Breaking the cycle of “educating for unemployment” in MENA

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The Audit Court (Cours des Comptes) in Morocco recently issued a critical report on the country’s vocational training system. At the same time, the World Economic Forum was focusing on youth under/unemployment at its annual conference in Davos. This is no coincidence, as the demographic realities in emerging markets create a demand for very high levels of job growth in the next decade to absorb high school and university graduates.

In fact, key demands emanating from the Arab uprisings are for jobs, greater transparency in employment practices, and sufficient resources for market-oriented training and education.

Jamie McAuliffe, president of Education for Employment summarized the challenge quite accurately: “But it is much easier to describe the problem than to advance concrete solutions. Both within the Middle East and North Africa (MENA) and beyond, there are still few examples of large companies and national governments putting the necessary muscle and resources behind solving the problem.”

Effective program management, qualified human resources, and sufficient budgets will provide a baseline for developing and delivering solutions to reverse the complacency and ineffectiveness that characterize training programs in the region. Looking at the Audit Court’s report helps provides a starting point to discuss the challenges to technical/vocational training in the MENA region.

The Moroccan Office of Vocational Training and Employment Promotion (OFPPT) is charged with orientation, education, and placement of students, as well as providing opportunities for continuing education for adults who wish to change career paths. Ideally, OFPPT maintains relationships with potential employers since it has the critical responsibility to be familiar with the needs of the workforce and adapt curricula and training to meet those needs.

OFPPT has its equivalents throughout the MENA region, some of which focus specifically on vocational and technical skills training for recent middle school and high school graduates, while others are similar to community colleges that provide “white-collar” education and training programs for the services industries. Whatever the agency’s mission, the goal is the same—to graduate employable young people for the workforce.

After decades of acquiring academic degrees that held out little prospect of jobs and careers, young people recognized that their educational systems did not make them employable, and governments are scrambling to respond.

It is too soon to tell how the new programs will turn out, but observations of actions over the past two years raise several critical issues. Let me say, from the outset, that this is a lifelong issue for me. I have been working on training programs in the Middle East since the late 70s, starting in Iran, moving then to the Arab Gulf countries, and continue today providing services to both US employees assigned to the MENA as well as to Arab trainees at all skills levels across a broad range of sectors. So while youth employment has become a regional priority due to the Arab uprisings, there are experienced professionals and best practices available that can help guide the determination of flexible yet accountable solution options.

One of the key concerns that I have is the quick fix notion of turning Arabs into entrepreneurs. Yes, Western mercantilism and international trade definitely had its roots in the Mediterranean, as Phoenicians (from Lebanon, of course) were the pioneers in sea-borne trade throughout the region. But that does not mean that one’s DNA equates with modern day commercial success; in fact there are many obstacles to ensuring an enabling environment for entrepreneurs.

A country’s legal, financial, regulatory, and cultural norms, among others, must be coordinated in order for enterprises to succeed. As this “eco-system” advances, concurrent efforts are needed to enable companies at all levels to expand their capacities to compete in the contemporary marketplace. And of course, the point of this enterprise is to develop the human resources to lead, manage, and staff the companies of today and tomorrow.

In my assessment, there are six “demand” factors that should shape the “supply” of labor generated by vocational/technical training programs.

  1. The skill/labor needs of the market today and projected for a decade.
  2. The interests/aspirations of youth and how this matches #1, and how to close the gaps that exist.
  3. Flexible and targeted curricula that provide core technical, language, and soft skills, as well as specific skill sets linked to jobs, with a strong emphasis on practical training based on partnerships with potential employers. Courses should reflect local demand and opportunities.
  4. The careful allocation of funding so that training programs are sustainable rather than becoming unsustainable subsidies.
  5. Government policies that take a holistic approach to job growth, involving a broad range of stakeholders and supporting outcomes based on results.
  6. Ensuring that entrepreneurship programs are balanced with efforts to enlarge the competitive capabilities of medium and large-sized firms.

With these “demands” in mind, a concerted, coordinated, strategic campaign involving various groups of stakeholders will go a long way in meeting the challenges not met by previous vocational/technical training regimes.

Breaking the cycle of “education for unemployment” in the MENA

/in /by

The Audit Court (Cours des Comptes) in Morocco recently issued a critical report on the country’s vocational training system. At the same time, the World Economic Forum was focusing on youth under/unemployment at its annual conference in Davos. This is no coincidence, as the demographic realities in emerging markets create a demand for very high levels of job growth in the next decade to absorb high school and university graduates.

In fact, key demands emanating from the Arab uprisings are for jobs, greater transparency in employment practices, and sufficient resources for market-oriented training and education.

Jamie McAuliffe, president of Education for Employment summarized the challenge quite accurately: “But it is much easier to describe the problem than to advance concrete solutions. Both within the Middle East and North Africa (MENA) and beyond, there are still few examples of large companies and national governments putting the necessary muscle and resources behind solving the problem.”

Effective program management, qualified human resources, and sufficient budgets will provide a baseline for developing and delivering solutions to reverse the complacency and ineffectiveness that characterize training programs in the region. Looking at the Audit Court’s report helps provides a starting point to discuss the challenges to technical/vocational training in the MENA region.

The Moroccan Office of Vocational Training and Employment Promotion (OFPPT) is charged with orientation, education, and placement of students, as well as providing opportunities for continuing education for adults who wish to change career paths. Ideally, OFPPT maintains relationships with potential employers since it has the critical responsibility to be familiar with the needs of the workforce and adapt curricula and training to meet those needs.

OFPPT has its equivalents throughout the MENA region, some of which focus specifically on vocational and technical skills training for recent middle school and high school graduates, while others are similar to community colleges that provide “white-collar” education and training programs for the services industries. Whatever the agency’s mission, the goal is the same—to graduate employable young people for the workforce.

After decades of acquiring academic degrees that held out little prospect of jobs and careers, young people recognized that their educational systems did not make them employable, and governments are scrambling to respond.

It is too soon to tell how the new programs will turn out, but observations of actions over the past two years raise several critical issues. Let me say, from the outset, that this is a lifelong issue for me. I have been working on training programs in the Middle East since the late 70s, starting in Iran, moving then to the Arab Gulf countries, and continue today providing services to both US employees assigned to the MENA as well as to Arab trainees at all skills levels across a broad range of sectors. So while youth employment has become a regional priority due to the Arab uprisings, there are experienced professionals and best practices available that can help guide the determination of flexible yet accountable solution options.

One of the key concerns that I have is the quick fix notion of turning Arabs into entrepreneurs. Yes, Western mercantilism and international trade definitely had its roots in the Mediterranean, as Phoenicians (from Lebanon, of course) were the pioneers in sea-borne trade throughout the region. But that does not mean that one’s DNA equates with modern day commercial success; in fact there are many obstacles to ensuring an enabling environment for entrepreneurs.

A country’s legal, financial, regulatory, and cultural norms, among others, must be coordinated in order for enterprises to succeed. As this “eco-system” advances, concurrent efforts are needed to enable companies at all levels to expand their capacities to compete in the contemporary marketplace. And of course, the point of this enterprise is to develop the human resources to lead, manage, and staff the companies of today and tomorrow.

In my assessment, there are six “demand” factors that should shape the “supply” of labor generated by vocational/technical training programs.

  1. The skill/labor needs of the market today and projected for a decade.
  2. The interests/aspirations of youth and how this matches #1, and how to close the gaps that exist.
  3. Flexible and targeted curricula that provide core technical, language, and soft skills, as well as specific skill sets linked to jobs, with a strong emphasis on practical training based on partnerships with potential employers. Courses should reflect local demand and opportunities.
  4. The careful allocation of funding so that training programs are sustainable rather than becoming unsustainable subsidies.
  5. Government policies that take a holistic approach to job growth, involving a broad range of stakeholders and supporting outcomes based on results.
  6. Ensuring that entrepreneurship programs are balanced with efforts to enlarge the competitive capabilities of medium and large-sized firms.

With these “demands” in mind, a concerted, coordinated, strategic campaign involving various groups of stakeholders will go a long way in meeting the challenges not met by previous vocational/technical training regimes.

Moving Maghreb Economic Integration Forward – Hopefully

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Blog: Beating the drum for regional integration–again

This past week, yet another regional conference was held promoting economic integration in the Maghreb/North Africa. Despite all of the splintering tendencies emerging from the Arab uprisings, there is still a strong pull among leaders for greater cooperation and coordination that goes beyond security arrangements to attack the root causes of economic stagnation.

The twin economic shocks of the Arab uprisings driving away tourists and potential investors and the decline of customer markets in Europe have greatly affected rates of growth throughout the Maghreb. Greater economic cooperation, particularly to access new markets and achieve greater economies of scale, would appear to be obvious, but then intraregional politics excels at obfuscation, not innovation.

At the 4th Paris Economic Forum – Casablanca Round, Tunisia’s former finance minister, Jaloul Ayed said that the lack of a working Maghreb Union linking Mauritania, Morocco, Algeria, Tunisia, and Libya is costing each country between two and three percentage points of growth. “I stress once again the absolute need for the Maghreb Union… a Union which would facilitate shared prosperity for all peoples in the region.”

His remarks were echoed by Morocco’s finance minister, Nizar Baraka, who noted that in order to “seize opportunities in a time of crisis, efforts needed to be pooled at the regional level. The democratic enthusiasm in the region should be harnessed and consolidated as democracy can only be meaningful if it translates into job creation, the restoration of social mobility, and improvements in citizens’ lives.” Minister Baraka, who was named by The Banker as the “best Minister of Finance in the Middle East” and “Minister of Finance 2012-Global Award,” speaks from hard fought experience in steering fiscal policy through the turbulence that has buffeted Morocco over the past two years. “This is why, for us, economic integration is essential and could be achieved through a cross-Maghreb growth pact with a shared ambition and a unifying aim: shared prosperity for all and the creation of a society of trust in North Africa,” he said. Baraka added that a competitive bloc needed to be created, so that it could position itself as a partner to the European Union.

While the economic benefits from a robust Maghreb Union may be somewhat obvious, as important in the long run is the positive impact on job creation, foreign direct investment, coordination of commercial regimes across borders, and the strengthening of the productive capacities of small, medium, and large enterprises at various stages of the value chain through competition, integration, and greater focus on competitive advantages. It would also have a salubrious impact on workforces throughout the region, focusing skills and capacity-building within competitive sectors to increase available pools of talent. All of this would engender greater regional stability to complement what is happening in the security realm.

Former Managing Director of the International Monetary Fund Dominique Strauss-Kahn spoke about Morocco’s economic potential as well as the difficulties facing the region. “We have moments in history where we must make difficult decisions that allow us to locate and seize the positive,” Moroccan daily L’Economiste quoted Strauss-Khan as saying. A sharp warning was given by Claire Spencer, head of the Middle East and North Africa program at the UK think tank Chatham House. She pointed out that about 75 percent of the region’s population falls between 18 and 30, which provides challenges and opportunities for the region’s economic recovery as there is an accessible workforce in the Maghreb that is well positioned to provide growing services to its neighbors in Europe whose populations are ageing. The countries of the Maghreb must make full use of this asset, Spencer said, adding that it was essential for the aspirations of the youth to be realized.

One of the commentators at the conference, economist Mehdi Zariri, highlighted the fact that the countries of the Maghreb are experiencing the same social and economic problems and must therefore come together to establish common strategies. “It’s vital to capitalize on the ways in which the economies of Maghreb nations complement one another, as they could form a strong economic unit in Africa,” he said.

It is this historic regional complementarity that holds the greatest promise for spearheading the economic growth critical to meeting the needs of the restive populations. Moving beyond rhetoric to concrete agreements that result in regional projects across key sectors—IT, transportation, value-added agricultural products, banking, specialty manufacturing, and renewable energies—is energizing private sectors to challenge business practices that under serve the needs of the Maghreb. The drums are beating.

IMF report card gives Morocco thumbs up – for now

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IMF report card shows challenges to sustained economic growth in Morocco

While there is a great deal of common wisdom about what the Arab governments need to do to more effectively participate in the global economy, there is much less certainty about how to get there. With no magic formula to follow, there is growing attention to the role of multilateral institutions in supporting progressive policies. For example, as Morocco continues to move forward with its economic reform agenda, the Executive Board of the International Monetary Fund (IMF) completed its first review of Morocco’s performance required under a two-year Precautionary Liquidity Line (PLL) arrangement. Agreed last August, the PLL arrangement makes available approximately $6.3 billion over two years to support the government’s program of economic reforms. The PLL provides access to liquidity against external shocks such as decreases in exports caused by shrinking markets in Europe or factors such as an excessive jump in imported energy prices.
The IMF recognizes that some form of fiscal backup is needed by countries with sound economic fundamentals and a history of moving on reforms so that their efforts continue despite factors beyond their short and medium term control. So the PLL is not a handout or a subsidy; it is meant to facilitate the government’s capacity to continue to make the needed hard decisions that will strengthen the Moroccan economy over the long run.
In its statement following the Board meeting, Ms. Nemat Shafik, Deputy Managing Director and Acting Chair, commented on the report. She praised Morocco’s “overall sound macroeconomic policies” and noted that the “worsening of the external environment and a below-average harvest” were threatening further progress.
The PLL brings into sharp relief the conundrum facing Arab governments attempting to respond to popular demands to increase jobs, broaden subsidies, and reduce barriers to accessing markets through government intervention. As Mohsin Khan pointed out in his article last week, the temptation to implement short term fixes through government employment programs, increased general subsidies, and protectionist measures end up mortgaging the country’s future fiscal health. And this is what Morocco is trying to avoid. By attacking subsidies over a four year period, and using the PLL as a safety net to avoid excessive borrowing and budgetary imbalances, the government is hoping to achieve “stronger and more inclusive growth.”
Ms. Shafik mentioned that “The arrangement…has provided Morocco with an insurance against external risks and supported the authorities’ economic strategy.” This gives the government breathing room to “move ahead with the reforms of the general subsidy system and the pension system and to better target social protection.”
Nemat Shafik is no stranger to the dislocations that accompany deep economic reforms. As the youngest ever vice–president of the World Bank and a member of the senior management team at the International Finance Corporation, she has spent several decades promoting reform policies that include “Efforts to strengthen competitiveness and better equip the economy to respond to external shocks…” She strongly emphasizes the role of the private sector and notes that “The planned fiscal consolidation and structural reforms, such as those to improve the business climate and professional training, will help underpin external sustainability.” I have always been impressed with Nemat’s wisdom and clarity, and Morocco will clearly benefit from the IMF’s support and sound advice.
One of the outcomes of the Arab uprisings is the challenge of facilitating growth without compromising the future solvency of the country. While the Gulf countries have the resources to weather short and medium term challenges, countries such as Morocco face strong domestic pressure against painful changes that affect their citizens even if they can bankrupt the country. So the PLL tests Morocco’s commitment by providing short and medium term support to facilitate the long term health of the economy. It is a partnership worth applauding and supporting.

Why it's important to promote US product standards in MENA countries

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Although the US remains the world’s largest economy, its ability to export is inhibited when US products do not conform to local product standards, many of which are being defined by our competitors. Time to spend money to make money!