EDITOR'S NOTE: To improve the lives of the young generation, Middle Eastern countries should work together on investment, capacity building and policy reform during the global economic downturn, a report by the Middle East Youth Initiative suggests. Its main authors are Navtej Dhillon, Djavad Salehi-Isfahani, Paul Dyer, Tarik Yousef, Amina Fahmy and Mary Kraetsch. For the full report, please visit the Wolfensohn Center for Development at Brookings Web site. A few excerpts:

Young people in the Middle East face a unique struggle to secure a larger stake in their economy and society. This generation faces deep and accelerating economic change, having lived through the oil boom and bust of the 1980s and the era of structural adjustments and liberalization of the 1990s. Now, as the Middle East's recent economic revival shifts to a downturn, future prospects for the region's young people are again at stake.

How Middle Eastern countries respond to the current crisis will determine whether their young citizens can exploit the new opportunities which lie beyond today's global slowdown. The path to economic recovery and regeneration must be consistent with long-term goals that have already been established: cultivating a skilled and entrepreneurial labor force, expanding the role of the private sector and reducing the lure of public sector employment, and building a solid foundation for the region's future middle class. Decisions made during the downturn will either accelerate this transformation or set the region back.

Global economic downturn: What is next for the Middle East's young generation?

The adjustment from a boom to a downturn poses three major challenges for Middle Eastern economies. First, the Middle East region is entering the downturn with large pre-existing education and labor market challenges which were not resolved during the boom era. With expanding access to education, young job seekers are increasingly more educated, aspiring for high quality jobs. However, these expectations are being dashed as the economic boom has not created sufficient quality jobs. As a result, young people continue to encounter low skilled, low wage employment.

Second, the global economic slowdown could ignite a new jobs crisis in the Middle East. The current downturn coincides with demographic pressures reaching their historic high, placing an unprecedented strain on the labor market.

Finally, the crisis also comes at a time when some Middle Eastern countries have enacted reforms to ease labor market regulations, scale back public sector employment, and promote an active role for the private sector. These efforts are aimed at resetting expectations of young citizens away from the state and creating diversified economies which can harness their talents. With diminished trust in markets and the private sector, pursuing these reforms now is politically more difficult.

A new policy agenda

As regional economies adjust to new and uncertain economic terrain, the following principles should guide the actions and interventions of various stakeholders:

• Do no harm: The first goal of policy should be to do no harm. At a time when policy makers are rushing to solve urgent youth problems, quick fix solutions can do harm to the long-term goals of economic development. In regard to employment generation, the best-designed policies are those that strike a balance between short-term solutions for immediate problems, such as the rising ranks of unemployed graduates, without jeopardizing long-term goals, such as encouraging those still in school to seek a more balanced portfolio of skills.

• Adopt a long-term perspective: Policies should be long-term and treat the youth bulge as a window for reform that benefits the whole of society. These reforms should be geared toward using the region's large youth population to prepare Middle Eastern economies for the competitive global economy.

• Understand the role of institutions and incentives: Recognition of the role of institutions and incentives that shape the behavior of youth and their families when making choices about education, employment, and family formation should be integrated into policy and program formulation. By reforming institutions, new incentives can be created for skill formation, productive job search, changing mindsets and empowering young people to make better decisions about their future.

• Formulate integrated policy responses: Policy reforms should constitute a holistic, integrated response to the challenges of waithood. Policy should be designed to take into account the interconnectedness between outcomes in education, employment, access to credit and housing, and family formation so that improvements in one area do not impinge on incentives in others. Further, recognition of this interconnectedness implies that interventions in some areas may be more effective and easier to implement than in others.

• Invest in monitoring and evaluation: Effective monitoring and evaluation must be streamlined into policy and program formulation and implementation in the region.

• Scale up promising initiatives: The region offers a growing range of potentially successful models and strategies for youth-oriented policy and programs, especially those initiated by the private sector and civil society. Each of these programs offers a distinct model in terms of information, outreach, and support to specific sub-groups of youth. Investments should be targeted at not only creating new initiatives but scaling up and replicating interventions which show promise.

Policy proposals

Based on the principles outlined above, we propose ten policy recommendations to be considered for implementation on the national and local level. These recommendations aim to both address the short-term job crisis and support the long-term goals of human capital development.

        1.  Countries committing to fiscal stimulus should target jobs for young people.

        2.  Promote access to secondary and university education for marginalized groups.
 

        3.  Reform university admission policies to promote better skills development.

        4.  Reform public sector hiring practices.

        5. Invest in scaled-up volunteerism and service learning programs for young people.
 

        6.  Expand training schemes targeting young people carefully.
 

        7.  Raise the value of informal jobs through investments in skills development.
 

        8.  Invest in the social services sector for job creation and human capital development.
 

        9.  Invest in technology to provide better job information, matching and career counseling.
 

        10. Provide social protection for all workers.

Emerging stronger after the downturn: The imperative of regional cooperation

The inclusion of young people is the most critical 21st century economic development challenge facing the Middle East. Solving this challenge has long been critical to the prosperity and stability of the Middle East. Now in a downturn, it is set to become more complex and urgent. The time is now for forging greater regional cooperation to build more effective policies, knowledge and investments toward a better future for the young generation.

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