Arab spring turns to winter on joblessness

Written by Bloomberg | Updated: Mar 29 2012, 09:13am hrs
Amir Mohammed has been sleeping outside the Libyan embassy in Cairo awaiting a visa for a week, his bed a layer of cardboard on the sidewalk. He has given up on finding a job in Egypt and is looking for a way out.

Theres no work. Why did we have a revolution We wanted better living standards, social justice and freedom. Instead, were suffering, the 30-year-old hairdresser said. The worlds highest youth jobless rate left the West Asia vulnerable to the uprisings that ousted Egypts Hosni Mubarak and three other leaders in the past year. It has got worse since then. About 1 million Egyptians lost their jobs in 2011 as the economy shrank for the first time in decades.

Unemployment in Tunisia, where the revolts began, climbed above 18%, the central bank said in January. It was 13% in 2010, International Monetary Fund data show.

Finding work for people like Mohammed will be the biggest challenge for newly elected governments, highlighting the rift between soaring expectations unleashed by the revolts and the reality of economies struggling to escape recession. Failure risks another wave of unrest in a region that holds more than half the worlds oil. The advent of democracy brought with it high, high hopes, said Raza Agha, London-based senior economist at the Royal Bank of Scotland Group.

Tunisias gross domestic product shrank 1.8% last year and the government this month lowered its growth forecast for 2012 by one percentage point to 3.5%. Tunisias hasnt contracted since 1986, according to IMF data.