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Oct 04, 2012 / 0 Comments
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This blog is part of a weekly series that we hope will provide some food for thought on the critical questions outlined in the forthcoming MENA Flagship Report on Jobs.

 

Several years ago, when I first came into the region, my department produced a Private Sector Flagship report titled, “From Privilege to Competition:  Unlocking Private-Led Growth in the Middle East and North Africa”.  This report gradually became known simply as “From Privilege to Competition” and more recently truncated even further to “P2C”.

 

When this report was first launched in Egypt, in the year before the Arab Spring first began to take hold, the region planned a large event in Cairo with Ministers and press.  Interestingly, no ministers turned up to the launch event.  The main thesis of the report had apparently become clearer as they digested the title!  Similar dissemination events in Rabat and Beirut also fizzled somewhat, as this highly charged message was not well appreciated by those in power.  Indeed, it was not until the advent of the Arab Spring that the message of the report really began to resonate in truly spectacular ways.

 

And what was that message?

 

The basic premise was that opportunities in the private sectors of the MENA region – and how well a private business man or (less likely) a private business woman  performed – depended upon WHO they knew rather than WHAT they knew.  Getting into business in Tunisia involved working with the extended Ben Ali family, while similar connections in Egypt, Libya, and other countries in the region were the only real  route to success in the private sector worlds of these MENA countries.  Naturally, these cabals of crony capitalists were all too keen to keep out all and any competition that may come in and threaten their cozy little nest egg of well protected companies.  Never were the words of Adam Smith more true than in pre-revolutionary MENA – “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”  However, in the case of MENA it was not just “the same trade” – it had sadly become virtually the entire private sectors of many countries in the region.

 

Basically, the nexus of political and economic power had come to skew development towards benefiting and protecting a few well-placed players who controlled the flow of opportunities and resources.  This not only narrowed the benefits of market-based growth, but also resulted in less investment, less export diversification, and less technological sophistication.

 

Competition is a fundamental driver of innovation and efficiency-oriented improvements in operations, yet with constraints on entry and competition, and with financial markets, land markets and industrial strategies all oriented more towards the few rather than to the many, economic dynamism was muted along with employment growth.

 

My favorite graph from that report plots countries by their level of per capita national income (i.e. at presumed similar levels of economic development) and the number of products that they produced and exported.  What is startling about this graph (below) is that virtually all MENA countries fall below – and some well below – the trend line.  The implication is that MENA produces less products compared to other countries at a similar level of development – something that we intuitively all recognize (i.e. that MENA is pretty much an undiversified region in terms of its production base).  But what is also very interesting is that the technological content of the goods that are produced is relatively low compared to similar comparator countries in other regions.

 

The up-shot of this is that MENA countries tend to have an undiversified economic base and that the technological content of that productive base is also fairly low.  Both attributes belie the status of MENA as a middle income region – and they have been perpetuated by a closed approach to trade and foreign direct investment and a system of crony capitalism that precisely tried to lock out competitive pressures.

 

However, as we have increasingly become aware, a dynamic and vibrant, constantly evolving economy – which creates the required number and quality of jobs for its employment seekers – requires competition, and the  innovation and  dynamism that it produces.  The very strength of the American economy is a direct result of the  emphasis on competition as a stimulus to innovation and dynamism.  As Charles Darwin said “It is not the strongest of the species that survives, nor the most intelligent, but rather the one most adaptable to change”.  As with living species – the same appears to be true of national economies.  Without competition and without innovation, economies calcify and shrink – reducing job opportunities for new job seekers – while a  privileged few monopolize the limited benefits.

 

The exciting aspect of the Arab Spring is that this dynamic has now suddenly changed.  A door has creaked open, a window of opportunity has appeared – there is now the potential to change the existing P2C dynamic of the past 20, 30, 40, 50 years of crony capitalism.  It will, however, require a substantial change in the existing status quo.  As Adam Smith hints, new crony capitalists are likely to rise up and take the place of their fallen forebears.  Nor  have all the former crony capitalists disappeared.  Many will seek to go back to the old predictable ways of the past.

 

This, however, is MENA’s moment.  The window will not stay open for ever.  Unless the rhetoric and the job creation mantra that is now being chanted by most of the governments of the region is accompanied by a real openness, a greater acceptance of foreign investment, substantially enhanced competitive pressures, and a fully supportive and comprehensive business Eco-System – then the opportunities for real innovation that can create the many middle income level job opportunities which are in such demand throughout the region, will be lost.

 

This blog is part of a weekly series that we hope will provide some food for thought on the critical questions outlined in the forthcoming MENA Flagship Report on Jobs. The common thread and objective of these blogs are to spur a conversation on “what to tell your Finance Minister.” This is in preparation for the World Bank Annual Meetings in October 2012, where the report's main messages and the results of the live chat will be presented to MENA policy makers. We want to know what YOU think is holding people back, and what can be done to create more and better jobs in MENA. Please send us your thoughts and join us for a live web chat on jobs on September 17.

Read the previous weeks' blogs in the series:

Oct 04, 2012 / 0 Comments
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This blog is co-authored by Juan Manuel Moreno and Stefanie Brodmann

 

This blog is part of a weekly series that we hope will provide some food for thought on the critical questions outlined in the forthcoming MENA Flagship Report on Jobs.

 

The low quality and relevance of education and training systems in MENA have led them to be perceived – most notably by employers – more as barriers to employment, rather than a path to good jobs. 

 

In recent focus group discussions in Egypt[1], some employers even voiced the preference for hiring young, non-diploma holders who have not gone through the technical secondary system, which is perceived as an unreformed low-quality option that is visibly associated with academic failure. This preference is a symptom of an endemic problem in MENA, of skills mismatches that have resulted in extremely slow education to work transitions, increasing rates of youth unemployment and, in some countries, high graduate unemployment.

 

Thus, despite all the progress made in increasing access and completion rates in secondary and tertiary education, MENA graduates still struggle to find a job. The region’s youth are now in a double bind, as dropping out from, or failing to complete secondary education drastically increases the risk of being condemned as an outsider, permanently excluded from the labor market, while graduating from secondary and even tertiary education is no guarantee of a job (let alone a desirable or ‘insider’ job).

 

This is putting more and more pressure on education and training systems since it is clear that progress in access and completion rates has not been enough; further, it has ultimately undermined the perceived value of education and training in the eyes of students, families and employers. 

 

What is the solution? Is it just about more and better education? Or is it maybe about less (higher) education but more training (job-specific skills)? Or is it about a different kind of education and training that emphasizes non-cognitive skills? Or is it all of the above?

 

These questions have become critical in the public debate about education in MENA. Some focus on the apparent structural mismatches, blaming education and training systems, particularly at the technical vocational education and training (TVET) and tertiary levels, for failing to equip graduates with the right skills and competencies. Others see the problem in terms of skills supply outpacing skills demand – over-education – and claim that there are just too many secondary and tertiary graduates which the labor market cannot absorb. This view suggests – and this is a dangerous point for the future of education development in the region –   that education and training systems have just gone too far and too fast in providing access and generating demand at post-basic levels.

 

So, the problem can be looked at from various perspectives: Is it that young people in MENA are overeducated but undertrained? Or is it that they are over-trained but undereducated? Or is it rather that they are overqualified (in terms of the level of the diploma they hold) but/and under-skilled (in terms of the labor market relevance of the skills they have acquired)? Or is it simply about the lack of jobs?

 

Perhaps it involves all of the above. We may very well see groups of students and graduates in MENA who fit into all of these categories. 

 

A meritocracy deficit? 

 

Being employable (i.e., having acquired skills, competencies, academic certificates and professional qualifications in order to function in a job) is not enough for many young people (and labor market outsiders in general) to get a job, because of the prevalent “meritocratic deficit” in MENA countries. This means that hiring practices are not meritocratic. Employers do not have enough incentives and/or information to select the best graduates and end up making their decisions based on criteria which have little to do with the human capital, or ‘employability,’ presented by candidates. This lack of meritocracy ends up undermining the whole process of building up human capital, and increasing employability, with the result that educational credentials are devalued.

 

So how do people get hired in MENA? Educated youth have long heard a clear message from the labor market: in order to access one of the few ‘insider’ jobs, you need to wait your turn, or have good connections.  The following quote is from a young man in Morocco: If they don’t know you or your family, they will never trust you with a job”.

 

The figure below shows that in most MENA countries the majority of young people think that the main obstacle to employment is that there are either no jobs available, or that the jobs that are available are only accessible through connections. Lack of training, on the other hand, is named as a prominent constraint only in Morocco (28 percent), Djibouti (23 percent), and the GCC (7-16 percent).

 

    
                                                   
 

There is no comparative data on the extent to which hiring is done in a transparent and meritocratic way. What can be looked at, however, are the reports that firms themselves produce on the extent to which they rely on professional management in making hiring decisions versus their reliance on families and friends. A review of this kind of data reveals that non-GCC MENA countries have the lowest scores of all world regions in meritocracy in hiring.

 

     
                                                    
 

If there is evidence that being employable is far from enough to get a job, then it could be argued that there is a “double transition” from education to employment. The first step is becoming employable (by acquiring the skills, competencies and diplomas), which is then followed by the extra hurdle of having to position oneself to access a labor market in which meritocracy plays a limited role.

 

Going back to the first figure, the data shows young people in MENA voicing stark concerns about not succeeding in the second transition; concerns which they feel are owed to factors beyond their control. They see the lack of job opportunities and the meritocracy deficit as larger constraints than the lack of training.

 

So far, we have only blamed failures in the first transition by assuming graduates were not employable due to the lack of quality and relevance of educational systems. But there are failures also in the second transition, i.e., in that many graduates who are employable cannot cash in their employability capital because of the meritocratic deficit. Moreover, being employable (i.e., successfully having mastered the first transition) obviously increases the expectation of a good job.

 

The result is not only a mismatch between the supply and demand for skills, but also between the aspirations for and accessibility of jobs. The first mismatch excludes young people, while the second makes those excluded young people frustrated and angry.
 


 

 

 

[1] Focus groups were carried out in Egypt in October 2011 as background work for the forthcoming World Bank MENA Flagship on jobs (El-Ashwami, 2011).

Source:
El-Ashmawi, A. (2011). “TVET in Egypt.” Background paper prepared for the MENA Regional Jobs Flagship. Mimeo, World Bank, Washington DC.

World Economic Forum and OECD. (2012). “Arab World Competitiveness Report 2011-2012.” Geneva: World Economic Forum.
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This blog is part of a weekly series that we hope will provide some food for thought on the critical questions outlined in the forthcoming MENA Flagship Report on Jobs. The common thread and objective of these blogs are to spur a conversation on “what to tell your Finance Minister.” This is in preparation for the World Bank Annual Meetings in October 2012, where the report's main messages and the results of the live chat will be presented to MENA policy makers. We want to know what YOU think is holding people back, and what can be done to create more and better jobs in MENA. Please send us your thoughts and join us for a live web chat on jobs on September 17.

Read the previous weeks' blogs in the series: 

Oct 04, 2012 / 0 Comments
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This blog has been co-authored by Lida Bteddini and Guenter Heidenhof

 

This blog is part of a weekly series that we hope will provide some food for thought on the critical questions outlined in the forthcoming MENA Flagship Report on Jobs.

 

Recent events across the Middle East and North Africa (MENA) region have underscored the urgent need to ensure job creation and an enabling environment for a young and better-educated, more skilled labor force.  The international economic crisis has further deepened the problem in a region that is characterized by the world’s highest youth unemployment rate and the lowest female labor force participation. This goes hand-in-hand with overwhelmingly low value-added employment and a public sector that in most countries still provides most formal jobs.  Tackling these problems and challenges has become a key policy priority for virtually all governments in the region.

In many countries in the region, the public sector remains the primary employer, employing anywhere between 14 percent and 40 percent of all workers.[1] Many government institutions are overstaffed and government employees are often paid more than in the private sector (see Table).  Government wages in the MENA region amount to 9.8 percent of GDP, the highest rate worldwide. At the same time we know from experience that the main vehicle for employment creation is private-sector led growth.  And we also know that high levels of government employment deter investment in the private sector. 

 


 

Why is public sector employment so attractive in MENA?  In fact, it is the top preference of jobseekers in the MENA region, in particular of women and of youth. In a 2009 survey, 80% of Syrian graduates reported a preference for public sector employment, and nearly 60% would accept only a public sector job.[2]  The reasons for the attractiveness of the public sector are quite obvious: the public sector provides for employment benefits such as advantageous wages and benefits. Employment in the public sector carries extremely low risk of dismissal and high job security – often in combination with relatively low demands in terms of productivity. At the same time, jobs in the formal private sector are limited when compared to countries of similar economic development. Most (private sector) jobs can be found in the informal sector and these jobs are not seen as attractive for a variety of reasons, including low pay and incentive systems.     
 

There is another dimension to the employment problem: many new labor market entrants do not have the skills that the market requires – while the labor force as a whole has become more educated and skilled over the years, the labor market has not built up sufficient capacity to absorb these more qualified entrants. The private sector is not growing fast enough to cater to the large number of first-time job seekers.  A significant number of individuals are voluntarily unemployed, not willing to accept lower skilled jobs or jobs at prevailing wages.  Across the region, public sector jobs are considered more respectable and more secure; they also provide for more “opportunities” than jobs in the private sector.  Just one example: ‘double-dipping’ is a problem throughout the region – in Egypt for example, one-quarter of the personnel in public health facilities is absent on an average day according to recent estimates.[3]
 

While the Middle East has undergone a large wave of privatization over the last two decades, many key economic sectors remain under direct state control or, more often, under the control of the social elite. The private sector is still subject to numerous constraints and distortions – this is particularly true for the informal private sector that is often subject to significant harassment and interference by the public sector.  
 

Faced with bloated and often inefficient bureaucracies and excessive wage bills, traditional strategies of utilizing public sector employment as a means to soak up excessive labor demands have reached their tipping point.  This makes it all the more important to effectively and decisively support the role of the private sector as the main engine for future job creation. The “rebalancing” of public versus private sector employment will require major policy changes, also in the public sector.  One key area to look at is the highly incentivized public sector employment system which has become an impediment to economic growth. Many experts argue that, in the long run, the costs associated with a high concentration of public sector jobs will cause lower total factor productivity growth, thus having a negative impact on poverty reduction efforts. A good example is among educated youth, who continue to wait for “comfortable” public sector positions rather than exposing themselves to market-driven demand and supply mechanisms.
 

The World Bank’s most recent flagship report, Bread, Freedom, and Dignity: Job Creation in the Middle East and North Africa underscores numerous challenges to the job growth agenda in the region, in addition to highlighting the destructive role played by barriers to firm entry in the absence of sound competition in many countries. Some of these problems are due to government policies; others are due to the discriminatory way in which these policies are enforced. While avoiding prescribed solutions, the recent World Bank flagship report highlights a number of measures that will be essential to rapid and sustainable private sector growth in the region. 
 

In order to meet employment challenges, the region will need to focus both on the quantity and quality of newly created jobs. MENA will require a sustained effort to move towards durable economic growth driven by the private sector—and will necessitate dedicated long-term strategies and committed leadership to carry them out. With the appropriate incentives and effective governance, public investments will work to crowd in private investment by providing energy, roads, logistics and communications links which are necessary for firms to function productively.
 

Unfortunately, the region has been largely characterized by weak governance systems that have achieved the contrary – crowding out private investment by using resources that would otherwise be used by the private sector. Indeed, weak governance has led to the inefficient use of public resources, has been spent on unproductive assets that are desirable only to small and select interest groups. Governments throughout the region will need to strengthen governance frameworks and reduce opportunities for monopolistic rent-seeking to foster increased competition. Governments will also need to enhance transparency and build the type of institutions that will allow a market economy to flourish, while mobilizing all relevant stakeholders around a long-term growth strategy.


 

 

 

[1]World Bank Flagship report, Bread, Freedom, and Dignity: Job Creation in the Middle East and North Africa, World Bank, 2012

[2]Dhillon, Navtej and Tarik Yousef (eds.), Generation in Waiting: The Unfulfilled Promise of Young People in the Middle East, Brookings Institution Press, 2009

[3]Grun, R., L. Etter, and I. Jillson. Arab Republic of Egypt: Management and Service Quality in Primary Health Care Facilities in the Alexandria and Menoufia Governorates. Mimeo. World Bank, Washington, DC, 2010.
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This blog is part of a weekly series that we hope will provide some food for thought on the critical questions outlined in the forthcoming MENA Flagship Report on Jobs. The common thread and objective of these blogs are to spur a conversation on “what to tell your Finance Minister.” This is in preparation for the World Bank Annual Meetings in October 2012, where the report's main messages and the results of the live chat will be presented to MENA policy makers. We want to know what YOU think is holding people back, and what can be done to create more and better jobs in MENA. Please send us your thoughts and join us for a live web chat on jobs on September 17.

Read the previous weeks' blogs in the series:

Oct 04, 2012 / 0 Comments
Tags: / / / / / / / / / / /
 

 

This blog is part of a weekly series that we hope will provide some food for thought on the critical questions outlined in the forthcoming MENA Flagship Report on Jobs.

 

High unemployment in the Middle East and North Africa (MENA) largely reflects the growth deficit.  While China has been growing at 10 percent for a decade and has unemployment below 5 percent—MENA is the mirror image, growing at 5 percent and suffering unemployment above 10 percent.

 

The absence of strong growth in MENA has been a serious constraint to employment. It's worth noting though that MENA’s employment situation is not accurately described by the jobless growth that has plagued much of the industrial world in recent years. Rather it largely is a result of insufficient growth. In fact, the response of job growth to income growth in MENA is in general relatively high.

 

One issue is that MENA’s labor force is growing rapidly, so in order to employ all the new young jobseekers, growth would have to be much higher or the employment response to growth would have to be well above average.

 

How can this happen?  Growth could be higher if resources were used more effectively. Employment’s response to growth could increase if there were relatively greater incentives for growth in employment creating sectors.  A number of opportunities to stimulate growth and employment are underscored in the forthcoming MENA jobs report.  My three top choices (going beyond standard ingredients, such as the need for macro stability) are:

 

Remove input price distortions.  Energy and labor are both inputs into production.  The high energy subsidies prevailing in many countries imply that energy is a relatively cheaper input than it is elsewhere in the world, and that firms may prefer to use subsidized energy in place of taxed workers.  This leads countries to specialize in sectors and production processes that are relatively energy intensive.  Such subsidies are therefore a major distortion in countries rich in human resources: they retard growth by using resources inefficiently while limiting the labor response to growth.

 

Incentivize the private sector.  Despite being low productivity, the public sector is still the main employer in MENA, with the private formal sector accounting for a paltry 10 percent of employment on average.  This sucks resources out of their most productive uses, retarding growth and employment creation.  Fast growing young private firms and large enterprises are typically the big job creators in an economy.  But growth in these firms is constrained in MENA by a weak business climate coupled with incentives for jobseekers to prefer public sector.

 

Manufacture more. Employment elasticities of manufacturing are much higher than of resource extraction and a large body of literature finds that growth accelerations are accompanied by manufacturing surges.  In other words, manufacturing creates both jobs and growth. In MENA, however, manufacturing contributes less than 10 percent to value added growth, with natural resources above 20 percent on average.  This compares poorly to the 15-25 percent for manufacturing and less than 10 percent for natural resources in countries like Turkey, Malaysia, and Indonesia.  In addition to private sector growth highlighted above, manufacturing requires a competitive exchange rate and openness to trade and foreign investment that has for the most part been absent in the region.

 

Growth and employment creation in MENA are about channeling the tremendous wealth in human resources into productive uses.  Labor policies alone will therefore do little to solve the unemployment problem because a number of other distortions prevent workers from being employed efficiently.  Incentivizing labor-intensive private sector employment—as opposed to current incentives which encourage excessive fuel use and public sector employment—is fundamental.

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This blog is part of a weekly series that we hope will provide some food for thought on the critical questions outlined in the forthcoming MENA Flagship Report on Jobs. The common thread and objective of these blogs are to spur a conversation on “what to tell your Finance Minister.” This is in preparation for the World Bank Annual Meetings in October 2012, where the report's main messages and the results of the live chat will be presented to MENA policy makers. We want to know what YOU think is holding people back, and what can be done to create more and better jobs in MENA. Please send us your thoughts and join us for a live web chat on jobs on September 17.

 

Read the previous weeks' blogs in the series:

Oct 01, 2012 / 0 Comments
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Imagine climbing into the cockpit of an airplane the weight of a medium-sized car and the wingspan of an Airbus 340. And then imagine taking off without a drop of fuel on board. Sam Shepard can, unless my eyes deceive me.

 

They do indeed deceive (sadly) but Andre Borschberg is a dead ringer for the star of The Right Stuff, that famous movie about test pilots pushing back the limits of the impossible. Andre is also a test pilot and also pushing hard against those limits flying Solar Impulse, the first experimental solar-powered plane. I was there to watch Andre bring it into Rabat, Morocco on its first intercontinental flight from Switzerland recently. 

 

For Andre and his partner, co-pilot and founder of Solar Impulse, Bertrand Piccard, it was their first stop-over on the African continent before heading south to Ouarzazate on the hot side of the Atlas Mountains. So here they came, out of the cockpit in those impressive flight suits and helmets claiming victory with a casual smile like those Right Stuff pilots when they climbed out of their crazy rocket-powered test plane that broke the sound barrier. The press waiting on the Rabat-Sale airport tarmac were delighted: what an image. Me, my knees were quite weak.

 

Solar Impulse is majestic. It looks a bit weird at first but its aerodynamics have a dragonfly aesthetic and its ultra-lightweight hi-tech design is powered by 12,000 solar cells in the wings that drive four 10-horsepower motors. Those solar panels also charge lithium batteries during the day which allows the sun-driven plane to fly all night. The only part of the story which is less amazing is the speed: at an average of 48 kilometers per hour, the graceful Solar Impulse is no rocket.

 

But rocket power is not the point. Solar Impulse is a courageous and imaginative feat but is also about a greater message. It has landed in Morocco because this country is launching one of the most ambitious solar plans in the world. Ouarzazate, the next stop on the flight plan, is home to the beginnings of a 500-MW solar power plant, one of the largest plants of its kind.

 

The long frail wings of Solar Impulse also bear a strong message about the destiny that links us all, across borders and economic size, if nothing is done to protect our planet, reduce greenhouse gases and promote clean energies. The ambition of the Ouarzazate solar plant, managed by the Moroccan Agency for Solar Energy, MASEN, is to become an energy-production hub not only for the domestic market but for its northern neighbors in Europe.

 

I’ve worked in Morocco for nearly three years as part of a World Bank team supporting Morocco’s vision of clean energy in the development of concentrated solar power. I see Morocco as a pioneer of clean energy in Africa and a visionary not just in the region but worldwide. For me this is the Right Stuff and I’m really proud to have worked with other Bank colleagues to help MASEN realize Morocco’s solar dream.

 

And I have to whip out my Ray bans when I watch Solar Impulse because it brings tears to my eyes. Human imagination in flight. See for yourself.

 

 

Oct 01, 2012 / 0 Comments
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This blog has been authored by Roger Coma-Cunill, Jonathan Coony and Manaf Touati

 

Last year, Mr. Berrada patented a new invention for solar-water heaters at the Moroccan Office of Property Rights (OMPIC). His idea is to improve the efficiency of solar-water heaters by introducing a heat-transport fluid system specially designed for buildings and communities. Mr. Berrada, a state engineer and a graduate of the Hassania School of Public Works, dreams of bringing his concept into commercial reality.

But he struggles.

To start with, he would need technical support to elaborate a business plan and financing for a prototype. If he could commercialize this promising technology, Moroccan consumers would be able to buy better solar-water heaters, local green jobs would be created and climate change emissions would be reduced.

The World Bank is currently developing a Climate Innovation Center (CIC) in Morocco to help innovators such as Mr. Berrada achieve their goals. CICs provide a tailored set of financing and other services to allow the local private sector to participate more pro-actively and profitably in the ongoing clean technology revolution.

InfoDev, a global partnership program within the World Bank Group, is leading the development of seven other CICs around the world. An on-going technical assistance project, jointly piloted by the World Bank and InfoDev, is preparing a business plan for the first CIC in the Middle East and North Africa (MENA) region after exhaustive consultations with numerous local stakeholders.

To identify the needs of entrepreneurs such as Mr. Berrada, the World Bank team recently finished a survey covering a broad spectrum of stakeholders engaged in innovation and climate technologies in Morocco. Around one hundred responses were received, half of them from industries and start-ups. The survey identified obstacles to innovation and ways that the Moroccan CIC could remove them. The results demonstrated a clear need among Moroccan stakeholders for the kind of services the CIC could provide. The key results of the survey are the following:

 

  • Strong demand for services to overcome the “valley of death” in product commercialization: applied research, demonstration and market entry.
  • Desire for (1) Information about market development and technologies, (2) Technical trainings, and (3) Financing suitable for small and medium enterprises that is not currently available in the market.  
  • 90% of respondents considered participation in national and international networks essential, which the CIC could provide to enhance technical capacities and foster technology transfer.
  • 88% of respondents saw benefit in a focal point, or cluster, for climate technologies in Morocco such as the one that CIC could provide.
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Morocco has a plethora of stakeholders involved in innovation and/or climate technologies. The government has recently put in place several instruments to show its commitment, e.g. innovation funds, clusters, etc. However, it will take some time before concrete results are visible . The CIC could support the country's progress towards a green economy. Moreover, it could assist Mr. Berrada and his fellow innovators in converting his dream into reality and, in the process , create badly needed local jobs.

Oct 01, 2012 / 0 Comments
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An invitation to a live web-chat on jobs in the Middle East and North Africa

 

This blog is part of a weekly series that we hope will provide some food for thought on the critical questions outlined in the forthcoming MENA Flagship Report on Jobs.

 

The Arab World faces a great opportunity with large numbers of educated youth entering the labor force in the coming decades.  An opportunity for the Arab World to re-emerge as the dynamic, innovative center of prosperity it once was – IF, and that is a big IF, this vast human resource is given the opportunity to reach its full potential.

 

 

So WHAT is standing in the way, WHY is unemployment so high and HOW can these both be overcome? These three questions form the basis for a new discussion series that we are launching today.  Over the coming weeks, we will present some of the analysis we have prepared on jobs in the Arab World. We will discuss some of the obstacles that need to be overcome and some of the technocratic solutions that we draw from this analysis.  But most importantly, this problem is too big for any one institution, government or individual to solve, so this is my challenge to you:  Let’s try ‘crowdsourcing’ the problem! 

 

WHAT do you think are the most important aspects of the jobs situation in the Arab world (is it unemployed youth, women, lack of jobs for the educated, regional inequalities????);

WHY is the situation so? (bad regulations, too little growth, wrong kind of growth, poor education, lack of safety nets????) and,

HOW can more good jobs be created for the many rather than the few?

If the Arab World continues along the same economic path excluding the many (largely younger and female) and benefitting the few (older and male) – the coming opportunity will be wasted.  With the Arab Spring and its call for a new social contract there is great hope but also even greater expectations – citizens are demanding more and better jobs and the politicians and academics are listening.  At the World Bank, I have heard this call from the senior civil servants and politicians I meet at official events, I heard it during a live web discussion with ordinary citizens, I have heard it from young people just asking for a chance, and older people worried about the next generation. 

Without more and better opportunities there is little hope of meeting the aspirations of the Arab Spring.  Without a job there is little dignity, little bread and little freedom – but most importantly, there is little hope.    

In December, 2012 we will launch a report on jobs in the Arab World together with the Arab Labor Organization, but we want to do more than simply present a report.  We would like to underwrite a debate, develop solutions jointly with experts, advocates and ordinary citizens, so we can present to policy makers a set of ‘crowdsourced’ recommendations as the basis for urgent and lasting action.  To stimulate the discussion, we will be posting a series of blogs over the next month that outline the Bank’s insights on specific issues related to the  what, why and how of jobs.  I hope you will then join me on September 17 for a live web-chat to discuss both our and your ideas on jobs, and to hammer out together a plan for tackling the problem. At the World Bank’s annual meetings later in the year, we will present the preliminary findings to the finance ministers and other high officials, and I will have the opportunity of communicating our ideas to them.

So here is the challenge: What do you want me to say when I meet ministers at the World Bank’s annual meetings on the WHAT, WHY and HOW of jobs in the Middle East and North Africa?

I look forward to discussing your answers on September 17th.

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This blog is part of a weekly series that we hope will provide some food for thought on the critical questions outlined in the forthcoming MENA Flagship Report on Jobs. The common thread and objective of these blogs are to spur a conversation on “what to tell your Finance Minister.” This is in preparation for the World Bank Annual Meetings in October 2012, where the report's main messages and the results of the live chat will be presented to MENA policy makers. We want to know what YOU think is holding people back, and what can be done to create more and better jobs in MENA. Please send us your thoughts and join us for a live web chat on jobs on September 17.

Oct 01, 2012 / 0 Comments
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This blog is part of a weekly series that we hope will provide some food for thought on the critical questions outlined in the forthcoming MENA Flagship Report on Jobs.

 

Like many of my colleagues, I have now spent several years trying to understand the reality of labor markets in MENA, especially for young people. Looking back over the research involved to define labor market dynamics for the whole region, a focus group with young Moroccans about their work as informal street venders in Casablanca comes to mind.  None of them considered what they did a “real job”. Their work was rarely rewarding, was risky, often persecuted by the police, and, more importantly from their standpoint, it did not provide them with the means to propose to a girl, let alone to start a family.

 

Yet they could not find anything better.

 

They had no faith in education, which they had abandoned long ago, as a path to a good job, and claimed that better and more stable positions were only available to upper middle class kids, backed by wealth and the right connections.

 

I learned many valuable lessons from this conversation. The first is that jobs provide much more than a livelihood.  They are also critical for achieving many of life’s milestones, such as forming one’s own family, and are a vital source of social recognition and the sense of self worth that goes along with it.

It was also clear that the quality of available jobs is as important as their quantity. Street vending is not only risky and badly paid, but frustrating, and on a mass scale, this frustration translates into social instability.  However, in MENA, good quality jobs are a privilege that continues to be out of reach for  the majority of the population.  

 
Much like the young Moroccans, the large majority of workers in the region’s low and middle income countries have informal jobs, which pay little, provide low returns to one’s education, and very rarely constitute a platform to better employment in the future, like forming thriving enterprises. On the other hand, the few desirable jobs in the economy – those with social protection or above-average earning - continue to be provided mostly by the state, and mostly to middle-age males at the expense of younger workers and women. 

 

 

 


 

 

What makes things harder is that these stark differentials across workers tend to persist. In short, MENA labor markets suffer from a mobility deficit.  Those who hold a good job keep it nearly forever, those in a precarious job hardly move into a better one. Residents of regions with high unemployment lack the means to move to places where labor demand is stronger, thus maintaining strong rural urban divides. Individuals with the same levels of education end up earning very different salaries, depending whether they work in the public or in the mostly informal private sector, but rigid rules prevent workers to flow across these sectors and to even out these disparities.

 

However, what surprised us at a closer look was to see that while protected or well paid jobs are few and persistent, most families tend to have at least one worker with such a job;  probably this allocation allowed appeasing the explosive situation for quite some time, but at the same time it reinforced a social model centered around the male breadwinner – a model now crumbling under the weight of the demographic boom.

Perhaps, though, what would stand out most in a bird’s eye look of labor markets in MENA is the sheer number of working age individuals who are not employed, a vast well of untapped human resources.

 

 

Three out of four working-age women still do not participate in the labor force, and constitute 80–90 percent of MENA’s inactive population. These rates have not improved substantially in spite of  improving educational achievement for women, and of a decade of sustained economic growth right up until the recent financial crisis. In addition, an alarmingly large number of young people are neither in school nor at work, and in many countries most of them are actually out of the labor force. Thus, the much-discussed youth unemployment rates of the MENA region, the world’s highest, grossly underestimate the extent of ‘joblessness’, because they only include those actively seeking work.

 

 

What I mostly gathered from my encounters was the frustration of not having any clue of how one could turn hard work and talent into success. I remember a 24 year-old woman from Tangier recounting how she went to law school, with the support and sacrifice of her poor family, only to find out at the end that her degree was no help in getting her a  job.

 

Public sector jobs in some countries have become so rare, and so coveted, that only those from top institutions, or the most connected, can credibly aspire to them. When searching for work in private companies, she learned her degree had little value, and rather that what employers wanted were French language and computer skills, or, in some instances, her willingness to be in workplaces where her safety as a woman was at risk.

 

Above all, she struggled at explaining to her mostly illiterate family members why all those years of education had not led her to a better life than their own.  And, in fact, the reasons for this inefficient and inequitable distribution of opportunities are complex, and rooted in the economic history and political economy of the region.  Understanding them   requires exploring a number of factors at play: why are educated young people no longer able to enter the middle class track as their parents could?  Why did economic growth fail to translate into broader benefits for the majority of the population in the Middle East and North Africa, compared to many economies in Asia, or in a country like Turkey? Why are the few available good jobs allocated mostly to older males, at the expense of young people and women? Why is the formal private sector employing such a small share of the working population?

 

This blog is part of a weekly series that we hope will provide some food for thought on these critical questions, based on our latest data and research. The common thread and objective of these blogs is to spur a conversation on “what to tell your Finance Minister”, in preparation for the World Bank Annual Meetings in October 2012. We want to know what YOU think is holding people back, and what can be done to create more and better jobs in MENA. Please send us your thoughts and join us for a live web chat on jobs on September 17.

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This blog is part of a weekly series that we hope will provide some food for thought on the critical questions outlined in the forthcoming MENA Flagship Report on Jobs. The common thread and objective of these blogs are to spur a conversation on “what to tell your Finance Minister.” This is in preparation for the World Bank Annual Meetings in October 2012, where the report's main messages and the results of the live chat will be presented to MENA policy makers. We want to know what YOU think is holding people back, and what can be done to create more and better jobs in MENA. Please send us your thoughts and join us for a live web chat on jobs on September 17.

Read the previous week's blog in the series:

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