The changing Middle East
‘Turbulent times’ may spur region to achieve sustainable growth, Booz & Company global chairman Joe Saddi tells Kellogg studentsBy Cheryl SooHoo
11/29/2011 - It all comes down to jobs. Economic stability in the Middle East — and the rest of the world, for that matter — depends on finding and creating opportunities for the good of all.
While the Middle East region’s collective GDP has increased at double the world’s average over the past decade, persistent unemployment has become the “ticking time bomb,” said Joe Saddi, global chairman of Booz & Company and managing director of the consulting firm’s Middle East business. Invited to speak at Kellogg Nov. 16 by the Middle East & North Africa Club, Saddi shared his thoughts regarding the region’s growth opportunities.
Concerns about the high cost of living and job opportunities have fueled, in part, the social unrest currently unfolding in the Middle East. Poor job creation, legal and financial obstacles to SME (small- and medium-sized enterprise) entrepreneurship, and a lack of skilled workers challenge the region and stifle growth. Improving the eco-socio-political situation will require leaders to address the root cause of the region’s major issues: an outdated educational system, according to Saddi.
“The overwhelming sentiment of [university] students in the region is that they are not well prepared for what the job market requires, such as technical skills,” says Saddi, who believes educational reform is a crucial “pillar of growth” for the Middle East. He noted that the difficulty in finding local talent also has a chilling effect on potential investors. In the long term, the region can’t continue to rely on an expatriate workforce to fill labor shortages.
However, positive change is afoot. Recent outcries from protesters have caught the attention of government leaders looking to restructure their countries for prosperity. Some have turned to consulting firms such as Booz & Company for help in building bridges between the public and private sectors. For example, the firm has assisted with strategies to re-skill the unemployed and under-employed through vocational programs and to incentivize companies to hire these retrained workers. Saddi has also observed some movement — albeit slow — toward stronger economic integration within the region. Some countries in the Middle East have begun drafting basic trade agreements and are in the process of adopting a common currency.
“There’s still a lot that needs to be done, quite frankly,” said Saddi. “Yet the events of the last few months are cause for hope — not despair. We are very hopeful for the prospects of the region.”