Arab labor sector hit the worst by COVID-19: ILO

By Rahul Vaimal, Associate Editor
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As per the International Labour Organization (ILO), the coronavirus has affected the Arab world’s labor market more seriously than other regions.

ILO Director-General Guy Ryder said that, based on the estimate of the real reduction in working hours, the effect of the pandemic was completely devastating on labour markets worldwide.

Mr. Ryder said during the G20 conference in Saudi Arabia that, “Arab countries have taken a bigger hit than others. In the second quarter, work hours decreased by 17.4 percent globally. In the Arab League countries, figures go up to 19.5 percent. Labor income in Arab countries has also been the worst hit, going down by 11 percent, which is equivalent to four percent of their GDP. So, there has been an enormous hit to the regional labor market from whichever angle you look at”.

He emphasized that for a long time the employment rate in the Arab world has not been satisfactory and the jobless rate in the Arab countries is nearly double that of the global average.

“In immediate terms, countries around the world are trying to stimulate economic activity to protect viable enterprises and preserve jobs. Logically, high-income countries can make a much bigger effort than countries with lower-level income,” ILO Director-General added.

Mr. Ryder further elaborated that “Young people are being hit in numerous ways. They start in a worse place, their access to the labor market is also tough and they have been expelled from jobs in large numbers. Also, let us not forget migrant workers who find themselves in extreme difficulty in many labor economies of Arab countries.”

The ILO chief also called for addressing the structural transformation of the labor market in this sector collectively and individually.

The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, said that public expenditure, health, education, youth and women’s jobs, and the closure of the digital divide are the key policy fields that Arab governments need to address.

“We must act today because the region and the world are at a transformative moment. Decisions made now will affect the lives of more than 420 million Arabs for years and decades to come. Preparing them for a rapidly-changing global economy is the work of today, and it must not be delayed,” she said during the G20 virtual meeting.

The IMF MD further added, “There is an ‘efficiency gap.’ But if Arab countries get greater value for the money they are already spending, the IMF estimates the Arab world could close a third of the health and education gap without any new spending”.

Ms. Georgieva said the fund has expanded this year’s additional loans to eight Arab countries, with a loan amount of $26 billion to the country.

Ghada Waly, executive director of the United Nations on drugs and crime, highlighted the need for the nation to counter corruption so it does not affect attempts against money laundering.

Ms. Waly commented during the virtual summit that, “Arab countries are not in any better situation than others. The ‘new normal’ was not good and was very challenging. However, I am optimistic about this region. The COVID-19 crisis will push governments to invest in digital infrastructure, health, education and make a bigger space for the private sector. If opportunities are given to start-ups and the private sector, it will help them flourish”.