With the right policies in place, unemployment could be a thing of the past, Niveen Wahish looks at the findings of a World Bank report A recent report by the World Bank on migration and job mobility in the Middle East and North Africa (MENA) region appears at first sight to take little or no regard of the current reality, as shaped by the current global economic slowdown. But in fact, as the title of the report indicates, Shaping the Future: A long-Term Perspective of People and Job Mobility in the Middle East and North Africa, the report examines the status of job markets in 40 years time. Speaking at the regional launch of the report this week Emmanuel Mbi, World Bank country director for Egypt, Yemen and Djibouti, acknowledged that the launch of the report may be taking place "at a time labour mobility may slow down". He said however that "the issue is with us," stressing that the report aims at avoiding bottlenecks in the area of migration in the future. Leila Zlaoui, the report's principal author, also stressed that "the picture will change. There will be an acceleration of labour mobility." The report not only offers advice that could help avoid bottlenecks in global labour markets, but also insight that may be a recipe for a brighter future for many young men and women. It cites some striking figures relating to demographic changes, an element with significant implications on the labour force and labour mobility. For starters, although the world population will reach nine billion by 2050, its growth is slowing down with the exception of much of the developing world. Not only that, but the majority of the world population will age considerably starting 2010 to 2050, with the exception of sub-Saharan Africa. These figures will in turn reflect on the size and shape of the labour force across various regions. Zlaoui pointed out that Europe will see the largest labour force decline, by 66 million by 2050. In fact, according to the report this will lead to "a cumulative work force deficit by 2050, of 215 million, half of which will materialise in Europe, North America, and high income countries in East Asia." On the supply side, "the increase in the labour force of population- growing regions would be 570 million," said the report. But those most likely to migrate, said Zlaoui, are aged between 15 and 39. This age group can be found in sub-Saharan Africa, South Asia and the MENA region. In the latter, this age group will number 44 million by 2050. But Zlaoui argues that "at today's migration rates, only 32 million workers would be willing and/or able to move." With the lack of policies to mitigate this problem, Zlaoui said, there will be grave consequences on the economic growth and social welfare of countries which suffer a labour deficit. With an increasingly large older population and a small young population, she said that pension premiums will suffer as the ratio between retirees and workers tips over. In addition, she pointed out, the elderly population will be needing services such as being taken care of, and there will be a scarcity of people to do them. Zlaoui stressed that this is not a hypothetical problem, but one that will be felt by current generations. In the countries with the labour pool, Zlaoui warned that there may be an acceleration of mobility leading to a brain as well as an "arm" drain, referring to middle-skill workers. "An insufficient global pool of skills means human resource drains for sending countries and competition for skills among receiving countries," said Zlaoui. To prevent the occurrence of such scenarios Zlaoui stressed that appropriate policies must be put in place. And while putting down these policies, countries such as Egypt and others in the MENA region, need to bear in mind that they are not strict exporters of labour, but that they too are a destination for others hunting for jobs. To clarify, Zlaoui said that while many Egyptians travel to work in the oil-rich Gulf countries, many foreigners and Asians come to work in the Egyptian market. A key element of these policies is educational reform. Johannes Koettl, labour market specialist at the World Bank, also spoke during the report launch. He focussed on the MENA and EU regions as case studies. He pointed out that despite shortage of manpower, Europe will be demanding higher qualification requirements. He stressed that not only will the highly skilled labour be in demand, but also medium-skilled and secondary educated workers. In the meantime, low qualifications will not be in demand, even for elementary occupations. On the other side of the Mediterranean, the report showed that "poor education outcomes in MENA countries remain an obstacle to compete in global labour markets. More important, MENA's education systems do not deliver and remain at the root of MENA's educational and technological shortcomings." Within the same context, the report says "the education system in the MENA region is biased toward humanities and social sciences at the expense of technical and scientific orientations that tend to be more important for innovation and knowledge development." As things stand, Koettl said that MENA countries would only be able to offer a large number of unskilled workers, mostly with primary education or less. However, should this change and "labour force participation and educational attainment improve to approach the level of European countries, the size of the labour force could grow to a potential 57 million and they would be more tuned with labour market demands." To conclude, the MENA and EU regions could complement each other's needs provided the EU adapt its policies on labour and job mobility and MENA invests in skills development. However, he stressed that this process takes time and there is a time lag before education reform reflects on the skills of the labour force. "It takes 15 to 20 years or more to educate a potentially skilled worker from childhood to adulthood." Moreover, Zlaoui pointed out that education includes life skills training which encompasses the ability to relate with employers, colleagues, work within a team and to take initiative. But both Zlaoui and Koettl stressed that the MENA region and other labour supply regions do not have the know-how or resources to make this change to the profile of their labour force happen, therefore global collaboration is needed. In addition to education, the report pointed out a set of other issues to be tackled. These include, among others, facilitating mobility through the portability of social benefits, integrating migrants through language and cultural training and anti-discrimination legislation and nurturing nationals abroad by providing them with administrative civil and legal services. All these measure are targeted at developing "well managed schemes to ensure that migrants, receiving countries and sending countries reap the benefits from increased global mobility." Once such policies are in place there will be a smooth adaptation to global conditions, the report concluded. More people jobless DURING the last quarter of 2008, 88,000 people became unemployed. According to figures released this week by the Central Agency for Public Mobilisation and Statistics (CAPMAS) this has caused a rise in the unemployment rate to 8.8 per cent. The same CAPMAS report showed that unemployment was worst in urban areas, at 12.5 per cent compared to 6.2 per cent in rural areas. The percentage of unemployed with university degrees or higher education reached 21.8 per cent. And for those with secondary education it reached a higher rate of 53.9 per cent. These figures reveal the degree to which the economic slowdown is beginning to make itself felt. Before the crisis, unemployment had fallen to 8.4 per cent during the second quarter of 2008. And more may be on the way as an increasing number of expatriate Egyptians working in the Gulf are laid off and start returning home or local companies start reducing their work force to cut on costs. This rise in unemployment is also attributed to a drop in the growth rate of major productive sectors of the economy, revealed a study prepared by Naglaa El-Ehwani, deputy director and lead economist of the Egyptian Centre for Economic Studies. The study presented at a seminar organised by the Egyptian National Competitiveness Council (ENCC), showed that the growth rate of the Suez Canal fell during the first half of 2008/09 to 3.9 per cent from 18.3 per cent during the same period last year while growth in the tourism sector fell to 0.6 per cent compared to 15.9 per cent. Such drops have affected employment gravely because, as El-Ehwani pointed out, every one per cent drop in growth, results in an 0.5 per cent drop in the employment rate.
