ABU DHABI, 16 April 2003 — Festering unemployment in Arab states because of high population growth and poor economic performance cost them nearly $311 billion in lost production in one year and the problem could further deteriorate without radical economic and employment measures.

An official study published in Abu Dhabi found that Arab countries are reeling under a worsening joblessness problem in the absence of sound planning and measures to spur economic growth to match a rapid population increase in the region.

The study, published in the monthly Public Affairs bulletin of the Abu Dhabi crown prince’s office, said Arab nations have the second highest population growth in the world after the Sahara region in Africa, standing at 2.3 percent in 2001.

Individually, the average is much higher in some countries, mainly the UAE which recorded the highest rate of 5.8 percent.

The study put the total unemployment rate in the Arab world at around 20 percent of the 95-million-strong work force, or nearly 19 million.

The figure includes only those who are effectively jobless, while there are nearly 10 million people classified under the category “disguised unemployment” which is a result of redundancy in the public and private sectors.

The study by Imad Salam, a researcher at the UAE Department of Organization and Management, considered those 10 million as more a burden than a productive force in the economy and said this means the real Arab unemployment rate is 29 million.

Following US-style economic production calculations, Salam estimated the per capita output in the Arab world at 9,336 in 2001 by dividing the gross domestic product over the number of workers, which he put at 76 million at the end of that year.

But in real terms, the per capita output stood at $10,751 by dividing the GDP over the actual number of workers of 66 million without the disguised employment.

“Using the disguised unemployment means lost production...since the real unemployment is 19 million and the disguised unemployment is 10 million, there is a lost production by 20 million people...as the per capita output is $10,751, the value of lost production was estimated at around $311.8 billion in 2001...in other words, the Arab countries lost $311.8 billion in wasted production, accounting for 44 percent of their GDP,” the study said.

It blamed poor economic performance, high population growth and other factors for the joblessness problem in the region.

These factors include failure of some governments to adopt sound planning policies, random employment of university graduates who do not actively contribute to productive sectors, low investment in sectors creating sufficient jobs, and unbalanced distribution of jobs in the different sectors.

“In the Gulf states, there is a problem of reluctance by their citizens to take up technical and productive jobs and their preference for administrative, office and supervisory jobs...their preference for the public sector over the private sector is also aggravating the redundancy problem and widening the gap in real production,” it said.

At a labor conference in Abu Dhabi last month, the UAE urged Arabs to take serious measures to tackle their festering unemployment problem and warned failure to reverse an upward joblessness trend could give rise to political and social turbulence in the region.

Dr. Muhammad Khalfan ibn Kharbash, minister of state for financial and industrial affairs, criticized the region’s long-standing economic policies which he said have so far failed to provide effective solutions to the persistent joblessness problem.

“Unemployment has become an obsession to Arab officials and to individuals and families...it is not a mere economic problem but a political and social problem as well.

“This problem can no longer be neglected...it is true that other developing nations are suffering from unemployment but the problem in our region has more serious and threatening proportions as our joblessness rate is much higher than in most other countries...its effects have become severe on the youth and the educated Arabs.”

According to the Arab Labor Organization, around 35 percent of the total Arab population is in the labor market and the figure is set to grow to 123 million in 2010 given the high number of the 15-year-plus age group which is about to join the work force.