GCC Needs To Invest In Job Creation

Long-term investment in developing the skills of young people and creating jobs are essential in promoting sustainable economic growth in the GCC, according to an Ernst&Young (EY) report.

Over 15 million young workers will enter the workforce in Saudi Arabia, Qatar, the UAE and Egypt in the next ten years, the report said.

“GCC governments have been pushing on multiple fronts to address the issue of job creation with efforts ranging from long-term strategic policies, to short-term desired outcomes,” said Bassam Hage, MENA markets leader, EY.

“Although these initiatives had measurable success in Saudi Arabia and other GCC countries, it is evident that there is the need for additional sector-specific efforts.”

Some of the key elements that will contribute towards spiking job creation include reforming existing business practices, infrastructure development, focused outreach to investors, economic diversification, development of micro and small, medium enterprises along with an improved access to finance.

The report also added that it is imperative to establish a strong human capital infrastructure by reforming the education curricula in the Arab states and equip young job seekers to meet the demands of the private sector.

“When brought together, the supply and demand factors must balance the need for an expatriate workforce to support growth with the need to increase training and employment of young nationals, addressing the key impediments to sustainable national employment across the region, ” said Gerard Gallagher, MENA advisory leader, EY.

GCC governments should also focus on improving the rate of entrepreneurship in the region, the report said.

In order to encourage entrepreneurship, the governments need to address the financial impediments that young businesspeople face when starting a venture in the region, it added.

“Tackling youth unemployment requires serious discussions on not only how to boost demand through strategic job creation across key growth sectors such as Tourism and Transportation, but also of the impediments to a pro-business environment whereby entrepreneurship is encouraged and facilitated,” said Ahmed Reda, office managing partner at EY, Jeddah.

“While there are key challenges surrounding youth employment and skill development, there are also tremendous opportunities for regional economic growth.”

GCC governments have been stepping up their nationalisation schemes in order to increase the local employment rate.

However, the majority of such schemes have been rendered fruitless due to the poor skill sets of the local workforce, according to a report from Alkhabeer Capital.