Dr.Zeina Moneer :The Arab Labor Market in the Context of Green Transition

Green transition in the Arab region

A green transition in the Arab region is not a mere shift to low carbon economies; it’s a radical transformation of lifestyles, state-society relations and labor trends and markets.

The latter is a crucial issue given the fact that hydrocarbon revenues are the main source of income to many states in the region including the GCC.

In the Gulf region, hydrocarbon revenues have been typically employed to finance jobs for citizens, and more than half of them are working in the public sector compared to an international rate of 10-20%.

Employment dynamics and labor future trends

The rigorous industrial policy scenario

Regarding the future and trends of labor market in the context of the accelerating decarbonation efforts in the Arab region, Modelling by Cambridge Econometrics for the ILO, has quantitatively analyzed the impacts of pursuing rigorous decarbonation policies on the labor market in the Arb states.

In the strong industrial policy scenario, Arab states will pursue ambitious decarbonization efforts relying on diversifying economic strategies and phasing out fossil fuels to achieve net-zero emissions by 2050.

Under the strong industrial policy scenario and compared to business-as-usual scenario, it is expected that GDP will rise over time reaching 4.1% higher GDP relative to the current GDP. This rise is linked to increasing investments in renewables including solar -based electricity, electric vehicles and green hydrogen infrastructure.

Under the strong industrial policy scenario, employment opportunities will grow, reaching 3.3% higher by 2040 relative to the current growth rates. This is equivalent to more than 1.5 million jobs by 2050.

The climate resilience scenario

The climate resilience scenario further strengthens the industrial policy scenario through the deployment of additional policies such as efficient waste management, climate adaptation including seawater desalination and reforestation.

In this scenario, it is expected that the GDP will increase by 5% by 2050-relative to the current growth rate- with an exponential growth rate of employment reaching 3.9% by 20240, resulting in 2 million new job opportunities between 2040 and 2050.

It is true that the two scenarios predict rise in employment opportunities but jobs losses would hit sectors in Oil and Gas/Fuel supply and Plastics industry most, with each sector needs the deployment of upskilling an reskilling programs to some 700,000 and 460,000 jobs respectively help them relocate to new roles.  Job creation in the most ambitious scenario is the greatest in the construction and green hydrogen sectors, with some 2.8 and 1.9 million new jobs respectively, followed by electric vehicle manufacturing (1.5 million jobs) and electric engineering (900,000 jobs).

The role of education, training and reskilling

In the unfolding energy transition in the Arab region, while job losses are anticipated to be more than counterbalanced by new employment potentials, realizing this net gain is far from being an easy task.

The reskilling of workers in high-emission industries and related sectors and ensuring their social protection to ensure frictionless industrial transformation is paramount.

Technical and vocational education are the building blocks of green economies and the speed and scale of the training, reskilling and upskilling are key for increasing the employability and facilitating job reallocation.

However, education and training systems in the Arab region are lagging behind regarding adapting to the transformation of the labor market and the emerging and future skills requirements.

For example, according to the outcomes of a survey conducted by Forward MENA, it was found that 88 per cent of Lebanese companies in the tech sector are recruiting but are facing huge skills mismatch.

Challenges of workforce reallocation

Low skilled workers in the Arab region- which is dominated by medium- and low skilled migrant workers- will face key challenges transitioning to new roles.

Highly skilled workers who will lose jobs in the core declining industries and supporting sectors might face difficulties as well, given that their niche expertise does not match the skills required for the emerging low carbon economies.

While both need retraining and re-skilling, the latter often possess a foundational knowledge base and technical skills that can facilitate their transition.

Women’s underrepresentation in the green labor market

It is anticipated that green transition in a region where gender dipartites are rampant will further intensify existing labor market disparities.

In many Arab countries, women’s share in STEM-related occupations is very limited, representing less than 10 percent of the workforce in science and engineering occupations.

Women participation in the renewable energy sector in the Arab countries remains one of the lowest and it ranges from 7 to 9 % and below the global average which is 32%.

It is true that Arab governments have increasingly introduced policies and reforms aimed at eliminating barriers o women full and equal participation in the green labor market.

For example, in 2023, the Saudi government approved the National Policy of Equal Opportunities and Equality in Treatment, in cooperation with the technical support from ILO, with the objective to promote inclusive labor market, defying the anticipated adverse impacts of transitioning to low carbon economy.

Among non-GCC states, Lebanon, Palestine and Jordan highlighted the need for a gender-responsive transition and a focus on youth.

However, there is still a pressing need for more proactive policymaking that provide concrete measures to develop gender response climate policies and system that allow governments to assess the efforts to gender gaps in the emerging green job market.

The way towards a just, gender-responsive and inclusive green labor market in the Arab region

Emerging labor market challenges cast a shadow over the green transition in the Arab region. Such challenges not only impede social welfare of Arab citizens but also jeopardize the fulfilment of social justice perquisite of a green transition that leaves no one behind.

As the Arab States strive to overcome such challenges, effective employment policies, with clear employment objectives emphasizing gender equality, youth empowerment and the rights of vulnerable groups – such as people with disabilities- should be laid out through robust tripartite social dialogue.

Adequate financial resources need to be allocated towards priority low carbon sectors with substantial potential for economic diversification and decent job creation.

Fiscal policies – such as public investment in digital infrastructure and preferential taxation policies designed to support small and medium-sized enterprises –are useful tools to stimulate job creatin and foster social justice.

 Importantly, as the job market needs evolves, education should be transformed to identify and anticipate skills required in growing and promising sectors.

Concurrently, efforts should be exerted to facilitate women access to climate finance, equipping them with green skills and apply gender-neutral recruitment practices in a way that foster diversity in the emerging green economies in the region.