January 26, 2012 3:19 pm

Mideast focus: Strife lends urgency to creating jobs

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Despite civil strife, Amal Masa’ad, 25, thought the time was ripe to go into business in Sana'a, Yemen’s capital.

“Many women waste their lives complaining,” says Ms Masa’ad. “But everyone has a chance to fulfil her dreams and become productive and self-reliant.”

Like many Yemeni women, she married young and dropped out of school to raise a family. Last March, she heard of Khadija, a business training centre focused on boosting entrepreneurship among women. In January, she opened a small beauty salon with two partners.

She says: “I had grandiose ideas of what a business should be like. The classes helped me understand risk management and accounting. I learnt confidence, skills for planning and budgeting my project.”

Khadija is run by the Youth Leadership Development Foundation, an non-government organisation backed by Silatech, a Qatari social enterprise founded in 2008 by Sheikha Mozah bint Nasser, wife of Qatar’s emir, which fosters entrepreneurship in the Arab region.

Youth unemployment is rampant in Arab countries. Despite an average rise in gross domestic product of 5 per in the past decade – twice the world’s average – the jobless rate among young people is 25 per cent, and this rises to 30 per cent for women, according to the World Bank.

Mohamed Bouazizi, the Tunisian street vendor who immolated himself in protest at the police confiscating his vegetable stand, embodied the issues Arab facing youth: inadequate education and training, and a lack of opportunities.

His action set off protests in Tunisia, leading to the toppling of the country’s president. It inspired similar protests in Egypt, Yemen, Syria, and Libya, which claimed or shook the power of these countries’ autocrats. One popular strand in each movement has been the frustration of the younger generation, which feels marginalised after decades of social, political, and economic stagnation.

Job safety in the Arab world is now a pressing item on the national security agendas of many governments. The participation of young people in the region’s labour force stands at 35 per cent, compared with a global average of 52 per cent, according to the World Bank’s International Finance Corporation.

Mohammed Saleh Al-Lai, chief executive of Al-Amal Microfinance Bank, says: “About 76 per cent of young people are poor in Yemen, which creates a fertile ground for terrorism and social instability.” The bank has provided nearly 36,000 loans to 12,873 young entrepreneurs.

For example, Amar Alkabodi, 20, used several $50 loans to start and upgrade his shop to provide for his six siblings.

“Political culture generally ignores youth, or placates them with sport,” said Mr. Al-Lai. “The issue is really about empowering youth socially and economically.”

Silatech has sought to promote training and entrepreneurship throughout the region.

“Our objective is to educate financial institutions on how to offer micro credit to young people,” says Stephen Brannon, director of communications at Silatech.

The enterprise has partners with local organisations to provide technical and financial support for youth projects in Yemen, Morocco, and Egypt, and which recently launched in Tunisia. “We are trying to include youth in society through economic and civic engagement.’’

As in many countries, traditional banks in the Arab world are reluctant to lend to small and medium businesses as they lack collateral and established credit histories. However, opaque regulatory climates and endemic corruption mean that well-connected young borrowers with relatives in high places can fund their ventures regardless of feasibility, draining what risk appetite banks might otherwise retain.

The International Financial Corporation, a member of the World Bank Group, launched a $500m SME facility, targeting the Middle East and north Africa, in June 2011.

To bridge the gap between the skills required in the job market and the frequently poor educational outcomes, it also launched Business Edge to re-educate graduates in skills including marketing, finance, operations and personal productivity in Egypt, the West Bank and Gaza, and it will soon start operations in Iraq and Tunisia.

Across the region, in Palestine, Jordan and Morocco, the United States Agency for International Development has supported employment and community engagement in the most disadvantaged areas. And in Egypt, a MasterCard Foundation initiative aims to provide job training, placements and assist business start-ups.

However, shaking up a decades-old mindset and providing immediate returns remain a challenge.

“The systems are not youth-friendly,” says Awais Sufi, vice-president for programmes at the International Youth Foundation. “You have to see young people not as a problem, but as assets. Recently, governments have been more responsive to the need. There is a real desire now to enhance the productivity of women”

The IYF joined with partners in Egypt to start Nahdet Al-Mahrousa, a career development scheme that aims to train and guide graduates of Cairo University and help them in the job market.

Other key players in technology have also formed partnerships, including Microsoft, which has helped launch several ICT training programs in the region.

“Microsoft works with hundreds of companies,” says Jeffrey Avina, who lead’s Microsoft citizenship and community efforts in the Middle East and Africa. “We facilitate training programs, which increase professional capacities, hopefully leading to internships and job creation. The biggest challenge we face is making sure these people land in positions.”

International organisations trying to train young people in the Middle East is not new, but governments have become more aware than ever before that they cannot ignore the younger generation.

“No one has listened or asked for youth’s opinion before,” says Mr. Al-Lai. “Now governments realise the importance of banks like ours in fighting the unemployment which caused these revolutions.”

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