Compulsory military service could help to solve the Arab youth unemployment crisis, says the chief executive of the Saudi Basic Industries Corporation (Sabic), one of the largest employers in the region.
The move would help to change the mindset of young people unwilling to consider certain jobs, said Mohammed Al Mady at the World Economic Forum on the Middle East and North Africa at the Dead Sea, Jordan.
“The problem is you have to tackle the cultural dimension of the labour force. People don’t accept jobs. They want the jobs that will give them higher money and stability. That’s not going to happen. They have to accept certain job categories that fit their situation,” he said at the weekend in a session about tackling joblessness in the Arab world.
“Therefore countries have to work very hard on how to change the perception of youth so that they accept existing jobs.
“How do you change it? Governments probably have to draft them in the military for six months before they go to the jobs market. Teach them resilience, teach them modesty, teach them how to work and take the ladder step by step.”
Nearly a quarter of youths in the Mena region are out of work, with Saudi Arabia having one of the highest unemployment rates among the 15 to 24 age group at 28 per cent according to the United Nations. Those who do work prefer the generally higher pay, shorter hours and better security of government jobs.
Several GCC states have drawn up quotas to force private sector companies to employ more nationals. Mr Al Mady said Saudi Arabia’s system, called Nitaqat, was aimed at gaining “quick wins”. But partnerships between the public and private sectors could also help to solve underlying causes of joblessness.
Sabic, the petrochemicals giant, which employs about 20,000 people in the kingdom, is working on its own initiatives. It is offering nationals two-year training programmes in services and manufacturing, as well as hiring academics to help close the skills gap between university graduates and the company’s requirements. It also aims to raise the number of women it employs from the current level of 50.
Other business leaders speaking at the session had their own ideas on how to create jobs.
Ellen Kullman, the chief executive of DuPont, the US chemical company, cited how the region trailed on research spending, investing only 0.2 per cent of GDP on research compared with the global average of 1.7 per cent.
Many business requests to Dupont in the region concerned transferring the company’s technical skills to solve issues, rather than complementing home-grown research, she said.
“I have seen how investment in research translates not only into stronger universities and stronger education systems but translates into sustainable job development as that research is completed, as it is developed into products, supply chains, it develops a virtuous cycle of growth,” she said.
The US$100 billion needed to be invested in regional infrastructure projects could help to generate much-needed jobs, said Majid Jafar, the chief executive of UAE-based Crescent Petroleum.
“We need to create inclusive growth in this region and in our view a major way to do that is through infrastructure development,” he said.
Unemployment has become more pressing as instability and economic stagnation push up rates of joblessness among oil importers in the region. For the oil-wealthy GCC, the problem is taking on greater urgency as they seek to reroute job seekers from the public to private sector to trim bloated government finances.
“Every year you don’t have the capacity to absorb newcomers to the labour force you’re compounding the unemployment issue and given the social and economic pressure in the region there is this sense of urgency setting in,” said Joe Saddi, the chairman of the consultancy Booz and Company, in an interview.