Institutions, Markets and Youth in the Middle East During Global Downturn

May 20, 2009

Reformers in the Middle East are facing testing times, explains Navtej Dhillon, summarizing the findings of a new Middle East Youth Initiative report. Will existing challenges of youth unemployment and exclusion worsen, or will countries enact the necessary reforms to emerge stronger from the economic slowdown?


“Between 2002 and around 2008, many Middle Eastern economies experienced some of their best growth in the last few decades, and I think that tells us that many countries were pursuing reforms, improving their business climates, and attracting more investment. Clearly, it’s been a telling story of good economic fundamentals in place in many countries. But what the report argues is, or what it questions is, whether that growth actually translated for young people who make up [the] majority of the citizens in many of these countries – they are the ones who are passing through the education systems, increasingly lining up for jobs – whether this prosperity, this kind of era we have seen over the last six or seven years, has had any material benefit.”

“… Institutions and markets are not functioning well and are not serving this generation. This is in a sense the report’s fundmental, and I think unique, contribution: we argue that whether its the education system, the labor markets, the housing markets there are arrangements and policies that were once developed to serve perhaps social justice objectives [that] have now, in this kind of current economic landscape, are actually hurting young people.”

“… The way young people are investing in their skills and their expectations when they are in education continue to be formed by the public sector. We ask the question: how can we reorient that? In the labor market, we raise I think questions about whether certain types of labor protection laws, employment protection laws which restrict and raise the cost of hiring new workers, are penalizing young people, because what they are doing is they are creating insiders and outsiders. The insiders are all the adult mature workers, and the outsiders are all the young workers.”

“… As the U.S. rethinks its core strategy of engaging in the Middle East – and the new administration is already looking beyond the paradigm of the ‘war on terrorism’ – it is absolutely critical that we understand where the Middle East is economically, arriving in this moment of downturn but, also, where it needs to go. I think this is imperative because economic discontent is likely to shape the political realities in many countries in the near future. We are already seeing this in the case of Iran and perhaps Lebanon, where there are elections, that economic issues are really going to play out in a very strong way. Because you have a generation of young people who are not quite benefiting from the economies and the progress that is underway in some of these countries.”