Abu Dhabi's young population an opportunity for economic growth

The situation of young people in the Arab world has long been a concern for policymakers. With some of the highest unemployment rates globally, much of the MENA region suffers from strife and sectarian tensions, warding off private investment and job creation that would help satisfy the aspirations of its young people. According to the World Economic Forum, the youth bulge represents both the region’s greatest challenge and its greatest opportunity.

The UAE is among the countries that are facing challenges in providing opportunities for their quickly changing demographics. It has enacted structural changes over the last year that link youth development and governance, in an effort to better respond to the needs of its next generation. Meanwhile, work by the non-profit sector is playing a crucial role in building data sets and providing young people with the tools to succeed.

Global Outlook

After several years of falling rates, global youth unemployment rose in 2016. According to the International Labour Organisation it was expected to reach 13.1% in 2016, up from 12.9% in 2015, with the total number of unemployed youth set to rise by 500,000 to 71m.

In Arab states, the figures are particularly striking. Unemployment rates are more than double the global average, and are expected to reach 29.7% in 2017, with unemployment rates on average 20% higher for females than males in the region. In a 2015 survey conducted by bayt.com, 83% of respondents aged between 18 and 34 stated that finding a job was a major challenge in their country. PwC estimates that in order to put all current job seekers to work, as well as those entering the work force over the next few years, 80m new jobs will have to be generated in the region by 2020.

The UAE is relatively insulated from many of the problems affecting other states in the region. Buffered by high incomes and public sector support, young Emiratis continue to enjoy a quality of life well above that of many of their neighbours.

Challenges Ahead

However, the UAE still faces challenges in providing opportunities for its growing cohort of young people as the economy matures. The number of nationals aged under 25 in Abu Dhabi was 312,928 in 2015, according to Statistics Centre - Abu Dhabi (SCAD), or 58% of Emiratis. Relying on the public sector to employ these young people could represent an increasing burden in the coming years.

According to SCAD, 54% of employed nationals work in the public sector and defence, and the challenge is reflected in the local and federal government’s long-term vision for the UAE.

In particular, both UAE Vision 2021 and Abu Dhabi Economic Vision 2030 highlight the growing need for private sector solutions and entrepreneurship in achieving the nation’s goal of a true knowledge-based economy. To achieve this, the focus remains on developing skills relevant to next-generation industries, ensuring UAE nationals have the expertise to sustain a diversified economy.

Cause For Optimism

While improved educational outcomes require time, there are indications that Emiratis are increasingly taking advantage of opportunities available to them. Enrolment at the Abu Dhabi Centre for Technical and Vocational Education and Training, for example, tripled between 2010 and 2015, from 4771 to 14,143.

The government’s focus on science, technology, engineering and mathematics (STEM)-based education is also likely to bring rewards in the coming years, with recent graduates better prepared with technical skill sets for industries such as nuclear, aerospace and renewable energy.

However, many educators recognise the challenges posed in shifting a generational mindset. In particular, multiple institutions in the UAE aim to encourage young Emiratis away from traditional business and finance, and into more technical fields and private sector employment. Part of the underlying challenge remains the enormous and disproportionate differences in employment incentives between the public and private sectors, in what the IMF calls a “missing link” in GCC policy formation.

Federal Changes

In February 2016 the UAE’s federal government announced one of the largest shake-ups in the history of the country, consolidating ministries and adding more specialised ministers to address a host of new priorities. In official statements, the government said that it wanted a “young and flexible government that will fulfil our youth’s aspirations and achieve our people’s ambitions.”

In addition to ministers of state for both happiness and tolerance, the UAE nominated a minister of state for youth, Shamma Al Mazrouei, who is thought to be the youngest minister in the world at the age of 22. Initial actions under Al Mazrouei included the launch of local youth councils to coordinate federal and emirate-level efforts, as well as an integrated directory of youth values that was built as a reference tool for future educational materials. Al Mazrouei was also charged with developing a national strategy for youth engagement, which includes consultation and a slate of initiatives aimed at the development of young people. One is endowment services, which in cooperation with business incubators across the UAE promote entrepreneurship and develop projects tailored towards the local youth. While much of the mandate remains in development, consultation and coordination with youth should boost understanding of generational aspirations and provide solutions that will contribute to society. These events prefaced the Arab Youth Forum held in Dubai in February 2017, which saw the development of seven major initiatives announced by Sheikh Mansour bin Zayed Al Nahyan, Minister of Presidential Affairs. The initiatives – spanning capacity-building programmes, an annual Arab Youth Report, and student exchange programmes – will form the backbone of the National Arab Youth Strategy, which is separate from the national strategy for youth engagement.

Venture Philanthropy

Apart from government-led directives, non-profit entities also have a major role to play in developing the next generation.

As part of the Abu Dhabi government’s efforts to establish public-private partnerships to help improve the welfare of youth across the UAE, Emirates Foundation was established in 2005. Through a series of social investment programmes, it has advocated for a break from traditional philanthropy in the region and a move towards what its CEO, Clare Woodcraft, describes as venture philanthropy, delivering social impact through the model of social enterprise.

“Venture philanthropy has largely grown out of the failure of traditional philanthropy to deliver social impact, or solutions to social challenges, at scale. It can play an important role in supporting the aspirations of young people where traditional models might have failed,” Woodcraft told OBG. “There is still very significant youth unemployment and youth disengagement across the MENA region. This new way of thinking – deploying business-based principles such as focus, accountability and scalability – can help foundations to deliver more impact for young people across the region.”

Programmes advanced by Emirates Foundation take a market-based approach and cover a range of gaps in the market where youth needs are not being met. These include financial literacy, private sector employment for UAE nationals, STEM education and civic engagement through volunteering work. Every programme comes with specific metrics, key performance indicators and a five-year business plan, just like any commercial entity would have.

According to Woodcraft, one of the most powerful metrics is the cost per youth. “We need to see that we can deliver social impact in a cost-effective way – that we are maximising the social outcome of every dollar we spend,” she told OBG. “To do this, you need to create economies of scale, to each year have an impact on more people with less money. Metrics such as cost per youth are hugely important in assessing how efficient and effective we are at delivering social value at scale.”

One of Emirates Foundation’s most anticipated developments is its Youth Development and Wellbeing Index Survey, which was launched in March 2017 by the chair of the organisation, Sheikh Abdullah Bin Zayed Al Nahyan, who also serves as the minister of foreign affairs and international cooperation. Functioning as a detailed survey encompassing 6000 young people in the UAE, it provides information across all aspects of the organisation’s portfolio.

The index is expected to aid both the development of the Foundation’s programme and also support policy formation, as the government continues to look for innovative ways of responding to the needs of both young people and wider society.