By Andy Sambidge
Booz & Co think tank highlights issues relating to region's unemployment problem.
Unemployment is one of the GCC region's biggest challenges with the potential to depress standards of living and breed economic inequality, a new report said on Sunday.
Underemployment (overstaffing or mismatching of skills) is also an issue, the result of governments being the primary employer of citizens who often do not have the qualifications to be competitive in the private sector, said Booz & Company's Ideation Centre, a Middle East think tank.
It added that the root causes of the GCC's employment problems included an education system which did not address the needs of modern industry and citizens conditioned to expect that governments will always take care of them.
Booz & Company's report said the problem resulted in pressure on the region to generate hundreds of thousands of jobs annually.
According to recent World Bank projections, the GCC's labour force will exceed 20.5 million by 2020 - an increase of almost 30 percent from the current estimated labour force of 15.6 million.
"The region must effect changes in the culture, in the government, and in private industry if its problems of unemployment are to be reversed," said Richard Shediac, a partner at Booz & Company.
In 2008, national unemployment in Saudi Arabia and the UAE was estimated to be close to 13 and 14 percent, respectively, and 15 percent in both Bahrain and Oman, despite the rapid growth in those countries' economies since 2003.
Qatar, by contrast, experienced 3.2 percent unemployment in 2007 (down from 11.6 percent in 2001).
Booz & Co added that government dominance of the economy had resulted in a big gap between the skills required by the private sector and those actually available in the workforce.
It said the effectiveness of employment policies in GCC countries had been limited while education policies were generally not aligned with economic goals.
"The misalignment of higher education policy and labour market requirements has produced a quantitative and qualitative skill gap," the report added.
Booz & Company said the GCC needed to promote the private sector, foster entrepreneurship, engender a culture of corporate governance and disclosure, and build up an infrastructure for private business.
It also said that immigration policies needed to be more focused, and GCC countries should follow the example of Bahrain in discontinuing the worker sponsorship system.For all the latest UAE news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
I fully endorse the observation of this report that "the misalignment of higher education policy and labour market requirements has produced a quantitative and qualitative skill gap" I had pointed several times in this column about logistics shortage skills esp among GCC nationals. Now my recent experiment on one tasks on BBC Box Experiment adminstered to students at different levels of learning - one at undergad level in GUST (Gulf University) Kuwait and the other in the MBA stream of Indian Marotime University (IMU) has led to the following conclusions: inadequate data interpretations skills,sustined motivation for research focus, inability to use basic software for graphical representation of quantitative proof and communication problems underlined the efforts of the experimental groups. IMU will have to redefine its VMG (Vision, Mission and Goals) statements at this new location to facilitate the paradigm shift in learning logistics on par with other international students.