Too many youth, too many unemployed, poor education, jobless economic growth: all frequent hypotheses put forward to explain the uprisings that started in Tunisia in December 2010 and then spread across the Arab world.
Of course, the youth were the most visible part of the uprisings. This is to be expected: Older people and those at work, mostly self-employed or small shopkeepers (some 85 percent of those employed in the Arab region are said to be working in family business) do not or cannot take to the streets.
But what is certain is that there are less youth in the region than there were two or three decades ago. In North Africa the ratio of youth-to-adult population peaked in the late 1970s and in the Middle East in the early 1990s. Why didn’t the youth revolt in those eras, given their numbers and the fact that youth unemployment was also higher?
In fact, since the 1990s job creation in the Arab region has been the fastest in the world. Employment rose to 81 million in 2010 from 45 million in 1991, an 80 percent increase compared to population growth of only 50 percent. Most new jobs went to young and educated job seekers who are prepared to work for less than adults: In 1990 the number of unemployed youth was 34 percent larger than that for adults. In 2010 there were 5 percent more unemployed adults than unemployed youth — a massive reversal. In short, it was not just the rate of economic growth that mattered since economic reforms were initiated in the 1990s — ironically with Tunisia being the region’s leader in this respect. It was the quality of jobs that did not meet the expectations of growing numbers of adults, the rising middle classes and the more educated youth.
Learning outcomes of Arab students are below the global average and, paradoxically, lowest in the GCC countries where no public expense is spared and citizens have little income pressures or need for child labor. But in current economic circumstances, Arab jobseekers are not unemployable.
There are many reasons to believe that production requirements in the Arab world are “primitive”, characterized by low productivity, low skills and low wages. How else can one explain the fact that the region has the highest skilled emigration rate in the world? If Arabs can work abroad in high-income countries with advanced technologies (e.g. the European Union or the United States) then they have more skills than are locally required — which local employers are willing to pay for. If there were skills shortages, employers would either train or pay higher wages for skilled workers. In fact, training rates among Arab employers are the lowest in the world, and the wage premium for educated workers is the lowest.
What went wrong before the Arab Spring? One explanation may be that the traditional social contract whereby the population exchanged political freedom in return for public sector jobs, free public services, low taxes, and other handouts from the state created increasing fiscal pressures on governments and rising gaps in private sector productivity and competitiveness. From the 1980s, the ability to co-opt the educated into the relatively well paid civil service — a mechanism for upward social mobility — or to expand social protection for the masses became constrained. Economic reforms were introduced in the 1990s that reduced the ability of the state to act as an employer of last resort, public expenditures were curtailed and with them social services, many of which were privatized.
The reforms created employment but at low wages, while social protection declined and vulnerability increased, as did a sense of unfairness. Given the absence of political changes, declining citizen voice and government accountability since the 1990s, privatization amounted more to “denationalization” wherein assets and profits were appropriated by the establishment’s elite, including political leaders, the army, and senior civil servants as well as their wives, sons, siblings and in-laws.
Looking beyond youth
Following the reforms, the region had fast economic growth from the early 1990s until 2010. However, the share of national income that went to workers declined by 30 percent, the fastest in the world, with a commensurate reduction in private consumption. Inequality increased as growth was not inclusive. This affected the majority of the population, namely the adults, who are also more empowered than the youth by virtue of their incomes and positions. The youth are the noise, not the engine.
This explanation can be contested and is perhaps unfair for some Arab states. In fact, this is an incomplete story. Other observations that can be added are, first, that whilst the Middle East has the highest rates of youth and adult unemployment in the world this is largely due to levels of unemployment for women. For example the unemployment rate of Arab men is in the normal range (8 percent) and, is in fact, lower than in Africa, East Europe and the high income economies. However the unemployment rate for women stands at 17 percent, while in all other regions it is half the figure with no material differences between women and men.
This is history and what is important now is “what next”? On the one hand, changes in the Arab region are relatively fast. It took the US 40 years to increase enrollments among girls aged between 6 to 12 years old from 57 percent to 88 percent; Morocco achieved a similar increase for this age group in just over a decade (from 58 percent in 1997 to 88 percent in 2008). The average family size declined from 7 to 3 children in just one generation compared to more than a century among high income countries. Family laws are also being reformed, even references to the husband as head of the family have been eliminated.
On the other hand, what matters in a globalizing world is not how fast you move, but how fast relative to others. The Arab region has yet to be integrated into the world economy. International experience suggests that it takes on average more than 20 years before youth unemployment reverts to pre-crisis levels. Local conflicts and geopolitical instability can add more to this. This is a grim scenario. What is therefore needed is for governments to create a level economic playing field by reducing nepotism and corruption, and developing sustainable and adequate social protection schemes for all: youth and adults, women and men. And to do this fast.
Whether this can be done without allowing citizens’ voices to be heard and governments’ accountability to be increased is debatable. What can at least be correctly diagnosed is that the problem is neither the Arab youth nor their drive for education. The youth are the solution, if they are given a chance.
Zafiris Tzannatos is a Beirut-based economist and former senior advisor to the International Labor Organization