Economy

Arabs Face High Unemployment!

Int’l Economy Desk

Unemployment among native citizens in the six-nation Persian Gulf Cooperation Council (PGCC), the richest in the Arab world, has remained far higher than the rate among the expatriates, Saudi Arabia’s largest bank, National Commercial Bank, said in a study.
The study said the joblessness problem among the young generations is “more acute” than the rate among other groups.
“Even though the headline rates of unemployment in the PGCC countries may not be exceptional by global standards, unemployment is a persistent problem in parts of the region, especially among nationals,” it said, Albawaba.com wrote.
“Of course, resident expatriates usually come to the region on work visas and their unemployment tends to be largely transitional.”

Jobless Youth
Youth unemployment is one of the major challenges facing PGCC economies. The ranks of the unemployed include many in some countries disproportionately–with secondary and higher education.
One problem is that young graduates still believe that a diploma means a guaranteed government job.

“Quite contrary to media headlines about unemployment rates, the problem of joblessness is particularly acute among certain sub-segments of the population. In particular, it tends to disproportionately afflict the region’s rapidly growing young population.”
Persian Gulf oil producers have one of the lowest joblessness rates in the world but unemployment among nationals, mainly the youth, remain a problem because of their heavy reliance on expatriates, according to Saudi bank study.
“Even though the headline rates of unemployment in the PGCC countries may not be exceptional by global standards, unemployment is a persistent problem in parts of the region, especially among nationals,” it said.
“Of course, resident expatriates usually come to the region on work visas and their unemployment tends to be largely transitional.”
The study said the joblessness problem among the young generations is “more acute” than the rate among other groups.
“Quite beyond the headline unemployment rates, the problem of joblessness is particularly acute among certain sub-segments of the population. In particular, it tends to disproportionately afflict the region’s rapidly growing young population.”
Citing Saudi Arabia, NCB said unemployment among the 15-19 age group according to the latest government data (2012) is 27.3 percent.
Among the 20-24 category, it has reached some 28.0 percent, it said, adding that the proportion among 25-29-year-olds is also as high as 14.3 percent.

Long-Term Problem
In UAE, youth unemployment is three times the overall unemployment rate, standing at around 12.1 percent versus 4 percent, the report showed.
In Kuwait, 36.3 percent of all the unemployed were 20-24 years old in April 2011. Nearly 17.4 percent of them were 25-29 and 10.1 percent 30-34 years of age.
“Similarly, female unemployment in the region is consistently higher than that of men. The 2010 figure for Saudi women was 28.4 percent against 6.9 percent for Saudi men. Women constitute at least 75 percent of job seekers in the Kingdom,” NCB said.
“This problem represents significant underutilization of human capital. According to one recent estimate, around 78.3 percent of unemployed women in Saudi Arabia have university degrees while the same is true for only 24 percent of men.”
The report showed that among UAE nationals, female unemployment of 28.1 percent compares with male unemployment of 7.8 percent.
Among Qatari women, unemployment in 2011 reached 8.0 percent as compared to 1.7 percent for men. In Kuwait, women made up 77.0 percent of the total number of unemployed in April 2011.
“In spite of the considerable commonalities across the region, Bahrain and Qatar appear to have made significant headway in containing their unemployment problem in recent years,” NCB said.
The report said a significant proportion of joblessness in the PGCC is ‘structural’ as highlighted by the fact that the overall rate has in many cases not meaningfully responded to economic growth.
For instance in the UAE, NCB said, although the economy went through a spectacular boom in the years preceding the global crisis, unemployment among Emirati nationals in 2009 still remained a relatively high 14 percent.
Saudi national unemployment in 2009 stood at 10.5 percent, while the total number of the unemployed reached 615,249 in 2012.
“The economic cost of unemployment was recently put by the Saudi Ministry of Labor at SR5.5 billion a year. Consistent with the labor market mismatches, available data on unemployment duration suggests that much of the joblessness is relatively long term.”

Growing Pessimism
Dismal British economic data that emerged may feed into growing market pessimism and renewed oil demand erosion concerns, a UK-based analyst has warned.
Jarmo T. Kotilaine, chief economist at the National Commercial Bank, also saw no major impact on Persian Gulf states from the ongoing interest rate fixing scandal rocking Europe and the United States.
“The crisis is likely to strengthen the pressure for greater regulatory scrutiny globally and probably also in the region, something that is already happening, most notably in the UAE,” he added.
The European Commission said it will ask all member-states to introduce criminal penalties for rigging interest rates so as to help restore market confidence after the London LIBOR scandal.
Britain is suffering a far deeper recession than thought, official figures showed.
The Office for National Statistics said the British economy contracted by a quarterly rate of 0.7 percent in the second quarter of the year.

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