Sunday, January 14, 2007

Unemployment Breeds Terrorism

The reason for the rise of the Muslim Brotherhood in Egypt and its allies across the Middle East, including those with divergent ideologies such as Hamas, Hizbollah, Al Quadia, the insurrgents in Iraq, etc. is simple and as obvious as the nose on your face; it has to do with unemployment and underemployment.

There is sufficient evidence now which indicates that the major cause of terrorism is economic, in particular, unemployment The Economic Genesis and Impact of Terrorism

No War on Terrorism can be won politically or militarily, that is an illusion and a dangerous one.

U.S. allies that are fighting al-Qaida-linked insurgencies often suffer illegitimate regimes, civil-military tension manifested by fears of a coup, economic backwardness, and discriminatory societies. These problems, coupled with allies' divergent interests, serve to weaken allied military and security forces tactically, operationally, and strategically.

The American Empire is hoping not to reconstruct the Middle East into a vast zone of democratic capitalism, but to use up the vast reserves of surplus labour by killing and jailing them.

The Terrorism Labor Market

A special report from the United States Institute of Peace (2002) focuses on how Islamic extremists mobilize support. The report highlights the humiliation of being treated as “second class” citizens by their governments as a major reason people join extremist groups. Other reasons include the desire to promote political goals, and for financial, spiritual, and emotional incentives. Two types of labor are sought by the extremist groups: young, uneducated “foot soldiers” and better educated elite operatives. The media is often used as a means to rally support, and in Pakistan the educated members are often plucked from religious schools called madaris. These ideas suggest that a number of social, political, cultural, and economic conditions might create a fertile environment for some individuals to form preferences for terrorism.
Yom and Saleh (2004), in an empirical paper, looked at the labor supply of Palestinian suicide bombers. Although suicide strategies started seven years before 9/11 and even though the lives of the Palestinians have not improved since then, they still continue with the bombings. The bombers are not just the instruments of terrorist leaders nor are they brainwashed. The suicide bombers are generally young, with large families, and better educated than the average Palestinian citizen. However, it is found that many of the bombers had violent encounters with the Israel Defense Forces and as a result many were injured, imprisoned, or lost a family member, so revenge could be a factor in their participation in terrorist groups. Participation in terrorist organizations is also increased due to closures that Israel enforces on Palestinian territories. These closures leave thousands unemployed because many Palestinians rely on Israel for jobs. The closures also disturb the prospects for good jobs within the territories. Because the closures hurt earning potential, those who are highly qualified for jobs, such as many of the suicide bombers, face high losses relative to the investment that they have made in education and job training. This can create incentives to join illegal activity. Yom and Saleh suggest that increasing income per capita will reduce Palestinian attacks against Israelis, and that decreasing unemployment will discourage youth from joining terrorist groups. These suggestions parallel the results of Landes (1978) in which the time and flight interval of hijackings decreased when per capita spending increased and unemployment decreased.

And it is using up its own surplus labour population by specifically mobilizing its National Guard, a home reservist army of the employed. In doing so they decrease the labour force at home, and thus free up jobs for others resulting in a three year decline in unemployment in the United States. With the death toll at three thousand American soldiers and over twenty thousand injured, some seriously enough to never return to work, job's once held by these workers are now being filled by others.

In other words the War on Terror is a War on the Unemployed Youth of the Middle East. The vast majority of populations in Iran, Egypt, Iraq, and other countries are now under the age of thirty. And they have vast amounts of college and university education. What they don't have is jobs.

Actual terrorist operatives are not poor or lacking in education. And yet lack of economic opportunity and recessionary economies are positively correlated with terrorism. The Quality of Terror

Terrorism and violence are two main threats to the civilized world. Social injustice and
criminalization of poor ultimately leads to terrorism and violence. As a rule, issues that make life
impossible must take precedence over problems that make life insecure. Survival, in other words, is a more basic issue than security. Ideals of peace and justice are meaningless to those who are
smarting under the brooding ferocity of hunger, malnutrition, unemployment and diseases. SUBHABRATA DUTTA

the roots of terrorism grow in those areas that are most dramatically affected by incomplete,
unbalanced or failed socio-economic and political modernization. Thus the roots of
terrorism as a socio-political phenomenon are always socio-economic, rather than
purely economic (this is also true of the impact of most of the economic tools that
are used to fight conflict-related terrorism).
Anti-terrorism and Peace-building During and After Conflict

And so they are attracted to movements for change. If there were a strong Communist or Socialist or even a labour movement in these countries, advocating social change in a populist language, then it would be an alternative to the Isalmist movements. There are none. These were either destroyed during the Cold War by the US client regimes in the region, including Egypts and the Shah of Iran, or they failed to evolve to meet the needs of their populations.

Like the increasing emphasis on growth in developing countries, increasing attention to poverty was nurtured by the reality of Cold War competition between the East and the West for influence and control in the countries of the developing world. In Vietnam the lesson that insurgency and civil war could be reinforced by poverty and poor social indicators was learned by the United States, the largest and most influential of the World Bank's shareholders (and of course was represented inside the Bank throughout the 1970s by McNamara himself).
Birdsall, Nancy and Juan Luis London (1997) Inequality and Human Capital Accumulation in Latin America

The greatest victory of the US and its regional client states was the war in Afghanistan against the Soviet Union. This spelled the death knell for any third way politics of the left in the Middle East. It also led to the collapse of America's only real ally in constraining regimes in the region, ironically the USSR.

It resulted in the creation of a war torn Afghanistan and the eventual control of the region by competing warlords, including the Taliban. And again the mobilization of the Pashtuns in the south included young people both from Afghanistan and Pakistan. Pakistan itself also suffers from a growing population of young unemployed who are now flocking to Islamist schools for ideological training providing them with new work, as armed fighters in the war of globalization of the marketplace.


For example, states in the Middle East and Africa, where authoritarian regimes have held sway without any semblance of accountability, have suffered from lack of political participation, economic hardships, public discontent and conflict

Disconnectedness leads to circumstances where the underprivileged can be
exploited by extremist groups such as those discussed above by recruiting them for their
violent causes in exchange for financial remuneration as can be seen in the case of young
children indoctrinated in madrassas in exchange for basic amenities such as food, shelter
and education. (Stern, 2003) Second, it may instill empathy among the disconnected
toward terrorist causes due to similarity of their situations as can be seen in the case of
peasant support for Maoists in Nepal.

Unemployment, underemployment has impacted on terrorist activities in Pakistan and in India as well. Where ever there is a lack of economic development the seeds of terrorism are planted. And because the term terrorism is a loaded word, it covers a wide swath of forms of armed struggle including illegal criminal activities as well as National Liberation struggles; armed resistance movements based on politics, religion or minority rights, etc.

Unemployment and lack of development are the main factors for youth involvement in terrorist activities and addiction. The proportion of drug abuse and alcoholism among the unemployed youth in the border villages is significantly higher than the interior villages Youth who were involved in terrorism have come back to the mainstream now. They would like to join the Defence Forces / Para-military or even to start their own self-employment ventures.

There are those who claim that poverty has no association with Terrorism, and in that they are correct, but they miss the point. Underemployment or unemployment does not necessarily mean poverty. Hence we find many well educated but 'under' employed youth flocking to various armed struggle groups, much like American underemployed or unemployed ghetto youth flock to gangs.

Globalisation and the Future of Terrorism: Patterns and Predictions

When the local economy is under-developed the choices for the unemployed or underemployed have historically been, even in advanced capitalist countries, joining the army to get a skill, trade or social advancement. Joining an armed struggle group is no different. It is seen as occupational training and social status. Not unlike joining a gang or in joining the army and police.

Mobility and Markets: Conceptual Issues and Policy Questions

In Africa and the Middle East, those countries that more quickly and fully adopted market policies have been widely acknowledged to have the best prospects for escaping economic backwardness. But the prevalence of the market economy has not been without costs. Inequality across and within countries has persisted and possibly worsened.

Market competition rewards those countries and people with the wherewithal (property, connections, and, increasingly central in the information age, education and skills) to exploit the new rules. Along with
greater inequality has come increased insecurity as even people with good jobs and rising income work in more volatile and flexible labor markets and as the globalization of markets generates constant adjustments in th nature and location of production and thus of jobs.

But increased inequality and insecurity may simply reflect deep and persistent differences in the capacity of individuals and households to exploit markets or to achieve equal access to education, employment, or property rights. Amartya Sen’s well-known definition of poverty, for example, focuses on people’s capabilities to participate as productive members ofsociety rather than focusing only on their incomes. Sen notes that the opportunity to convert personal incomes into capabilities depends on a variety of personal circumstances, including age, gender, and health status, and on other circumstances such as the physical environment and the state of available public services.

Economists have also developed models that explain inequality and its persistence even in the absence of market failures. George Akerlof describes a phenomenon he calls the economics of identity, which stems from individuals’ ties to particular social groups. Because leaving such groups threatens individuals’ identity, they are often reluctant to do so, even if it meansgiving up opportunities to escape poverty. This is applicable to a variety ofsocial groups, ranging from adolescents in ghetto gangs to ethnic minoritiesand immigrants.

And in the new market state economy of globalization gang states or so called terrorist states, such as the Punjab, Palestine, Southern Lebanon , Jamaica or South Central LA create a real localized economy for the creative destruction of modern capitalism, that is for the use and abuse of their members. Gang violence, violent suicidal death, etc. are again just another part of the war of capitalism on the unemployed. The fact is that if these same youth got jobs as agents of the state instead of as members of armed struggle factions, they would still be killing themselves and others in order to reduce the surplus population.


The Engineering and Construction Industry in Jamaica is hampered both by politicians trying to enforce politically-motivated employment conditions on engineering managers working in their constituency, and criminal elements ostensibly providing ‘security’ for works. Failure to accept this patronage, corruption and extortion often leads to death, injury or severe damage to engineering and construction works. The paper serves to investigate and analyse the problems and costs of this system within the context of a dangerous global environment. The paper considers extortion as a form of terrorism and discusses the vulnerabilities of engineering and construction works in general to terrorist activities.

Terrorist organizations are a localized employer of surplus labour just as they are a form of state within the state. And as such they do not just need the undereducated unemployed the surplus labour of the region, they need like all modern forms of capitalist organizations and states, the educated, skilled, those who can produce advanced informatics and work with the web, advanced communications, etc.

The Quality of Terror
American Journal of Political Science
Volume 49, Issue 3
(July 2005)
Ethan Bueno de Mesquita

Our biggest problem is the hordes of young men who beat on our doors, clamoring
to be sent. It is difficult to select only a few. Those whom we turn away return
again and again, pestering us, pleading to be accepted. [ A senior member of
Hamas as reported by Hassan (2001)]

I present a model of the interaction between a government, a terrorist organization, and
a population of terrorist sympathizers in which education or economic opportunity, and
opposition to the government play important roles in determining whether an individual
volunteers to join a terrorist group. In particular, as a result of an endogenous choice between
economic activity and terrorist mobilization, individuals with low ability or little education
(and consequently few economic opportunities) and strong anti-government dispositions are
most likely to volunteer to become terrorists. However, the terrorist organization wants to
recruit only the most effective, highly skilled terrorists. This is because higher ability, better
educated people are more likely to succeed at the demanding tasks required of a terrorist
operative. Consequently the terrorist organization screens the volunteers.

An Economist Looks at Suicide Terrorism
Suicide terrorism has an economic aspect. The organization of a suicide mission requires an incentive, a voluntary transaction, and a contract that is enforceable by the parties to it. A terrorist faction that competes for power in a community that is both oppressed and oppressive provides young people with an incentive to invest in an identity that is rendered more valuable by death. Suicide attacks are then the outcome of a voluntary agreement between the faction and the young person to trade life for identity. The institution of the “living martyr” renders the agreement privately enforceable. Thus, suicide terrorism is the outcome of an individual rational choice. There are some implications for counter-measures.

One needs only look at the advanced networks of TV, web, newspaper broadcasts of Hezbollah, Hamas, even Al Qaeda, and we begin to see that these disassociated states, these freelance governments, are well advanced, despite their medievalist ideology and aims. They have to be.

In order to promote their ideological opposition to globalization from the West they have to offer their alternative globalization, to make the world one under Islam. They are using the advanced technologies of capitalism as it is to undermine capitalism as it isn’t in their regions.

In other words the very existence of resistance movements like Hamas, Hezbollah, the Chechen rebels, etc. are not just nationalist movements but are a condemnation of capitalism’s failure to achieve democratic states capable of promoting Western style development. Of course it never was American Imperialism aim to create free democratic regimes, they have one in the region already; Israel. All other regional economies are to be colonies for exploitation by America for if they became capitalist states they would become competition for Israel and the U.S. as we have seen last summer in Lebanon and in the saber rattling of the U.S. over Iran.

And since globalization is about creating a unitary unified global state/economy then it appeals to the Islamic notion of creating a unified global state/economy as Mohammed had originally done in the region and as his followers have done ever since, the greatest of these states being the Ottoman Empire. They are the two faces of modern Manichaeism; Bush’s God versus Allah, both are Satan to the other. Thus globalization is two faced and dualistic. It has one meaning for the G8 countries and another for everyone else.

But that does not mean that those engaged in armed struggle against the Empire are not themselves attempting to build their own form of capitalism, globalization and empire.

The assault on the World Trade Centre was an attack on the very source and soul of Globalization, of globe capitalism and the attack on the Pentagon was a further reinforcement of this attack on Imperialism and Empire.

It was ‘engineered’ by Bin Laden Inc., the son of the world’s largest Engineering firm outside of Bechtel and Halliburton. His success in Afghanistan was not just in mobilizing unemployed youth in the Middle East to come to fight the Soviet Union in Afghanistan, but the fact that they were responsible for the infrastructure, the fighters used, bunkers, roads, etc. It was a banking and engineering project in the same way the American invasion of Iraq was.

Downsizing in Disguise

by Naomi Klein [Nation, June 23, 2003]

The streets of Baghdad are a swamp of crime and uncollected garbage. Battered local businesses are going bankrupt, unable to compete with cheap imports. Unemployment is soaring and thousands of laid-off state workers are protesting in the streets.

In other words, Iraq looks like every other country that has undergone rapid-fire "structural adjustments" prescribed by Washington, from Russia's infamous "shock therapy" in the early 1990s to Argentina's disastrous "surgery without anesthetic." Except that Iraq's "reconstruction" makes those wrenching reforms look like spa treatments.

Paul Bremer, the US-appointed governor of Iraq, has already proved something of a flop in the democracy department in his few weeks there, nixing plans for Iraqis to select their own interim government in favor of his own handpicked team of advisers. But Bremer has proved to have something of a gift when it comes to rolling out the red carpet for US multinationals.

For a few weeks Bremer has been hacking away at Iraq's public sector like former Sunbeam exec "Chainsaw" Al Dunlap in a flak jacket. On May 16 Bremer banned up to 30,000 senior Baath Party officials from government jobs. A week later, he dissolved the army and the information ministry, putting more than 400,000 Iraqis out of work without pensions or re-employment programs.

But Bremer has gone far beyond purging powerful Baath loyalists and moved into a full-scale assault on the state itself. Doctors who joined the party as children and have no love for Saddam face dismissal, while low-level civil servants with no ties to the party have been fired en masse. Nuha Najeeb, who ran a Baghdad printing house, told Reuters, "I...had nothing to do with Saddam's media, so why am I sacked?"

As the Bush Administration becomes increasingly open about its plans to privatize Iraq's state industries and parts of the government, Bremer's de-Baathification takes on new meaning. Is he working only to get rid of Baath Party members, or is he also working to shrink the public sector as a whole so that hospitals, schools and even the army are primed for privatization by US firms? Just as reconstruction is the guise for privatization, de-Baathification looks a lot like disguised downsizing.

War and warrior cultures are male. We find few women historically that are terrorists or involved in armed struggle. They are the exception not the rule. And when we do find them they are involved usually as the sole female in an all male group.

Even when we have them involved as suicide bombers in Palestine, they are adopting the social role and disguise of their male counterpart. In patriarchical cultures male violence is acceptable and encouraged, when it is used by the State to enforce its laws, it's idealized and accepted in mass culture even when it is done by gangs, the mafia, or other paralegal or illegal male groups.

The popularity of the Sopranos for instance is the visceral thrill we get seeing the inner working of a violent male group. The success of the World Cup last year was the reflection in sports of the warrior culture of males including head butting. Gangs and terrorist organizations world wide, still play soccer as a social activity between bombings.

Soccer, Masculinity, and Violence in Northern Island: Between Hooliganism and Terrorism

Despite, or arguably because of, the marked decrease in the level of politically motivated violence in Northern Ireland since 1994, greater attention can now be paid to other forms of violence. The article argues that hegemonic masculinity encourages patterned male violence at large and that this was formerly an important element in the persistence of terrorist violence. The latter existed on the same continuum as other manifestations of hegemonic masculinity including the antisocial behavior of certain soccer fans. Specific attention is paid in the article to the relationship between loyalist paramilitary violence and the activities of young Protestant working-class men at soccer games. The two phenomena are revealed as interconnected responses to a crisis of masculinity rooted in economic and political uncertainty.

The armies of the armed struggle movements in Chechnya, Iraq, Afghanistan, Palestine, Pakistan, India, Indonesia, and in the street gangs in Jamaica or East L.A. are all men. Unemployed and underemployed, they are responsible in their patriarchical societies for taking care of their families, women, children, and the elderly. Given no rational choices, as economists call it, between poverty and death, they choose the latter, which in areas like Palestine at least affords them a pension and familial support from regimes like Saudia Arabia, and once upon a time Saddam Hussein, to become martyrs for the cause.

This is known to the World Bank, to the IMF, to those promoting free trade and development in the conflicted regions of the world. What they cannot offer is a solution. It is because in some cases the destruction of what was once agrarian pre-capitalist societies and economic zones, has left no alternative occupations. Moving to the cities enmasse the vast army of unemployed and underemployed now become the reserve army not of capitalism but of terrorism. Until capitalism is allowed to fully develop in these regions then the war on terror will be lost battle by battle. It is the contradiction of Imperialism, that while the American Empire talks of the joys of unfettered capitalism, it denies it to those regions it depends on for Oil. In so doing, it limits the threat of capitalist competition to its own corporations and to its hegemonic role in the region. And in doing so creates the alternative employment opportunities in armed struggle and resistance movements.

Armed struggle in the Middle East has always been about drawing the world’s attention to the neglect experienced by those whose existence was created by Western Imperialism after WWI and WWII. It began with Black September and Fatah’s attacks in Germany at the Munich games to call attention to the plight of the Palestinian refugees, ignored for twenty years in concentration camps in the occupied territories. It has expanded to now conflagrate the entire region. 9/11 was the Munich of the 21st Century.

American Imperialism has failed to create a modern capitalist economy in the region except for Israel, who benefits directly from billions of dollars of State support from the United States. Nor can it create any such a regime now as it’s nation state building in Iraq has proven. America would not only have to invest in creating and subsidizing capitalist states in the region, but invest and subsidize a capitalism that is in direct competition with it, as is the case of Bin Laden Inc.

IRAQ: Unemployment caused by insecurity and vice-versa

Click here to enlarge image

Iraqis protesting for jobs in Baghdad.

BAGHDAD, 29 Nov 2004 (IRIN) - It's catch-22 in Iraq - a huge increase in danger means less employment; more unemployment could mean more potential recruits for insurgents as people become increasingly tired of the situation.

It's one of the country's most serious problems, government sources say. Officially, unemployment stands at more than 60 percent, according to unverified statistics from the Ministry of Labour and Social Affairs (MLSA).

Iraqi officials and US-led forces alike feel if more people were working, the country would become more stable, living standards would rise and all Iraqis would have more opportunities.

Unemployment rates worldwide, 2005:



East Asia:


Rich countries:


United States:


European Union:






Latin America:




Middle East:


Estimates of the level of unemployment in other Arab countries in the 1990s include: 6% in Syria, 11-21% in Morocco, 12% in Yemen, 15% in Tunisia, 16% in the north of Sudan, 17% in Jordan, 21% in Algeria, 33% in Iraq, and 18-51% in the West Bank and Gaza. Even in the Arab Gulf countries, governments are known to have been confronting the problem of finding employment opportunities for new entrants into the labour force, particularly educated women. For the Arab world as a whole, an overall open unemployment rate of at least 15% around 1995 seems reasonable. This corresponds to more than 12 million unemployed persons, mostly poor (often educated) youth.

The Middle East and North Africa [MENA] stands out as the region with the highest rate of unemployment in the world. With an unemployment rate of 13.2 percent, the Middle East is ahead of sub-Saharan Africa, the poorest region in the world, which has the second highest rate of unemployment, 9.7 percent. The Arab League Economic Unity Council estimates unemployment in the Middle East (members of the Arab League only) at 20 percent. The number of unemployed people in MENA is particularly puzzling because the oil producing countries employ 7-8 million expatriate workers transmitting perhaps as much as $22 billion a year.

Notable Features About Middle East and North Africa

The most significant feature is the structure of the population. MENA is characterized by its growing young population, with 37 percent below the age of 15 years in 2000, and 58 percent below the age of 25 years. The working-age population is increasing by three percent a year. The biggest challenge facing policy makers in the region is the high rate of youth unemployment, estimated at 25.6 percent in 2003, which is the highest in the world. Although fertility rate (births per woman) in the region may be declining, it is still higher than in other developing countries, and there is the concern that population growth could outpace economic growth.

The unemployment rate of the MENA region has been hovering around the 13 per cent mark for the last decade. According to the ILO report this steady rate of unemployment reflects an average of 500,000 of additional unemployed per year. The increase in employment is not enough to absorb all those who enter the labor market annually. In May 2005, Taleb Rifa'i, regional director of ILO, asserted that the high rate of unemployment in the Arab world, which at one estimate reached 20 percent, will ultimately result in a state of underemployment, as most people will be forced to take up jobs for low compensation packages that do not suit their qualifications, and will further result in increased poverty.

High Rate of Unemployment in the Arab Countries

Ahmad Gowaili, secretary-general of the Arab League Economic Unity Council, referred to an unemployment rate of 20 percent in the Arab countries. According to Gowaili, this percentage is translated into 22 million unemployed, of whom 60 percent are youth. This figure, he added, is likely to increase by three percent annually. He attributes the main cause of unemployment to the failure in most Arab countries to link educational orientation to the labor market requirements.

Are Trade-Based Initiatives an Effective Tool in the War on Terrorism?

Massive population increases: The Middle East and North Africa had a population of 112
million in 1950. The population is well over 415 million today. Most likely it will more than
double again reaching at least 833 million by 2050.
· A youth explosion especially in the 20-24 age brackets. This is the key age group for new
job entrants and has grown steadily from 10 million in 1950 to 36 million today. Growth is
expected to remain steady reaching at least 56 million by 2050.
· A failure to achieve global competitiveness, diversify economies and create productive
jobs. Direct and disguised unemployment ranges from 12-20% in many countries. The
high percentage of the population entering the labor force only compounds this problem.
· A steady decline in non-petroleum exports as a percentage of world trade over the last
half a century—and an equal pattern of decline in regional GDP as a share of global GDP.
· Over-urbanization and a half century decline in agricultural and traditional trades impose
high levels of stress on traditional social safety nets and extended families. The urban
population seem to have been under 15 million in 1950. It has since more than doubled
from 84 million in 1980 to 173 million today, and some 25% of the population will soon
live in cities of one million or more.
· Broad problems in integrating women effectively and productively into the work force.
While female employment in the MENA region has grown in recent years it still averages
15% lower than in high growth areas such as East Asia.
· Growing pressures on young men and women in the Middle East and North Africa to
immigrate to Europe and the US to find jobs and economic opportunities—a process that
inevitably creates new tensions and adjustment problems.
· Little regional trade. Almost all nations in the region have as their major trading partners
economies outside the region. Furthermore increased intraregional trade offers little or no
comparative advantage.
· Increasing water scarcity. Much of the region cannot afford to provide more water for
agriculture at market prices—many countries have become permanent importers of food.
· A failed or inadequate growth in infrastructure and in key areas like housing and

Iran’s Unemployment Crisis

Stubborn, double-digit, unemployment is currently the Islamic Republic’s most acute single economic concern. Providing gainful, even if not equally productive, jobs for millions of job seekers now tops the list of the theocratic oligarchy's unrelenting headaches. The challenge is formidable not only because of unemployment’s debilitating impact on the economy, but also due to its dire political, social, and even cultural consequences for the regime's stability and staying power. While shortages of job opportunities have been a structural phenomenon in Iran for some time, the acceleration in the growth of labor force since the late 1990s has now reached a critical mass – defying all attempted solutions.

Despite the enormity of the challenge, statistics on Iran’s employment and unemployment are the flimsiest, least reliable and most contested of all basic indicators. The principal sources of data are either out of reach, limited, or largely conjectural. Iran’s total population itself – and thus the size of its labor force – is based on conflicting estimates. And estimated figures for any given year vary between those of the UN Secretariat, Iran’s Statistics Center, other local authorities, and foreign organizations – often with a 10% margin of difference. The size of the labor force is subject to even greater variety of guesswork. And the official estimate is highly misleading because it suffers from technical, conceptual, and methodological flaws.

Iran’s current working age population, ie, persons between the ages of 15 and 64, is broadly estimated to be about 37mn of which some 21mn (or less than 32% of the total population) constitute the active labor force This figure compares poorly with the 50-60% labor participation in other countries, partly because it leaves out some 5mn or so deprived job seekers ie women (not including housewives). The total also excludes children below 15 and older men above 64 who are still in the job market due to poverty or inadequate social security benefits. The estimated employed number is equally questionable because it includes seasonal workers, every one who works at least two days a week, and all those who have a job at the time of census taking regardless of their status shortly before or after.

The Problem of Unemployment in Egypt

The new entrants into the labor force, the Egyptian youth, represented more than 90% of the total unemployed in the first half of the 1980's, and the university graduates had to wait five years after graduation -even more than this now- to be employed by the labor force administration (Hammad 94). This indicates that the largest percentage of the unemployed comes from the young university or higher institute graduates. And this is because the government is not capable of immediately employing all the unemployed educated young people as it did in the sixties through the guaranteed public employment for graduates.

Independent of the large numbers of workers who emigrated to other countries, the percentage of the unemployed increased (Hansen, Employment Planning 536). Analyzing this strange phenomenon, Ibrahim found that migration leads to the loss of skilled man power, the decline in the quality of labor, the waste consumption, the decline of the work ethic, the concept of "Foreign is better", and the feminization of the family (120-130). An active example of this theory is what happened in the Egyptian rural areas due to the use of more machines to replace the skilled emigrant labor. The unskilled workers couldn't work on these machines because they lacked training; consequently, unemployment increased (Hammad 87).

Employment and Unemployment in Egypt: Conventional Problems ...

Leading economists are talking about the “return of depression
economics,” and creating employment has emerged at the top of the agenda of developed and
developing countries alike. The recent events in Argentina, the third largest economy in Latin
America, after Brazil and Mexico, provide sobering lessons to both economists and policy
makers. Despite the recent optimism about the performance of the global economy and the
slowdown that has begun to bottom out,1 there is concern that the volatility of the global
economy should leave no place for complacency and that better management in support of
robust growth on a world scale is badly needed.

By 2001, the objectives of “full employment” remained as illusive as ever and the
problem of unemployment rose to the top of the agenda for the country as a whole. Today, the
questions are: what has gone wrong and why; and how do we get out of this situation? The
purpose of this paper is to tackle these questions within the constraints impost by the
notorious lack of data on employment and unemployment.4 The basic argument is that while
the diagnosis of the problem and its causes are well-known, unconventional policies and
institutions are required if the present trends are to be reversed.

For the next ten years, the average number of new job seekers will increase to 638,000 per year compared to the capacity of the Egyptian economy to create 435,000 jobs annually over the last decade.

Unemployment is essentially a problem of the youth. Total unemployment for
those aged 15-29 has increased from 82 percent in 1988 to 84 percent in 1998,
and the majority of these are first-time job seekers. The negative economic and
social repercussions of such a situation cannot be overemphasized

A major characteristic of the Egyptian labor market has been the dislocation between supply
and demand. Educational and training systems continue to churn out graduates taking little or
no account of the actual demand for labor.

A more significant measure of labor supply should take into account the output of the
educational system, as well as the dropouts who join the labor market every year as job
seekers – an estimated 896,000 persons in 1999/2000.6 Assuming that the domestic economy
generates 435,000 jobs and that 90,000 migrate annually, the total labor absorption amounts
to only 58.6 percent of supply or a deficit of 371,000 jobs a year.

The Paradox of Education and Unemployment in Egypt

There is a large body of empirical evidence that shows that education is good for rapid
economic growth.

When shared widely, education is also the best equalizing force in society, short of outright redistribution of other assets.

Employment is the vehicle through which education is translated into growth and equitable distribution of this growth. When the link between education and employment is broken, significant resources are wasted and the returns to education diminish. Egypt has made significant progress on the provision of education to a large segment of the population. The problem is that the link between education and employment is broken.

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Jackline said...

Hi Nice Blog .I think HR understands the importance of other people tracking time--IT, Lawyers, non-exempt employees, but struggles with the idea of labor time management .