It is a problem that has captured the attention of Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai. "Why did Arabs fail to make deep structural reforms in education and in stimulating employment opportunities?" he asked recently in an editorial in The Wall Street Journal. That question is important to him. He set up the Mohammed bin Rashid Al Maktoum Foundation in December 2007 to find answers to it. And a report entitled the "Arab Human Capital Challenge" released this summer illustrates how daunting these challenges are, and the repercussions for failing to act on them. Consultants hired by the foundation spent a year talking with chief executives throughout MENA about their concerns. Top of the list to address? An Arab workforce ill-equipped to support a world-class economy for the long run. Even the UAE's considerable oil wealth has not insulated it from these challenges. Though it fares better than many of its MENA neighbours in areas such as literacy, the country also hasn't succeeded in nurturing its own human capital. Only 20 per cent of Gulf chief executives surveyed said they thought there was a sufficient supply of qualified national labour, lower than in the Levant (at 70 per cent) and North Africa (55 per cent.) That suggests the Gulf will be reliant on expatriates from around the world to staff its property brokerages, oil refineries and schools for a long time to come. That is not to say that the two groups are mutually exclusive. Talent from around the world can, and does, play a vital role in developing the UAE economy. And since the economic downturn first took hold last autumn, leaders here have offered up proposals that are a good starting point: changes in the school curriculum; more teacher training; the idea of more flexible labour laws. As it stands today, the Emirati labour force may not be prepared for the kinds of jobs being created in the UAE's changing economy. The unemployment rate among nationals is at a record high, 13 per cent at the end of last year, according to the Emirates Centre for Strategic Studies and Research in Abu Dhabi. "There is a lot of unemployment by choice," said Adel al Shared, the vice chairman and managing director of the research organisation. Essentially there are not enough qualified workers, in the UAE and elsewhere in MENA, for the few jobs they would want to take, he added. The Government, which employs a lot of the Emirati workpool, simply will not have the numbers of jobs available for such a growing workpool. Nearly half of the Arab world is under the age of 25. Typically, such a youthful demographic profile - the Arab world will have one of the largest workforces in the world - would be a harbinger of a robust economy. Young people drive consumption and are the most productive members of society, building businesses, raising families and sustaining economies if they are given the tools to do so. Countries such as Japan and Italy may face dire financial consequences because of their ageing populations. But if not properly nurtured, this asset can become a disadvantage too. "These increasingly restive youths are particularly vulnerable to those who would preach radicalism and hostility toward the West, especially the US," Sheikh Mohammed wrote. While the UAE has spent a considerable sums building world-renowned cities, the report says the country must now put its resources into building something different: a home-grown workforce. "The quality and productivity of expatriates is far superior than the national workforce at all management levels," the report states. At a round-table discussion in Dubai recently to discuss the report's findings, panelists stressed that the economic downturn is the perfect time to address this issue. They did not call for the Gulf to adopt a one-size-fits-all approach, to simply overlay a western solution on to the Middle East's business climate. The Middle East could use its traditional values around the importance of tribe and family to build a culture of trust, co-operation and an acceptance of failure. It also needs to make working socially acceptable, even if it means starting at the bottom. A friend recently told me of an Emirati colleague who lamented that, more often than not, when he goes to a coffee shop in his own country he has to order in English. It is a notable point: few places in the world would you find this. But it's also true that you're not likely to find Emiratis working as baristas. Or as taxi drivers, as Sharjah recently found when its drive to recruit national drivers failed. Anything other than a corner office is considered "a social defect", said Ghaith H Fariz, the director of the Arab Knowledge Report, which is a joint project of the UN Development Program and the Dubai-based foundation. Sure, making coffee is not many people's idea of a lucrative career, but it could be a way to a better one. Many of the world's top chief executives speak almost reverently of the lessons learnt as front-line employees in cafes, shops and restaurants. Right now "the attitude is, 'God forbid, my son is a carpenter,'" Dr Fariz added. "This is a shame. You can't only have CEOs." The UAE's leaders have recently put into place initiatives to help strengthen the nation's schools, such as the new entrepreneurship centre at Abu Dhabi University. ADU Enterprise aims to help students create and launch companies with the help of executives at an adjacent business park. The organisation has set up business incubators throughout MENA and is forming partnerships with private companies to help train teachers. The organisation concentrates on seeding entrepreneurial initiatives all over the Arab world through a variety of programmes. These include the Arab Incubators Network and the Centre for Entrepreneurship and Innovation, which it launched last year with the American University of Beirut with an endowment of US$5 million (Dh18.3m) to be a regional nucleus for entrepreneurship research in the Arab world. Building up an education system to foster business development is the only viable way for the Arab world to prosper in an increasingly competitive economic environment. Sheikh Mohammed hearkens back an earlier time when his ancestors "through free trade and scientific inquiry ? brought great wealth and enlightenment to Arab societies", he wrote. "We want to rekindle that spirit of daring in the Arab world." ashah@thenational.ae
