Youth Employment

A Key Issue

Economist Imed Drine recently left UNU-WIDER and headed with his family for Jeddah, Saudi Arabia, to take up a new position as a senior economist with the Islamic Development Bank. Senior communications specialist Carl-Gustav Lindén had a chat with Tunisian-born Imed before he left Helsinki, a city he learned to like a lot during his four-year stay in Finland.

The Islamic Development Bank is hiring economists to strengthen its new focus as a knowledge-based institution. Imed Drine is one of the bank’s newest recruits. His research will continue to concentrate on one of the hottest topics in North Africa: youth and employment in the Arab region.

In the MENA region nearly 5 million new workers hope to enter the labour market annually. If the workforce in the region continues to grow at the same rate, it is estimated that it will reach 185 million by 2020. This means that the MENA region needs to provide 105 million new jobs by 2020, to meet the additional needs of job seekers as well as new labour market entrants.

‘I think these are issues that should be addressed and they will be very important for the transition period to more democracy. We can see now what is going on in Tunisia and Egypt. Young people continually claim more jobs and if the new governments will not be successful in creating these jobs this will be a cause for more social instability’, commented Imed.

Technology transfer and the knowledge economy are also crucial challenges for the Arab region, with countries needing to invest seriously more in education and research.

‘I don’t really think they lack financial resources. It’s about how they use their financial resources to improve skills.’

Policy focus

The Islamic Development Bank was founded by the finance ministers from Muslim countries in 1973. The purpose of the bank is to ‘foster the economic development and social progress of member countries and Muslim communities, individually as well as jointly, in accordance with the principles of Shari'ah, i.e., Islamic Law.’

‘We don’t really do core research but are more expected to focus on policy implications of our research, give some recommendations to country members about development issues and for example write reports at the country level.’

Imed has personal experience in dealing with shaping the policy agenda from Tunisia, hishome country, where youth employment is a huge issue. Imed and his fellow researchers met with policy makers for a UNU-WIDER-AfDB workshop in Tunisia and came up with some practical solutions. One was to encourage university graduates to accept jobs with a lower wage for the first-entry position. Another, that the government should subsidize training for graduates.

‘The government needs to subsidize these kinds of jobs to give the incentive for young people to accept lower wages. Firms do not seem prepared to pay higher wages because they think that the new university graduates  do not really have the right skills to be operational immediately when they go to the market; they think their productivity is not really enough and that they need more training, but the training is really costly for the firm.’

Imed argues that after one or two years, graduates would have the skills that firms are willing to pay higher wages for.

Regional problems

Another problem in Tunisia is regional disparities, between the north and the south, between the coastal areas and the inland areas.

‘What we propose is to encourage regional mobility of young people. They can migrate to the coastal areas where there is more economic activity, more job opportunities. Even for the firms, I think it’s less expensive for them to invest in the coastal areas where the infrastructure is much better and access to the market is better than in the inland areas where Tunisia needs to invest in the infrastructure.’

Even with this, regional development policy will take time to have a positive impact on inland infrastructure, maybe ten or fifteen years, so there needs to be a short-term solution in place meanwhile.

‘We proposed a kind of subsidy for young people to pay for these migration costs—this would give them a chance to find a job in the coastal area. Some say this is not good for regional development because we need to keep young people where they are in order to develop their own region, but it has to be emphasised that, in the long run, we really need a regional development policy based on improving infrastructure, encouraging the private sector invest in inland areas to create a kind of opportunity model within the region.’

Lack of data

What works for Tunisia might not be the best advice for other countries. So policy recommendations need to be based on an analysis of structures and markets as well as institutional settings of each economy. Quite often there is a lack of useful data for this kind of policy-making in analytical assessments.

‘For some countries the right labour market data is not really available. We might have macro-level economic data but that may not be useful because we really need to do the analysis at the regional and at the local level. Very recently, we succeeded getting such data for Morocco, Jordan, and Egypt, and we will start to work on these countries to be able to give some policy recommendations on how to deal with the problems in the region.’

For other countries the same information either does not exist or access is limited.

‘Remember, before the revolution in Tunisia it was not easy to get access to the data. We tried to do some work on climate change in Tunisia. We really wanted to run a CGE-model (computable general equilibrium simulation model) so we requested the data on households in Tunisia. They said that it is forbidden, it is not really accessible. Later on, because of the revolution, it became more open and we could have access.’

So the data was there?

‘Yes, it was there but we could not really get it; they considered it top secret. We did not get access to the core data but had to refer to what they called ‘official statistics’. This is the problem in many countries in the region. The situation now is much better,’ said Imed  with reference to the Arab Spring.

Multicultural experiences

The Islamic Development Bank has a broad range of member countries from the Middle East to Asia; from sub-Saharan Africa to North Africa. The membership constitutes a mix of different kinds of cultures and development levels—with countries like Turkey, Indonesia, and Malaysia that can be considered emerging countries on the one side, to countries like Mali, Senegal, and Chad which are markedly less developed.

‘It is very broad. We have countries with different structures, different institutions and levels of development.’

What will you take with you from UNU-WIDER?

‘Many things. I have learned a lot from working here at UNU-WIDER—a lot of knowledge, skills and experiences. UNU-WIDER is an international organization where some people come and others go so we have this opportunity to interact with people coming from different horizons and from different cultures. We learn new experiences when we interact with them.’

Imed especially notes the opportunity to participate in all the activities of UNU-WIDER, such as conferences and workshops where many people meet and exchange ideas. He thinks it is a good environment to do research for someone who really wants to improve his skills and to get invaluable experience.

‘When I came I didn’t really have any experience in launching projects. I had been teaching at the university. I did some research and published some papers before coming to UNU-WIDER but my former university was not really research-centred and the main activity was teaching and supervising students. So the fact that I had that kind of flexibility and autonomy at UNU-WIDER to do research has helped me a lot because there was not really any constraint on what topic you should focus on.’

Learning to like the snow

Imed Drive arrived in Helsinki from Paris in 2008, fresh from a teaching job at Sorbonne University.

‘For the first time I experienced snow and darkness, it was hard for someone coming from Tunisia. Even for the family (my wife and two children) it was really stressful. But with time we succeeded in adjusting, easily in the end. Now we like this kind of weather—we like the snow and like going to the park to skate. It is nice, really. With the children we have been learning many new things.’

If you look at your future, in what way will you be in contact with UNU-WIDER?

‘At UNU-WIDER we have a kind of personal and professional relationship with colleagues and there are some ideas on how to develop some joint research activities in the future. The institute is now a part of my life; it is something that I can’t really ignore. I hope to be able to work with my former colleagues from UNU-WIDER again.’

Since the institute actively is looking to develop partnerships with international organizations there is, according to Imed, much potential for joint research projects.

‘And I think it’s fairly interesting for me to have that kind of network. It’s a very valuable asset that I can use in order to succeed in my new mission.’

WIDERAngle newsletter
January 2013
ISSN 1238-9544