World Unemployment to Hit Record in 2013, Outlook for the Middle East Looks Grim
- Published on Thursday, 24 January 2013 02:33
- 2 Comments
The International Labour Organization (ILO), which is a United Nations agency, recently came out with its outlook for world employment. The forecast is not good. Nearly five years since the global financial crisis, the global economy continues to struggle. Stock markets around the world are breaking five-year highs as optimism drives up prices, yet economic fundamentals remain poor. Has the EU solved its debt problems? Has the US solved its fiscal crisis? Has Japan escaped its deflationary death spiral? Are economies growing at healthy rates?
Record high optimism reflected in stock prices will soon face reality and then trouble starts again, but not until the “experts” can come up with a new name for it since the “Global Financial Crisis” is already taken. Experts will also say that no one saw this coming. Well, here’s a heads-up courtesy of the ILO:
“World unemployment could top record levels this year and continue rising until 2017, the International Labour Organization (ILO) said on Tuesday in its annual employment report.
2009 currently stands as the worst recorded year for world unemployment, with 198 million people across the globe without work.
In its 2013 Global Employment Trends report, the ILO forecasts unemployment numbers will rise by 5.1 million in 2013 to reach 202 million, topping 2009’s record.
The report also predicts unemployment will rise further in 2014 to reach 205 million.
“Unemployment remains as dire as it was during the crisis in 2009,” Ekkehard Ernst, chief of the employment trends unit at the ILO, which wrote the report, told CNBC.” Read the full article on CNBC.
If the global economy is getting better why is unemployment in 2013 expected to break the record set in the height of the financial crisis and still continue to rise into 2014? The truth is that fundamentals do not match up with the optimism. At some point these two will need to reach equilibrium; either fundamentals shoot up to match the optimism or optimism collapses to reach fundamentals.
The outlook for the Middle East is even worse:
“Unemployment in the Middle East, already twice the rate of the global average, is set to rise further in the coming years, the International Labour Organization warned in a report yesterday.
Overall, unemployment in the region in all age groups was 11.3 per cent last year and was expected to rise slightly this year, according to the ILO’s Global Employment Trends report.
The report showed that youth and women continue to bear the brunt of joblessness.
A total of 28.1 per cent of youths were out of work last year. Female unemployment was 19.3 per cent, more than twice the rate for men.
The figures are a heavy reminder of the challenges still facing many governments more than two years on from the start of instability in parts of the region. Unhappiness with bleak job prospects was among the many seeds of protests in parts of the Arab world, leading to the overthrow of leaders in Tunisia, Egypt, Libya and Yemen.
But joblessness has risen in many countries as instability has taken a toll on economies.
The ILO warned the outlook for the region’s jobs market remained bleak because of slowing growth.
“On the back of this deceleration of growth in most of the region, unemployment is set to rise again,” the ILO wrote in the report. “Following a gradual but steady decline over most of the 2000s unemployment rates are expected to rise over the coming years.”
Some of the data in the region was especially alarming. More than half of youths under the age of 20 were without work in some countries, while joblessness among women in some countries was 70 per cent.
Iran, Yemen, Iraq and the Palestinian Territories were highlighted as having the highest unemployment.” Read the full article from The National.
The conclusion from this, in case the experts didn’t see this coming as well, is that the Arab Spring is not over. Yes, Egypt, Libya, Tunisia and Yemen have new leadership but economies in these countries have only gotten worse. Violence in the Middle East continues to rise and tensions are running high. Expect more turbulence in the Middle East before things can find a new normal.
For those of you interested in additional reading on the topic of unemployment in the Middle East, read this article from Emirates 24/7