Speeches & Transcripts

Arab Forum for Development and Employment

February 24, 2014

Inger Andersen, Vice President Middle East and North Africa Riyadh, Saudi Arabia

As Prepared for Delivery

Your Excellency Eng. Adel Faqih, Minister of Labor in the Kingdom of Saudi Arabia
Director General Mr. Ahmed Luqman, Arab Labor Organization
Director General, Mr. Guy Ryder, International Labor Organization
President, Dr. Ahmad Mohamed Ali Al-Madani, Islamic Development Bank

Ministers, Ambassadors, Presidents and representatives of the Labor Unions and Employers’ Associations, Ladies and Gentlemen,

Allow me first to extend my sincere thanks to the Government and the people of Saudi Arabia and to the city of Riyadh for hosting this important Forum and for the gracious hospitality and welcome with which we have been received.

It is an honor for me to be here with you today to share a few thoughts on how we can deliver the promise of a bright future for the next generation - a future with jobs and opportunities for all.

Employment and access to the labor market continues to be a critical issue to the world. Jobs are a basic form of social engagement and a critical source of self-fulfillment and self-worth. Therefore, it is important to understand the layers of exclusion that can cause unemployment so that we can better identify policies that promote inclusion.

Arab countries are blessed with a young population, which represents an important asset and hope for the future. This blessing, however, has also caused challenges for societies and governments. Economies have not been able to generate enough jobs for the large number of new entrants to the labor market causing increased unemployment and idleness.

Let’s hear from a few voices of the Arab people, courtesy of Twitter:

“There are no jobs for high school women graduates. No universities will accept us and no employers want us. What is this bad luck?” said a young woman’s tweet this month.

“I’m not asking for the impossible and I don’t want to take what’s not mine. I’m asking for the simplest right of my rights, which is a job that suits my educational background” was the message from a second tweet.

These voices come from across the region whether in the social media, in university campuses, in cafés and over the family dinner conversations.

The unemployment numbers are staggering.  The Arab region persistently ranks higher than any other region and overwhelmingly reflects the numbers of youth and women. Joblessness is as high as 54%, which includes inactive and unemployed individuals between the ages of 15 and 64. Three of four working-age women do not participate in the labor force and constitute over 80 percent of the inactive population in the region.

In a World Bank study entitled Jobs for Shared Prosperity, we found that the rules and the incentives that govern labor markets in Arab countries have led to inefficient and inequitable outcomes.

In simple words, there are two sides to this problem, (1) JOBS. Economies in the region are not generating enough jobs and (2) SKILLS. The qualifications of many of those asking for employment are not the skills demanded by the labor market.

Let me focus on four strategic areas that address the labor issues in the MENA region.

1.      Policies encouraging competition and private sector investments for job creation

It’s not easy to start a new company or small business in many Arab countries.  Rules, red tape, regulations, bureaucracy, and the like make it a daunting task for any entrepreneur - even more so, if this is a young person starting out.  Often it is not what I know, but who I know that makes all the difference.

What’s more. Where competition is slow and low, where new technology is not quickly adopted, we see that new companies and businesses are even slower to start up.  Innovation and creativity are stifled.  Companies are less agile, they are heavy, slow and old.  In order to maximize job creation, companies should be nimble, dynamic and fast. But that takes a change in the policy environment.

I should mention, though, that some countries in MENA have taken steps, at very low costs, to improve openness and to reduce barriers to entry.   

2.      Realigning employment conditions so that the public and the private sector can compete on equal terms

Here we note that the flow of skilled labor to productive sectors continues to be limited. Public sectors in the region continue to offer better employment conditions. Restrictions for entry to the private formal sector have contributed to high rates of informal employment and joblessness, especially among youth and women.

Therefore, moving towards less restrictive labor market regulations would be more beneficial and easier to enforce. This, coupled with a reform of employment terms in the public sector, would result in even larger employment gains.

3.      Closing information gaps through meritocracy, vocational options and second chances

Living in the Arab world, we are all familiar with the word “Wasta” which is a demonstration of a structural problem in recruitments and filling job openings. Unfortunately, the importance of merit and competence in gaining jobs continues to be limited. Increased meritocracy in access to education and hiring opportunities, the availability of good technical and vocations training, and the provision of second-chance options are key elements for developing a productive workforce. This also helps create demand for the “right” skills in the “right” areas and reduces mismatches between education and labor market needs.

4.      Breaking the cycle for disadvantaged groups

We need to understand and recognize that the opportunities that are available to people are often a function of where they are born, their social status, their gender, their disability or the educational level of their parents. So social justice matters. Today, in many of the Arab countries, a person’s future prospects is determined by factors outside of their control. 

So there is a need for the countries in the region to advance progress towards targeted social safety net programs so that everyone has a chance to get ahead in life in spite of the circumstances into which they were born. Such reform programs could include reconsidering the implementation of universal subsidies; and using the freed up resources to protect the poor through social safety and security schemes..

So to conclude,

The biggest asset available to any economy is its people.  And the Arab world has the blessing of a young, vibrant, committed and engaged youth who want to take part in shaping the society of tomorrow through active participation in the labor market and the business world.  This is a huge advantage.  We know that imagination, fearlessness, courage and adventure belong to the young.  Given half the chance, and with God’s grace, they will start a business, enter the job market, innovate and create.  And by doing so, they can create a vibrant economy with jobs and opportunities for all.

It is our responsibility, the governments’,  the trade unions’, the employers’ and the international organizations’, to not spare any effort in supporting the region as we work to meet the promise of the future.

Events such as this Forum are the ideal time to think and strategize about the best policy options. Together we can identify common understandings of the issues at hand and present a shared commitment to a path forward.

Thank you very much.