Trade can generate more and better jobs in Southern Mediterranean countries

An ILO report assesses the impact of trade growth and economic development of Southern Mediterranean countries on the quality of jobs in the region, with a particular focus on women and youth, and on SMEs in the region.

News | 20 September 2022
Even though current crises have disrupted supply chains and severely impacted the volume of international trade and investment, they also have generated new nearshoring opportunities, which might benefit countries in the Southern Mediterranean by boosting export opportunities across different sectors says a recent ILO report.

According to The Impact of Trade and Investment Policies on Productive and Decent Work countries in the region grew by about 4 per cent in 2019 and experienced a significant economic slump due to the global COVID-19 pandemic.

Figure 1 Economic growth in the different in the Southern Mediterranean Countries, real GDP growth rate (percentage)

Note: 2020 data is estimated; 2021 data is a projection.
Source: IMF, World Economic Outlook, October 2020.
The region is weakly integrated into the global economy. In 2019 the Southern Mediterranean countries accounted for less than 0.1 per cent of the global exports and for about 1 per cent of the global import of goods.

Figure 2 Evolution of merchandise imports and exports in the Southern Mediterranean Countries, 2000–19 (total value in US$ million)

Source: UNCTAD.
Foreign direct investment can often result in the technological upgrading in host countries. However, despite significant reforms, the region’s success in attracting foreign direct investments has been limited, and this in turn has restricted growth.

The region is also characterized by low labour force participation rates, high levels of unemployment and informality, and inadequate creation of quality jobs. Women in the region face challenges in joining the labour market. Despite high levels of education, the female labour force participation rate is one of the lowest in the world. In 2019, just 22 per cent of women were in the labour market, compared to a global average of 47 per cent.

Figure 3 School enrolment in tertiary education by gender, 2017 (percentage of gross)

Source: World Development Indicators.
Another characteristic of the region is the high proportion of young people. More than a quarter of the population is aged 15 to 29. However, they struggle to secure quality jobs and develop their potential. Increasing and improving employment opportunities, in particular for youth, women, and in small and medium sized enterprises, would help to improve the region’s economic prospects.

The report concludes that a more effective integration of employment issues into trade and investment policies can result in a more equally and evenly distribution of economic gains. Promoting dialogue and increasing technical cooperation can also play an important role and help to strengthen regional integration.

About METI

METI is a four-year regional programme funded by the European Union and implemented by the International Labour Organization. It aims to enable policy makers in the Southern Mediterranean region to incorporate an employment perspective into trade and investment policies. This will support the design and implementation of investment strategies that optimize the quantity and quality of employment creation in the region.