Unemployment levels are on the rise worldwide and growth rates are not keeping up, a UN report has found. Wael Gamal writes The state of unemployment worldwide is bleak, a recent report by the International Labour Organisation (ILO) revealed, and especially so for the Middle East and North Africa region. A stagnating world economy combined with post-11 September developments have left more people without jobs. The report, entitled "Global Employment Trends", said the number of unemployed has risen to new heights worldwide, with little prospect of any improvement in the global employment situation this year. The ILO estimates that the number of the unemployed worldwide grew by 20 million between 2000 and the end of last year, when it reached a total of 180 million. Although Latin America and the Caribbean were the hardest hit, with recorded joblessness rates rising to nearly 10 per cent, the situation in the Middle East and North Africa (MENA) region was no less dramatic. Overall economic conditions have declined over the past two years, with GDP growth falling from more than six per cent in 2000 to 1.5 per cent in 2001. At the end of 2002, the number of working poor, or workers living on $1 or less a day, resumed its upward trend, returning to the level of 550 million recorded in 1998. "To absorb new entrants into the labour market and reduce working poverty and unemployment, at least one billion new jobs are needed during the coming decade to get on track for the UN goal of halving extreme poverty by 2015," the report said. Growth, therefore, is the only way to prevent the explosion of the unemployment bomb. With the expected war on Iraq, this task becomes all the more difficult to achieve, especially in the MENA region, where there exist severe structural economic problems. "Several countries continue to be extremely vulnerable to climatic and commodity price shocks," the report said. "Poverty, though relatively low compared to any other developing region, persists in large pockets. Human capital development is low and under-employment burdens the income generation potential of the rapidly growing labour force." The MENA region recorded the highest unemployment rates among developing regions in the 1990s. Unemployment rates ranged from over three per cent in some countries to close to 29 per cent in Algeria. The number of the unemployed in the region was estimated at over 22 million (17.6 per cent of the labour force). "Difficult internal reforms are needed to increase integration with the rest of the world. These will have significant consequences in terms of both economic and employment growth," the report said. Dismissals and redundancies resulting from reductions in the size of the public sector pushed up unemployment. Youth unemployment was distressingly high in some countries, such as Syria, Algeria, Bahrain and Morocco. Moreover, the Gulf countries are increasingly adopting policies to replace migrant workers with their own nationals, a move that could have significant consequences for employment as well as remittances to countries supplying labour. Meanwhile, the unemployment burden is shouldered mostly by youth, women and children. The rate of women's unemployment is higher than men's and disproportionately high given women's smaller share in the labour force. "In Egypt, the 22.6 per cent unemployment rate for women is four times higher than that of men. Unemployed women appear to be mainly new labour force entrants, but also include previously employed women who lost their jobs following restructuring or privatisation. But educated women are more likely to be unemployed than educated men," the report said. Youth unemployment also represents a major challenge. Unemployment among the 15 to 24 age group stands high for women as well as men, ranging from close to 13 per cent to almost 39 per cent. Child labour in the MENA region continues to be a persistent problem. The ILO estimates that in 2000, over 13 million children were economically active, which represents 15 per cent of the total child population in the region. The emergence of neo- liberal-driven policies have complicated matters. Combining government employment and employment in public enterprises brings the share of employment in the broader public sector among wage employees to as much as "35 per cent in Egypt, 50 per cent in Jordan and 60 per cent in Algeria", the report said. But public sector reforms initiated in the 1990s have meant significant downsizing of the public sector. The subsequent redundancies were significant and exceeded the initial estimates. The decline in government spending also had consequences for a private sector that needs to consolidate, streamline and downsize as a means of coping with both ongoing economic reforms and the economic slowdown. As a result, the informal sector has accounted for the bulk of employment creation in the recent past. In North Africa alone, the report estimates that 48 per cent of non-agricultural employment is informal. Self-employment, estimated at 31 per cent of non-agricultural employment in North Africa, is up from 23 per cent 10 years ago. The informal economy contributes up to 27 per cent of GDP in North Africa. In order to absorb all the new entrants into the labour force, half the unemployment rate and half working poverty, the MENA region needs to grow at a minimum of 4.7 per cent. The highest the figure has been is 2.9 per cent. The report's grim conclusion is clear: the region's growth rates are unlikely to head off the major crisis of unemployment it is heading towards.
