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Economic growth not boosting job creation in MENA region



           

Faced with two major problems, low job number growth and weak productivity, the MENA region countries need a more qualified workforce. Version française



Economic growth not boosting job creation in MENA region

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In Jordan, GDP has risen thanks to the increase in number of salaried workers, while at the same time productivity has fallen (photo : F.Dubessy)
In Jordan, GDP has risen thanks to the increase in number of salaried workers, while at the same time productivity has fallen (photo : F.Dubessy)
To find out if an economic sector is recruiting and to ascertain its impact on productivity , the economists at the 'Euro-Mediterranean Network for Economic Studies (EMNES) analysed data from three MENA region countries, Egypt, Jordan and Tunisia for the period 1983-2010.
 
The working paper, entitled “Employment Intensity and Sectoral Output Growth” shows that economic growth and investment are prerequisites, yet insufficient, for creating jobs and providing a solution to the problem of unemployment. Consequently, in 20 years (1985 - 2006), Egypt’s GDP has increased by more than 90%, while job creation, at 7.9 million, has only increased by 67%.

If manufacturing remains by far the largest sector in Egypt in terms of job creation, it is surpassed by the services sector in Tunisia and Jordan. In the latter, services employ 80% of the workforce, against 49% in Tunisia (a 29% increase in the 30 years between 1980 and 2010) and 47% in Egypt.

Industry provides few-jobs

Despite the substantial reductions in the workforce brought about by the various economic reforms and in the government administration, services represent a high-recruitment sector, ahead of trading.

In contrast, and despite the level of foreign direct investment (FDI) targeting the sector, industry provides better-paid -but few- jobs. The study puts this down to factors such as automation and technical advances.
Employment is a powerful driver for growth. In Jordan, GDP has risen thanks to the increase in number of salaried workers, while at the same time productivity has fallen.

Employment legislation and recruitment incentive schemes have had a considerable impact on the job market, with some significant disparities according to the targets singled out: age group, region, level of education, major corporation or SME. In Tunisia, despite measures aimed at boosting employment representing 1.5% of GDP (between 2000 and 2010), no long-term solution has yet been found to the unemployment issue, which particularly affects qualified persons and the inland regions.

Two main problems still remain in MENA countries: low job number growth and weak productivity. The working document concludes, “It is crucial to improve the economy’s competitive environment and enhance equality of opportunity between all the market stakeholders. Likewise, in order to increase labour productivity, MENA countries urgently need to realign the education system with job market requirements, thus providing a more skilled workforce.”

Authors : Chahir Zaki (Cairo University and ERF), Nooh Alshyab (Yarmouk University), Mohamed Goaied (IHEC de Carthage), Nesreen Seleem (Cairo University).


Read the working paper


Frédéric Dubessy


Wednesday, December 12th 2018



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