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KUWAIT CITY, July 16: The International Monetary Fund (IMF) recently released a report on promoting growth and inclusiveness in the Middle East and North Africa, showing that about 80 percent of Kuwaitis believe the use of ‘wasta’ (influence) is necessary to secure jobs — the third highest after Lebanon and Jordan, and the highest in the Gulf, reports Al-Qabas daily.
According to the report, less than 76 percent of Emiratis believe that ‘wasta’ is necessary in getting employed, while 62 percent of Qataris think it is imperative to know high ranking officials to secure a job. The report added the performance of Kuwaiti students compared to expenditure on education is lesser than other countries such as Bahrain, Qatar, Oman, Lebanon and Iran, but better than Saudi Arabia.
In relation to the previous opinion poll, the IMF said 70 percent of Arab nationals think their government is doing bad or very bad in narrowing the gap between the rich and the poor.
On the contrary, only 30 percent of Kuwaitis think their government is not doing well in this aspect. About 30 percent of Kuwaitis are dissatisfied with their government’s performance in improving basic health services — the least compared with Egyptians and Lebanese as more than 80 percent of them are dissatisfied.
Meanwhile, Director of Middle East and Central Asia Department at the IMF Jihad Azour explained the importance of inclusive growth lies in responding to the aspiration of the people through the creation of jobs and developing social justice. “Today, with transformation witnessed by the Middle East; in fact, by the entire world, there is a great need for audacity in implementing reforms continuously to achieve inclusive growth”, he pointed out.
He added the growth rate in the Middle East has been below the desired level since the global economic crisis as manifested in income stagnation and insufficient job opportunities. He attributed the weak economic activities in the region to several factors related to the internal structure, in addition to external challenges which negatively affect the region and its economy such as volatility of prices of basic commodities.
Furthermore, security conflicts led to destabilization of the region and that has negatively affected its economy. Amid these factors and the world’s highest unemployment rate among youths — an average of 25 percent, more than 27 million youths are expected to enter the labor market in the region in the next five years. The report also pointed out that countries are working towards improvement of the business environment to help in the development of the private sector and subsequently, generate job opportunities.
Development of the private sector is the main engine for finding jobs as it is the key for inclusive growth amidst fiscal space limitations and inability of governments to be the first resort for the employment of citizens.
The report revealed countries like Bahrain, Djibouti, Egypt, Jordan, Kuwait, Mauritania, Morocco, Pakistan, Qatar, Saudi Arabia, Tunisia and the United Arab Emirates (UAE) have started implementing policies to reduce time and cost for starting a business. For instance, these countries have introduced one-stop registration; and in some cases, the use of e-government technologies while Morocco, Tunisia, Saudi Arabia and Sudan have streamlined customs procedures. Also, several countries have enacted new laws for small and medium enterprises (SMEs) like Algeria; publicprivate partnership frameworks (Algeria, Kuwait, Qatar); and bankruptcy (UAE). Kuwait and Saudi Arabia have taken measures to facilitate foreign direct investment.
In the aspect of finance, figures in the same report showed that Kuwaitis who are 15 years old and above are in third place, after their counterparts in the UAE and Bahrain, in terms of owning bank accounts (more than 72 percent). Kuwait is also third in borrowing from financial establishments (less than 15 percent). On transparency, the report indicated that the region is not on par in the implementation of IMF data standard initiatives; while only four countries in the region subscribed to the Special Data Dissemination Standard (SDDS) and none of them implemented the enhanced General Data Dissemination System (e-GDDS).
Only five countries in the region have reported their budget data in the IMF’s Government Finance Statistics Yearbook on accrual basis, and 11 countries on cash basis. As of 2016, only seven countries (Egypt, Jordan, Kuwait, Lebanon, Morocco, UAE and Tunisia) published these data within one year; thereby, limiting their usefulness for policymakers. “No country in the region reports data on Sovereign Wealth Funds (SWFs) in the Government Finance Statistics Yearbook or International Investment Position (IIP)”, says the IMF report. T
he report added that Public Private Sector Wage Gap is highest in Kuwait compared to other countries in the region — 250 percent; followed by Bahrain, Qatar and Saudi Arabia, whereas the gap is lesser in Jordan and Egypt. The region has the largest gender workforce participation gap in the world. While men’s labor force participation is generally comparable to that of developed economies in other regions, only one in four women participates in the labor force.
However, there is significant variation across the region; ranging from less than 15 percent in some countries to about 50 percent or more in Kuwait and Qatar. Despite the relatively high level of education, female unemployment is high — exceeding 30 percent in some countries. Female youth unemployment is even higher, up to 62 percent in Saudi Arabia, 70 percent in Syria, and 65 percent in Libya and Iraq.