ILO and ESCWA | The Arab region registers the highest unemployment levels worldwide

By International Labour Organization

ILO and ESCWA | The Arab region registers the highest unemployment levels worldwide

The Arab region registers the highest levels of unemployment worldwide, especially among women and young people, with 14.3 million individuals already unemployed prior to the COVID-19 pandemic. This reality puts into question the capacity of Arab labor markets, and particularly the formal sector, to generate equitable and sufficient employment, as underscored by a report issued by the UN Economic and Social Commission for Western Asia (ESCWA ) and the International Labour Organization (ILO ) Regional Office for the Arab States.

The report, entitled Towards a Productive and Inclusive Path: Job Creation in the Arab Region, highlights the high levels of informal employment in the region, accounting for about two-thirds of total employment and resulting from demographic shifts, political instability, and low levels of fiscal and monetary stability.

ESCWA Executive Secretary Rola Dashti stressed the lack of gender equality in Arab labor markets, illustrated by women’s lower shares as business owners and the generally few top management positions they hold.

“We must challenge gender-discriminatory perceptions in labor markets so that women can evolve in their careers and capitalize on their increased levels of education,” she affirmed.

For her part, ILO Regional Director for Arab States Ruba Jaradat underlined how the COVID-19 pandemic has highlighted the need to address pre-existing labor market deficits in the region, especially those affecting the most vulnerable workers.

“The impact of the crisis has been particularly devastating for youth, persons with disabilities, women, informal workers, migrants, and refugees. It is fundamentally important that we develop an action-oriented roadmap to advance a human-centered recovery, and construct a better future that delivers economic security, equal opportunity, and social justice,” she stressed.

The report also identifies several sectors that were particularly hit hard by the pandemic in the region, such as manufacturing, accommodation, real estate, and business and administrative activities, in which 39.8 million individuals are under the threat of layoffs or reduction of wages and/or hours of work.

Moreover, the report finds that training systems and educational curricula are not in line with the needs of the labor market, leading to a significant skill mismatch. In fact, 40% of firm owners claim that the inadequately educated workforce is an obstacle in the region.

The report also points to contradictions between policy discourse and labor market realities. While policymakers constantly advocate the role of small enterprises in creating jobs, they have the lowest employment growth rate in the region among enterprises, standing at 1% annually.

Meanwhile, political unrest and conflicts remain a primary obstacle in the region impairing enterprise performance, affecting investor and consumer confidence and subsequently limiting investment and consumption.

Under these circumstances, Jaradat stressed the need to work with Arab governments and social partners to enact urgently needed reforms.

“With the right mix of policies, the right coordination frameworks, and the effective involvement of workers’ and employers’ representatives, we can ensure a successful recovery and an effective transition towards a more inclusive future of work,” Jaradat said.

“For every crisis, there is opportunity. The current challenges shall be overcome by building forward better and by ensuring that, in the future, labor markets in the Arab region offer prosperity for their younger generations, prevent people from falling into poverty, and reduce inequalities,” Dashti concluded.

The report provides guidance to policymakers on reducing labor market deficits, especially in the formal sector, and unlocking the potential of this sector is becoming a major driver for economic growth and the creation of decent employment across the region.