Education and Employment: Bridging the Divide (Part 1/2)

In the Middle East and North Africa, rates of unemployed young women are eight times that of men. This is the first of a two part series.

After more than two years, economic issues raised during the Arab Uprisings are still lingering on government agendas. Along with governance and transparency concerns, the most obdurate legacy for most countries is the demand for meaningful employment — a nettlesome priority that bedevils governments in the Middle East and North Africa (MENA), including the wealthy Gulf Cooperation Council (GCC) members.

A Complex and Interconnected Challenge

Current governments are burdened with trying to fix education and training regimes that did not prepare local management and workforces for competitive global markets. The lack of a qualified labor force is part of a web of symptoms that result in weak economic growth policies. In addition, opaque regulations are an obstacle to open and competitive markets, as well as restrictive financial regimes that continue to block attempts to broadly facilitate entrepreneurship and greater domestic and foreign investment. While there are some glimmers of improvement, after decades of neglect, the prospects for short-term solutions are limited.

Improving education and training requires an organic strategy that incorporates stakeholders across the employment spectrum, from labor and management to the labor pool, government ministries, the private sector, and all intermediary groups and institutions, including NGOs and civil society focused on concerns ranging from gender to healthy environments.

A core economic issue is the plight of youth, usually defined as those under 30, with little schooling through university education, who are marginally employed usually in the informal economy, unemployed, or seeking employment. The priority of youth employment was in the spotlight of the 2013 WEF in Amman, Jordan where experts in employment and education and advocates such as Queen Rania of Jordan were quite explicit about the challenges confronting the region. According to the 2013 World Bank development report on jobs, some 40 percent of men and 62 percent of women in the MENA are engaged in non-wage employment (farming and self-employment).

The International Labor Organization (ILO) put youth unemployment at 28.3 percent in 2012 and says it will not reverse course for the next five years, despite a global economic recovery the ILO projects at 30 percent by 2018. In his remarks at the WEF, Majid Jaafar, CEO of Crescent Petroleum, noted that on average, over 25 percent of the region’s youth are currently unemployed and the figure is rising — expected to exceed 30 percent within five years, and already exceeding 50 percent in some countries.

Challenges to Accelerating Youth Employment

While there is universal agreement on the centrality of improving job opportunities for youth in the MENA, realistic programs and goal-setting are constrained by four fundamental factors:

1.   Availability of jobs: Throughout the region, from Mauritania and Morocco to Qatar and Saudi Arabia, there is a jobs deficit due either to a lack of opportunities, a mismatch between the job skills and those of the labor pool, gender restrictions, or perceptions of young people concerning available jobs.

2.   Lack of investment in projects that create jobs for nationals: Either there is not enough local and foreign investment to drive job creation, or projects are capital (energy) or skills intensive (construction, infrastructure), limiting opportunities for inexperienced local hires.

3.   Inefficient ecosystem supporting new business development: Onerous local labor regulations, lack of reasonable access to financing for start-ups and business expansion that inhibits entrepreneurship, perceived threats to existing unions and industries, and insufficient resources for targeted training and education combine to stifle growth.

4.   Need to coordinate and target international and national economic and technical assistance programs: Too often, well-meaning efforts are in silos within government ministries or agencies, and do not benefit from a broader perspective on closing the gap between education and employment and applying value chain analysis and similar tools to better utilize human investment dollars.

Agencies look to addressing their specific objectives rather than seeing how their efforts impact other agencies. For example, entrepreneurship, technical, and vocational training will benefit from closer coordination and sharing of resources to align programs to provide skills for trainees that enable them to make choices, rather than limit their options to certain trades.

Given the wealth and demographic differences among the MENA countries, there are few cookie-cutter approaches or “lessons learned” that can be applied across the region. Rather, a series of principles need to be defined in each case, informed by similar efforts in other parts of the world. As the Arab Competitiveness Report 2013 points out:

“North African economies face significant challenges related to labour-market efficiency and institutions. More labour-market flexibility and more efficient allocation of talent, as well as a fundamental overhaul of the institutional framework, will be crucial for creating growth and employment in these countries [Libya, Morocco, Egypt, and Algeria].”

While the required reforms may be conceptually and technically straightforward, the political, social, and economic stakeholders in each country will inevitably shape the policy outcomes.

Take the issue of facilitating skills acquisition by youth. With the majority of the populations in MENA between the ages of 15-35, there are few prognosticators who are willing to divine how that demographic surge is to be absorbed, particularly if greater female employment is an objective.

In national address, King of Morocco calls for stronger links between education, skills, and markets

On Tuesday, August 20, in an address on the 60th anniversary of the Revolution of the King and the People, King Mohammed VI outlined his pride, hopes, and vision for his country’s educational sector. Remarkably, he spent less than two sentences on what had been accomplished with far more attention paid to where Morocco must go to secure its future. The king spoke about “another revolution, which I am spearheading with a view to developing human resources, achieving economic and social progress, and promoting a dignified life for our citizens.”

He noted the dedication of Moroccan parents to a good education for their children, and tied the development of the country’s human resources to good citizenship, largely abetted by family cohesion and a strong and relevant educational sector.

“Nevertheless, we still have a long, arduous journey ahead of us if we are to enable this sector [education and training] to actually play its role as an engine for the achievement of economic and social advancement,” he announced.

To make this happen, King Mohammed made several critical recommendations. First of all, noting that Moroccans had to master at least two languages to acquire university degrees, he encourages Moroccans to become proficient in foreign languages to “thus expand their knowledge base, refine their skills, and gain competence needed to be able to work in Morocco’s new professions and areas of employment, in which there is a significant shortage of skilled workers.” He then went on to emphasize technical and vocational training grounded in skills needs of the marketplace, from high tech manufacturing and IT to artisanal crafts that serve the tourism industry.

Building on lessons learned

Referring to the kingdom’s Education Action Plan 2013-2016, King Mohammed made a point that education policy should not be subject to re-invention with every new administration and should build on the experience of previous programs. “It hardly makes sense for each government to come with a new plan every five years and disregard previous programs…The education sector should, therefore, not be included in the sphere of purely political matters, not should its management be subjected to outbidding tactics or party politics.”

Referring to the disparities in quality between the private and public educational systems, the king called for speedy adoption of educational reforms he previously addressed and called for “implementation of the constitutional provisions regarding the Higher Council for Education, Training, and Scientific Research,” which is charged with implementing national reforms at all levels and promoting more rigorous and market-linked programs. To this end, King Mohammed directed the Higher Council for Education to carry out an evaluation of the achievements of the National Charter for Education and Training over the past ten years to provide baseline data for educational reform.

This step of looking back to move forward is how the king has launched all of the country’s major reforms. In closing his speech, he called for “a broad-based, constructive debate on all the major issues of concern to the nation, in order to achieve the tangible results Moroccans are looking forward to,” reaffirming his model of consensus and consultation as the basis of reform.

So the speech squarely places education and human development at a top priority on the king’s domestic agenda, and it doesn’t appear that he’ll wait another year for effective results.

Can Corporate Social Responsibility Aid Reform in the Maghreb?

The Rise of Corporate Social Responsibility – A Tool for Sustainable Development in the Middle East argues that companies can contribute to sustainable economic development in the MENA region through corporate social responsibility (CSR). The report was issued by Booz & Company’s Ideation Center, its “think tank in the Middle East [providing] thought leadership through insightful research, analysis, and dialogue that is true to the Middle East’s dynamics.”

The report raises several questions; some are existential, while others focus on distinguishing between short-term – “give him a fish” – approaches and long-term “teach him to fish” options. I have never been a great fan of CSR, simply because it is not, in my analysis, a substitute for investments in sustainable economic development that directly create jobs. This report takes a different tack, saying that “Companies, as good corporate citizens, must become involved in sustainable development and contribute to the broader improvement of their societies … [by aligning] themselves with these national goals [job creation, poverty alleviation, and the environment] that are built around sustainable development, using the powerful tool of CSR initiatives to help achieve them.” CSR, in their assessment, is both a social force for reducing economic inequality and a means of improving environmental conditions. Their case studies in the region are helpful yet do not address the core issue: can CSR have a long-term impact beyond philanthropy that supports greater opportunities for more equitable economic growth?

What is CSR?

Perhaps the first issue is definitional, as the United Nations Development Project (UNDP) defines sustainable development as “distributing the benefits of economic growth equitably, regenerating the environment rather than destroying it, and empowering people rather than marginalizing them.” Is this consistent with what the region is thinking? According to the Booz report, “Companies and government officials interviewed in our study most frequently cited the need for robust job creation to nurture economic growth and spread benefits among the population as the most salient issue.” This is the dilemma, as few of the examples provided in the report are about job creation. More are about philanthropy, which, while laudable, does not necessarily lead to enhancing job growth over the medium to long term.

I am not saying that CSR is not important. In fact it is a key component of a mature approach to economic growth; but it lacks a defined connection to job creation. As the report highlights, “half of the region’s population is under the age of 25…among those 14-24 years of age, approximately 25 percent lack a job…” So building homes for the poor, insisting on higher environmental standards for manufacturing facilities, and encouraging literacy are laudable, yet my assessment is that these programs must be part of a larger coherent CSR strategy that is wedded to generating meaningful employment if it is to go beyond alleviating short-term social and environmental issues.

And the challenges for recruiting partners into CSR programs can be quite daunting, as there are few if any incentives for employees to participate. Less than 14 percent of firms surveyed have formal CSR-related key performance indicators, “and just 11 percent include CSR performance in their bonus schemes.” So to make CSR effective over time, the report points to a process to close the gap between a company’s individual CSR programs and a country’s national development priorities.

Another challenge is that countries diverge in their CSR priorities, making it critical to define local needs rather than using an imported template. In the MENA, the focus is on issues ranging from alleviating poverty and supporting charities and community projects to education and employability. There is not a broad consciousness of the need to address environmental issues, which is a priority elsewhere. “Executives [in the MENA] are struggling to relate environmental issues to profitability and long-term business objectives.” In many cases, environmental concerns are still seen as external to the company rather than incorporated into its internal operations.

Building effective partners

The report also talks about the importance of proactive government and civil society participation and encouragement of CSR. On this theme, a very interesting CSR project is run by SEDCO Holding, a Saudi Sharia-compliant wealth management company. After a national survey indicated that young Saudis have few skills in managing their personal finances, SEDCO initiated a financial literacy program for university students. It is a private-public partnership that involves an international NGO, resulting in a great example of how CSR can make an economic impact beyond charity. Smarter consumers make smarter decisions and can transfer this knowledge into their own business practices. This is a forward-thinking project that benefits all of the stakeholders and provides best practices that can be emulated elsewhere.

A positive recent development noted in the report is the notion of corporate governance – responsible and accountable company leadership. “It was only within the last 10 years that an Arabic word for corporate governance, hawkamah, was coined.” In the transition from family-owned private firms to corporate-managed public entities, a company’s identity shifts beyond the personality of the founders to values expressed in their corporate mission. It is this redefinition of company identities that holds the most promise for the inclusion of CSR in a firm’s objectives.

Just as long as you don’t forget that the bottom line is profitability and job growth!

Global business in emerging markets: Transformational partnerships

At a recent corporate presentation in the Maghreb on the potential transformational effect of foreign direct investment (FDI), I focused on two points: the notion of impact investing and the corollary dynamic of how FDI impacts human development beyond the benefits of economic growth.

The discussants were company leaders and employees discussing how to build a globally competitive company culture integrating local sensibilities and priorities with technologies and industrial know-how developed abroad.  The initial discussions, following the usual pattern of strategic planning sessions, concentrated on building a common vision and purpose among the participants. The vision that coalesced was then defined in a series of core values and principles that would become the “brand” of the emerging company culture.

As I listened to insightful and well-presented points of view, it became apparent that as the new company drills down from values and principles to behaviors, it is critical that both sides examine the scope of their assumptions and expectations. While there was a strong consensus around the vision and principles, agreement was not so clear on the behaviors that would then follow. It reminded me of the iceberg metaphor in cross-cultural communications, where the core values, principles, attitudes, and beliefs are unseen below the waterline, while the behaviors, which are visible above the surface, are subject to interpretation by the other party who cannot see below the waterline. The lesson: we make judgments about others based on what we see, rather than what we know lies beneath the surface.

Given this observation, I asked the group to consider a broader perspective, moving above their particular iceberg to consider the implications of the new partnership beyond the terms of the company’s goals and objectives. I began with what I know best—defining the mission of the new company and how training impacts its brand.

The Arab uprisings pointed out the need for rapid economic growth to stimulate broad and meaningful employment and drive education relevant to the marketplace. This is not a simple task; it is not merely about providing skills training to enhance work opportunities; it is about the core aspirations of people and what this means to their country. Employees and employers are not the only beneficiaries of FDI; all of the country benefits from a more capable and effective workforce.  The workforce that is emerging will have better technical capabilities, operational sensibilities, and soft skills that enable them to define options and make choices about their futures.

In the MENA countries that I have surveyed in terms of technical and vocational training needs, soft skills are defined as more than communications and teamwork; they include the capabilities to pursue a career and anticipate and grasp needed learning opportunities. This involves creativity, innovation, and judgment. Thus, these enhanced soft skills are more complex and encourage what is called “global dexterity,” blending awareness and knowledge that lead to effective behaviors in the workplace while securing one’s core values.

The Arab uprisings remind us that there is a related issue that needs attention: that what we are dealing with is more than better training, education, and employment; Arabs are redefining the social contract that existed between regimes and their people. At the heart of it all are the issues of identity and the basis of legitimacy of the governments: political, religious, ethnic, cultural, etc.

Historically, the social contract was an exchange between a government that provided order, stability, and a bit of prosperity to citizens who felt protected and secure enough to have sustainable livelihoods.  That balance has, in many countries, been shaken to a large degree by demographics, the global economy, technology, more gender equality, a reduction in social distance, and education, which are providing the ingredients and tools for reshaping and recalibrating social contracts. So it is this redefining of the social contract that is at the heart of the struggle for political legitimacy and national identity.

In this context, skills training and professional development enable employees to access careers and benefits that equip them to be part of a generational and transformational shift. These empowered employees become capable participants with tools to achieve aspirations for themselves, their families, and their children. This confluence of skills and knowledge has the capacity to impact the debate on the social contract, which has implications for the MENA region. This may sound a bit grandiose, but it is a historical lesson that economic development and human development go hand in hand. What was once considered a business relationship has the potential, in today’s highly connected and able public space, to be a link between global markets and local human development.

By raising the performance of employees to better engage the global economy, we build a platform for moving beyond issues of economic growth as both employees and employers seek growth opportunities that require more effective governance and use of human capital. People become internal change agents that provide the role models, mentors, and early adaptors missing from the broad business landscape in the MENA countries. These local transformation agents link with others throughout the region and larger markets to promote global dexterity – adaptive behaviors built around core values.

And what is the external partner’s role in this? The concept is “impact investing,” which focuses on projects that have social and environmental benefits and generate profits. At its core, impact investing reflects business models that are sustainable, advance human capital, provide opportunities for community development, and have results that are attractive to long term relationships with the private sector. The key consideration is to move beyond social and community outreach that is beneficial in the short-term but does not significantly alter the future prospects of the communities touched. By promoting an investment perspective that recognizes that broader and deeper FDI requires long-term returns, countries and companies make mutual cause for mutual benefit. Governments have their role to play but no more than is usually needed to attract serious FDI, ranging from needed infrastructure to incentives for training, use of local materials, and similar inputs.

There are several revolutions going on in the MENA and elsewhere, some messy and unwieldy while others are barely perceptible. The role of workforce development in crafting solutions should not be overlooked or minimized as simply giving people jobs. Companies exist for a purpose, to be profitable and grow. Employees share these goals, to profit from their employment by acquiring skills that free them to know and exploit opportunities for themselves and their families. Partnerships between local and international private sectors that are emerging will, in many respects, help governments in their mission to build a new social contract with their citizens by greatly reducing demands for counterproductive government intervention in the economy. Good business making better jobs and great citizens and governments is a goal worth pursuing.

Worker incentives: Are MENA employee stereotypes shifting?

 In reviewing comprehensive strategies for closing the gap between education and employment—an unresolved agenda of the Arab uprisings—one area where there is no ready agreement is non-monetary compensation. Everyone acknowledges that money is the chief incentive for attracting employees, but there is a dilemma when taking a longer view of the “employee value chain,” that is, from graduation to employment to career, what matters for recruiting and retaining good workers? In looking for possible answers, there are clear differences between countries that have plenty of people and plenty of funding, such as Saudi Arabia, and countries that have plenty of people and limited funding, such as Morocco. In both countries, young people assert that they want to and are ready to work. Yet in both countries there are wide gaps in expectations between those with secondary and university educations, which preclude a “one size fits all” approach.

The case of Saudi Arabia

In Saudi Arabia, where hundreds of thousands of new jobs are needed annually over the next 5-10 years to fill employment needs of locals under 25, the clear preference is for white collar jobs, even though industrial workers are in high demand throughout the country. While there has been extensive research on the categories of jobs available to Saudis, the most difficult step—motivating young people to fill the potentially available slots, has yet to be taken.

The kingdom has a three-pronged approach: 1) pushing the private sector to hire more Saudis and provide incentives for companies to have in-house training programs; 2) upgrade government coordinated training programs to enable young Saudi men and women to acquire skills linked to the rising demand centers for employment; and 3) educate and motivate Saudis to take seriously employment as a career.

The majority of the general population as well as university graduates are female, who, while seeing a gradually growing number of workplace opportunities, are also facing a dwindling pool of eligible husbands. This fact impacts the career aspirations of both men and women and cannot be overlooked as a normative peg is promoting employment.  

 

The case of Morocco

Morocco has different challenges since its young people are attracted by both blue and white collar jobs but the labor supply exceeds demand, especially if potential employees are reluctant to relocate. University graduates who prefer government-related jobs are disappointed in that few are being chosen under the accelerated hiring program of the current government. Since it has limited funding, the government is incentivizing the private sector through subsidies and grants to train in specific sectors. This is especially important since government training facilities are limited in number and unable to carry the full burden of training across a range of jobs. While there is an increasing emphasis on entrepreneurship and start-ups, the overall environment for promoting new businesses is still difficult to navigate. There is a large pool of entrants into blue collar work if they can access effective training programs.

Non-monetary incentives

Given the challenges in both countries, another motivational tool is identifying non-monetary incentives that could be part of an effective recruit and retain policy. Offering some ideas are two articles. McKinsey & Company just republished a seminal article on the topic “Motivating people: Getting beyond money.” And IESE Insight published “Remuneration Tips for a More Motivated Workforce,” which covers a study conducted by this Spanish economic institute. Both are based on surveys done with a variety of companies, ranging from mid-size to large corporations.

The McKinsey article found that:

“…praise from immediate managers, leadership attention…, and a chance to lead projects or task forces—[are] no less or even more effective motivators than the three highest-rated financial incentives: cash bonuses, increased base pay, and stock or stock options. The survey’s top three nonfinancial motivators play critical roles in making employees feel that their companies value them, take their well-being seriously, and strive to create opportunities for career growth.” 

The IESE Insight article found that:

“variable remuneration schemes, although increasingly widespread, do not always achieve their main objective: to motivate people.” In these schemes linking benefits to company profits (however measured), the author found that the relationship between variable remuneration and motivation is too complex as “numerous factors that cannot always be controlled influence the equation.”

In the MENA countries, using Saudi Arabia and Morocco as examples, both the financial and non-financial motivators cited in the two articles are not common practice. Yet the McKinsey article noted that “…in developing markets…[respondents] cited employee motivation as a key reason for modifying incentives.”

The Way Forward

So where to begin? Promoting one’s initial job as an entry into a career will be a major culture change in how Moroccans and Saudis perceive employment. Too often, either the job in industrial settings has defined limitations, or traditional job security has meant that there was little turnover to allow movement upwards for young, talented employees. Senior management must become committed to integrating their traditional role as benefactor/bureaucrat with a balanced style that demonstrates appreciation for talent, initiative, and loyalty.

Both articles warn that nonfinancial compensation schemes must be fair, objective, and realistic to discourage employees from “gaming” the system by working for the reward and not the overall benefit of the company. Discussions about how to motivate through nonmonetary rewards are a very useful device for engaging employees, if the option for these benefits is available. In addition, until middle management and supervisors also adapt their behaviors to support a corporate culture that recognizes and rewards teamwork and respect for diverse skills, talents, and personalities, any incentive-based motivational program will be eroded by a “do as I say, not as I do” credibility gap.

Crossing the divide: young Moroccans reaching for the future

If Moroccans were any kinder, I would be buying an apartment in this North African nation tomorrow – the only challenge being where! Their multilingual skills were prominently displayed for the past 10 days as I struggled in French, Arabic, and English to get to know Moroccans under 40, many under 30, who are part of the new wave of university graduates and Moroccans returning from abroad committed to building the future Morocco. It was more than invigorating to be talking with young people the age of my children, having conversations that were incisive, insightful, and clear-eyed about the opportunities in their country. They were open and willing to discuss a range of issues related to their aspirations and motivation. As my sentences tumbled out in broken bits of languages, they were immediately in tune with both the intent and the context of my remarks and questions, displaying a sense of humor and desire to understand and to be understood.

These are trying times in Morocco. Against a backdrop of the drama of rifts in the governing political coalition, a large number of regional and international conferences in Morocco are focusing on its place in the global market. There is a growing appreciation that business as usual, whether that means speaking French and selling into the EU or maintaining rigid labor and business hierarchies, is not sufficient. Foreign direct investment continues to grow incrementally, moving beyond real estate and tourism into manufacturing sectors that rely on the improving infrastructure and competitive salaries that Morocco provides. The renewable energy sector, including wind and solar power, is broadening its scope of activities from north to south, requiring even more investment in transportation, power, and broadband/IT services. Most importantly, all of these projects provide opportunities to engage Moroccans who have the talent and energy to acquire or develop skills needed in the global market.

As I spoke with the young people about what skills or attitudes would help Moroccans meet future challenges, the words I heard most often were innovation, creativity, breaking barriers, adaptation, caring, and courage. There is a tension, mirroring young people globally, when they talk about the older elites and networks that they believe limit their prospects for growth. Their impatience and sense of entitlement echoes US graduates whose expectations are undergoing shock therapy in today’s jobs marketplace. As these rising Moroccan stars re-examine their professional aspirations, I detect in many of them a more holistic style in approaching job opportunities. Of course salaries are the first priority but there was a very strong emphasis on the processes and environments they value.

It was surprising that courage came up so often, and for them it has at least two elements. The first is having the confidence to take initiatives, make suggestions, and address issues that in the past had been the purview of only those higher up the workplace food chain. They felt that the support of their peers and managers is the key to building this confidence. The second, closely aligned dimension is risk-taking – feeling secure enough that trial and error is an option because it promotes learning, innovation, and team building. Most felt that risk-taking is valued more inside international companies than Moroccan firms, which often are reluctant to suggest out-of-the-box alternative solutions to their customers. I found this perception was especially strong among those who had worked/studied abroad and experienced the benefits of a more collaborative and creative work milieu. One of the pleasant surprises I encountered in the more than two dozen interviews I conducted is the pride that older (over 40) Moroccan managers have in young people. While counseling that they should be patient and acquire more experience, these managers appreciate the dynamic and intense work styles of their younger teammates. This was quite interesting as at least half of the group is Moroccan women under 35.

I spent a solid ten days in Casablanca building new ties to Morocco and renewing past friendships. While the confidence of the Moroccans with whom I spoke is tempered by the barriers they encounter, there is an essential conviction running through all of them that Morocco can make the needed changes to compete globally. And they are very excited and motivated about being part of that change.

Consensus and capacity-building: Tipping the scales in favor of reform

After a year away, I returned to Morocco for 10 days. I am sure that I will find the visit both challenging and satisfying. My central interest is to better understand the tangible governance issues facing the PJD-led government. It continues to struggle with advancing its agenda through parliament and achieving a consensus among its coalition partners on policies that effectively attack unemployment, the budget deficit, corruption, and social reforms. Most organic laws required to enable reforms promised in the 2011 constitution are still either being drafted or pushed off to a later agenda. And, as Morocco moves towards implementing its regionalization strategy, there is still a long way to go to enable officials and civil society to acquire the skills associated with effective local government.

While the policy debates on issues ranging from the latest version of the media law to subsidy and judicial reforms and strengthening protection for whistleblowers are well reported in the press, many critics are claiming that there are few results after 16 months in office. My assumption is that this is politics as usual in any democracy, especially a hybrid like Morocco. But there is more going on here that I want to explore.

In a country where labor issues can bring thousands of people into the streets, it is remarkable, but not surprising, that a common platform addressing labor mobility, training for work, and an open regulatory environment has not been vetted and moved through parliament yet. As in the US, political leaders seem to have a block against cooperating on issues despite the reality that their constituencies voted for change, not for stalemate.

Morocco badly needs to restructure the labor environment to enable workers to acquire skills and access to jobs while employers will benefit from more flexibility in responding to variable market conditions and a reduction in restraints on employee hiring and firing. This is not to say that important steps have not already been taken. As I’ve written previously, the government is moving incrementally to improve the labor force by broadening and upgrading technical and vocational training and by setting up a system to certify on-the-job skills acquisition. These steps however have not made a significant dent in the unemployment and underemployment rates.

An equally daunting task is focused on reducing and realigning the government’s subsidies to better serve the less well off in a country where a significant portion of the population is in the informal economy. Today, rich and poor equally benefit from fuel and food subsidies and the government is exploring options that not only relieve human needs but also encourage small business expansion. One proposal that I heard last night is to subsidize small farmers rather than the price of imports to the wholesalers. Of course, I asked if this was just another form of welfare that could grow into corporate subsidies, which like in the US distort market prices. But that is not the approach that Morocco is considering. Greater support to local growers would include training and equipment for better crop practices ranging from higher quality seed and watering to the use of fertilizer and more efficient cultivation, storage, and distribution. This would expand their capacity for more production, new employees, and fresh local supplies to market.

Whether it’s better labor practices or rationalizing subsidies, at the heart of the movement to reform is human development. Last week, I met with Mariam, a very capable, multilingual woman IT graduate from the top school in Morocco. She graduated months ago and still doesn’t have a job. Less than 30 percent of her classmates have found employment. One woman friend found an unpaid internship in Turkey through an organization that places capable graduates, for a fee, in positions scattered around the world. Now, Mariam is seriously looking at a position in India…ironic, isn’t it that Morocco is sending its talented young people, at their own expense, to fuel the IT capabilities of other countries.

I can’t help but put these concerns into a larger context – the daunting challenge of building consensus around reform policies that will benefit Moroccans and the simultaneous need to greatly enlarge capacity building training for the grassroots as well as the managers of Morocco. The promised policy of regionalization – devolving power to local governments – requires local communities and their leaders to have skills for administration and governance. The demand for more and better jobs requires policies that enable the transformation of a rigid economic regime into a market-friendly, results-driven, equal-opportunity economy that prioritizes achievement over status. Hopefully, in next week’s posting, there will be some success stories that I can share about where Morocco is heading.

Repairing the neglect of workforce development in the MENA

The World Bank has issued its fourth volume in the series Jobs for Shared Prosperity – Time for Action in the Middle East and North Africa. Well over 300 pages, the study provides its five main messages separately for those who need a super condensed summary. Reading through the messages, I noticed how clear it is that very few results can be achieved without strategies that integrate the resources and talents of the public and private sectors. Drawing on my experiences across the MENA region, there is much to be gained from cross-border sharing of best practices regardless of the differences in the economic profiles of the countries. Let’s look at the region in terms of the key messages of the study.

Message #1: Labor markets in the MENA make poor use of the available human talent and resources, thus inhibiting the economic potential of countries and people in the region. Current political dislocations aside, Arab countries, like much of the developing world, made post-independence choices that centralized economic growth around government institutions. Despite dramatic changes in society since then in population, education, middle class composition, ethnic/minority/gender issues, global market standards, etc., governments were slow to accommodate to the realities of today’s economies. Concurrently, vested interests working with their government counterparts too often dominated the private sector. This cronyism added to the obstacles inhibiting progressive economic policies. Human capital was collateral damage in this scenario since labor had little impact on employment standards in a system of regulated government-social services and little flexibility in labor markets.

Message #2: Change the rules to create a dynamic private sector that capitalizes on the full range of the region’s human capital. Government business regulations have been slow to shed their opacity; end interference in the business of business, and equitably protect the rights of owners and employees. A major incentive towards transparency is that all MENA countries require FDI, which requires attention to rule of law, accountability by government officials, and awareness of environmental impact. The WTO, bilateral trade agreements, and a host of multilateral treaties have helped shine a light on changes that must be made for an economy to be competitive.

Message #3: Let skills flow into productive private sector jobs by realigning employment conditions in both the private and the public sector and rethinking labor regulation. Lower the barriers holding back women who want to work. MENA governments can no longer be the employers of first or last resort. Coddling public sector employees in non-productive jobs limits economic efficiencies and distorts opportunities. Efforts to enhance the employment of youth and women will be advanced through adopting unemployment policies that enable transitions to the labor force and access to services that respect the needs of working families.

Message #4: Make young people employable by closing information gaps, improving quality and relevance of skills, and partnering with the private sector in training. These steps have become the mantra of US, international and local government programs to advance employment among young people. An interesting corollary to this focus on training programs is providing recognition to those who have acquired skills informally, through on-the-job experience. Morocco is piloting a program called Validation des Acquis de l’Experience Professionelle (VAEP) to provide accreditation to workers who can demonstrate proficiencies that qualify them for advanced positions. Piloted through a cooperative agreement with the French government, VAEP originally started with the building trades in 2008, was expanded to textiles and clothing in 2011, and is poised to move into hospitality and meat processing. The bottom line is that professional skills validation through transparent proficiency examinations will “make it possible for employees to obtain diplomas or certificates outside of their initial schooling,” according to the article in Le Soir.

Message #5: Use short-term interventions to respond to immediate needs while building credibility and consensus for medium-term, game changing reforms. Demands for jobs, training, market-focused education, and transparency will not be satiated by government promises. Public-private partnerships can be a critical vehicle for identifying quick start-up projects and programs that support jobs for those marginalized and underutilized in current labor markets. Government subsidies for employment can be used more efficiently when tied to needs identified by current and future employers. The success of longer-term reforms of labor regulations, jobs training and education, gender-related policies, and workplace health and safety rules can be facilitated by piloting initial efforts at these reforms in short-term programs that deliver jobs and generate data that supports new policies.

The World Bank’s Jobs for Shared Prosperity, like the Arab Human Development Reports of a decade ago, offers a serious and methodical critique of how to take an under-performing region and enhance its prospects by freeing its most abundant resource – its people – from antiquated and ineffective labor constraints. Empowering employees is at the heart of building local stability and prosperity in the MENA, and it is an agenda that can no longer be postponed.

Managing the dynamics of Morocco’s reforms, can a tidal wave be tamed?

“…the transformation of a country is no easy matter…What we take for granted—a concept of citizenship, respect for a constitution, competent governance and an independent judiciary—have to, in large part, be started from scratch…That requires immense patience…and…requires a long- term commitment by the West…” So wrote Jennifer Rubin in her daily blog, Right Turn: “The Arab Spring: No walk in the park.” She had just spoken to a Moroccan thought leader, Professor Rachid Benmokhtar Benabdallah, who was in Washington, DC to speak at the German Marshall Fund on reform in Morocco and the Economic, Social, and Environment Council (CESE) project on regionalization in the Saharan provinces.

Professor Benabdallah and I had several opportunities during his visit to discuss the prospects for reforms in Morocco and his degree of optimism regarding the outcomes. “People who have responsibility for change have to have some pessimism to make them work harder to achieve the right outcomes,” he said, “With the right tools and training, we can do a lot in Morocco but it is not easy and it is not quick.” He pointed out that the baseline for today’s steps forward is the report on the first 50 years of Morocco’s human development prepared at the behest of King Mohammed VI. It was this report that laid out the challenges facing the country as it develops a more equitable and inclusive society. It was a bombshell, similar in impact to the United Nations Development Programme’s Arab National Human Development Reports, both of which provided a framework for analyzing the achievements and deficiencies in the Arab world.

Professor Benabdallah pointed out that the 50 years assessment was much broader in scope than the UNDP studies and provided the logic for the National Initiative for Human Development (INDH), which is Morocco’s roadmap for eliminating poverty, building sustainable economic growth in poor and marginalized communities, and enhancing local governance and inclusion. After achieving very positive results in its first phase (2005-2010), INDH was renewed in 2011, dealing with many of the issues raised during the Arab uprisings. This, according to Professor Benabdallah, is the nexus of the current challenge – how to learn from the results accomplished so far to accelerate efforts that respond to the legitimate aspirations of those who are pessimistic about the government’s efforts to tackle serious problems in employment, education, social services, housing, transparency, and governance.

As a result of INDH and Morocco’s vibrant civil society, a strong base exists from which to move forward. A key ingredient is the government’s role in enabling local communities and leadership to generate the inclusive, kinetic projects that solve problems and build sustainable alternatives. The Professor was quite adamant about the importance of capacity and institution building as core principles of human development. He believes that communities that demonstrate their commitment to economic and social progress should have resources to support their strategies. According to Benabdallah, democracy doesn’t come as a result of political will alone; it requires institutions, capabilities, normative values, and a shared sense of purpose. This is the strongest lesson of INDH. “Communities and individuals have acquired new ‘value and dignity’ and adopted a ‘better look on the future’,” says INDH National Coordinator Nadira El Guermai. “They only needed someone to help them realize it – and this is an important part of INDH. This allows the person to say, I am someone, and able.”

Where to begin? Families, schools, and jobs are the most important facilitators of civic values, citizenship, and participation in society. The future is constrained when people are marginalized, when young people carry the twin burdens of distrust of institutions and few market-ready skills, if courts and administrative bodies do not implement laws to protect women and girls, and when social biases still affect someone’s job opportunities. Professor Benabdallah believes that the US and other countries can be “part of the solution” by making available best practices, technologies, and strategies for local governance that provide Moroccan communities with tools to engage each other and centers of power. He is bullish on Morocco’s future because the majority of Moroccan people are looking for change that is inclusive and sustainable. If the tools are coming and the reforms are moving forward, then sufficient time and resources to sustain reforms are the key.

Linking Communications & Development – One Professional’s Story

Just spoke with Dr. Salmane El Allami, a professor at Mohammed V University who had attended a UN sponsored conference on how IT-facilitated development can help alleviate poverty. He was representing the Rhamna Foundation for Sustainable Development, which works to advance the lives of people living in the Rhamna region north of Marrakech. We started out talking about his background, and what emerged is a lesson in how even the smallest interactions can have great consequences.

He first came to the US in 1987 on a United States Information Service exchange program marking the 200th anniversary of the US-Morocco Friendship Treaty, our longest continuous treaty that is still in force. He was a university student who fell in love with English in high school and, unable to major in journalism or media at his university, took his degree in English literature. He stayed for six weeks, and it changed his life. Later, when pursuing his doctorate at the Sorbonne, he was struck by the lack of an area study of US-Arab relations. He received permission to do self-directed research on the topic of Arab Americans in the US, starting his field work in 1991. While in the DC metro area, he interviewed dozens of Arab Americans to better understand their integration into US society, and the role of religion in that transition. As importantly, he acquired knowledge in media and social-research techniques that became key to his career.

Much of our conversation focused on his study of the perceptions of Morocco’s National Human Development Initiative (INDH) and a follow up evaluation of INDH projects. INDH is a grassroots campaign launched by King Mohammed VI to build sustainable alternatives to the grinding poverty and lack of resources that afflict the hundreds of communities targeted by the program. It brings together stakeholders, government officials, the private sector, and NGOs to ascertain the challenges and the resources available, and then to bring together partners to develop solutions. This is what he has been doing both through his organization called Anfasse and also as a board member of the Rhamna Foundation.

And he has not left his love of media behind. When he moved to Mohammed V University, he started the Higher Institute of Information and Communication in Rabat to train young Moroccans in media. This year, he will launch a private effort called the All Media Development Training Center – a three-year program for media professionals to advance their craft and acquire skills in political communications, strategic communications, and similar specializations. He has also made a number of documentary films on subjects such as the crisis in Arab Higher Education, research in the Arab World, and the challenges of teaching and preserving Arabic. In addition, next month, he is taking his work on the road, bringing movies to rural areas where children have not been exposed to films, teaching them the essential skills of movie-making.

He sees all of this as inter-related – focusing on capacity-building for Moroccans to take charge of their lives and resources. He believes that this is the genius of INDH, “the most important development project in Morocco.” In the past, development programs lacked coherence, he says, with very little coordination, sporadic efforts, and no central strategy. Today’s INDH is based on firm principles of inclusion, sustainability, and a philosophy of development that puts people at the center of the projects. “We want them to learn how to do things on their own…it’s a paradigm shift that builds their capacity to positively affect their lives.” So there is a balance between government interventions and building up small businesses and other forms of income generation. For example, more than one million women have been affected by INDH since 2005.

Rhamna Foundation is a local partner for INDH and is focused on partners and stakeholders working together. Fortunately, Office Chérifien des Phosphates (OCP), the world’s largest exporter of phosphates, has a major facility in the region. It is partnering with Rhamna to build the first green city in Morocco as well as participating in projects such as improving local schools and launching the Mohammed VI Polytechnic Institute to enhance marketable skills of local graduates.

Dr. El Allami is quite enthusiastic about the future. He believes that this innovative strategy of involving stakeholders in a detailed analysis and conceptualization of the region’s needs, encompassing all sectors of economic and human development, is the key to success. “By matching projects to the specific needs of the area and bringing in other parties from the government and private sector, we are giving people the tools they need to manage their futures.” And it started in part with a six-week visit to the US by someone who fell in love with English in high school.