job market in the kingdom. It also said 86 percent of respondents said that they expect the jobs market in Saudi Arabia to improve over the next six months.

In a press release announcing the survey results, Michael Page Saudi Arabia’s operating director, Domenic Falzarano, said: “Given the kingdom’s commitment to its Vision 2030, the bulk of the hiring is taking place in the financial services, infrastructure, entertainment, tourism and healthcare sectors.”

(Reporting by Michael Fahy; Editing by Mily Chakrabarty)

(michael.fahy@refinitiv.com)

Iran’s labour market failing to generate adequate employment

Iran’s labour market failing to generate adequate employment

Nader Habibi and Gholamreza Keshavarz Haddad in the University World News of June 8, 2018,  Issue No:509 elaborate on the lack of employment for university graduates after completing their degrees in Iran. Unlike all its peer countries in the MENA region, and despite all the difficulties, Iran has managed to sustain as normal a life as it could muster, but being no exception, Iran’s labour market failing to generate adequate employment could be looked from a different angle; that of normality. As a matter of fact, all MENA countries, monarchies and republics alike are to a certain degree, going through the same trauma: that of unemployment.  In any case, here is that article.

Graduates push school leavers out of low-skill jobs

In recent years Iran’s labour market has failed to generate adequate employment for the growing number of university graduates. As a result, not only has the unemployment rate among university graduates sharply increased, but a growing number of university graduates who have found employment are working in occupations that do not require university skills.

In the past three decades Iran has experienced a sharp increase in the annual enrolment of university students. The annual admission to institutions of higher education rose from 146,115 in the 1991-92 academic year to 1,174,897 in 2015-16, while the total number of students in higher education institutions rose from 588,228 in 1991-92 to 4,348,383 in the 2015-16 academic year.

This sharp increase was a result of a strong social demand for university education. Policy-makers reacted positively to this growing demand by rapidly expanding the admissions capacity of universities. Moreover, the government was able to limit the fiscal burden of this policy by allowing for the creation and expansion of private and non-profit universities such as the Islamic Azad University.

As a result of these developments the number of university graduates has sharply increased, but the quantity of new job vacancies has not kept pace with this growing supply. The impact of this labour market imbalance is visible, reflected in a high unemployment rate for university graduates. While overall unemployment has oscillated between 10% and 12% in the past decade, the unemployment rate for young university graduates has been between 15% and 20%.

This situation has received considerable attention in the domestic media and it is often referred to as a graduate unemployment crisis. The 2016 labour market statistics indicate that there were 1.185 million unemployed university graduates – some 36% of the total number of unemployed people. They included 797,000 graduates with four-year (bachelor) degrees and 224,000 with two-year (associate) degrees. The remaining 163,000 had masters and doctoral degrees.

This condition represents a substantial waste of higher education resources and human capital for the Iranian economy.

Overeducation

The high unemployment rate among university graduates, however, is not the only adverse consequence of the excess supply of university graduates in Iran. A growing number of university graduates who manage to find a job are employed in jobs that do not require university skills or do not match their university skills. As a result they are securing these jobs at the expense of less educated workers. In other words, a growing percentage of employees in low-skilled and semi-skilled jobs are university graduates who are overeducated for these positions.

A domestic online news site attracted attention to the plight of these university graduates by posting several photos in a July 2016 article.

For a more accurate investigation of the growing number of overeducated persons who are active in Iran’s labour market, we have calculated the share of employees in various occupations who hold at least a two-year associate degree from a higher education institution. The data for our analysis comes from the annual Households Income and Expenditure Survey database that is produced by the Statistical Center of Iran.

In this annual survey the level of education and job categories of wage-earning workers and self-employed individuals are available and allow us to calculate the share of overeducated workers in each occupation category. Our findings show that the share of economically active individuals in low- and unskilled jobs who have a university degree is on the rise.

We observe that in all of these occupational categories the share of employees with at least a two-year degree has consistently increased. Occupations in the service and retail sector have experienced the largest replacement of less educated workers with university graduates.

We observe that by 2015 nearly 57% of employees in office work and customer service occupations had at least an associate degree. For sales-related occupations, the share of workers with university degrees grew from 4.3% in 2001 to 17.3% in 2015.

As for lower skill categories, such as vehicle drivers, or unskilled workers, the share of employees with university degrees is relatively small, but an upward trend is noticeable.

Among unskilled service sector workers, for example, the share of university graduates increased from 0.7% in 2001 to 7.1% in 2015. These are mainly manual and routine tasks for which no university degree is required and a university graduate will rarely work in these occupations if a more skilled job is available.

We have calculated that the share of workers with at least an undergraduate degree in semi-skilled and unskilled categories is substantial in several categories, such as office and retail workers.

Furthermore, in all unskilled occupations that do not require even a high school diploma, we observe that the share of workers with undergraduate degrees ranged between 1% and 4% in 2015. While these university graduates must have felt fortunate to be employed, they are clearly not using their university skills in these occupations.

Self-employment

As for the self-employed in semi-skilled and unskilled economic activities, the number who have completed at least a two-year university degree is also rising in Iran. This growth is particularly noticeable in agriculture, industry and construction, rising from under 1% in 2001 to more than 6.5% in 2015. Furthermore, at least 5% of the self-employed working in unskilled industrial and agricultural activities hold four-year degrees.

One of the undesirable consequences of the trends that we have observed is that the trickle down of higher-educated jobseekers into low-skilled jobs is crowding out the less educated workers from low-skilled positions. This process pushes a share of high school graduates from employment in low-skilled jobs into unemployment.

The reduction of job opportunities and the higher risk of unemployment for high school graduates might compel them to enrol in a university degree programme in order to improve their chances of employment, even in occupations that do not require university degrees.

This adverse incentive will lead to a high rate of participation in higher education without any direct connection to a labour market demand for university skills.

Photo credit: IranKhabar online news

  • The employment data presented in this article are available in this online file.

Nader Habibi is Henry J Leir Professor of Practice in Economics of the Middle East at the Crown Center for Middle East Studies and senior lecturer in the department of economics, Brandeis University, United States. Gholamreza Keshavarz Haddad is visiting faculty at the Crown Center for Middle East Studies at Brandeis University and is associate professor at the Graduate School of Management and Economics, Sharif University of Technology, Iran.

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