President Obama and GCC Leaders: Let’s Talk about Jobs

When President Barack Obama meets his Gulf Cooperation counterparts in Riyadh on April 21, he will yet again reassure them about the US commitment to Gulf security and once again they will work through a litany of regional issues, focusing on Syria, Yemen, and Iran.  There is little expectation of startling results, and given the fraught relationship between this Administration and Gulf leaders, the fact of the meeting may serve as the most tangible result.

However, the President and the monarchs could enrich their time together with a discussion of an issue that will have a huge impact on the medium and long-term security and viability of the GCC states and the broader region – JOBS.   The leaders could attack the problem of severe unemployment and underemployment from at least three different angles.

First, is there any realistic prospect of actually employing the thousands of GCC young people entering the market in the coming years? It seems unlikely, given that youth unemployment is acute, especially in Saudi Arabia (27. 8 percent), Bahrain (27. 5 percent), and Oman (20. 6 percent).   These figures, especially alarming for Saudi Arabia given its much larger population, reflect what economists term complex structural issues: oil-dependent economies with weak private sectors, excessive government employment, high dependence on low paid foreigners to keep things running, and failure to adequately include women in the work force.  

The solutions proposed for this vast employment gap reflect a major intelligence failure by policymakers and academics.  The tired prescription that just tweaking the incentives for private sector investment will soak up job-seekers or the currently fashionable idea that a significant percentage of Arab young people can easily become successful internet entrepreneurs are patently inadequate bromides for the challenges of providing real work for vast numbers of real people.  The US and the Gulf, along with Europe and the rest of the world, need to spend some time thinking about why they have so little ability to influence unemployment and what to do about it.

The second and closely related part of this US/GCC jobs discussion should expand the focus to the Middle East and North Africa more broadly – where most countries would love to have the problems confronting the GCC.  The MENA region has the highest youth unemployment in the world.  The leaders might want to spend some time on Egypt, where the Saudi King recently made a visit.  Saudi Arabia, Kuwait, and the United Arab Emirates have spent $35 billion in assistance to Egypt since the ouster of former president Mohamed Morsi in 2013.  Neither the technocratic consulting firm approach of the Emiratis, or the more hands-off approach of the Saudis and Kuwaitis appear to have made much of an impact on the Egyptian economic policy or results.  At least a quarter of Egyptian youth remain unemployed and huge numbers live in poverty while working full time in the informal economy.  The Gulf donors are frustrated, both because their aid only doesn’t seem to be having much impact but it does not seem to be providing them with much leverage.  (A long list of Egypt’s aid providers have shared this frustration since Egypt’s independence.)  But other countries, such as Tunisia have even more young adults out of work. As the leaders review this landscape of dashed aspirations, they might recall that the spark in Tunisia that ignited the Arab Spring was all about the dignity of work.  And that Tunisia produces more Islamic State (ISIS) recruits than any other country.  

A third perspective on jobs and unemployment that the leaders might discuss is, who does what to protect Gulf security?  Or better, there are some jobs that will be vacant if only the US Navy will get out of the way.   Currently, the vast preponderance of naval power in the Gulf comes from the US Fifth Fleet. GCC states are enamored with fancy aircraft, missiles, missile defense systems, and helicopters, but not so much with ships to patrol the Gulf to protect the sea lanes for the petroleum that they ship and that Europe and the Far East depend upon.  Their naval forces are for the most part incapable of operating outside their close-in coastal waters, and avoid even overnight deployments.  

Last March, the GCC agreed to create a “Joint Maritime Security Force.” The GCC leaders should brief the President on how this effort is coming along.  There has been radio silence about it since its announcement.  Such a force would require an expansion of indigenous GCC naval forces but would not require the most sophisticated expensive equipment.  It will be a long time before there is any risk of replacing the Fifth Fleet as the big naval force in the area, but the Gulf states should at least aspire to protecting their own sea lanes.  Call it job creation or call it national security – both are important.  The GCC states should also spend a lot more effort getting European and Far Eastern navies involved.  With few exceptions, their contribution is minimal, while their dependence on oil from the area far outstrips that of North America.

Foreign policy questions will dominate the meeting with President Obama.  But all the leaders are well aware that their populations need security, but can’t live on security alone.   The United States (and its Western allies) and the Gulf have a long way to go before we have adequate principles or practices to deal with large scale persistent unemployment.  If the US and the Gulf are to have an enduring partnership, we need to attack the jobs gap with far more creativity and energy.   

Richard LeBaron is a former US Ambassador to Kuwait and a non-resident Senior Fellow at the Atlantic Council.  

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Image: Photo: King Salman bin Abdulaziz of Saudi Arabia bids farewell to President Barack Obama at Erga Palace in Riyadh, Saudi Arabia, Jan. 27, 2015. (White House)