Is Governance Failure Driving Youth Unemployment in the Middle East?

By Hisham Jabi

Youth unemployment in the Middle East is not only a socio-economic challenge but also a governance problem, with deep-rooted political, institutional, and systemic issues that have compounded over time. Let's delve deeper into the contributing factors:

1.?Distrust in Institutions

The Arab Spring, sparked by Mohamed Bouazizi’s tragic protest in Tunisia, symbolized the deep frustration many young people across the Middle East and North Africa (MENA) region feel toward their governments. This distrust stems from a perception of widespread corruption, nepotism, and lack of transparency within public institutions. For youth, who often look to the government for stability and opportunities, this mistrust undermines their engagement with the formal economy. Many young people have given up on the idea that government or public institutions can provide them with meaningful employment or support. This disenchantment is particularly pronounced in Egypt, Jordan, Tunisia, and other countries where many youth report long periods of job searching only to give up due to bureaucratic obstacles, favoritism, or a lack of available positions neither in the public sector or private sector.

2.?Government’s Role as a Provider, Not an Enabler

In many MENA countries, governments have historically positioned themselves as the main providers of jobs, especially in public administration and state-owned enterprises. This stems from a misconception of the social contract where the state should take responsibility for offering employment and services to its citizens. However, as populations have ballooned, governments are no longer able to meet this demand in the middle east. The region has witnessed a dramatic demographic shift, with a large and growing youth population entering the labor market every year. Despite this, governments continue to focus on providing direct employment rather than creating an enabling environment for the private sector to grow and generate jobs. Governments in MENA often monopolize sectors like energy, utilities, and sometimes even services (Take the Army in Egypt as an example), leaving little room for private sector growth. Instead of facilitating a dynamic economy, they compete with private companies, discouraging entrepreneurship and investment. This limits job creation in diverse fields that could otherwise absorb young talent.

3.?Educational Mismatches

While the education systems in several MENA countries have seen significant investment and improvements, there remains a stark mismatch between the skills acquired in school and the needs of the labor market. Youth are often trained for public sector roles or in disciplines that are disconnected from private sector demands, such as STEM and soft skills. This disconnect creates an oversupply of graduates in certain fields and a deficit in others, particularly in technical and vocational skills (Jordan is an example). Moreover, the traditional education system rarely emphasizes soft skills, critical thinking, or innovation, further limiting young people's employability and entrepreneurial potential in the rapidly evolving global economy.

This mismatch results in underemployment, where many young people accept positions below their qualifications or move into informal or gig work—such as ridesharing or food delivery services—as seen in cities like Cairo, Casablanca, and Amman.

4.?Natural Resource Dependency and Rentier Economies

In resource-rich countries, especially in the Gulf, the rentier economy model prevails. Governments in these nations derive substantial revenue from natural resources (oil and gas) and, consequently, do not rely heavily on a diversified economy. This reliance on resource revenues enables the state to provide jobs and services without needing to stimulate or diversify other sectors of the economy. The government become a welfare agency to employ youth with little productivity.

This model stifles the development of the private sector, and thus limits opportunities for young people to find jobs outside government employment. In non-oil-rich countries, such as Jordan, Palestine, Yemen and Tunisia, the reliance on aid or remittances creates similar challenges where economic diversification and job creation remain stagnant. The result is a labor market that cannot meet the needs of a rapidly growing and increasingly educated youth population. The region ends up with many frustrated, educated, and unemployed youth, which is responsible for instability and social unrest.

5.?Bureaucratic Barriers and Corruption

Bureaucracy and corruption in many MENA countries are significant obstacles to youth employment. Youth often face long waiting times, numerous formalities, and the requirement to pay bribes or have personal connections (wasta) to secure jobs. Nepotism is rampant in the public sector, where political loyalty or family connections often outweigh merit. This perpetuates feelings of alienation and disenfranchisement among youth who do not have access to such networks, pushing many of them to either give up their job search or turn to the informal economy, where jobs are typically low-paying, precarious, and offer no social protection.

6.?Gender Inequality in the Labor Market

Gender inequality adds another layer of complexity to the issue of youth unemployment in the MENA region. Despite improvements in female education, women’s participation in the labor market remains among the lowest in the world at around 17% only. Legal, social, and institutional barriers severely restrict women’s access to employment. In many countries, labor laws are outdated and discriminatory, limiting women’s ability to take active roles in the economy. For example, legal frameworks in some countries require a male guardian’s approval for women to work, travel, or conduct business. Women are also restricted from working in certain sectors deemed inappropriate for them or are excluded from night work and other opportunities, which effectively reduces their employability.

Additionally, cultural norms often prioritize men as breadwinners, leading to the perception that women’s work is supplementary. This, combined with societal expectations around marriage and child-rearing, forces many young women to opt out of the labor force entirely, even if they are highly educated and willing to work. The lack of childcare support, rigid working hours, and insufficient maternity leave further deter women from entering and remaining in the workforce.

In countries like Egypt, Jordan, and Iraq, unemployment rates among educated women are higher than those among men. This disparity not only represents a loss of potential in the workforce but also deepens societal inequities and prevents economies from fully utilizing their talent pool, especially in high-demand industries such as technology, where women have better access due to virtual work opportunities.

7.?Private Sector Weakness

Another governance issue is the weak and underdeveloped private sector across many parts of the region. In some MENA countries, rigid labor laws, high tax burdens, and extensive red tape make it difficult for businesses, particularly small and medium-sized enterprises (SMEs), to grow and create jobs. Many businesses are also reluctant to hire young people due to concerns about their readiness for work.

Moreover, the large informal economy means that even when young people do find work, it is often in jobs that are unregulated, low-paying, and lacking in social protections. This creates a cycle of vulnerability and instability for many youth, especially those without strong networks or family support. Family businesses and state-owned enterprises are often hire based on family ties and political affiliation, which puts the private sector in a weaker position in competition and attracting the right talent.

8.?Perception of Youth as High-Risk for Investment

Youth in the MENA region often face significant barriers when trying to access capital, whether for growing their own businesses or securing funding for innovative projects. Financial institutions and investors view young entrepreneurs as high-risk due to their lack of experience, credit history, and collateral. As a result, youth are frequently excluded from traditional financing avenues like bank loans, venture capital, and angel investment. This perception stems from broader structural issues, such as underdeveloped startup ecosystems, insufficient mentorship, and lack of support infrastructure that could help mitigate the risks associated with investing in young people.

In many cases, even when youth are educated and have promising business ideas, they struggle to find financial backers because investors tend to prefer established businesses or entrepreneurs with proven track records. This lack of access to equity further deepens the unemployment crisis, as youth with entrepreneurial aspirations are unable to create businesses that could generate jobs for themselves and others.

9.?Risk-Averse Culture

The MENA region also suffers from a deeply rooted?risk-averse culture, which affects both individuals and institutions. This cultural tendency prioritizes job stability, particularly in government roles, over entrepreneurial ventures or innovative, high-risk careers. Many young people, particularly those from conservative families or communities, are encouraged to seek stable, predictable employment, often in the public sector, rather than pursue entrepreneurial or creative paths that might involve failure or financial insecurity.

This cultural mindset not only discourages youth from taking risks themselves but also influences how businesses, investors, and governments operate. The private sector in many MENA countries tends to be risk-averse, focusing on established industries like construction, oil, and retail, rather than emerging sectors like technology, green energy, or creative industries, which have the potential for high growth but also higher risks. This conservative approach stifles innovation and limits the development of new industries that could absorb young talent. Governments in the region also contribute to this risk-averse culture by failing to create policies that encourage entrepreneurship and innovation. Many regulations are designed to minimize risk for businesses and governments but fail to incentivize experimentation, startups, or high-growth ventures that could transform the economy. Without the proper legal frameworks, access to financing, and cultural support, young entrepreneurs are often deterred from taking risks, further limiting their role in job creation.

Conclusion

In sum, youth unemployment in the Middle East is not merely an economic issue but a profound governance problem that reflects the failures of governments to create an enabling environment for job creation, institutional reform, and gender equality. Without addressing the systemic issues of corruption, bureaucracy, private sector constraints, and the exclusion of women, the region will continue to struggle with high youth unemployment. Reforms are needed that foster private sector growth, diversify economies away from resource dependency, align educational outcomes with market needs, and promote gender inclusion. Only by addressing these challenges at their roots can meaningful and sustainable solutions be found to the youth unemployment crisis in the region.

?

?

?

?

?