Economic reality hits Arab hopes

When young Arabs marched this year chanting “the people want the fall of the regime”, the slogan that has come to define the Arab spring, they demonstrated an extraordinary resolve to destroy the autocratic order in the Middle East.
Ridding the region of dictators would restore dignity, end the corruption of elites and pave the way for a happier, more prosperous future, they thought.

As old regimes are swept aside, the people are enjoying their new found freedom. But they are also finding, unsurprisingly, that the gap between their expectations and the economic reality is widening.

The people now want jobs – but jobs are hard to find.

The transitional authorities are finding themselves in an unenviable situation, trapped between pressures for populist measures which may deliver a quick boost and the need for sounder, longer-term economic management. Their biggest headache has been to persuade the excited young people to be patient.

The emerging economic dilemma is the result of the miserable failures of the past. A report issued earlier this year, commissioned by the International Finance Corporation and Islamic Development Bank, found that the Middle East has the highest youth unemployment rate in the world, at about 25 per cent, with female unemployment even worse, at 30 per cent.

The scarier part is this: keeping unemployment at this dismal level means countries in the region have to create at least 35m extra jobs by 2020; reducing it requires another 10-15m jobs; and reaching a more acceptable global average unemployment needs the creation of 85m jobs. “This is no mere scaremongering,” the report says, noting that the estimates are in line with other data regarding the scale of the challenge.