Jobs: What the Middle East Needs

CAIRO, EGYPT - JUNE 02:  Islamic students study in the al Azhar mosque before heading into exams at the associated al Azhar U
CAIRO, EGYPT - JUNE 02: Islamic students study in the al Azhar mosque before heading into exams at the associated al Azhar University, the chief centre of Arabic literature and Sunni Islamic learning in the world, on June 2, 2009 in Cairo, Egypt. The Egyptian capital is preparing to receive US President Barack Obama, who is due to deliver his Middle East policy speech at Cairo University this Thursday. (Photo by David Silverman/Getty Images)

The biggest threat from and to the Middle East and North Africa (MENA) region stems not from ISIS, nor from extremism, nor religious conflict. While all these are serious threats, at their root is the massive unemployment problem of a growing youth population.

The MENA region is a particularly young place, with youth constituting more than 40% of the total adult population. This young population is also characterized by the highest unemployment rate in the world.

As the Arab Spring has shown, high levels of unemployment, especially among the youth, generate a predictable cycle of frustration, social unrest, and political instability. Add a little agitation and throw in some arms and you have a full-blown disaster on your hands.

When we surveyed working people born between 1980 and 1996 about their priorities in life in the "Millennials in the Middle East" survey (February 2014), the overwhelming response was what you would expect from young people anywhere in the world. They want financial stability, good health, and successful careers. Unfortunately, the same survey also showed the gap between these hopes and reality: 59% rely on their family for supplementary income; and 28% say that they find it difficult to make ends meet. Furthermore, 79% say that the foremost challenge of their generation is finding a job ( "Fresh Graduates in the MENA," July 2014).

The solution is neither surgical strikes, nor invasions, nor divisive propaganda. All these add fuel to fire. They deprive people of even more jobs, strip away hope, and push people to potentially non-rational and destructive paths.

Job creation is the solution. With jobs come dignity, stability, choice, and typically moderation. Regretfully the MENA region is pursuing the path of accelerated job destruction. War, political uncertainty, and increasing governmental focus on financial control and centralized planning are destroying opportunity and maintaining economic power with the traditional elite.

Job creation cannot come from traditional welfare state policies. Too many jobs are required with estimates of over 100 million new jobs in this decade being commonly cited as the requirement to maintain even current, unacceptable, unemployment rates. The governments in the region are already too burdened to carry this load with many government employees already under-employed in a bloated public sector.

Even in mature economies (including the US) most jobs are created by young businesses in their high growth first 5 years. The formula is simple: To build jobs, encourage entrepreneurship! To encourage entrepreneurship, governments need to reform the regulatory framework and step out of the way. The cost and time to setting up a business must be brought down significantly; the barriers to operate including severe laws on local ownership, bankruptcy, labor relations, and the movement of goods and services must be relaxed; and importantly, protectionist policies need to be stripped away.

The desire for entrepreneurship in the region is overwhelming. According to research, 73% of millennials say that they would prefer to have their own business than be employed. Our youth no longer want handouts. They want to build their own futures and to have a fair chance to compete.

Where regional governments have allowed this to happen through noninterventionist, laissez faire policies, businesses have thrived and stability has reigned. In Dubai, for example, business friendly policies have meant that thousands of new companies have incorporated in the last year alone. Dubai has solidified its position as the regional business capital. The supportive steps the UAE took include free zones to allow international investments within commonly recognized corporate structures, relatively fast and efficient incorporation practices, more transparent regulations, and lower barriers to the movement of global talent and capital.

In a time of monumental change in the MENA region, people continue to seek hope through better opportunity. That opportunity can no longer come through large governmental employment programs or welfare state policies. Entrepreneurship must fuel the next generation of jobs. To governments: Reduce the red tape, lower the barriers, and let the region get to work! We have a lot to do. To the rest of the world: If you want to lend us a hand send us more of your free market experts, your MBA professors, your venture capitalists, and your angel investors, and less of your arms. Your costs would be much lower and your returns far more favorable.

This post is part of a series produced by The Huffington Post and Education For Employment (EFE), a non-profit focused on creating job opportunities for unemployed youth in the Middle East and North Africa (MENA). Conflict and upheaval have dominated the news on MENA in 2014, and some see a region spiraling into chaos. But beneath the alarm bells, some digital pioneers are doubling down on their bets that the region's next generation could have a brighter future tied to technology and skills. For more information on EFE, read here.