Unemployment: a looming specter [Archives:2005/840/Reportage]

May 9 2005

Yasser Mohammed Al-Mayyasi
Unemployment in Yemen seems to be the most difficult economic problem. Rates of unemployment have been rising dramatically especially in recent years, despite State's annual expectations that unemployment will sink.

It is unfeasible to search for official unemployment figures as they are contradicting each other. Latest governmental statistics show that unemployment has hit the mark of 40%. Yet, economic analysts confirm that actual figures are higher and increasing, especially with the fact that Yemen has plunged into depression and failed to create more jobs.

Today, the unemployed are estimated at 1.6 million. This number is attributed to the 3.5% rate of population growth over the recent years. Some official reports admit that reasons behind unemployment include impotent policies which can't generate job opportunities, as well as lack of coordination with the private sector to help establish mammoth projects which would recruit a large number of workers.

Academic studies and researches have revealed a multiplicity of factors that pushed unemployment upwards into an unprecedented level. One of these factors is the field of specialization in educational institutions, which do not meet the real need of the country. Besides, recommended fields have limited capacity. Universities just accept small numbers and turn away many students because of their limited resources. Therefore, many young people abandon studying and run for bread.

Figures show that some 250 thousand students are currently on the lists of public and private universities. These students cherish worrisome thoughts about their unknown future, fearing to join lines of the unemployed. This is also true for about 4 million students in other different stages of public and private education. Yemeni labor markets receive about 50 thousand university graduates annually, of which 85% have theoretical qualifications and skills unwanted by the market. Because unemployment poses a substantial threat to Yemen's future, Yemen Times conducted this investigation to explore this significant issue.

Dr. Mustafa Nabli, Chief of World Bank Economists in the Middle East and North Africa, who attended the round table conference in Yemen to discuss Yemen's obstacles, confirmed that further challenges lie ahead of countries of the region in coping with unemployment and generating many job opportunities.

He pointed out that Yemen will need more than 4 million jobs during the next 20 years as the workforce is growing rapidly (4% annually), one of the highest rates worldwide.

Therefore, Yemen has to diversify its economy and not depend mainly on oil resources during the coming decade. He added that Yemen has to fight poverty and for that, it has to change its overall development policy and essentially reform economy to be more flexible when dealing with looming challenges.

The private sector should be encouraged to help boost economy, alleviate unemployment. Nabli also recommends comprehensive improvement of education and local workforce skills in order to satisfy the economic needs.

He emphasized that “generating job opportunities and combating corruption is a major hindrance in Yemen, where corruption rate is as high as that of other Arab countries. Corruption in general is detrimental to investment and development and therefore worsens unemployment.”

He stressed that the provisions should be made to attract women to the labor market and laws be reconsidered to facilitate women joining the labor market.

Dr. Mutahar al-Abbasi, economist and deputy ministry of planning and international cooperation, said, “Yemeni community since ancient history sought job opportunities in the form of migrations to East Asia and the African Horn as well as Gulf States. The 90's of the last century was the time when unemployment emerged. Repatriation of 1 million expatriates from the Gulf States put the Yemeni market off balance, as it accelerated the growth of workforce at rates surpassing those of population and national economy. The inefficiency of productive sectors particularly agriculture and the disability of other sectors to provide alternative jobs, led to the spread of unemployment. An increased rate of university education output, which most of the time does not fit in the market is another factor. For the record, during 2000-2004, graduates of public universities only reached 75 thousand of whom 15% were from practical fields and yet they lack many necessary skills for actual work.

“Of the difficulties faced by recruitment agencies trying to employ graduates is their lack of mastery over foreign languages, computers skills, tools manipulation skills and mathematical skills. The government's efforts towards creating jobs can be summarized as follows:

“During 1990-1994, no clear vision was materialized about how to treat economic and social challenges which underlie unemployment because of unreliable indicators about unemployment. By 1995, the government received indicators of an economic crisis. It began working to implement the economic reform program and preparing the five year plans and poverty alleviation strategy which was scheduled to begin in 2001-2006. Those economic strategies intended to encourage economic growth, generate jobs to reduce unemployment ,reinforce economic, administrative and monetary reforms, lessen the dependence on oil, develop promising non-oil sectors, enhance partnership with the international community to achieve the millennium goals and strengthen the active role of the private sector.”

Dr. Al-Abbasi believes that jobs can be generated in many ways such as attracting expatriate capitals, providing the suitable climate, attracting investments from the Gulf States and other countries, providing the best advantages, promoting investment opportunities, rejuvenating the banking system and encouraging small enterprises. Another helping factor is to expand technical education and vocational training programs for the young workforce.

Dr. Ali Qaid, Economic Professor in Sana'a University, attributed the rising unemployment to many social and economic reasons resulting from local, regional and international transformations.

“The returnees from the Gulf State in the early 90s were the biggest factor behind unemployment. There is also the decline in aids and loans to Yemen besides the difficulties and shortcomings of the Yemeni economy during the first half of the last decade which resulted in the State's inability to provide job opportunities.”

“The unbalance in the labor market is yet another reason. Skilled workforces form just a small portion (4.6%) of the overall volume of the workforce and this is why foreign workforce is employed.”

Dr. Ali Qaid added, “Sudden freeing of the trade and policies implemented for the sake of getting integrated into the international economy had its strong impact on industry. The unfair competition between national and imported products led to the dwindling production of factories and establishments as they cannot stay the course and win the race. Establishment owners were encumbered with liabilities and were obliged to sack part of their workforce.”

Shawqi Hail Sa'eed, Deputy Chairman of the Taiz Chamber of Commerce and Industry, is also of the opinion that the countty's inability to create jobs is the reason behind unemployment.

“This is because of economic depression resulting from monetary and financial policies as well as obstacles to investment. The public sector, because of the general trend of the State, no longer employ many numbers of people due to job inflation. All these reasons and others, limit job opportunities and increase unemployment.”

He indicated that another reason behind this is less investment and less local production resulting from smuggling and abrupt freedom of the trade which completely or partly did away with some national industries. He warned of the dangerous phenomenon engendered by unemployment such as looting, burglary and ganging.

According to Shawqi Hail, the private sector has been playing a major role in combating this negative phenomenon and is “the main employer of workforce.”

The five-year plan depended on the private sector for creating job opportunities. Yet, statistical indicators report a notable retreat in the performance of the national economy including the private sectors in terms of employing workforces which reflect many facts: investment is floundering, investment environment is still riddled with complication, hurdles, and constraints which limit the activity of the private sector. What adds insult to the injury is bureaucracy and bribery.

Today, unemployment has been exacerbating day by day and getting more complicated for a variety of reasons. For example, the unemployed are unable to reach foreign local markets which may employ them because of complex migration procedures; investment as we said is not sufficient in heavy-workforce projects or in productive projects in general. The ever-increasing education output further upsets the balance of workforce and job opportunities and represent a frustrating challenge.

Many economists believe that the solution of Yemen's unemployment should be tackled in many ways along with implementations of government plans and procedures aiming to reduce population growth and students' opting out of school.

Therefore, it is needed to enhance economic growth by fostering sectors that require large number of workers, paying attention to training and qualification. Attracting capitals and investors, boosting small and medium enterprises and broadening their programs so as to incorporate thousands of unemployed youth.

Today all people should understand that to leave unemployment unresolved means more complicated problems in the future which will provide the fertile soil for terrorism and crime. We hope this difficulty would be removed soon.