Job growth key to stability in Egypt

The driving force of revolutionary sentiment in the Middle East and North Africa is chronic youth unemployment.

This is social upheaval we’re witnessing, fuelled by joblessness and a resulting lack of self-esteem. It is not the rise of a religious theocracy, as with the 1979 Iranian Revolution. Nor is it the assertion of nationalist pride in the former Warsaw Pact nations in the 1990s. Those are two misleading comparisons that get far too much attention.

A more apt comparison would be to the English welfare reforms and U.S. Progressive movement of the early 20th century, and the 1935 march on Ottawa by unemployed men from across Canada.

Yes, police brutality in the 30-year regime of Egyptian President Hosni Mubarak has been very real. Operatives of Al Qaeda and other terrorist groups do wander freely in the failed state of Yemen. And suppression of basic freedoms and a chasm between rich and poor are indeed oppressive facts of everyday life in the Arab world.

But the oft-cited rampant corruption of despotic leaders and their crony-ridden bureaucracies in Egypt, Tunisia, Jordan, Yemen, Syria and Sudan is actually less pronounced than in comparatively stable nations like Russia.

Transparency International assigns the same ranking of low integrity in government — coming in an abysmal 98th of 178 states measured — to Egypt as to Mexico. (Canada came in 6th.)

Italy (67), China (78) and India (87) don’t win any prizes for superlative honesty in public administration, either. But their booming economies, with high rates of business formation and expansion, more readily absorb new entrants to the workforce.

A clear-eyed Economist sees the unfolding events in Cairo, Tunis and Amman for what they are. “Policy-makers would be well-advised to think about how we’re going to promote job-intensive growth, even as they try to calculate the gigantic geopolitical consequences of the Egyptian earthquake.”

But this crisis is seldom framed that way, because resolving it on economic rather than geopolitical terms will be a long-term project that makes an enormous claim on the resources of affluent nations. Replacing a dictator or repressive junta will not cure unemployment rates for people under 30 that range from 25.4 per cent in Egypt to 30.3 per cent in Tunisia.

“The protesters believe that the freedom of expression they are fighting for now will improve their chances in the job market,” Djavad Salehi-Isfahani, a professor of economics at Virginia Tech, told Der Spiegel recently. “I am deeply worried that young Arabs will turn away from democracy as soon as they realize that you cannot eat free elections.”

At 14 per cent, Canada’s youth unemployment rate is intolerably high. But 15- to 29-year-olds account for about one-third of the total population of Canada and the other former G-7 nations.

In most Middle Eastern and North African nations, that figure averages 60 per cent. In Jordan, about two-thirds of the population is under 30. Jordan’s Queen Rania recently warned of a “ticking time bomb” in the projected increase in unemployed youth in the Middle East. The region’s number of jobless young people is expected to soar from a current 15 million to 100 million in just a decade’s time.

That’s a number worth printing in bright red at the top of every foreign minister’s daily to-do list. No one likes to think about the implications for regional stability of 100 million idle youth. Thanks to heavy investment in higher education in most Arab and North African nations in past decades, the region’s 20-somethings have high expectations of job fulfilment. And they’ve just shown their organizing ability in forcing the early retirements of despots in Tunisia, Egypt and Yemen.

The factors behind this crisis include higher fertility rates than any region outside Africa (2.7 per cent compared with Canada’s 0.67 per cent). That fecundity creates far more new workers than employers can absorb. And the region’s universities have emphasized quantity over employability, graduating students ill-equipped to compete with highly skilled, low-paid workers elsewhere in the global economy.

State-planned economies remain the rule in an Arab world in which about 70 per cent of the workforce is employed by government. Even before the current global recession, the region’s fiscally fragile governments stopped taking on more than a fraction of workforce entrants. And an underdeveloped private sector, hobbled by bureaucratic sclerosis and corruption, is of scant help in easing youth unemployment.

“Educated youth have been in the vanguard of rebellions against authority certainly since the French Revolution and in some cases even earlier,” said Jack A., Goldstone, a sociologist at George Mason University School of Public Policy, in a recent Bloomberg Businessweek interview.

Parisians, Chicagoans and Torontonians recognize how toxic is the combination of youth and long-term unemployment. If nothing short of a revamped Marshall Plan is required to create viable economies in one of the world most volatile regions, the price will be well worth paying.

dolive@thestar.ca