Economic experts today warned of a ‘vicious cycle’ of unemployment, telling a World Economic Forum (WEF) panel in Abu Dhabi that a lack of trust in governments is exacerbating the global problem.
The Organization for Economic Cooperation and Development (OECD) this week cut its economic forecasts, saying that the global economy will probably expand by just 2.7 percent this year, instead of the 3.1 percent it forecast in May. The Paris-based organization also said unemployment in the euro area “remains very high”.
Stefano Scarpetta, the director for employment, labour and social affairs at the OECD, said that he feared a spiral of greater unemployment across global markets.
“I see a potential vicious circle building up: A high level of unemployment or underemployment… feeding into inequality, and that feeding into a lack of trust in the ability of the government to provide actual solutions,” Scarpetta told a WEF panel in Abu Dhabi.
“We collectively have to try to break this vicious circle… We are still at a very high level [of unemployment] in a number of countries.”
The unemployment rate in the Middle East and North Africa is among the highest in the world. According to the International Monetary Fund, around 20 million young people in the Middle East are without work.
One possible solution to this global problem is to promote apprenticeships in helping train young people, Scarpetta said.
Other experts pointed towards “growing inequality” in societies, as the gap between the rich and poor widens.
“The fact is that we still have billions of people who are living in poverty, hunger, ill-health, poor education,” said Salil Shetty, secretary-general of right group Amnesty International.
However, Shetty expressed hope in the number of young people “rejecting fear and pessimism”.
“There is growing inequality, discrimination and climate uncertainties at the same time as a massive explosion of information. So there is a lot of anger and outrage, not necessarily well directed and mostly from young people. They don’t believe in unaccountable, non-transparent government. I have a huge amount of hope from young people,” he said.
The experts were speaking at the WEF’s sixth Summit on the Global Agenda. The dangers of inequality, instability and the weakness of global institutions were all raised during the panel, which marked the close of the meeting.SHOW MORE