Business
Mar 18, 2020

Impact of Social Entrepreneurship on Unemployment within the MENA Region

The population in the Middle East North African region continues to grow steadily, while disparities in resource distribution persist. 

The population in the Middle East North African region continues to grow steadily, while disparities in resource distribution persist. 

By implementing social enterprise concepts, MENA citizens can develop new resolutions or modify existing ideas to solve their under-development and poverty challenges without compromising access to resources by future generations–one labor market at a time.

Population Growth Rates: All-Time High

Based on the data that the UNICEF MENA office collected in 2017, the region is experiencing a shift in demographics because the number of youths, adolescents, and children is increasing exponentially. 

 MENA’s average annual population growth rate stood at 2 percent between 2000 and 2005. Even though the figure has since dropped to 1.7 percent per annum, it is still higher than the global aggregate of 1.3 percent. The situation leads to an increase in competition for scarce resources.  

If the trend continues, the MENA youth, children, and adolescent population will surpass 270 million by 2050, and more than 33 million people will reach the working age before 2030. Therefore, every stakeholder within the region must capitalize on human capital, or employment rates will continue to dwindle.

flock of bridges flying on blue sky

Employment Rates: How Low Can They Go

Access to employment opportunities is a significant issue for most MENA economies. From 2000 to 2010, population scientists recorded yearly surges in working-age demographics by at least 1.2 percent (the highest record was 3.7%). Currently, 1.8 million MENA citizens join the job market every year. 

However, the existence of workers within the MENA region does not necessarily translate into participation. The average employment rate is 52.5 percent, while countries like Algeria and Tunisia have unemployment rates of 55.8 and 53.3 percent, respectively. 

Participation in the labor market varies according to gender; men are significantly more likely to secure jobs than women. Case in point: 60.2% of Algerian men are employed, while only 13.6% of women have jobs. The situation is similar in Jordan and Palestine, where men dominate at least 60 percent of the entire workforce.

Though solutions have been implemented to offset this imbalance, the results are not satisfactory. For instance, the Egyptian government ensures that women fill 54 percent of its civil service positions. Still, men represent 90 percent of private-sector personnel. Nevertheless, social enterprises have the potential to positively impact resource distribution by encouraging inclusivity in the labor market.  

Social Entrepreneurship: For The Win

Social entrepreneurship is an effective solution to the MENA unemployment crisis. By balancing both profit maximization and social impact, these businesses influence social reconstruction and economic revitalization within the region. 

Womena, a prominent angel investment organization, was founded in the UAE to support female business owners. The group organizes a 4-month accelerator program, during which beneficiaries receive financial backing and mentorship. As a result of Womena’s efforts, more women can build successful companies from the ground up and provide employment opportunities to other under-represented MENA citizens. 

Social enterprises are tailored to serve the needs of the youth. They do not just appeal to the cohort’s desire for self-actualization and independence; they also imbue in them a passion for the responsibility that is unrestricted to the self or immediate family. 

Every year, the International Youth Foundation partners with USAID to organize BADIR, a program that provides Jordanian youths who are interested in running social ventures, with mentoring, training, financial, and networking support so that they can realize their dreams of establishing successful businesses. Overall, the program has benefits at least 240,000 people per annum, not only through non-profit but also for-profit ventures. The beneficiaries ultimately contribute to the reduction of MENA’s unemployment rates due to the risks they take. 

Image result for nour al hassan

Social entrepreneurship is MENA’s only hope for swift economic expansion and equitable distribution of public goods. From a macro-economic perspective, social enterprises incorporate the stakeholder model which favors self-regulation and encourages long-term planning as well as fair revenue distribution.

For instance, whereas capitalist corporations like Coca-Cola focus on their shareholders and short-term corporate social responsibility schedules, social enterprises are self-governing entities that factor in the interests of employees, customers, community, environment, and investors when ideating the business model and mission. Unregulated capitalism will exacerbate the MENA unemployment crisis if semi-socialist approaches to conducting businesses are put on a back burner. Through social entrepreneurship, governments will be able to align wealth formation with fairness, equity, and accountability despite regulatory and bureaucratic challenges. 

There are myriad MENA social entrepreneurs who are at the forefront of creating unique employment positions for the region’s unemployed. Kamal Mouzawak founded Tawlet, a Lebanon-based organization whose mission is to provide rural farmers with avenues for profitably selling their produce. Mohammed Kilany also established Souktel in Palestine to match the country’s unemployed with employers using SMS messaging and mobile networks. Seasoned MENA entrepreneurs and philanthropists like Fadi Ghandour are also publicly avowing their support and passion for social enterprises in an attempt to convince the masses that capitalism has failed the regional labor market.

In a Nutshell;

The notable increase in MENA’s regional population has had an unintended consequence of raising competition for scarce resources. Job allocation, a prominent determinant of resource distribution, is skewed to favor men over women. Current trends indicate that if the regions require out-of-the-box thinking to guarantee access to resources without negatively affecting the lives of future generations. Social entrepreneurship, a practice that is conscious of the interests of the environment, consumers, and employees, among others, emerged as an appropriate solution to MENA’s unemployment problem. It is evident that capitalism-oriented institutions are failing, so it is time for people to borrow some components of socialist systems.       

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