Never let a crisis go to waste

“The region already faced significant economic fragility prior to the pandemic, but the coming recession will hurt the Middle East especially hard.” On May 1, the Wilson Center hosted a panel discussion on “The Middle East Workforce and COVID-19: Resetting the Regional Economic Formula.” The discussion featured six speakers:

Sheikh Meshal bin Hamad Al-Thani: Ambassador of the State of Qatar to the US

Theodore Kattouf: President of AMIDEAST and Former United States Ambassador to Syria and the United Arab Emirates

Denise Lamaute: Economic Officer, Middle East Bureau, USAID

Andrew Baird: President and CEO, Education for Employment-Global

Alexander Farley: Research Associate

Merissa Khurma: Project Manager, Middle East Special Initiatives, moderated

Current context

In Ambassador Al-Thani’s keynote speech, he pointed out that unemployment, the lack of human development, and the absence of social justice have posed a threat to political, economic, and social instability in the Middle East. The outbreak of COVID-19 across the world has led to a greater challenge. The collapse of oil prices as well as the decline of tourism revenue, emigrant remittances, and economic demand are aggravating the region’s structural weaknesses. Limited opportunities for youth and their lack of prospects will create discontent and generate distrust to political leaders. Al-Thani believes that this is the main reason of the Arab Spring.

Baird thinks that COVID-19 is an enormous disrupter. The hospitality industry, including restaurants, hair salons, and manufacturing, are suffering from this crisis. There are, however, winners at this point, including home health care, public health workers, transportation, agriculture, and the information technology sector. Baird is concerned that this crisis may have a long-term impact on SMEs, making them more vulnerable. They will take a longer time to recover than larger businesses. Additionally, Baird emphasized that the crisis will widen the digital divide between men and women.

Education and workforce

Farley summarized key findings of An Analysis of Workforce Asymmetries in the Middle East and North Africa:

1. The skills mismatch and deficit of needed skills in the labor market
2. Private sector and education uncoordinated
3. Education systems do not emphasize essential skills
4. Technical vocational education and training (TVET) is neglected and suffers stigma
5. Mindsets adhere to a hierarchy of public over the private sector
6. SMEs face barriers to expansion, economic growth is limited
7. Entrepreneurship and new business creation is low
8. Women ahead in education but behind in workforce participation

Kattouf said that during the Ottoman period, there was no education except for certain elites who were educated by the British and French to serve colonists’ needs. In the Gulf, most of the current countries were protectorates without education. It was not until Nasser and Arab socialism that an aspiration for universal education and literacy started.

While the number of educational institutions is now overwhelming, the quality of higher education is decreasing as more students are admitted to public universities and good professors prefer to teach in the Gulf for higher salaries. Kattouf added that when the youth graduate from tertiary education, they are equipped with fewer skills than expected and there are fewer jobs than needed.

Remedies

Al-Thani believes that Middle Eastern states need to take collective action to make long-term, youth-centered development agendas in order to address the challenge of workforce asymmetries, including protecting youth rights and allowing them to participate in public life.

Farley listed various recommendations from An Analysis of Workforce Asymmetries in the Middle East and North Africa:

1. Realigning education systems to labor market needs
2. Rethinking assessment and tracking student progress
3. Upgrading the TVET pathway
4. Strengthening entrepreneurship and SMEs
5. Increasing female labor force participation through multiple interventions

Denise suggests that governments, the private sector, and education systems should pursue a firm understanding of the region’s demographics, the evolving demands for skills, and the connections between providing goods and providing services. Since the pandemic forces people to embrace digital tools, it may push a “fourth Industrial Revolution.” This revolution can lead to faster technology adoption, increased productivity and performance, emergence of new markets and new consumers, the relocation of value chains, and job loses as well as job gains. Since the MENA region possesses a young workforce, they will be ready to adopt the “fourth Industrial Revolution” to create more opportunities and changes.

Baird resonated Denise’s point to never let a good crisis go to waste. He suggests that the financial system can bring the private sector closer to education. As governments exert more control over the private sector, they can take advantage of it to propose women friendly policies, including women friendly transportation, anti-harassment policy, and day care.