Growing youth population in Saudi offers economic potential

Updated 23 August 2013
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Growing youth population in Saudi offers economic potential

Pearson has welcomed a report by the International Monetary Fund (IMF) that finds youth unemployment in Saudi Arabia could be lowered by reducing reliance on public sector jobs and by improving the competitiveness of Saudi workers in the private sector.
Fifty percent of Saudi Arabia’s population is below 25 years, a figure set to increase further in the future, leading to a phenomenon widely referred to as a “youth bulge”.
Economists debate whether Saudi’s burgeoning youth population will be a burden or advantage to the country.
Such a large number of young people brings with it enormous opportunity for growth through the generation of innovative, new ideas, and a sufficiently large work force to power these ideas into practice.
However, if not managed appropriately, a rapidly growing population of young people could lead to an increased rate of unemployment amongst 15 to 25 year olds, a figure which already stands at around 30 percent.
The IMF Saudi Arabia Country Report found that a large number of young people will enter the local job market over the next decade, and that creating a sufficient number of rewarding jobs will be a challenge.
However, generating jobs is not the only difficulty the Saudi government faces.
Around 2 million new positions were created in the Kingdom between 2008 and 2012, but three quarters of these jobs were filled by non-Saudis, suggesting the local workforce needs to become more productive and competitive in the face of mounting competition from expatriate workers.
The Saudi Arabian Government has recognized the importance of harnessing the potential of its young people through education.
More than SR204 billion from the 2013 budget was channelled into education, a staggering 25 percent of the Government’s annual spending, and around 10 percent of its GDP.
Saudi Arabia is now ranked as the world’s highest spending nation on education.
Such initiatives have had a positive impact on the learning outcomes of individuals in the country, with the literacy rate among adults currently standing at around 97 percent, according to World Bank data, up from 30 percent in 1970.
The number of individuals completing school and tertiary education is also on the rise.
Mark Andrews, Pearson’s director of qualifications in the Middle East, says that these educational developments are instrumental in addressing the skills shortage the Kingdom faces.
Andrews says that providing young Saudi nationals with an education that will lead to placement in a rewarding job is not only important for the Kingdom’s youth, but also to the Saudi economy.
“Saudi Arabia’s youth bulge offers enormous opportunities in both Saudi and wider region. It has the potential to increase economic growth and living standards, and help realize the government’s goal of greater economic diversification,” he said.
Andrews said: “However, as the IMF report makes clear, equipping young people with effective education and training is critical to ensuring the youth bulge becomes an asset — and not a liability. Education and training needs to focus on preparing young people for the workforce.
Pearson’s research in the Gulf region indicates many local employers believe that the education system does not always prepare school and university leavers with essential employability skills.” Andrews added:
“Employers tell us they want candidates with 21st century skills, such as communication, collaboration, responsibility and problem-solving.”
Pearson’s 2009 global study into the links between education and employment, detailed in the Effective Education for Employment report found that skills gaps exist for both new employees and more experienced workers.
Gaps around leadership, teamwork, creativity and innovation continue to present employers with difficulties in training and development. And this is a problem not only for Saudi Arabia, but countries right around the world.
Andrews believes that giving young Saudi nationals the right workplace skills will help this growing demographic group enter and succeed in employment and contribute to the long term prosperity and stability of the country.
“Giving young Saudis an education that allows them to enter the workplace, and contribute meaningfully in their careers will not only help reduce youth unemployment,” he said.
“Making young Saudis more effective and productive in their jobs will also foster economic growth and raise the standard of living in the Kingdom. Saudi Arabia’s vast youth population has the potential to become an economic powerhouse in the region, but it is a matter of channelling that potential into positive and productive outcomes,” he added.


Bitcoin craze hits Iran as US sanctions squeeze weak economy

Updated 18 July 2019
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Bitcoin craze hits Iran as US sanctions squeeze weak economy

  • Some Iranian officials worry that “mining” is abusing the subsidized electricity
  • Iranian Bitcoin miners are purchasing more affordable Chinese ready-made computers

TEHRAN: Iranians feeling the squeeze from US sanctions targeting the Islamic Republic’s ailing economy are increasingly turning to such digital currencies as Bitcoin to make money, prompting alarm in and out of the country.
In Iran, some government officials worry that the energy-hungry process of “mining” Bitcoin is abusing Iran’s system of subsidized electricity; in the United States, some observers have warned that cryptocurrencies could be used to bypass the Trump administration’s sanctions targeting Iran over its unraveling nuclear deal with world powers.
The Bitcoin craze has made the front pages of Iranian newspapers and been discussed by some of the country’s top ayatollahs, and there have been televised police raids on hidden computer farms set up to bring in money by “mining” the currency.
Like other digital currencies, Bitcoin is an alternative to money printed by sovereign governments around the world. Unlike those bills, however, cryptocurrencies are not controlled by a central bank. Bitcoin and other digital currencies like it trade globally in highly speculative markets without any backing from a physical entity.
As a result, computers around the world “mine” the data, meaning they use highly complex algorithms to verify transactions. The verified transactions, called blocks, are then added to a public record, known as the blockchain. Any time “miners” add a new block to the blockchain, they are rewarded with a payment in bitcoins.
To work, the expensive specialized computers require a lot of electricity to power their processors and to keep them cool. In Iran, “miners” have an edge because electricity is cheap thanks to longtime government subsidies. “Miners” also buy cheaper Chinese ready-made computers to do the work.
But the constant raids and authorities’ conflicting statements on the issue have Bitcoin “miners” in Iran incredibly leery of being identified. Those contacted by The Associated Press refused to speak about their work or to say how much they earn from their “mining.”
But they acknowledge they do this to make some money at a time when Iran’s currency, the rial, tumbled from 32,000 rials to $1 at the time of the 2015 nuclear deal, to around 120,000 rials to $1 now.
“It is clear that here has turned into a heaven for ‘miners,’” Mohammad Javad Azari Jahromi, Iran’s minister for information and communications technology, recently told AP in an interview. “The business of ‘mining’ is not forbidden in law but the government and the Central Bank have ordered the Customs Bureau to ban the import of (mining machines) until new regulations are introduced.”
Ali Bakhshi, the head of the Iran Electrical Industry Syndicate, said earlier this month that the country’s Energy Ministry likely would boost costs for Bitcoin “miners” to 7 cents for each kilowatt of electricity they consume, a massive increase from the current half-cent but still almost half the cost of electricity in the United States, according to the semi-official Fars news agency.
Still, there are concerns, especially among Iran’s religious leaders, that people might try to circumvent paying extra for the electricity as well as using digital currency to hide or move money illicitly.
Tabnak, a hard-line news website associated with a former commander of the country’s paramilitary Revolutionary Guard, quoted three ayatollahs describing Bitcoin as either problematic or “haram,” meaning forbidden. Islam prescribes strict rules about finance.
But Jahromi said clerics became more receptive to the idea after his staff briefed them that Bitcoin had a value in the real world, which is required under Islamic finance. Islamic finance also prohibits gambling, the payment of interest and misleading others.
“Some of our top clerics have issued fatwas that say Bitcoin is money without a reserve, that it is rejected by Islamic and cybercurrencies are haram,” Jahromi said. “When we explain to them this is not a currency but an asset, they change their mind.”
Iran has tried to keep its economic situation in check by controlling foreign currency rates and cutting down on those moving their money from the rial to other currencies, including Bitcoin. Last year, the semi-official Mehr news agency quoted Mohammad Reza Pour-Ebrahimi, the head of the Iranian parliament’s economic commission, as suggesting that about $2.5 billion left Iran through digital currency purchases. He did not elaborate and authorities have not discussed it since.
The US, meanwhile, has been keeping a close watch on Iranians holding bitcoins. In November, a federal grand jury in Newark, New Jersey, accused two Iranian men of hacking and holding hostage computer systems of over 200 American entities to extort them for Bitcoin, including the cities of Newark and Atlanta.
“As Iran becomes increasingly isolated and desperate for access to US dollars, it is vital that virtual currency exchanges, peer-to-peer exchangers and other providers of digital currency services harden their networks against these illicit schemes,” said Sigal Mandelker, Treasury’s undersecretary for terrorism and financial intelligence.
Not so, said Jahromi.
“Cybercurrencies are effective in bypassing sanctions when it comes to small transactions, but we do not see any special impact in them as far as mega-transactions are concerned,” he said. “We cannot use them to go around international monetary mechanisms.”