Job creation is ME's biggest challenge - ex-World Bank chief

Unemployment rather than the price of oil is the biggest challenge facing the Middle East region, according to the former head of the World Bank.

James Wolfensohn, told delegates at the second annual Silatech summit in Doha, Qatar that the need to create up to seven million jobs per year in the region was "daunting".

He added: "The price of oil is less important than the issue of unemployment and the impact of all of this on economic development.

"It’s a daunting challenge in this region because we’re not creating jobs quickly enough. The numbers vary but it’s somewhere between five and seven million jobs that need creating every year, and we have a backlog of young people that are already unemployed."

Wolfensohn, who served for 10 years as the president of the World Bank before stepping down in 2005, said: "If you have seven million jobs that are needed and only three million jobs are being created, it means that each year you are adding to the group that remains unchallenged.

"That’s not good for them and it’s not good for society, because you have a group of young people who are frustrated, instead of being able to put their creative energies to work for society."

Regarding the current global economic crisis, he said: "We’re at a moment that I’ve not seen in my life. The overall GDP growth of the world is negative, which we’ve not seen in many years.

"Then in the largest countries or groups of countries, starting with the US, we have negative growth, we have unemployment nearing 10 percent – it will surely reach 10 percent in primary unemployment; we could see 16 or 17 percent or more in secondary unemployment – and we have a massive budget deficit, which is pushing interest rates up as we speak.

"Europe, which for a time was looking rather superciliously at the US, is now discovering that it is not immune to some of the same problems. So you have these two engines of Europe and the US, in considerable trouble.

"My judgment is that this is not a downturn that will have a v-shaped recovery, or even a u-shaped recovery. It’s more likely to be a long, slow grind out of it. I’m rather bearish."

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