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Citizen today, March 2012 - Arab Spring nations explore new developments - EY - Global

Citizen today, March 2012

Arab Spring nations explore
new developments

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Improving the skill set among nationals and ensuring less of a skills mismatch between nationals and non-nationals is a priority.

As the dust starts to settle on a year of unparalleled political and social instability for the Middle East and North Africa, Osama Toema, Government & Public Sector Leader in the Middle East and North Africa, says policy-makers need to develop the non-oil economy and create employment — and fast.

The first steps the MENA region should take to improve the business environment include promoting investment in physical and human capital, and creating business friendly environments focused on the rule of law with appropriate institutional checks and balances.

Here are other possible ways to promote opportunities for the next generation.

  • Encourage employment in the private sector: while wages are relatively flexible, better wages and job security in the public sector can discourage nationals from seeking employment in the private sector.
  • Promote entrepreneurship: this can create the right environment for new businesses and provide faster employment growth.
  • Develop the non-oil economy: the oil sector is highly capital-intensive and provides fewer opportunities for employment growth. But many economies in the region have successfully taken advantage of opportunities in tourism, financial services and technology and there is potential for much more to be done.
  • Invest in education and training: improving the skill set among nationals and ensuring less of a skills mismatch between nationals and non-nationals is a priority. In the UAE, foreign professionals have, on average, four more years of formal education than nationals. Saudi Arabia has increased spending on placement programs and training schemes.
  • Target public spending on infrastructure: according to the IMF, evidence from Latin America and the Caribbean suggests that infrastructure investment can have a sizable impact on employment generation. About 40,000 annual direct and indirect new jobs can be created in the short term for every US$1b spent on infrastructure projects. On this basis, 1% of GDP spent on the right kind of infrastructure projects could generate 87,000 new jobs in Egypt.

For more information about these issues, read our Rapid-Growth Markets (RGM) Forecast — a quarterly analysis that offers insight on macroeconomic trends across 25 RGMs from around the world — includes 4 from the region; Egypt, Qatar, Saudi Arabia and UAE.



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