CAIRO: As the global financial crisis continues to put a hamper on Arab economies, a Brookings Institute report said that youth in the Arab world have been hit hardest by rising unemployment numbers. According to the report, titled "The Middle East in a Post Oil-Boom Era? released Friday, the unemployment rate for youth in Egypt plummeted between 1998 to 2006 from 25.6 percent to 16.9 percent. The report noted that youth unemployment was in a steep decline, and well over the general population's unemployment rate of 8.3 percent Though privatization efforts have provided scores of Arab youth with job opportunities, it is not enough to solve the unemployment problem in Arab countries. Young people in the Arab world cannot turn to government jobs as an alternative, the report said, since "the public sector is not big enough to absorb them and the private sector is too small. The report said that only through continuous privatization deals can unemployment among youth in the Arab world drop to tolerable levels. "Successful expansion of private sector job creation has occurred in a number of countries, contributing to a drop in unemployment rates across many countries, it read. However, Magdi Sobhi, an economic expert at Al Ahram Center for Political and Strategic Studies, disagrees with the report's conclusion that privatization is the only solution to fighting youth unemployment. "We can't always rely on the expanding private sector to fight unemployment, he said. Educational institutions must be built to improve the skills of graduates and better prepare them for the job market, he added. An exponentially growing youth population has placed overwhelming pressures on the capacity of companies to employ large numbers of job-seeking university graduates. In Egypt, many are educated, but few are employed. "Egypt's youth bulge has only recently peaked, and a maturing cohort is now exerting pressures not only on the education system and labor markets but also the housing market, said the report. Yet, Sobhi said that the report lacked explaining one dimension to Egypt's education system: There are certain specializations that are not demanded in the market. "Engineering graduates will always find work because there are many companies that want engineers, he said, while others are not so easily employed. Moreover, engineering is so popular among university graduates, but the market cannot provide the same number of engineering jobs to absorb the wave of graduates that hit the workforce annually. To generate more jobs, the private sector has to expand; and for the private sector to expand, the country needs investments. On the upside, the report said that Egypt is becoming an attractive location for investments. The current economic trends may present an opportunity for Egypt as many Gulf countries are being roughed up by crisis and investor confidence in the Gulf becomes shaky. "US foreign assistance to the Middle East must be reassessed in order to effectively support countries through this difficult transition, as economic security and recovery will take on a renewed urgency in the region, said the report.
