Poverty stoked Mena unrest: ALO

Festering unemployment and poverty fuelled the current upheavals in the Arab region and authorities should intensify reforms to tackle such problems and restore stability, a top Arab labour official has said.

Ahmed Lukman, director general of the Cairo-based Arab Labour Organisation (ALO), said turbulence sweeping the Middle East and North Africa has aggravated poverty and joblessness in the region with the number of unemployed Arabs reaching more than 18 million.

Quoted by the London-based Saudi Arabic language daily Alhayat ahead of an ALO conference in Cairo this week, he said Arab nations need now to focus on reforms and attract more investment to improve the people’s living standards.

“Widespread poverty and unemployment in the Arab world were the spark of the current revolutions in the region…government efforts to tackle these two problems had been very slow and the ALO had warned many times of this inefficiency in dealing with such two vital issues,” he said.

He said investments attracted by most Arab nations over the past period had concentrated on key cities as some areas have been deprived of capital and development funds, leading to more joblessness and poverty.

He noted inter-Arab investments had also focused on economic sectors and failed to take into consideration the social sector.

“The failure of such policies has led to an imbalance in the internal society…development has remained focused on one leg.”

Lukman said he saw bright prospects for the Arab world after the end of the current uprisings but stressed the new governments must expand reforms.

“The reform decisions taken by some Arab countries over the past two months surpassed all the decisions taken over the past 40 years thanks to the current revolutions…we call on all Arab governments to act against poverty and unemployment and to start a social dialogue among the labour parties…the new governments must realize that creation of jobs has to be a top priority in the coming stage to they can march firmly towards a new era.”

Lukman said poverty, unemployment and other socio-economic problems in the Arab region deteriorated following the 2008 global fiscal distress, which jolted most world economies, adding that the problem worsened after the present unrest which depressed local economies and halted oil exports.
 

In a recent report, a United Nations organization warned that the 2008 crisis had complicated the region’s endeavors to tackle poverty and unemployment.
 

“The global slowdown in economic growth which began in the second half of 2008 is primarily expected to lead to higher levels of unemployment, more specifically in the case of migrant workers who are often the most vulnerable category,” the Economic and Social Commission for Western Asia (ESCWA) said in the study about the post-crisis Arab job market.

“Evidence gathered so far shows that unemployment, depression in wages and worsening working conditions are on the rise in response to the slowing of activities in finance, construction, tourism, services and real estate.”

Arab League figures released early this year showed the crisis had already impacted the region’s growth and per capita income, with real Arab GDP growth sharply slowing to 1.8 per cent in 2009 compared with 6.6 per cent in 2008.
 

In current prices, the combined Arab GDP collapsed by at least $200 billion to $1.7 trillion in 2009 from nearly $1.93 trillion in 2008, a fall of about 1.9 per cent against a growth of around 25.8 per cent in 2008.

“As a result, this led to a decline in the per capita income in the region from around $6,002 in 2008 to $5,159 in 2009,” the Cairo-based League said in its annual economic report released by the Abu Dhabi-based Arab Monetary Fund and two other key League Organizations.
 

According to the AlO, a key Arab League establishment, Arab countries need to create nearly 40 million jobs by 2020 to tackle unemployment through reforms.

Given their massive oil wealth, the UAE and other Gulf Cooperation Council (GCC) states have maintained the lowest jobless rate in the region but unemployment has largely deteriorated in such low income nations as Mauritanian, Djibouti, Somalia, Sudan, Yemen and Palestine, it said.

“As a group, the Arab countries are suffering from the highest unemployment rates in the world despite a slight improvement in the past years….the Arab joblessness rate is estimated at over 14 per cent compared to an international average of nearly 5.7 per cent,” ALO said.

“There was some improvement over the past years but it has been mainly a result of greater participation by the private sector…the region now faces a serious challenge in matching the rapid growth in the population and labour force and how to ensure jobs for those who are about to join the labour market, mainly the youth, who account for nearly 50 per cent of the total jobless Arabs….if the Arab countries want to face that challenge and reduce unemployment by half, they will have to create nearly 40 million jobs by 2020.”

ALO said several decades of socio-economic development have failed to tackle the problem and warned that the rate could jump to 100 million by 2020 without real efforts to match an upsurge in the workforce.

“Arab countries are facing a serious challenge as they entered the new millennium burdened with severe economic and social problems, including unemployment and poverty….they have no choice but to intensify their efforts to support economic development and ensure jobs for their citizens,” it said.
 

“Developments over the past years have shown that the fiscal policies in Arab countries lack flexibility because they are heavily reliant on limited sources of income, including oil…this reliance has made them highly susceptible to any shocks to those sources…besides, the accumulating domestic debt in an increasing number of Arab states is seriously aggravating their financial situation…in some members, the debt has reached alarming levels that are consuming up a large part of their public revenues and seriously affecting their development spending…this is hindering economic growth and their efforts to improve living standards and find jobs for their citizens.”

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