Governments in various countries around the world have introduced local regulatory frameworks with the aim to promote and enforce local participation in various sectors of their economies. The framework objectives seek to create local jobs, promote enterprise development, and accelerate the transfer of skills and technologies.
Unemployment is a very important issue today because every country would like its citizens to capture the best opportunities in its economy and therefore assist to keep its wealth within its borders. This is achieved through enforcing frameworks that promote capacity building to enhance the local skills base, create local enterprise as well as offering and manufacturing products and services locally. As such, this has become a strategic issue and it presents both opportunities and challenges in an economy.
The relative lack of economic success in sub-Saharan Africa in comparison with other countries has been attributed to the lack of skilled labor in the former (Bigsten et al., 1998). Thus, even with abundance in natural resources and the few manufacturing programs largely in processing primary products, sub-Saharan Africa remains behind, economically, due to lack of skilled labor (Bigsten et al., 1998). Thus, any strategic program with the hope of making any changes and accelerating growth in these countries must first provide for an expansion of educational provision.
Even as the lack of educational provision and expansion is a problem in sub-Saharan Africa, one problem is present across the globe. According to the International Labor Organization (ILO 2015), the global economy has not yet recovered from the pre-economic crisis levels of unemployment creation. As a result, there is a global job gap of 61 million (ILO, 2015). Further, ILO indicates that the annual employment growth rate has slowed down from 1.7 percent between 1997-2007 to 1.2 percent per annum between 2007 and 2014. ILO further predicts that the unemployment rate will continue to rise, particularly with an expansion in the labor force, with the job gap expected to reach 82 million by 2019 (fig. 1 details this information) (ILO, 2015).
Fig. 1 global job gap. Source: ILO, 2015
Currently, however, the number of job seekers stands at 201 million. This is according to the 2014 survey by ILO. This is an increase of 1.2 million comparing 2014 with 2013, and a further difference of 31 million in comparison with 2007 (Fig 2 shows this) (ILO, 2015). Moreover, as of 2014, more than 5.9 percent of the global labor force had no jobs. This however varied from one country to another.
Fig. 2 global unemployment. Source: ILO, 2015
In reference to countries, the MENA (Middle East and North Africa) and Sub-Saharan African countries had among the highest unemployment rates. The rates of unemployment, particualrly in MENA countries have remained high, especially among the youth aged between 15 and 24 (Mottaghi, 2014). On the average, more female youth than males are unemployed in the MENA region. According to Mottaghi (2014), the average rate stands at 39 percent for females and 22 percent for male. The overall youth unemployment rates are also particularly hight, with Tunisia’s rate standing at 40 percent, although it is predicted that other inland governorates may have even higher rates (Mottaghi, 2014). The gender gap in unemployment rate is additionally exceptionally high in the MENA region, with female unempoyment rate standing at 65% in Egypt, 50% in Jordan and Yemen and 40% in Iran. This is in comparison with male unemployment rate that stand at 23% in Egypt, 27% in Jordan and Yemen, and 25 in Iran (See fig 2 for detailed chart).
Fig. 3 Unemployment in MENA. Source: Mottaghi, 2014
Even with such high unemployment rates in MENA, one of the most interesting factors is that the rate of unemployment is much higher among the educated. According to (Mottaghi) 2014, more than 30 percent of individual with higher education in egypt, Tunisia and Jordan were unemployed between 2011 and 2012. Of the unemployed women that contributed to the 60 percent and 40 percent unemployment rates in Jordan and Egypt respectively, all were waiting for job openings in the public sector. The unemployment rates in the MENA region therefore is not as a result of lack of jobs in the private sector, but due to the preference, among the youth, of public sector jobs. Mottaghi (2014), informs that public sector jobs in this region are attractive given that they offer better pay, job security and attractive benefits.
it is expected that the private stands as the driver of the economy through the micro-businesses and SMEs, which provide employement, the MENA region is indeed unique in characteristic. The dynamism that exists in the private sector stands as a prerequisite to economic development. Thus, governments must provide a strong business environment, encourage the creation of a competitive private sector, as well as integrate with the world economy for economic development. This is especially true for developing countries.
The potential for poverty eradication and economic development through the private sector is visible through the belief among the poor that getting a job is the sure way to poverty. The private sector must therefore be at the forefront of creating the job opportunities for people, whether through self-employment or salaries. Additionally, as driver of economic growth, the private sector tackles challenges including unpredictable policies, insecure property rights and limited access to finance. By overcoming these challenges, the private sector increases its income, which in turn allows the players to expand their activities.
As earlier mentioned, the lack of skilled labor is among the greatest setbacks for Sub-Saharan countries (Bigsten et al., 1998). It is therefore the responsibility of the local governments to ensure educational provision for the labor force as a means of increasing the labor force’s productivity. This is possible through the institution of international legal framework for fair and stable organization. By instituting such a framework, governments level the playing field for their citizens making them competitive in the global scale, and in so doing increasing the citizens’ productivity. Thus, while it is the belief of many that insituting international labor standards by governments through education provision and international legal framework only increases costs and hinders economic development, the contrary is true. A large body of research actually indicates that such compliances are coupled with improved productivity and economic development.
Therefore, higher wages, observation of international working standards and time, and equality in employment and remuneration often translate into better work performance and economic development. This, also inludes personal and professional development, which means that governments must invest in their people and ensure the people’s professional and personal development. This is possible through investment in vocational training centers, which translate into better trained personnel and increased employment levels.
Bigsten, A. et al. (1998). Rates of Return on Physical and Human Capital in Africa’s Manufacturing Sector. Oxford: University of Oxford
ILO (2015). World Employment Social Outlook. Geneva: ILO.
Mottaghi, L. (2014). The Problem of Unemployment in the Middle East and North Africa Explained in Three Charts. Quarterly Economic Brief.