São Paulo – The Organisation for Economic Co-operation and Development (OECD) and the World Economic Forum disclosed on Friday (27) a study on foreign direct investment (FDI) in the Middle East and North Africa. According to an OECD press statement, the report recommends that investment be diversified beyond the oil and gas industry and allocated to areas that generate greater volumes of jobs.
According to the document, two thirds of the FDI turned to the region goes to the oil and gas sectors, which absorb much capital, but do not generate jobs in the same proportion. Despite investment having grown significantly over the last decade, the study shows that the Arab world still has a high level of unemployment, exceeding 40% among the youths of some countries.
The OECD says that among the causes for the low impact of FDI on the labour market are a little developed private sector and great space between the needs of companies established and qualification of the labour force.
The study recommends that investment promotion agencies in the region foster business with greater potential for generation of employment. It points out that new enterprises create more new work posts than mergers and acquisitions of local companies by foreign enterprises.
To the OECD, policies should be established for: the training of labourers, relaxation of very strict labour legislation, integration of women into the work force, greater engagement of foreign investors with local suppliers, promotion of sectors that add value, the fight against corruption and the incentive to responsible trade conduct.
According to the OECD, the study updates the Arab World Competitiveness Report, published in October, which defends that political changes resulting from the Arab Spring should be accompanied by economic reforms to face the “routes” of protests that swept the region in 2011. This means creating employment for 2.8 million youths who enter the labour market each year.
*Translated by Mark Ament
