Urgent need to deal with unemployment

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AMMAN – Economists and sociologists believe that the current economic situation threatens the safety and security of the Jordanian society and that the government needs to find proper solutions, and soon.اضافة اعلان

The unemployment rate in the country fell by 0.1 percent in the third quarter of 2021, compared to the third quarter of 2020; it stood at 23.3 percent last year. Male unemployment stood at 21 percent in 2021, having fallen by 1.2 percent over the year before, while female unemployment fell by 2.1 percent, standing at 30.7 percent in 2021. Unemployment among holders of high school diplomas and higher reached a staggering 52.4 percent.

Economic analyst Mazen Irsheid told Jordan News that the government does not seem able to deal with the unemployment rates and is taking too long to resolve this issue, even though most economic sectors are completely opened following the COVID-19 pandemic, as is international trade.

Officials have been issuing statements about the need to coordinate with the private sector, yet, Irsheid claims, the government has no clear plan to lower this high unemployment percentage.

According to Irsheid, the Jordanian government sector is one of the biggest employers globally, with a 40 percent employment rate. As such, the private sector should be more involved in the hiring process, he said.

A solution Irsheid proposed is for Jordanian banks, in collaboration with the Central Bank, to allocate a certain percentage of their deposits, which total JD37 billion, to provide low-interest, long-term repayment loans to enable individuals to start small projects.

One reason unemployment is so high, said Irsheid, is Jordan's high labor costs, including social security at 22 percent, “the highest in the region”, which negatively impacts private sector hiring decisions. Yet another is the decline in foreign investments.

"The government should reconsider investment costs, such as social security and energy costs, to attract foreign investors and reduce local unemployment," he said.

Economic writer Salameh Al-Darawi told Jordan News that the increase in unemployment rates is to be expected because of the decline in economic growth (now standing at 2.5 percent), the chronic budget deficit, and the country’s high level of indebtedness, which drains large allocations, amounting to approximately JD1.6 billion or about 10 percent of the volume of expenditure, to pay debt interests.

According to Darawi, the government is unable to hire more people or create new job opportunities, the private sector is suffering from high inflation, and the number of workers is so large that the effect of creating new job opportunities is minimal.

At the same time, the Gulf job market is no longer what it used to be, and travel to look for work has decreased significantly as Gulf countries implement policies that prioritize their citizens over people of other nationalities.

Darawi said that 165,000 people enter the labor market every year, of which 88,000 have a university degree. He explained that even when the economy was at its peak and growth reached 7 percent, it was unable to provide more than 56,000 jobs opportunities.

"Given the current low rate of economic growth, it is easy to see the significant weakness in the ability to create jobs," Darawi added.

The only solution, he said, is to revise investment policies in order to generate higher growth rates.

Investment should acquire top-priority status, he emphasized, and the government should offer incentives to investors by reviewing investment law and employment contracts to ensure that local labor gets employed.

At the same time, the government should work to remove the current obstacles and challenges impeding business development. This may be accomplished if the government listens to and assists the private sector in resolving administrative and financial problems, Darawi said.

Professor of Sociology Hussein Al-Khozahe told Jordan News that the figures show an alarming situation: unemployment among bachelor’s degree holders is very high – 79 percent among women and 26 percent among men – and women's economic participation is only 13 percent.

According to Khozahe, the first social repercussion of unemployment is loss of confidence in all government institutions. Trust in political parties stands at 12 percent, in Parliament at 15 percent, in trade unions at 40 percent, in the media at 40 percent, and in the government at 67 percent, he said. These percentages, he said, are reflected in the large percentage of people unwilling to participate in political life.

Unemployment has social ramifications as well, said Khozahe. The average marriage age for males increased to 31 years, while it reached 27 years for females. It was also reported that money is the root cause of 66 percent of crimes in Jordan, including theft, bribery, check fraud, and inability to pay debts.

At the same time, unemployed individuals can experience psychological diseases like depression, anxiety, and suicide and increased domestic violence.

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