MENA: Human Resource Potential

The Human Resource Potential factor measures the extent to which the country's economy is able to make use of its human resources. It assesses levels of education, employment, labor force participation, and labor market rigidity. In our latest update for the third quarter of 2023 (here), the UAE, Bahrain, and Kuwait emerge as the strongest countries in the region, while Iraq, Morocco, and Djibouti stand at the bottom of the ranking.

Source: Continuum Economics
The United Arab Emirates (UAE) excels in the Human Resource Potential category, evident in its significant allocation of resources towards education. Representing 15.5% of the country's $17.1 billion federal budget for 2023, this commitment underscores the nation's dedication to fostering a skilled workforce. The "National Strategy for Higher Education 2030" further exemplifies this dedication, aiming to equip future generations with technical and practical skills aligned with international standards. The steady increase in employment, surpassing pre-COVID levels, and the rise in registered private companies highlight the positive impact on the labor market, signalling a robust foundation for sustained growth.

Iraq faces severe challenges in the Human Resource Potential category due to decades of conflict and underinvestment. With a mere 6% allocation of its national budget to education, the system is compromised, leaving 3.2 million children without quality learning. Damaged infrastructure, a 33.0% employment-to-population ratio, and over a third of youths unemployed underscore the impact of underdeveloped industries and a poorly educated workforce. Iraq's struggle to recover from conflict hampers its ability to deliver quality education services, resulting in a low ranking in fostering a skilled and employed workforce.