Unemployment rate requires policy fix, say economists

AMMAN — The unemployment rate in Jordan declined during the second quarter of 2022, amounting to 22.6 per cent, according to the Department of Statistics (DoS).

The unemployment rate during the first quarter of the year sat at 22.8 per cent. This figure is a decrease of 2.2 percentage points compared with the first quarter of 2021, and a decrease of 0.5 percentage points from the fourth quarter of 2021.

Ahmad Awad, director of the Phenix Centre for Economics and Informatics Studies, noted that the decline in unemployment rates is very minimal, and likely a result of restarting the post-pandemic economy essentially as it was before, rather than an indication of better economic policies.

“The decline will continue, but unemployment rates will remain high as there are no economic or labour policies in Jordan to reduce these rates, and they were not successful before,” Awad told The Jordan Times.

Awad added that the unemployment rate necessitates a comprehensive review of current economic policies, especially financial policies, in order to generate better job opportunities.

He added that over the past several years, the role of the Ministry of Labour has been “systematically weakened”, and that the recent decision of abolishing the ministry will certainly lead to poorer working conditions, which in turn will lead to a reluctance among young people, and especially women, to join the labour market.

Awad emphasised that working conditions are not the reasons driving disruptions in investments. Rather, they are caused by the prices of production inputs, especially energy, and indirect taxation, which has affected domestic demand and purchasing power, weakening any future attempts to promote economic growth.

Economist Wajdi Makhamreh said that sectors that returned to full operation in the post-pandemic economy along with the pandemic-driven increase in unemployment led to the quick employment of many people, which contributed to the slight decrease in the unemployment rate.

“Unemployment is one of the government’s most important priorities. They should focus on investments, large projects, and incentivising young people to establish small and medium businesses which can contribute to further improving employment and lowering the unemployment rate,” Makhamreh told The Jordan Times.

He highlighted the importance of investment and cooperation with the private sector to create job opportunities in different fields.

“In order for the Economic Modernisation Vision, which aims to employ 100,000 Jordanians by 2030, to be achieved, there must be incentives and privileges for investors, as well as a competitive investment environment that will attract foreign and regional investors, in addition to taking advantage of underutilised resources,” Makhamreh said.