Structure of the Labour Market, the Economic Crisis and the Political Uprising in the Arab World

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Structure of the Labour Market, the Economic Crisis and the Political Uprising in the Arab World
Structure of the Labour Market, the
Economic Crisis and the Political
Uprising in the Arab World

Samir Aita         aita@mafhoum.com

DG Réd en Chef Le Monde Diplomatique Editions Arabes www.mondiploar.com
President du Cercle des Economistes Arabes

Le Radici delle Transformazione del Mondo Arabo. Un
Confronto Sulle Interpretazione.
Universita di Firenze, January 21-22, 2013
Structure of the Labour Market, the Economic Crisis and the Political Uprising in the Arab World
Uprisings or Revolutions?

•   Many Arab Countries Simultaneously?
    •   Is there and Arab World?

•   What is common?
    •   The Demography and the labor Market
    •   Globalization and the failure of the independence model
    •   The Power System above the State
    •   The role of the Gulf countries: from Dubai to Islamic Jihad

•   How Deep? Redefining the Social
    Contract
    •   State, Economy and Politics…
    •   Equal Citizenship, Islam, minorities, regionalism…
    •   The Strong will for change… (The Spring: we want to topple the
        regime but we don’t want to talk Politics!!!)
Structure of the Labour Market, the Economic Crisis and the Political Uprising in the Arab World
How Important for Europe and the World?
Demography… has been the social answer !
                                       Evolution de la population en milliers

           800 000

           700 000

           600 000

            500 000

            400 000

            300 000

            200 000

            100 000

                     0
                         1950

                                1960

                                       1970
                                                                                                            Europe

                                              1980

                                                       1990

                                                               2000

                                                                      2010
                                                                                                           USA

                                                                               2020

                                                                                      2030

                                                                                             2040

                                                                                                    2050
                                                     USA      Arab           Europe
Structure of the Labour Market, the Economic Crisis and the Political Uprising in the Arab World
How Important for Europe?

                                   Egypte

                                     Turquie et Iran
        RFA

         France
                            Irak            Algérie
                                            Arabie Saoudite

                                       Syrie
Structure of the Labour Market, the Economic Crisis and the Political Uprising in the Arab World
The Youth Tsunami

   A baby boom around the 90’s  youth
    bulge now, like Europe in the 1960’s, but
    without the « Glorious Thirty »
                    Syrie: Répartition de la population suivant les tranches d'âge

   May 68!       50%
                  45%
                  40%
                  35%
                  30%
                  25%
                  20%
                  15%
                  10%
                   5%
                   0%
                        1970

                               1975

                                      1980

                                             1985

                                                     1990

                                                            1995

                                                                    2000

                                                                           2005

                                                                                   2010

                                                                                          2015

                                                                                                 2020

                                                                                                        2025
                                      0-14          15-29          30-44          45-59          60+
Structure of the Labour Market, the Economic Crisis and the Political Uprising in the Arab World
Where are the youth?
   Rural Urban Migration: in small towns
    and in suburbs
                                        Evolution de la part de la population urbaine (%)
                    100

  mapping
                    90
                   80
                                                                                                       Algerie
                                                                                                       Egypte
Socially the        70                                                                                 Jordanie
                                                                                                       Liban

Uprisings
                    60
                                                                                                       Maroc
                    50
                                                                                                       Palestine
                    40                                                                                 Syrie
                                                                                                       Tunisie

  Islamism
                    30

                    20

And social
                          1950

                                 1960

                                        1970

                                               1980

                                                      1990

                                                             2000

                                                                    2010

                                                                           2020

                                                                                  2030

                                                                                         2040

                                                                                                2050
integration
Structure of the Labour Market, the Economic Crisis and the Political Uprising in the Arab World
Why is it a tsunami?

                                   The participation to economic
                                    activity is increasing… while people
                                    are leaving agriculture!!!

Taux de population en âge de travailler par rapport à la population totale                            Taux de Population active (+15 ans)

  75%                                                                                            70

                                                                                     Algerie     65
  70%                                                                                                                                       Algerie
                                                                                     Egypte                                                 Egypte
                                                                                                 60
  65%                                                                                Jordanie                                               Jordanie
                                                                                     Liban       55                                         Liban
  60%
                                                                                     Maroc       50                                         Maroc
  55%                                                                                Palestine                                              Palestine
                                                                                                 45
                                                                                                                                            Syrie
                                                                                     Syrie
  50%                                                                                                                                       Tunisie
                                                                                                 40
                                                                                     Tunisie
  45%                                                                                            35
        1950

               1960

                      1970

                             1980

                                    1990

                                           2000

                                                  2010

                                                         2020

                                                                2030

                                                                       2040

                                                                              2050
Structure of the Labour Market, the Economic Crisis and the Political Uprising in the Arab World
The share of agriculture in the labour force

               Rural urban migration without an industrial
               revolution
                     Travail à                                organizations
  Autres activités domicile           Algérie                internationales                                                              Maroc
     sociales
               Santé et                                     Non classifié
             travail social                                                                                                               Non classifié

                  Education

                                                                                                                  Finance     Administration
                                             Agriculture                                                                        et armée
                                                                                                             Transport
                                                                 Pêche
                                                                            Mines
                     Administration                                                                                                                       Agriculture
                       et armée
                                                    Industrie                                                            Commerce
    Immobilier
           Finance
            Transport                       Construction     Electricité et
               Tourisme          Commerce                         eau
                                                                                                                  Construction              Industrie
                                                                                                                            Electricité                   Mines
                                                                                                                              et eau

                                                                            Tunisie
                                                                            Non classifié

                                                                      Autres
                                                                     activités         Agriculture
                                                                     sociales

                                                           Administration
                                                             et armée                           Industrie

                                                                                    Construction     Electricité et
                                                  Transport         Commerce
                                                                                                          eau
Structure of the Labour Market, the Economic Crisis and the Political Uprising in the Arab World
The share of agriculture in the labour force

       Rural urban migration without an industrial
       revolution
         Autres activités                            Travail à          organizations
            sociales               Egypte            domicile          internationales
                                                                                                        Autres
                                                                                                       activités
                                                                                                                        Travail à      Jordanie                                Agriculture
                                                                                                                        domicile
                    Santé et                                     Non classifié                         sociales                       organizations
                                                                                                                                           Non classifié              Mines
                  travail social                                                                                                     internationales
                                                                                                          Santé et travail
                                                                                                              social

                      Education                                                                                                                           Industrie     Electricité et
                                                                                                                                                                             eau
 Administration                                Agriculture                                                               Education                                        Construction
   et armée

 Immobilier
      Finance                                                                                                          Administration
                  Transport                                                                                              et armée                            Commerce
                                                                 Pêche
                                                   Industrie         Mines
         Tourisme        Commerce
                                                                                                                                              Transport
                                                    Electricité et                                                 Immobilier                                Tourisme
                                    Construction                                                                                    Finance
                                                         eau

                                                                          Syrie

                                                                                   Agriculture

                                                         Services

                                                                                           Industrie

                                          Finance
                                                                                   Construction
                                           Transport
                                                                 Commerce
Structure of the Labour Market, the Economic Crisis and the Political Uprising in the Arab World
Also a women tsunami !!!

                    Women participation is increasing
                                                                    Part des femmes dans la population active
                                                  35.0%
   Part des femmes parmi les nouveaux arrivants
               1985         2008         2020     30.0%                                                                                                     Algerie
Algerie         22.3%        44.3%        42.2%                                                                                                             Egypte
Egypte          40.9%        22.1%        23.1%   25.0%                                                                                                     Jordanie
Jordanie        24.2%        37.9%        45.0%                                                                                                             Liban
Liban           87.3%        47.8%        38.4%   20.0%                                                                                                     Maroc
Maroc           31.3%        29.4%        34.0%                                                                                                             Palestine
Palestine       10.7%        16.2%        19.9%   15.0%                                                                                                     Syrie
Syrie           32.1%        37.7%        46.3%                                                                                                             Tunisie
Tunisie         26.7%        43.8%        52.8%
                                                  10.0%
Total          34.27%       33.32%       35.30%           1980
                                                                 1983
                                                                        1986
                                                                               1989
                                                                                      1992
                                                                                             1995
                                                                                                    1998
                                                                                                           2001
                                                                                                                  2004
                                                                                                                         2007
                                                                                                                                2010
                                                                                                                                       2013
                                                                                                                                              2016
                                                                                                                                                     2019
The Paradox of low participation for women

    It is not a cultural/Islamic (!)
    It is a moment of history and social
     demography
Women Participation
                   Women strongly
                    increasing their                                         Fig. 7 Crude Econom ic Activity ratio am ongst Wom en

                    participation at all ages                                           in Syria (1970-2010) (source ILO)

                                                                      65+
                   Although women child                             60-64
                    labor in household                               55-59
                    activities not well                              50-54
                    reported, but decreasing                         45-49

                                                                     40-44
                   Age 15-19 not decreasing                         35-39

                                                                     30-34

                                                                     25-29

                                                                     20-24
    Table 6. Percentage of the never married in the work force
           By age class and gender (2004, source CBS)                15-19

Age class   15-19       20-25       25-29       30-34       35-39   10y-14
  men        98%         84%         46%         19%          7%     Total
 women       94%         81%         57%         38%         27%
                                                                             0     10      20      30      40      50      60        70     80

                                                                        1950      1960    1970     1980    1990    1995    2000      2010
Average age of marriage for women 28!
Where are the jobs?
               Chronic deficiency in job creations
                            Labour force: >+300,000/ year
                            Job created: 65,000/year (8,000 formal)!!!!!!!!!!!!!
               De-industrialisation
  Taux moyen annuel de creation d'emploi ‐ILO
                   création            Année                  Industrie     Année
  Algerie           5.05%             2001‐2006    Algerie     13.60%        2004
   Egypte           2.20%             2000‐2005    Egypte      12.95%        2005
 Jordanie*          2.70%               2006      Jordanie     14.50%        2005
    Liban                                           Liban      13.00%        2001
   Maroc            1.20%             2001‐2006    Maroc       12.33%        2006
 Palestine          1.70%             2000‐2006   Palestine    12.81%        2006
    Syrie           1.90%             2001‐2002     Syrie      13.40%        2004
  Tunisie           1.52%             2000‐2005    Tunisie     20.61%        2004
* suivant les récentes statistique jordaniennes
Where are the jobs?
   Chronic deficiency in job creations
           Labour force: >+300,000/ year
           Job created: 65,000/year (8,000 formal)!!!!!!!!!!!!!
   Is participation correlated with job creations?
What is unemployment?

         Young people and Women unemployment
          ( with low participation)

 Le chômage en Syrie suivant les tranches d'âge                                               Unemployment trends in Syria
 25.00%                                                                                                ILO‐LFS
                                                                                  55.0%
 20.00%                                                                           50.0%
                                                                                  45.0%
 15.00%
                                                                                  40.0%
                                                                                  35.0%
                                                                                  30.0%                                             M
 10.00%
                                                                                  25.0%                                             W
                                                                                  20.0%
 5.00%                                                                            15.0%                                             T
                                                                                  10.0%
 0.00%                                                                             5.0%
                                                                                   0.0%
          15‐19

                  20‐24

                          25‐29

                                  30‐34

                                          35‐39

                                                  40‐44

                                                          45‐49

                                                                  50‐54

                                                                          55‐59

                                                                                          1994 2001 2002 2003 2004 2005 2006 2007

Not working even 1 hour last week, on labor force
What is unemployment?

      Most of unemployed never worked before!
      No unemployment compensation

GDP growth minimum of 7% to keep unemployment stable
Unemployment rates

   ILO Definition
   The highest in the world
                      taux de chômage
                 Total        H        F    Année
     Algerie     20.0%     20.0%    21.0%    2004
     Egypte      11.0%      7.0%    23.0%    2003
     Jordanie    12.0%     12.0%    17.0%    2004
     Liban        9.0%      9.0%     7.0%    1997
     Maroc       12.0%     12.0%    13.0%    2003
     Palestine   27.0%     28.0%    20.0%    2004
     Syrie       12.0%      9.0%    28.0%    2003
     Tunisie     15.0%       NA       NA     2003
Unemployment

                      Very dependent on government policies

                           Le chômage en Algérie                                                   élasticité de l'emploi au PIB par secteur
35%
                                                                                           2.50

30%                                                                                        2.00
                                                                                           1.50
25%
                                                                                           1.00
20%                                                                                        0.50

15%                                                                                        0.00
                                                                                           ‐0.50
10%
                                                                                           ‐1.00
5%                                                                                         ‐1.50
                                                                                           ‐2.00
0%
                                                                                           ‐2.50
      1982

             1984

                    1986

                            1988

                                   1990

                                          1992

                                                 1994

                                                        1996

                                                               1998

                                                                      2000

                                                                             2002

                                                                                    2004

                                                                                                          Agriculture    Industrie    Services
What is EMPLOYMENT?

   What is a salary man?
What is EMPLOYMENT?

   What is a salary man?
Employment and education

   Young women better education
   Young men less educated
What working, or salary man means?

   Informal economy vs informal work

          Evolution de la part de l'emploi Informel dans le secteur productif
         40.0%

         35.0%

         30.0%

         25.0%

         20.0%

         15.0%

         10.0%
                 1990
                        1991
                               1992
                                      1993
                                             1994
                                                    1995
                                                           1996
                                                                  1997
                                                                         1998
                                                                                1999
                                                                                       2000
                                                                                              2001
                                                                                                     2002
                                                                                                            2003
                                                                                                                   2004
                                                                                                                          2005
                                  Part Emploi Informel dans Emploi Total
                                  Hors Emploi Administratif
                                  PIB Informel
Most jobs are informal

    Informal economy… informal work
               The play of the ILO
Economie informelle    %
PNB 1990/1992                 Part de l'emploi Informel dans l'emploi total
Algérie          34%                     non agricole, 1994/2000
                                            Total      Femmes Hommes
Egypte           35%
                              Algérie        43%         41%       43%
Jordanie         19%          Egypte         55%         46%       57%
Liban            34%          Jordanie
Maroc            36%          Liban
                              Maroc          45%         47%       44%
Palestine                     Palestine
Syrie            19%          Syrie          42%         35%       43%
Tunisie          38%          Tunisie        50%         39%       53%
Migrations

   Internal Migrations
   External Migrations:
       Permanent
       Cyclical
   Entering Migration:
       Regional Refugees: Palestinians,
        Iraqis, Sudanese, Somalians

The Arab Mediterranean countries has received
more migrants in the last 40 years than what
they have send to Europe
Internal migrations

   Civil wars… occupation
           Déplacements internes Forcés des Populations
                      Nombre               % population
      Algerie        1,000,000                3.0%
      Egypte              0                   0.0%
      Jordanie            0                   0.0%
      Liban       90,000 à 390,000          2% à 10%
      Maroc               0                   0.0%
      Palestine   24,500 à 115,000          1% à 3.1%
      Syrie           433,000                 2,3%
      Tunisie             0                   0.0%
      Total          1,547,500                1.0%
Entering Migration

    Mostly refugees
      Réfugiés dans les pays et ceux qui en sont issus (UNHCR, fin 2007)
                            dans le pays              issus du pays
    Algerie                    95,735                     11,972
    Egypte                    112,515                     8,431
    Jordanie                  500,658                     2,531
    Liban (1)                 250,919                    215,670
    Maroc                      1,457                      4,505
    Palestine                    23                      343,680
    Syrie (2)                1,509,677                    20,579
    Tunisie                     156                       2,854
    Total                    2,471,140                   610,222
 (1) il faut rajouter en plus 200,000 personnes déplacés à l'intérieur
 (2) il faut rajouter en plus 300,000 personnes sans nationalité
Outgoing Migration: a solution ?

   300,000 people emigrate each year from Arab Mediterranean
   countries

              Flux migratoire annuels nets                    Net migration (per year)
                                                       200
                     Tunisie   Algerie
            Syrie                         2000‐2005
                                                       150
Palestine
                                                       100

                                                        50

                                              Egypte
                                                         0

Maroc                                                   ‐50

                                                       ‐100

                       Liban   Jordanie                ‐150
Globalization through Immigration
Globalization through Immigration
Migration: a base component of the labour market

    Work Migration has never stopped:
           18% of new comers each year migrate!!!!
           Several waves:
               The Americas

               Europe

               The Gulf countries

    Migration and labour market:
           Cyclical migration:
              Syrian workers in Lebanon: 7% of Syrian LF,
               30% of Lebanese LF
              Iraqis: 7% of Syrian and Jordanian population

           Permanent migration:
              Remittances = %% of GDP = the real social
               safety net
              Crisis in Europe  Social crisis
The outlawed Arab workers
Financial Globalization of the Gulf countries

                             Sovereign Funds
                           Fonds Souverains et Fonds de Pension Publics*
                                               en millards US$

Les principaux Fonds Souverains

     UAE            Abu Dhabi investment Authority, ADIA                   875
    Norway          Government pension Fund Global                         357
  Saudi Arabia      Saudi Arabian Monetary Authority, SAMA                 300
   Singapore        Government of Singapore Investment Corporation         330
                    Temasek Holdings                                       108
     Kuwait         Kuwait Investment Authority                            250
                    Future Generation Funds                                174
      China         China Investment Corporation                           200
      Russia        Stabilisation Fund of the Russian Federation           122
      Libya         Reserve Fund                                            50
      Qatar         Qatar Investment Authority, QIA                         45

Les principaux Fonds de pension publics                                            What role in the
      Japan         National Reserve Fund                                  1,217   global financial
                    ABP                                                     271
  Netherlands
                    PGGM                                                    122    crisis?!
                    California Public Employees Retirement Systems          224
                    Federal Retirement Thrift Investment Board              181
       USA          New York State Common Retirement Fund                   146
                    California State Teachers Retirement System             140
                    Florida State Board of Administration                   122
                    New York City Employees Retirement Systems              109
      Korea         National Pension Fund                                   191
     Sweden         Florida State Board of Administration                   117

* d'après l'OCDE, Morgan Stanley, Deutsche Bank et Petreson Institute
Financial Globalization of Gulf Countries

   The Stock Markets

                        Financial bubbles,
                        Especially in Saudi
                        Arabia, with its cycles
                        and vulneraibilities to
                        external shocks….
Foreign Direct Investment

                 From15 MM $ in2000
                 To between 45 et 50 in 2006 and2007

    ،‫ توزيع تدفّقات االسثمارات البين ّية العرب ّية السنوية‬:‫ ب‬12 ‫المصو ر‬
                                                                  ّ                ،‫ توزيع تدفّقات االسثمارات البين ّية العرب ّية السنوية‬:‫ آ‬12 ‫المصو ر‬
                                                                                                                                                 ّ
                    2006- 2002 ‫حسب البلدان المستقبلة‬                                              2001- 1997 ‫حسب البلدان المستقبلة‬
                                                                     Algeria                                                                         Algeria
                                                                     Bahrain                                                                         Bahrain
                             Egypt                                   Egypt                    UAE        Algeria                                     Egypt
                                                                     Jordan                                                                          Jordan
                                                                     Kuwait                                                                          Kuwait
        Sudan                        Lebanon                         Lebanon      Tunisia                                                            Lebanon
                                                                     Libya                                           Egypt                           Libya
                                                                     Morocco                                                                         Morocco
                                         Morocco
                                                                     Oman         Syria                                                              Oman
                                                                     Qatar                                                                           Qatar
                                                                     Saudi                                       Lebanon                             Saudi
                                                                     Sudan         Sudan                                                             Sudan
                                                                     Syria                                                                           Syria
                                                                     Tunisia                                                                         Tunisia
                                                                     U.A.E.                                                                          U.A.E.
Saudi Arabia                                                                                                                   :‫المصدر‬
                                               :‫المصدر‬               Yemen     Saudi Arabia                                                          Yemen
                                   ‫المؤسسة العربية لضمان االستثمار‬                                                 ‫المؤسسة العربية لضمان االستثمار‬
Neo-liberal Financial Globalization

   The Stock markets

                        Une financiarisation
                        très liée aux secteurs
                        rentiers….
Immigrant Remittances

   These are the major fluxes
Globalization throughImmigration

   Immigrants remittances
                             • 18% of new
                               comers
                               emigrate…
                             • The Arab
                               countries are
                               the first
                               recipient of
                               remittances >
                               50 MMds$/y
                             • Lebanon10% of
                               GDP
                             • Informal
                               remittances
                               important
                             • remittances>>
                               FDI
Uprisings or Revolutions?
•    The “youth tsunami” (freedom and Dignity) hitting the
    “Power System above the State”(crony liberal
    globalization)  Uprising  Transition towards new
    social contract

•   The coalition between Gulf countries and Europe (and
    Turkey) to dominate the countries in transition 
    replacing civic values by those of “traditional society”

•   Is (the present version of) political Islam (in Arab
    countries and Turkey) compatible with equal citizenship
    and freedoms?

•   Does political Islam have a model to bring dignity?

Civic democratic State or State of equal citizenship and freedoms
Revolution or Sunni-Shiaa conflict
Equal Citizenship or complex identities
Religious Stratification of identity
Ethno-linguistic stratification of identity
Ethno-linguism and colonial manipulation
Equal citizenship is not equilibrium between
communities

                             Nowehere the
                             internal and the
                             internal dimension
                             are as initricated as
                             in Lebanon …
The Kurds: A Nation witout a State
Is Turkey a secular or an Islamic country?
Syrian Revolution: the corner stone of equal
citizenship
Syrian Revolution: the corner stone of equal
citizenship
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