By Staff writer
New report says private sector in the Middle East and Africa is still 'largely underdeveloped to create sufficient formal jobs'
Youth unemployment in Saudi Arabia is expected to increase from 33.5 percent last year to over 42 percent in 2030 as the Middle East continues to struggle to create enough jobs for its growing population, according to a new report.
Bank of America Merrill Lynch said the private sector in the Middle East and Africa is still "largely underdeveloped to create sufficient formal jobs".
The report added that at the same time the region's public sector, which is the traditional employer of university graduates, is "overcrowded".
"The region has one of the highest rates of youth unemployment in the world where many young people therefore end up in informal work or inactivity," the report said.
Conversely, the report also showed that despite the unemployment problem, 55 percent of Saudi Arabia’s employers feel that domestic graduates are prepared for the job market, amongst the highest in the world.
The study said the MENA region spends $84 billion on education, 9 percent of total global expenditure, adding that failing to remediate the education deficiencies in low/middle income countries "could pose a serious threat to security in the Middle East".
According to the UN’s Education Commission, this could increase the potential for intergenerational cycles of poverty to persist and the youth of tomorrow to be left without the skills and knowledge they need to contribute to their societies and economies.
BOA Merrill Lynch's report also highlighted the global race to attract top talent and prevent "brain drain", adding that countries such as the UAE and Qatar continue to offer a strong “pull” factor for workers to migrate thanks to their tax-free regimes.
On apprenticeships, the report said pilot projects on dual vocational training show some positive results but lack sustainability and vocational schooling seems "obsolete and underrated".
"While huge improvements in general secondary and tertiary education has increased access to the labour market is highly problematic," the study added.