São Paulo – The International Monetary Fund (IMF) disclosed on Monday (7) a report that forecasts the main challenges of the countries of the Middle East and North Africa (Mena) for coming years. The fund stated that the remaining countries in the region, be they rich in natural resources like oil, or not, must have strong institutions, invest in qualification of citizens and diversify revenue sources.
According to the IMF, the countries of the Middle East and North Africa have been living unprecedented expansion in labour force in recent years. The study uses World Bank figures and shows that in 2000, the region had 104 million workers. These figures rose to 146 million people in 2010 and should reach 185 million in 2020. These figures refer to people available for work and people who are unemployed.
"The region has been unsuccessful in creating the number of jobs necessary to generate rapid expansion in the work force, and has become the area with the highest rate of unemployment in the world,” says the Fund. The situation is worse, according to the IMF, among youths. While the global average is 2.9 unemployed youths per unemployed adult, in the Mena, this rate is four youths per adult in the same situation.
In the study, the IMF divides Arab nations in three groups: the first includes the nations of the Gulf Cooperation Council (GCC), rich in natural resources and importers of Labour. These nations are Bahrain, Kuwait, Oman, Saudi Arabia, the United Arab Emirates and Qatar. The second group includes countries that do not belong to the GCC, but are rich in natural resources and have abundant labour. This is the case with Algeria, Iraq, Libya and Syria. The third group, considered emerging nations, includes Morocco, Egypt, Jordan and Tunisia: countries with few natural resources. The IMF compares these nations to another two nations, rich in oil, though not Arab: Venezuela and Iran.
The report shows that the countries in the GCC had better performance in terms of income generation (a classification in which the group of emerging nations was the worst classified), the largest per capital income, greater life expectancy and most educated inhabitants. While among the countries that are rich in oil but not in the GCC, the average level of education is 6.5 years, among the nations of the GCC the average is almost 8.5 years. The average estimated by the study for Venezuela and Iran is 7.5 years and in the emerging Arab nations, the average is seven.
The IMF warns that the countries in the Mena must reduce their dependence in natural resources to become less susceptible to market volatility. The nations in the region own 55% of world oil reserves and 29% of gas reserves. In 2008, 38% of Algerian revenues, for example, came from revenues generated by the hydrocarbon sector, which, in turn, answered to 98% of exports.
The Fund suggests that the countries of the Mena manage their macroeconomic policies better to avoid effects like the so-called expansion-recession cycle; that is, periods of great economic growth followed by others of GDP contraction. The organisation also recommends investment in human capital and innovative policies to diversify economies and supply the labour market demand. The Fund estimates that to implement these changes, governments need to invest in the training of people involved in public management.
*Translated by Mark Ament
