GCC countries need to invest in education and raise skill levels if the region is to be internationally competitive, according to an ICAEW report.
Although GCC governments have recognised the need to diversify themselves from oil-based revenues, they still face challenges in terms of skill shortages in the region.
The report said that timely investment in education would enable GCC countries to benefit from a ‘demographic windfall’ owing to strong population growth. However a lower skilled population would contribute to rising unemployment and drain natural resources.
Middle East GDP growth is expected to remain steady in the short term and is above the global average, but skills shortage coupled with population growth could be detrimental in the future especially with an expected plunge in oil prices, the report said.
“To compete in skills-intensive industries like engineering or financial services, economies need access to a highly-skilled workforce,” said Peter Beynon, regional director, ICAEW Middle East.
“Currently, statistics suggest the GCC is lagging behind other developed economies in terms of education. This means firms are forced into buying in expertise from abroad, but in certain circumstances if they do not employ enough nationals they are fined. This could place them at a distinct disadvantage in competitive international markets.”
Beynon said that investing in education to raise skill levels would be a long-term sustainable strategy that would help GCC countries to diversify while helping to integrate nationals into the workforce.
Education has become a strong concern among GCC countries with nationalisation procedures gaining momentum post the Arab Spring.
A recent Booz & Company study revealed that around 25 per cent of students in the GCC believe that the region’s education system is in need of drastic reform while 67 per cent said that reforms would improve their education.
“While most GCC governments are aware of the problem and have made “human capital development” core to their policy agendas, problems still persist with the quality and relevance of GCC education,” said Leila Hoteit, a principal with Booz & Company.
“The underlying difficulty remains a gap between the skills that businesses need and what young people learn in schools.”