THE LABOUR MARKET IN MEDITERRANEAN AFRICA
North Africa has been the epicenter of the so-called “Arab Spring” that has rocked the region from 20111, and that led to the long-lived regimes in Egypt, Libya and Tunisia to collapse. The revolutions in those three countries , as well as demonstrations in Morocco and Algeria , have resulted from decades of political repression and unrest related to the lack of economic opportunities , increase in the cost of living and the widening gap between rich and poor.
In recent decades the economies of North Africa , partly as a result of profound inequalities in income distribution , have failed to provide enough jobs to absorb the unemployed workers is existing is to cope with the rapid growth of the labor supply resulting from a strong population growth.
These reflections emerge from the reading of the report on the economy of the South SVIMEZ 2012 .
“After a period of rapid growth and creation of jobs from 1960 to 1980 , the production and employment have entered a deadlock , and between 1980 and 2010, the growth of per capita income in the region has only reached the average of 0.5 % per year. Unemployment has averaged about 12% over the past two decades. The peaks , according to the latest data , in Tunisia (14.2%) , Algeria (11.4% ), Morocco (10%) and Egypt (9.4% ) .
Slow economic growth, low employment elasticity and rapid population growth have created a very serious situation, especially among the younger generation . The average unemployment rate for the age group between 15 and 24 years , in fact, reaches approximately 30% in North Africa, more than double the world average of 13%. With an even more serious situation in Egypt and Tunisia . On an even more alarming is that unemployment is more concentrated in the range of educated youth . In Egypt, for example , the highest unemployment rate among its graduates and Tunisia , the unemployment rate among graduates in 2007 came to 40%.
The problem of youth employment largely reflects a lack of organization between demand and supply of labor , even inter-regional and European level, and a serious mismatch between the skills of young workers and the needs of employers in the private sector . The education system and business, in fact, have so far failed to pass on the skills and expertise needed in a globalized world of work , not responding well . the challenge , which is crucial for North Africa today , to create about 27 million (1) of new jobs .
Revolts and crisis in North Africa
In the years immediately preceding the “Arab Spring ” in North Africa has experienced one of the highest GDP growth rates ever, recorded between 1998 and 2008 , average values between 4.5% and 5.5% . Subsequently, the limited exposure to the international markets has partially protected North Africa by the impact the global financial crisis of 2008 and the recovery , while not as impressive as that of other countries in the developing world, has been quite encouraging.
They then followed the shock of the financial crisis of 2009 and, more importantly , the impact of political and social movements of 2011 , which undermined the short-term macro-economic stability in North Africa , while paving the way for prospects of democratization in an arc time you wider.
As a result of the events is considered correct to analyze from a different perspective the countries of the region : if you have previously used to group the countries according to the criterion of the presence of extractive industries , it is now necessary to consider the size of the phenomena of social unrest ( 2 ) . These events , despite having covered the whole of North Africa , have assumed different connotations in some states have sparked strong revolutions with immediate effect and obvious , while in others the transition was gradual and less disruptive effects .
Algeria , Mauritania and Morocco
Although the countries of the North- West region have not experienced true revolutions , even this area has been affected by growing social tensions resulted in sporadic manifestations. The lower intensity of the phenomena revolutionaries in Algeria, Morocco and Mauritania , allowed a better economic stability , albeit for different reasons.
Algeria’s economic growth was mainly driven by the oil and gas sector and high public spending , supported by a program of investment and growth in domestic demand. Excluding the oil sector , the growth was driven by the construction sector (10%) and agriculture ( 9%). For the latter, in particular, the positive trend can be attributed to the expansion of irrigated areas , which in 2011 reached more than one million hectares. It is estimated for 2012 economic growth of 3.1% and 4.2% in 2013 .
In Mauritania , mining has contributed significantly to the strong and steady growth , primarily due to an increase in the price of gold. Another important factor is the abundance of fish stocks, with an increase in exports related to fishing by 29.7 % in real terms . This trend is expected to continue in 2012 with the renewal of agreements with the European Union and new agreements with China and Algeria.
The rural sector was , however, severely affected by the drought with a consequent reduction in agricultural production. The most optimistic estimates indicate a decline in production of 75% , an alarming trend given that the rural sector employs 67% of the workforce and accounts for about 13% of GDP .
GDP growth in Morocco reached 4.6 % at the end of 2011 , supported by the burgeoning domestic demand and positive industrial performance . At the sectoral level , agriculture has benefited from favorable weather conditions and the initial impact of the Green Plan for Morocco. With regard to non-farm activities Morocco has continued to record strong growth in the secondary sector (4.6%) and the tertiary sector (4.2%) , with a trend that will likely continue in 2012.
There is also on the demand side , the constant growth of household consumption , which accounted for almost 60% of GDP in the period 1980-2010 , and the increase in domestic investment.
Tunisia , Egypt, Libya
In 2011, the economies of North -East North Africa have been forced to face intense pressure from the revolutions that occurred in their respective countries , as well as additional tensions created by instability in neighboring countries. Although economic growth is strongly impaired in all three states, an improvement in political stability will likely be able to face the new challenges , as it comes to economies with high growth potential .
The confidence of investors and consumers have been hit hard during the revolution in Egypt. The closure of banks and the stock market, the collapse of tourism and a series of strikes have further negative impact on the situation . The tourism and manufacturing and construction have had a rapid recovery in the post- revolution, but continue to produce at lower levels than in the past ( the contraction of tourism was 5.9% in 2011) . Unemployment, as a direct consequence , has increased , reaching almost 12% and the youth unemployment rate around 24% ( 3). In addition, a sharp decline in foreign direct investment ( FDI ) fell by 67.6% in 2011 alone .
The economy of Libya, which had previously reached a significant level of growth, attributable mainly to the oil and gas sector has been severely affected by the civil war of 2011 . Apart from the impact on liquidity caused by the freezing of the assets of the country , the economy was particularly hard hit by the effects of war on the oil sector and the decline in productivity associated with the loss of human capital and the destruction of the infrastructure of the country. About 70 % of Libya’s GDP is , in fact, generated by the hydrocarbon sector and exports. In 2011, the GDP has fallen to 41.8 % in 2012 and is expected to recover 20% as a result of the reconstruction efforts of the government.
The Libyan revolution has also had important knock-on effects for Egypt and Tunisia. In particular, it has led to the return of more than 100,000 migrant workers in Egypt and Tunisia .
In Tunisia, it was estimated that the damage caused by the revolution amounted to 4% of GDP. The situation of insecurity and social tensions have , in fact, resulted in drastic reductions in 2011 of revenue from foreign tourists ( -46 %) and foreign investment (-27 %). As a result , GDP contracted by 1.1% .
A crucial question for Tunisia (where the third quarter has an average of nearly 40% of the total annual tourist arrivals ) is the number of tourists who visit the country during the peak season.
The outlook for 2012 show an overall improvement that should cover all the North African countries, with the exception of Egypt. In particular, the economies of North Africa who have had revolutionary phenomena less extensive , for the implementation of some economic and social reforms , growth levels are expected to recover in 2010.
For Algeria , Mauritania and Morocco , in fact , the African Development Bank estimates a growth rate of 3.1% , respectively , 4.7% and 4.5%. Inflation is expected to grow in Morocco , but remained moderate ( 1.6%) , while it should remain stable in Algeria ( 4.3%) and Mauritania ( 6.0%). These results associated with the rationalization of public spending, an increase in tax collection and recovery of key sectors such as agriculture and raw materials, should enable these countries to strengthen their macroeconomic equilibrium .
Morocco also could benefit from the ongoing recovery in the manufacturing sector and a new production unit in the automotive industry .
The recovery of the North African countries that have experienced the revolution will depend , however, the process of transition to the short term. . necessary to improve the security of the territories , so rebuilding . the confidence of foreign investors . On this basis , the expected economic growth for 2012 is 0.8% in Egypt, 2.5% in Tunisia and 20% in Libya.
The moderate growth prospects for Egypt is explained by the current climate of insecurity and the high level of unemployment. In addition, the loss of trust in institutions could lead to a process of ” dollarization ” , to the detriment of the national currency , which would have dramatic consequences on the functioning of the banking sector and economic activities , in particular for SMEs ( 4).
In Tunisia, the authorities are optimistic about the recovery of economic activities , particularly agriculture and industry and refining of phosphate . The economic recovery in 2012 will depend on the normalization of the political situation after the October elections and the impact of the recovery plan implemented in the spring of 2011.
The rebirth of Libyan oil sector offers hope of a recovery in a relatively short time for the country’s economy . Despite the complete shutdown of oil production and exports between April and the end of August 2011 , Libya was granted by OPEC to keep its official production quota of 1.47 million barrels per day and September 2011, Libya resumed production . It is believed that with the return of oil revenues should be back to grow the non-oil sector and that the reconstruction , supported in part by the Central Bank reserves (150 billion USD) , will support the sectors of construction , services, communications, transportation and financial sectors , stimulating growth at a very high level (GDP of 2012 estimated at 20.1%) .
For the three countries, inflation is expected to return to the same levels of the previous years due to lower food prices (Egypt, Libya) and monetary policy actions (Egypt) .
The uncertainty and the perception of insecurity continue to affect tourism and private investment across the region . For 2011, revenue from tourism were down in Egypt and Tunisia up to one percentage point of GDP. It FDI in both countries will see a contraction between one and two percent of GDP.
Past experience suggests, however , that tourism could recover fairly quickly. For example, after the terrorist attacks in Luxor in November 1997 , tourist arrivals in Egypt fell by about half , but recovered completely after about a year. International studies on different countries have , in fact, shown that tourism responds quickly to outbreaks of violence and suggest that the effect is usually temporary. According to these studies , the estimated recovery times ranging from 2 to 21 months (5).
With regard to investments , there will be more time for recovery, as investors remain at the window , waiting for the economic policy decisions of the new Government .
For the GDP of the entire area of North Africa is considered a slow-down to a level of less than 1 % in 2011, from 4.6 % in 2010. As for 2012, assuming a return to a situation of stability , promises a return to growth of 5% .
It is noted that normally the entire area of North African GDP weighs about a third of the continent and the extraordinary events of the “Arab Spring” had a negative impact on growth in Africa for more than a percentage point.
The labor market in South Africa
The root causes of the “Arab Spring” and the reasons that led in different countries so . many young people to take to the streets , even at the cost of life , give rise to pressing questions . The answers are certainly varied, but a common factor in the region is the lack of prospects for young people, who see before them a hazy horizon . For young people the chance to get a satisfying job are very limited and although they are more educated than previous generations , they can not find a job that allows them to live a financially independent life .
Demographic dynamics and prospects
Over the next forty years the world population will increase by 2 billion inhabitants, from 7 to 9 billion people , most of whom will be born in North Africa and the Middle East. Despite a slight decline in fertility rates in the second half of the twentieth century, the population of these regions continue to increase. For today in North Africa , there are nearly 213 million people and, according to UN estimates , in 2050 the population of North Africa will amount to about 322 million people, four times more than there were in 1950. Comparison with Italy’s numbers are impressive. If in 1950 the situation was not dissimilar, with 46 million in Italy and 53 million in North Africa , now it has gone to 60 , respectively, and over 210 million in 2050 to 59 322 for our country and for the southern shores of the Mediterranean. Egypt is the country that, in absolute terms , presents population projections more pronounced , with a projected increase in population between 2010 and 2050 more than 40 million inhabitants.
The determinant of demographic change in these countries is not only the continuous increase in population , but also the change in the age distribution . The considerable increase in the number of young people ( aged 15-24) is the result of what scholars have termed a youth bulge , that the boom in births recorded in the 80s and 90s who , accompanied by an equally sharp decline in the rate of mortality , is translating into a significant increase in young people , that is, the potential labor force (6). Today, more than 40% (7 ) of the population of the North African region are aged between 15 and 24 years, a percentage that is reflected in the figure of the labor force (8). The population is made up of more men than women across North Africa and the dense stands out because of the Egyptian population .
Features and components of the labor force
The employment rate – a useful indicator to show how efficient a country to use their productive potential of human resources – in North Africa was 43.6 % (2011), compared to a world average of 60.3 % . It is a very low value, mainly due to low levels of employment of young people and women. The figure represents a situation in which over 100 people potentially active in the labor market , not half manage to actually find a job.
North Africa is facing a huge challenge. Analyzing the average occupancy rate of the population of labor force participation and unemployment shows that the region has the lowest level of employment and labor force participation , as well as the highest levels of unemployment.
One of the major employment problems in North Africa is the substantial under-utilization of the economic potential of women. The female employment rate is much lower , as well as the level of female participation in the labor force , while the female unemployment rate reaches high levels.
On average , considering the last decade , North Africa more than two out of three women will not enter the labor market and , among those who succeed, more than three out of twenty are unemployed . Therefore , the area while presenting participation rates of men aligned to the average of developed countries , shows a low rate of labor participation mainly due to the limited participation of women.
There is no shortage positive trends, such as in Egypt, for example , where the female unemployment rate has fallen in recent years, from almost 25% in 2005 ( compared to 7% for men) to 19% in 2008 ( compared to 6% for men) . However, this result is due to a slowdown in hiring public , which has led many educated women to abandon the labor market ( 9). Egyptian women , in fact, tend to seek employment in the public sector , which is considered more egalitarian than the private sector , where instead there is still a large gender gap in wages and opportunities ( 10).
Similarly, in Morocco the recent improvements in employment levels are mainly due to a decreasing participation in the labor market , particularly among women (11).
The situation of women is particularly worrying if we analyze the band 15-24 years: according to the most recent estimates by the ILO (International Labour Organization) in 2010, the participation rates of young women in the labor force ranged from a low 8 9 % in Algeria , even up to a very encouraging 24.2% of Libya (see Table 6).
The region also records some of the highest world levels of youth unemployment. This phenomenon is particularly serious when one considers that young people often do not have the ability to cope with the lack of income from work , even for short periods, as they have not yet accumulated the resources necessary to overcome any shock on income . Furthermore, it is analyzed that those who are out of work or they take on one of low quality in the early stages of his career may have more difficulty getting good jobs later . Finally, the youth unemployment can trigger social instability and unrest, as has been the case in the “Arab Spring” .
The average unemployment rate for young people aged between 15 and 24 years is approximately 28% in North Africa , compared to the world average of 13% ( 12). This value worse and worse in Egypt and Tunisia , reaching peaks of over 30%.
Despite the good performance of the region’s growth over the last decade , North Africa seems to have been able to transfer these results in more job opportunities for young people. Among the causes are to consider especially the impact of the global recession and the huge change in the employment context . The current youth population was born , in fact, at a time when the fixed place of work in the public sector was the norm and the highest aspiration , but has matured into an increasingly globalized economy in which different emerging needs of education and training . The combination of these conditions has led to a youth increasingly sidelined , which reacted with the revolutions of 2011. Paradoxically , the instability created by the uprisings 2011, more than improve the economic prospects of young people, has had disastrous economic consequences and countries such as Egypt and Tunisia , whose economies depend on tourism and foreign investment , have been hit hard , making the problem of youth unemployment ever more urgent and serious . The outlook , however , with the passing of totalitarian regimes , they could certainly be better.
Among the six countries considered , there are obvious differences in terms of youth unemployment, however, have characteristics of all youth bulge , inadequacy of training to meet the needs of businesses and the lack of decent jobs , as well as a high rate of migration that exacerbates indirectly problem.
Workforce and Education
In North Africa the unemployment affects all income groups and , as family income and education variables are closely related , it manifests the paradox that subjects with higher levels of education are affected by unemployment in the same way as those who have a low level of education. In some countries in the region , unemployment among the highly skilled population is even higher than that of the rest of the population.
This situation generates, of course, frustration among the educated youth , and even among families who have invested in the education of their children , exploded in a visible during the social unrest of 2011 .
One of the main causes of youth unemployment is , in fact, the severe mismatch between the skills possessed and those required by employers , especially the private sector . Yet the failure of the education system is not due to lack of attention or resources on the part of governments in North Africa . They are , in fact, achieved important goals in relation to access to education and reduce gender differences. Between 1970 and 2003 the countries of North Africa have almost reached the goal of full deployment of primary and tripled enrollment at secondary schools and those with post- secondary quintuple . Over the past 40 years the region has invested in training 5% of GDP and 20% of public spending, more than other regions in the developing world with similar levels of per capita income.
Numerous studies (13) have questioned the quality of education provided to students, highlighting the rigidity of the education system , which often has an approach of rote learning at the expense of critical thinking . These studies have also pointed to gaps in scientific knowledge and transverse , such as communication and problem solving . Therefore , investments in education have had disappointing results in terms of increased employment and economic growth, especially when compared to regions such as Asia and Eastern Europe.
The main problems of the youth training can be summarized as follows:
– Lack of connection with the world of work : lack of collaboration between academia and industry, which mainly affects graduates ; poor planning for vocational training for the less educated segments of the population ; lack of opportunities for internships , mentoring programs, vocational guidance and placement services ;
– Limited and low quality of the university : in many countries, the provision of training at tertiary level has not increased at the same rate of population growth and often suffer from quality problems caused by overcrowding , inadequate teachers , by lack of infrastructure for research;
– Gender discrimination : although increased the number of women graduates , is not it also increased the number of working women due to cultural and social factors .
In Morocco , 61% of young people with secondary education or higher are unemployed , compared with 8 % of young people without training . In Tunisia , 40% of graduates are unemployed , compared with 24 % of non- graduates. In Algeria , more than 34% of the unemployed have completed secondary education or tertiary education.
SME Development : Challenges and Opportunities for the South of Italy
Recent social and political events in the Arab world have contributed to the decline in economic activity and rising unemployment , particularly for young people. The latter figure ILO estimates for North Africa , the unemployment rate for young people after the Arab Spring to 27.9% and the population in the Arab world set to reach 460 million by 2025 , the situation could deteriorate further .
It can, however , transform these factors into an opportunity for growth in both North African countries and for Italy , which has always partners on the southern shore of the Mediterranean , focusing on the creation of more and better jobs in African countries and in improving mobility of young talent.
The improvement of employment opportunities for the thousands of graduates of North Africa can be achieved with a more careful development of the skills of young people through training and improved cross between demand and supply of labor . With this objective , the companies in the area or who wish to invest in the area could be more involved in the process of developing skills, increasing the number of internships and collaboration with other enterprises and governments to create training centers targeted to their needs.
Another key point in the strategy to increase employment is to facilitate the mobility of talent between North Africa and Europe , which could help to improve the existing employment needs of businesses.
In addition, the European population is getting older and older : 50 million workers will leave the labor market in the coming decades . To this end, we should see the pre measures to enable a simplified migration of workers, greater access to short-term visas for high professionalism and an improved analysis of the needs of the skills needed to plan the flow of workers.
In this framework can be added to support small and medium-sized enterprises ( SMEs), which are considered the backbone of the economy of the region. In fact , in countries such as Morocco , for example , SMEs constitute 95 % of the productive fabric . You must , however , not so much create new ones, as consolidate existing since more than 80 % of small businesses close in the first two years of operation. Traditional barriers to the growth of SMEs in the North African region have limited access to technology , lack of access to capital , political instability and bad governance.
In the strategic framework outlined to help reduce unemployment in North Africa, the small to medium businesses in Southern Italy could play an important role in creating jobs in those areas . SMEs in the South can meet the needs of North Africa who need to acquire know-how , advanced technology and process organization .
On the other hand , the benefits for small businesses wishing to cross the Mediterranean are manifold, including to qualify for youthful energy and untapped talent in times of crisis and to access new markets still little exploited and considerable potential , given the high rate of population growth. To be competitive, however, SMEs in the South need to focus on combinations and forms consortia , because only then can acquire a critical mass sufficient to deal with the new international competitors that overlook the area, particularly China . In fact , the first brake in the approach area is definitely averse business partnership from the southern part of the companies that still prefer to export local roots .
In contrast, the countries of North Africa asking first of all investments for the transfer of know -how and land development in order to address the serious theme of employment . ”
(1) D. Schmidt , Decent Jobs for Youth : The Road for Socio -Economic Progress and Social Justice , ILO , 2012.
( 2 ) African Economic Outlook 2012.
( 3 ) R. Sahay , Economic Causes and Consequences of Middle East Turmoil , Washington , IMF , 2011. Much higher estimates of other studies, 23% and 55.2% respectively . See Table 10 .
(4) IMF, 2011.
(5) B.S. Frey , S. Luechinger and A. Stutzer , Calculating Tragedy: Assessing the Costs of Terrorism , in ” Journal of Economic Surveys ” , Wiley Blackwell , vol. 21 , 1, 2007; E. Neumayer , The Impact of Political Violence on Tourism : Dynamic Econometric Estimation in a Cross- National Panel , in the ‘Journal of conflict resolution ‘, 48 , 2, 2004
(6) R. F. Assaad and Roudi – Fahimi , Youth in the Middle East and North Africa : Demographic Opportunity or Challenge? , Population Reference Bureau , 2007.
(7) The world average is 25.7% .
(8) F. Sperotti , Demographics in North Africa and the Middle East : a challenge or an opportunity? , In www.adapt.it , 2011.
(9 ) A. Assaad , Unemployment and Youth Insertion in the Labor Market in Egypt . ECES Working Paper 118, February 2007 .
(10) UNDP , Egypt Human Development Report 2010 Youth in Egypt : Building our Future , UNDP, Egypt Institute of National Planning , 2010.
(11) World Bank Country Partnership Strategy for the Kingdom of Morocco for the Period FY 10-13 , World Bank, Washington , DC December 30, 2009c .
(12) ILO , Trends Econometric Models, April 2012.
(13) World Bank, The Road Not Traveled : Education Reform in the Middle East and Africa , 2008.