Job Creation Efforts in the Middle East Hit a New Snag: Covid-19

Efforts at creating jobs for young people and supporting entrepreneurs in the Arab region, already facing an uphill battle, have hit even harder times because of the lockdowns many countries imposed to slow the spread of the novel coronavirus.

The numerous programs set up in recent years to try to tackle the region’s high unemployment rates have been forced by to move online, where many are struggling to remain effective.  Efforts at supporting entrepreneurs during the pandemic were discussed last month at the online conference Rebuilding Futures, organized by SPARK, a Dutch nongovernmental organization focused on creating better jobs for young people in fragile states, and Al-Fanar Media. (See a related article, “The Acceleration of Online Education: What Can We Learn from the Crisis and Beyond?”)

Yet experts warn that even when countries finally claw their way back to some semblance of normality, unemployment levels will remain high without reforms to make economies more dynamic, less dependent on the public sector for jobs, and more friendly to the creation of private businesses.

Even before the coronavirus pandemic, the jobless rate in the Arab region was double what it is in the rest of the world. In 2019 the region had an unemployment rate of 10.3 percent, compared to a global average of 5.4 percent, according to estimates of the International Labor Organization (ILO). Youth unemployment stood last year at 26.4 percent, vs. 13.6 percent globally. Fueled by one of the world’s highest proportions of young people in the population, the Arab region’s youth unemployment rate has been the highest in the world for over 25 years.

Meanwhile, cases of Covid-19, the disease caused by the novel coronavirus, continue to climb around the world. Among the Arab countries, Saudi Arabia has the most confirmed cases, followed by Qatar and the United Arab Emirates.

Difficult Transitions to Online

Experts say that across the region, the combined effects of coronavirus lockdowns, a contraction of trade, a sharp fall in tourism and depressed oil prices, have thrown many people out of work and plunged the area into a deep recession.

Programs set up to provide job training or support to entrepreneurs had limited reach to begin with, and have had varying degrees of success in moving their programs online.

Hala Bugaighis is founding director of Jusoor for Studies and Development, a Libyan nongovernmental organization that helps women create small businesses, especially home-based enterprises in such areas as food catering, fashion, and beauty services. (See a related article, “Libyan Women Push for a Bigger Role in Rebuilding Their Country.”)

Bugaighis says Jusoor’s attempts to put its business incubator and skills training programs online have been undermined by frequent and long-lasting power cuts, even in the capital, Tripoli, and by the fact that most women among the group’s clients lack digital technology skills.

Jusoor has teamed with SPARK on some training events for women. SPARK is also one of the largest providers of scholarships and jobs skills training for Syrian refugees in the Middle East, and is currently providing scholarships to 1,300 young Syrians in Turkey. With classrooms shuttered, SPARK has given scholarship-holders additional funds to pay for Internet connections so they can continue their education online.

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But according to Ola Enis, project officer with the group in Gaziantep, Turkey, “poor Internet connections” and a lack of laptop computers are making it difficult for many to follow their classes online. SPARK distributed tablet computers to the neediest scholarship-holders to help improve access.

Local Training Efforts

Other organizations trying to help young people find jobs include ReBootKamp (RBK), based in Jordan, which provides intensive five-month programs training young people in computer programming.

Last year ReBootKamp partnered with Anera, a U.S.-based development organization, to extend the training to young Palestinians in the West Bank and Gaza. In April they began training for a new batch of students online.

Denise Habash Hazboun, program manager for the Anera+RBK PLUS program, says that in addition to frequent power outages in Gaza, the program faced the challenge of “building community” among the 30 students who are now studying alone, in their homes. Program organizers have sought ways to make them feel part of a group.

“Our learning is collaborative,” says Hazboun, “so we have layered in opportunities throughout the day where we can be humans together, joking together, meditating together, playing games and otherwise sharing bits and pieces of our lives.”

Another initiative, Sharqi Shop, based in Amman, helps Syrian artisans who have fled to Jordan as refugees to market their copper coffee pots, backgammon games, stuffed toys, and other high-quality crafts, especially to Saudi Arabia and Europe.

Saleem Najjar, founding director of the for-profit social enterprise, says that with most of the craftspeople now forced to work out of their homes and unable to meet with photographers, wrappers, and other support service providers, the company is coaching them in taking good quality cellphone photos of their pieces, doing online marketing, and professionally wrapping their items for shipping.

“They need a lot of support to help them with the digital transformation,” says Najjar.

Bigger Changes Are Needed

Such programs have improved the livelihoods and lives of a number of people and provided an alternative model to the goal of many young people in the region—getting a cushy, life-time job with a public administration or public company. Yet economists say such projects have done little to change the character of the region’s economies, which are dominated by the public sector and seen as not sufficiently dynamic.

Experts say rigid laws and regulations make it hard to create and operate private businesses, the banking system is unfriendly to small entrepreneurs, and old-fashioned education systems do little to prepare graduates for today’s jobs or for entrepreneurship. In addition, cronyism and corruption suck the energy out of the region’s economies, they say.

“Almost 90 percent of jobs in the world are supplied by the private sector, and that’s what the region lacks,” says Federica Saliola, a lead economist in the Social Protection and Jobs Global Practice of the World Bank. Unlike in other regions, she adds, most big companies in the Middle East are state-owned.

In 2018, the average rank of Arab countries on the World Bank’s Doing Business survey was 115 out of 190 economies in terms of the ease of opening and operating a business. Only the United Arab Emirates was ranked among the top 50 countries.

The lack of work prospects for young people was a driving force behind the 2011 Arab Spring uprisings. Tariq Haq, a senior employment specialist for the Arab region with the ILO, says the situation continues to be a major cause of concern. “Young people who don’t have jobs are a source of instability.”

Hurdles for Job-Creation Efforts

Development experts had hoped that increasing education levels in countries would lead to increased employment. But as higher education enrollment rates have increased, unemployment levels have remained stubbornly high.

As elsewhere in the region, would-be business owners face many barriers. A survey carried out by Jusoor among 250 female small-business entrepreneurs found that 90 percent were operating informally. “This is not good,” says Bugaighis. “They have no possibility of getting loans and their employees don’t have social security or other legal protections.”

“We need an enabling environment” for small-business creation, says Bugaighis. “We need to encourage people to not only rely on the public sector [for jobs] and to go out and create their own businesses.”

Indeed, experts appear to feel increasingly that while skills training programs and help to small-scale entrepreneurs play a valuable role, they can only go so far. “In parallel, we need to address the bigger issues,” says Saliola. “Unless we address problems that prevent dynamism in the economy, those initiatives will always be a drop in the bucket.”