Facing Human Capital Challenges of the 21st Century

Countries in the Arab region are faced with the challenge of developing their populations' skills and technical knowledge, or human capital, in order to compete in the 21st century global economy. The authors describe the education and labor market initiatives implemented or under way in four countries in the Arab region — Lebanon, Oman, Qatar, and the United Arab Emirates (UAE) — to address the human resource issues they each face as they prepare their countries for a place in the 21st century global economy. Three of these countries — Oman, Qatar, and the UAE — are in the Arabian Gulf; the fourth, Lebanon, is in the Levant. Together, they highlight the similarities and dissimilarities of the challenges faced by countries in the region and the responses to those challenges. The study answers three main questions: What are the human resource challenges each country faces? What education, human capital, and labor market reforms have recently been implemented or are under way to address these challenges? What mechanisms and information are used to assess whether reforms are meeting their objectives, and is there evidence of success? Answers were sought through analysis of relevant literature, the most-recent population and labor force data from international and in-country sources, and a series of elite interviews in 2006 with government officials and individuals in private organizations in the four study countries. The authors found that while the study countries have instituted reforms to their education and training systems that are designed to raise the skills of the population, and have made changes to the labor market and economy aimed at facilitating the use of human capital in diverse sectors of the economy, a disconnect remains between implementing reforms and evaluating them to ascertain whether they are having the intended effects. In many cases, reforms have only recently gotten under way, so it may be too early to measure their impact. In other cases, however, the lack of systematic assessment stems from gaps in the data needed to track the effects of policy changes. If policy evaluation is made integral to reform, the countries in the Arab world will have the information they need to make the best investments in their human capital in the decades to come.