The circumstances surrounding the dramatic overthrow of Tunisian president Zine al-Abidine Ben Ali and calls for the end of Egyptian President Hosni Mubarak’s rule have cast a spotlight on the problem of unemployment – and particularly youth unemployment – across the Arab world. Average unemployment across the region stands at  25 percent, a high number raising alarm bells for regional countries that have faced civil unrest in recent weeks. Even by this low standard, however, youth unemployment in Yemen remains staggeringly high: estimates vary, but the latest World Bank statistics suggest a figure of at least 35 percent.

The combination of rapid population growth and a stagnant economy has caused Yemen’s unemployment rate to rocket over the last ten years, with young people aged 15-29 the most likely to be unemployed. In a country where 70 percent of the population is under 25, the frustration and disillusion caused by young people’s inability to make a living is a potentially potent source  of conflict.

If Yemen’s job crisis deepens, it will severely hamper the international community’s efforts to stabilise the security situation and prevent further weakening of the state. Reports by USAID and the Yemeni diaspora organisation Resonate! Yemen have found that Yemeni youth consider unemployment – and the poverty and sense of alienation that it brings – to aid the efforts of radical Islamist groups (principally al-Qaeda in the Arabian Peninsula, or AQAP) in recruiting young people.

Unemployment in Yemen is an intractable problem, for which there are no short-term solutions. Despite an ongoing IMF programme established to aid the country, its economic troubles are likely to get worse. Oil supplies, which the government relies on for the bulk of its revenues, are predicted to run out in the next decade, and the population growth rate – which will potentially see a doubling of Yemen’s population by 2025 – means that current job creation rates will be unable to keep pace with the number of new entrants to the labour market.

Opening The Barriers: GCC Labour Markets as a Solution?

The absence of adequate employment opportunities in Yemen has meant that Yemenis are increasingly looking to labour markets outside the country. For many Yemenis, gaining increased access to jobs in the Gulf Cooperation Council (GCC), an economic union composed of several Gulf countries, has come to be viewed as the key solution to the problems of unemployment in their own country. The GCC states themselves are heavily dependent on a migrant workforce, and are a key stakeholder in Yemeni affairs: they have a vested interest in preventing instability in Yemen, which would have regional repercussions. Despite this and the close cultural ties and high levels of aid money flowing into Yemen from these states, Gulf countries have thus far shied away from granting Yemen full membership in the GCC.

Yemen’s Deputy Minister of Finance, Jalal Yaqoub, has authored a 10 Point Plan, which sets out a path for government reform and economic stability, which includes increased access to GCC employment opportunities. Point 2 of the plan is dedicated to lowering the barriers for Yemenis to work in the GCC, with the aim of generating employment for young Yemenis, who in turn will send remittances to Yemen. The government hopes that remittances from migrant workers will reach $1.2 billion over the next 5 years.

Despite a lack of legal barriers to the recruitment of Yemenis by GCC employers, there are significant obstacles Yemenis will need to overcome in order to increase their share of the GCC job market. Recent conflicts in Yemen and the presence of AQAP in the country have led to an increasing belief that hiring Yemeni workers constitutes a security risk. In addition to this, according to a forthcoming report on Yemeni access to GCC labour markets from the UK-based think tank Chatham House, after relying for years on immigrant workers Gulf countries are beginning to experience high levels of unemployment amongst their local populations, leading to various “nationalisation” initiatives to encourage the hiring of GCC nationals.

However, the biggest obstacle for Yemenis remains their inability to meet the demands of the GCC labour markets. Asian workers provide cheaper unskilled labour, while Yemenis lack the skill levels needed for more advanced GCC jobs. Though a recent report by a Yemen-based think tank, the Sheba Centre, called on the GCC to encourage its local businesses to engage in preferential hiring of Yemenis, Yemen will still have to address the inadequate job skills of its labour force before it will see any significant increase in Yemenis employed in the GCC.

Education and Training: A Skills Deficit

In the 2008 USAID report on youth in Yemen, one of the greatest frustrations expressed by young people was the mismatch between education in the country and the skills and knowledge needed to obtain a job. Participants reported a lack of facilities in Yemeni schools for practical learning; when asked what educational improvements they would most like to see in their communities, the most popular answer by far was vocational training centres.

In a recent NPR programme investigating the problems facing young people in the Arab world, this sentiment was echoed by Dr. Mohammed al-Qubaty, Head of Foreign Affairs in the ruling GPC and a professor at Sana’a University. He emphasised the deficiencies in Yemen’s educational system, which has produced university graduates often lacking necessary job skills, such as English-language proficiency and IT skills. Rather, the education curriculum in Yemen focuses heavily on recitation and memorisation instead of developing skills more suited to the needs of employers.

As Gregory Johnsen, a Yemen expert at Princeton University, noted on this NPR programme, improving education and training to increase opportunities for young people to find work in Yemen and abroad is also important to stabilising the country, though the Yemeni government has yet to prioritize this as a policy initiative.

This deficit in necessary skills has also affected the Yemeni government’s ability to efficiently run the country. In 2006, the GCC committed to providing a $3.2 billion aid package to Yemen. At a conference in November, Dr Abdel Aziz Aluweisheg, Director General of External Economic Affairs at the GCC Secretariat, described how the GCC agreed to provide aid to projects selected at the “highest level” of the Yemeni government. 80 percent of funding was allocated to “big ticket” physical infrastructure projects (such as highways and ports), and the remainder to education and health projects.  Five years later, more than half of the $3.2 billion remains unspent, as neither the private nor the public sector in Yemen had the technical capacity to implement the planned projects.

The Way Forward

Yemen and its international partners have realised, albeit belatedly, the importance of directly tackling the problem of youth unemployment. Saudi Arabia has funded the construction of 19 new technical training schools inside Yemen, and the UAE is planning to fund a further 20. The Qatari foundation Silatech has stepped in to provide training for young Yemenis, as well as to execute contracts with Qatari businesses to employ Yemenis. Meanwhile, the Yemeni government has brought in the consultancy company McKinsey to help formulate a strategy for increasing Yemeni employment within GCC private sector enterprises.

With a great many Yemenis looking to the GCC to help mitigate spiralling levels of unemployment, the GCC can certainly take additional steps to help resolve Yemen’s job crisis, such as by channelling aid money towards technical and vocational training, by working towards a unified labour law across the GCC, and by enhancing the coordination of curricula to match the requirements of private sector recruiters in GCC countries.

At the same time, the Yemeni government must commit itself to prioritising reforms, which will stabilise the economy and effectively address the unemployment that is destroying the lives of so many of its young people. Many young Yemenis see the poverty and unemployment that afflict them as fundamentally tied to widespread corruption and a lack of government accountability. A recent dispatch from Yemen in the Financial Times describes how unemployment is feeding political grievances and even stoking resentment against perceived state-sponsored discrimination against Yemenis from the south of the country. The report echoes findings from USAID’s Cross-Sectoral Youth Assessment report, which highlighted frustrations caused by uneven access to political processes and the failings of the law enforcement system, such as the prevalence of arbitrary arrests and police corruption.

A Potential Flashpoint

Escalating youth unemployment rates pose a grave threat to stability in Yemen, which is already considered a “fragile state”. In helping Yemen to address this critical problem, it is important for Yemen’s international partners to recognise that for many young Yemenis the problems of poverty and unemployment are tied to frustrations with the political system and wider feelings of social alienation.

While Yemen’s 10 Point Plan represents a serious attempt by government reformists to address the country’s high unemployment rate, if the administration does not demonstrate a clear commitment to tackling the problem – and take concrete steps to do so – the political situation in Yemen will surely take a turn for the worse. With young Yemenis already alienated by the political process, recent events in Egypt could provide the perfect flashpoint for unrest.

* Leonie Northedge has a BA in Arabic and Middle Eastern Studies from Oxford University. She has been an intern on the Yemen Forum at Chatham House since July 2010. You can follow her on Twitter at @leonieleonie.