Jordan: US$112 Million to Finance National Employment Program in the Private Sector, Focused on Jobs for Youth and Women
Washington – The World Bank has approved US$112 million in financing for the Jordan Support to Private Sector Employment and Skills Project, a program designed to support Jordan’s own efforts to stimulate private sector employment, improve skills training, and reduce youth and female unemployment.
The past 20 months of the COVID-19 pandemic have taken a toll on Jordan’s small, open economy, with its strong links to the rest of the world. Real gross domestic product (GDP) contracted by 1.6% in 2020 and, despite an economic rebound in the first two quarters of 2021, the country’s unemployment rate remains at 24.8%. Women and youth, whose unemployment rates were already higher, are being hit hardest by the COVID-19 crisis: Overall youth unemployment jumped from 40.6% in 2019 to an unprecedented 50% in 2020, while female unemployment rose from 24.1% in 2019 to 32.8 % in 2020, a much larger increase than for men. At 14%, Jordan’s female labor force participation rate is one of the lowest in the world.
In response, the Government of Jordan (GOJ) will be launching the National Employment Program (NEP), which will be supported by this new World Bank project. Part of Jordan’s Economic Priority Plan 2021–2023, the program aims to help the country’s private sector create sustainable jobs at a time when many firms are recovering from the initial impact of the pandemic but are still reluctant to hire new employees. Male unemployment also increased between 2019 and 2020, from 17.7% to 22.6%.
“This program is considered one of the most important pillars of the government’s priorities program for the years 2021-2023, and it is added to the economic stimulus packages approved by the government to support the national economy during the pandemic period,” said H.E. Nasser Shraideh, Minister of Planning and International Cooperation of Jordan. “The NEP was designed in full partnership with private sector representatives, and its implementation mechanism was simplified to enable the private sector to create the largest number of job opportunities, with the least possible government intervention, as the private sector companies will be the most important player in this program.”
“World Bank financing will help us to launch our National Employment Program in early 2022 to help us recover from COVID-19 by promoting private sector-led job creation targeting youth and women, who are most in need of job opportunities”, said H.E. Nayef Stetieh, Jordan’s Minister of Labour.
The NEP aims to enable more than 2,000 private sector firms to hire and train over 63,000 new employees, with a third, women, and half, youth aged 18 to 24. It plans to do this through a combination of government subsidies for wages, social security, and transport, as well as for structured on-the-job and classroom training.
Jordan’s persistently high levels of unemployment are driven by the limited capacity of its private sector to create more—and better—jobs. The private sector generates far fewer jobs than the number of new entrants into the labor force, and the public sector is not able to make up the gap. Unemployment is also explained by the mismatch between the skills that workers bring to the labor market and the skills the private sector demands.
“The World Bank is supporting Jordan in its COVID-19 response efforts, including through this new employment initiative, and help strengthen private sector-led investment growth and job creation for an effective and resilient recovery,” said Saroj Kumar Jha, Mashreq Regional Director, World Bank Group. “On-the-job and classroom training under this new program will contribute to upskilling of Jordanians and achieving sustainable employment”.
The World Bank’s Country Partnership Framework for Jordan 2017–2022 highlights the need for stronger private sector-led growth and better employment opportunities for all. By providing finance for government strategies to support the creation of more economic opportunities for women, Jordan’s new employment program is in keeping with the Bank Group’s Gender Strategy 2016–23, as well as Jordan’s Women Economic Empowerment Action Plan and its National Strategy for Women 2020–2025.