The Role of Private Sector Capital in Job Creation and Driving Economic Growth
The Middle East and the Arab region are undergoing a historic transformation amid a widening employment gap. The region’s population exceeds 270 million people, about half of whom are young people under the age of thirty. This creates significant challenges, despite the enormous capabilities and promising potential that this generation possesses.
According to estimates by the International Finance Corporation (IFC), based on data from the United Nations Department of Economic and Social Affairs and the World Bank (2024), around 36 million people are expected to enter the labor market in the Middle East over the next decade, in search of opportunities to build a better life. To absorb this influx, the region will need to create 18 million new jobs in the coming ten years. However, if current trends continue, only half of these job seekers will find employment. Without clear pathways to work, many will face unemployment, exacerbating poverty, widening inequality, and deepening instability.
This challenge is all the more pressing as many Arab countries continue to suffer from fragility and conflict, undermining economic opportunities and leaving millions vulnerable to risk. The crisis is further intensified by chronic structural problems, including excessive reliance on public-sector jobs, weak private sector growth, and major gaps in education systems. Political instability and economic stagnation make efforts to create jobs even more difficult.
Statistics show that women’s participation in the Arab labor market stands at only 19 percent, one of the lowest rates in the world, with 68 million women remaining outside the workforce, according to data from the International Labour Organization (ILO). Limited access to financial services also poses a major barrier; in countries such as Yemen and Iraq, only 12 percent and 19 percent of the population, respectively, have access to formal financial services. Meanwhile, the dominance of the informal economy adds to these challenges—informal work accounts for 68 percent of jobs in Iraq and 55 percent in both Lebanon and Jordan.
Addressing these obstacles requires a coordinated response between the public and private sectors. While public investments remain important, the private sector continues to be the main engine of growth and the primary source of job creation.
Given this reality, creating more decent jobs is not merely a development priority—it is a fundamental pillar of economic growth and global stability. This is why expanding access to employment opportunities through the mobilization of private capital is essential to addressing the jobs challenge in the region. This involves investing in infrastructure, health, and education to strengthen the enabling environment, develop human capital, and boost productivity—ultimately fostering sustainable employment through more efficient trade flows.
It is also crucial to create an environment where businesses can grow and generate jobs. This can be achieved by supporting both public and private sectors in addressing complex challenges through evidence-based solutions, smart financing, and innovative technologies, including artificial intelligence (AI). The outcome will be better governance, fewer barriers to employment, and greater financial inclusion.
Furthermore, it is important to identify priority sectors and implement practical reforms that support national development visions while allowing the private sector to lead this process by mobilizing private capital to expand job creation.
Ultimately, job creation is not only an economic necessity but also a social and political imperative. The quality of jobs matters as much as their quantity—by enhancing productivity, formalizing employment, and empowering women and youth to adapt to the transition toward a green economy and digital transformation. The jobs challenge in the Middle East is undoubtedly difficult, but it is not impossible. With urgent and well-planned action, the region can unlock its economic potential and create opportunities for millions of talented individuals.
