RURAL YOUTH UNEMPLOYMENT AND COPING STRATEGIES IN THE NEAR EAST AND NORTH AFRICA (NENA) REGION

1. RURAL YOUTH UNEMPLOYMENT AND COPING STRATEGIES IN THE NEAR EAST AND NORTH AFRICA (NENA) REGION by Samir Radwan IFAD Governing Council Roundtable on Promoting Livelihood Opportunities for Rural Youth Rome, Feb. 14-15, 2007

2. I.INTRODUCTION Youth Unemployment in general, and rural youth unemployment in particular, constitute the most serious problem in NENA Region. The region has the highest world rates in total and youth unemployment(Table 1).

5. II.UNEMPLOYMENT PROFILE • Table 3 indicates that urban unemployment is higher than rural unemployment in some countries, which can be explained by rural-urban migration in escape from the concentration of poverty, underemployment and poor basic services in rural areas. • In Yemen for example, the rural out-migration is significant due to heavy concentration of land ownership. In Morocco, the lack of job opportunities in rural areas discourages job seekers.

9. The Unemployment Problem in NENA is essentially a youth problem, with the highest rates of unemployment in the 15-29 years age bracket. • As to Education Level, unemployment is higher among graduates of secondary schools and above in a number of countries. • The agriculture sector did not succeed in solving problems of rural unemployment, poverty and inadequate food security. The sector’s contribution to employment and value added had a downward trend in most countries (Table 5).

11. The Unemployment Problem takes different forms: a) Labor Surplus Diversified Economies b) Marginalized c) Oil Rich Economies Patterns of Rural Development: (i) The transition to a Market Economy negatively affected the small landholders and the landless. (Urban bias). (ii) Globalization and trade Liberalization but major access problems: (a) the difficulty to compete with heavily subsidized products of advanced countries, (b) supply-side constraints related to the need for capacity building.

12. III. COPING STRATEGIES(1) The Supply SideDemographics: Rapid population growth and delayed decline in fertility led to a 3% growth rate in working age population in last decades (world highest rate), now 2.7%.(a) Productivity can be enhanced by involving the private sector in the design of training material, and by considering the privatization of training services, establishing skill standards, upgrading the training centers.

13. (b)Rural-urban disparities in education and learning achievements: “ruralization” needed through a decentralized education system. (c) Increased ICT-penetration in rural areas improves rural people's 'employability' ; thus the need to address problems of illiteracy, high ICT-cost , inadequate ICT-infrastructure in marginalized areas and insufficient online Arabic material/software. (d) Female employment can be increased through enhanced infrastructure: roads, transportation, proximity of schools & childrearing facilities, women extension agents, and improved access to credit (ID-cards, birth certificates).

14. (2) Structural Factors (a) Earlier agrarian reforms did not solve the problems of land concentration. Meanwhile, land fragmentation hampers the use of modern technology & raises costs of production &marketing. (b) Success stories: establishment of firms to manage a number of farms according to economies of scale was encouraged; and coop's strengthened through capacity building. State's role is to provide technical assistance to new owners & simplify land leasing & registration procedures. (c) Irrigation water better managed by rationalized consumption through cost recovery (tariffs), decentralization & community participation, technological support & capacity building, & setting institutional & legislative frameworks.

15. (3) Drivers/Inputs to Rural Development (a) Technology: constraints to technology-adoption can be reduced by establishing buffer prices in face of the uncertainty vis-à-vis returns to investments, and establishing insurance systems as a drought- mitigation policy. (b) Access to credit can be enhanced if Microfinance Institutions (MFIs) apply best practices including full autonomy in pricing & collection, and if they access international finance based on MFI 'rating' by acceptable international rating firms. (c) Business Development Services (BDSs) can support off-farm business for rural diversification purposes (vocational training, assistance in marketing and in formalization of status).

16. (4) Institutional and Legal Frameworks (a) NENA's CSO sector needs strengthening. Farmers & non-farm laborers face difficulties in forming/joining unions. Domination by large landowners could be reduced if rural coops are strengthened. (b) Active Labor Market Policies (ALMPs): There is a need to strengthen the employment search offices, expand their services to the informal sector and set up village local offices. ALMPs have better impact if targeted to particular categories. “Youth sub-minimum wage” could be set at a lower level. (c) An improved environment for investment and openness to the world economy leads to enhanced competitiveness. (d) Increased regional migration by effectuating Arab migration agreements, and enhancing integration (through skill standards & on-line labor market information).