Most countries in the Middle East and North Africa (Mena) region have state-led economies that are dependent on the export of oil and gas and, more recently, refined fuel products and petrochemicals. The region has some of the fastest-growing populations in the world and is subject to a ‘youth bulge’, which is placing an increasing strain on demand for both education and jobs.

The education sector has a crucial role to play in ensuring youngsters are … able to participate in the labour market

About one in five people living in the Mena region are aged 15-24. Although this will slide to about 17 per cent of the population by 2025, according to the US’ Population Research Bureau, it will increase in absolute terms by some 7 million people and the total number of youths in the region could hit 100 million by 2035.

These people will need jobs, which, despite the abundance of natural resources in the region, state governments and companies alone will simply not be able to offer.

The education sector has a crucial role to play in ensuring these youngsters are employable and able to participate in the labour market.

Powerful force of education

The benefits offered by investment in education are not just economic, but also social, something that is high in the minds of the region’s policymakers following the popular uprisings of 2011.

As the Washington-headquartered World Bank noted in a 2008 paper on the success of education reforms in the region: “Education is a powerful force that can speed up economic growth, improve income distribution, facilitate social mobility and reduce poverty. It can also improve the quality of life for citizens by contributing to longer life expectancy, lower birth and infant mortality rates, and a more cohesive national identity.”

Increased spending has not necessarily translated to a better standard of education in the region

Governments have become increasingly aware of the importance of education. World Bank data shows that state expenditure on education as a share of gross domestic product (GDP) has risen consistently over the past four decades, from about 4.4 per cent during 1965-74 to 5.3 per cent in 1995-2003.

More recent data gathered by Unicef suggests that the regional average was closer to 4.2 per cent as of 2008 (in Asia, the average is 3.6 per cent of GDP, slightly less than the mean figure of 3.9 per cent for Latin America). This puts it close to the rate of spending in the developed countries of the Organisation for Economic Cooperation and Development, where spending on education averages about 4.6 per cent of GDP.

The Mena region follows global trends in investing most in secondary education as an absolute percentage of total public spending (Key Stages 3-4) followed by primary education (Key Stages 1-2), although spending as a measure of expenditure per pupil is the highest for those in tertiary education.

Independent schools in the Gulf

Private education is widespread in the region, particularly in the Gulf Arab states. Large expatriate labour forces have led to the development of international schools, which educate the children of executives from home and abroad, and less-well-funded schools for the children of lower-income immigrants, typically from Pakistan, India and Bangladesh, which complement state schools for the indigenous population.

According to international consultancy Booz & Company, the GCC private-school market is one of the largest in the world, worth $5.2bn in annual tuition. The firm estimates that 1.36 million students are enrolled in about 5,000 private schools throughout the region. As demand for higher-quality education grows, Booz & Company predicts the GCC K-12 private-school market will grow to between $11bn and $17bn by 2020 and enrolment will reach about 2.6 million.

The biggest overall public spenders on education in the region as an absolute dollar figure are Saudi Arabia and Iran. Saudi Arabia allocated SR150bn ($40bn) to education in its 2011 budget. Iran is estimated to have spent a similar figure during 2010, equivalent to 5 per cent of GDP.

Qatar, which has a local population of about 250,000, committed to spending QR19.3bn ($5.3bn) in 2011-12, while Kuwait and Oman both budgeted for about $5bn expenditure on education for 2011.

Egypt also spends significantly on the sector. The country’s 2009 Education Ministry budget was about $9.3bn. However, Iran and Egypt have the highest populations in the region – about 72 million and 82 million people respectively, according to the World Bank. As a result, per-capita spending is significantly lower than in the Gulf Arab states.

Unemployment rate in the Middle East

Despite the spending on education in the region, unemployment levels for both the general workforce and young people aged 15-24 are among the highest in the world.

About 10.3 per cent of the total available workforce in the Mena region was unemployed in 2010, according to the International Labour Organisation (ILO). Unemployment among 15-24 year olds was 23.7 per cent in the Middle East and 23.8 per cent in North Africa the same year, according to the US consultancy Deloitte.

The figure for youth unemployment in Saudi Arabia was 25.9 per cent, despite the kingdom’s enviable resource wealth and high spending on education.

Equally worrisome is the level of unemployment among university graduates. On average, they remain unemployed for three years after graduation.

There are several reasons for the high unemployment. Increased spending has not necessarily translated to a better standard of education in the region. In the US Department of Education’s 2007 Trends in International Mathematics and Science Study, eighth-grade students from Kuwait, Qatar and Saudi Arabia were among the lowest ranked for mathematics and science, alongside pupils from countries that spent far less on education, such as Ghana, El Salvador and Botswana.

Analysts attribute the gap between the level of spending on education and outcomes to two distinct phases in regional governments’ thinking. Initially, the major focus was expanding education to as wide a proportion of the indigenous population as possible, with mass education and ‘national identity’ a particular priority after states gained independence in the 1920s-40s.

“Countries placed a high premium on forging a common heritage and understanding of citizenship, and used a certain reading of history, the instruction in a particular language, and the inclusion of religion in the education curriculum as a way of enhancing national identity,” World Bank researchers write.

“Mass education was pursued by initiating and accelerating the building of schools, recruiting teachers and attracting students, along with a special effort at including specific groups, such as girls, rural children, students of particular ethnic groups and the disabled, into the education system.”

The past decade has seen growing attention being paid to increasing the qualitative aspects of education regionally, with a more doctrinaire attitude to education giving way to a more open attitude to global trends.

The opening up of education to the private sector should also have increased competition and, as a result, the overall quality of education, however lax regulation of private schools in some countries has made this outcome debatable.

Today, the UAE is focusing more on the regulation of the private sector to ensure that levels of education meet international standards.

Mismatched skills

A further issue has been the creation of education systems that have generated high-school and university graduates with skills that do not match those demanded by employers. In discussing the triggers behind the Arab uprisings of 2011, the ILO notes that “schools, universities, and vocational education and training institutions are turning out graduates lacking the skills that are needed in competitive labour markets.”

Again, this is not an issue that has gone unrecognised. The Gulf Arab states in particular are now focusing on creating educational institutions that encourage students to develop skills suited to international business, from the vocational degrees offered at King Abdullah University of Science and Technology in Saudi Arabia to the MBAs offered at Insead in Abu Dhabi and the engineering degrees taught at Texas A&M in Qatar.

Future trends in education spending are likely to be shaped by the events of 2011, with governments across the region focusing more than ever on creating skilled labour forces that are capable of playing a greater role in the global work place.