Assessing MENA human capital

Human capital development faces significant challenges in the MENA region

Only 3 countries from the MENA region have made it into the upper half of the 124 economies studied in the World Economic Forum’s latest Human Capital Index.

The Index seeks to capture education and workforce dynamics, education and employment outcome gap and demographic trends and untapped talent pools. It also seeks to assess learning and employment outcomes across 5 distinct age groups.

It shows that only Israel (29), the United Arab Emirates (54) and Qatar (56) have made it into the upper half of ranked countries.

“The United Arab Emirates (54) and Qatar (56) benefit significantly from the strong perceived quality of their primary schools (13th and 9th overall, respectively) and overall education systems (9th and 3rd, respectively), but also report some of the lowest tertiary and vocational enrolment rates among their 15–24 age groups,” the Index reveals. “Israel (29) benefits from a high tertiary attainment rate amongst its 25–54 age group core working population, resulting in a significant high-skilled employment share of 49.7% (4th overall) and a relative perceived ease of finding skilled employees. While among the lowest in the region, the country’s rate of unemployment for the 15–24 age group is at 11% and its share of youth not in employment, education or training is also relatively high, at 15.7%.”

Other GCC economies, such as Kuwait (93) and Saudi Arabia (85), perform at a level comparable with that of Morocco (95) and Egypt (84), respectively, as per the findings. This highlights that “economic performance alone is an inadequate measure of countries’ ability to successfully leverage their human capital endowment”.

According to the report, the region’s overall average score of 60.50 masks significant differences in the countries’ human capital performance. It also indicates that several critical issues plague the under-15 age groups in parts of the region.

Youth unemployment continues to be widespread among the 15–24 age group in the region, with Egypt at 42% and Tunisia at 31% reporting the highest levels of youth unemployment.  The region also suffers from the lowest labor participation rate in the index because of low rates of female participation. Eight out of the 12 countries in the region record a prime working age participation rate of less than 80%.

Yemen is ranked 124th on the index and has the weakest human capital performance in the region, “with consistently low education outcomes across all Age Group pillars and high rates of child labor”, the report reveals.

“An ability to quantify human capital and set targets for its growth is ever more important today, as technological, geopolitical, demographic and economic forces profoundly reshape labor markets. Furthermore, investing in human capital goes beyond an economic necessity: it is the basis for individuals to live up to their full potential,” said Klaus Schwab, the founder and executive chairman of the World Economic Forum.

The youth imperative and the future of jobs will be critical talking points at the World Economic Forum’s Middle East and North Africa meeting in Jordan, scheduled to be held between 21 and 23 May 2015.