- 03 May 2020
A recovery pathway for workers in Jordan, Palestine, and other MENA economies
Impact
COVID-19 implications on the workforce and society are profound. The International Labour Organisation (ILO) expected the loss of 25 million jobs worldwide early during the outbreak, and it expects the number to increase way more by the end of the year. More than three quarters of the 3.3 billion global workforce (81%; more than 4 out of 5 people) are affected by lockdowns. The pandemic could cut 8.1% of working hours in the Arab world in the second quarter of 2020, which is equivalent to 5 million full-time workers.
The unemployment rate stood at 24% in Palestine and 19% in Jordan by the fourth quarter of 2019.
Approximately, 25% and 70% of employees in Jordan worked in the currently disrupted sectors of industry and services respectively. More than 90% of the private-sector employers in the country are small to medium, and they are compelled to cut salaries and lay off workers to manage their deteriorating cash flows. According to a survey by Ipsos 2020, 73% of Jordanians think COVID-19 poses a high threat to their jobs and businesses.
Day labourers and blue-collars, who are mostly foreign and ineligible for social services, may lose their jobs in the industry, construction, and agriculture sectors. Local communities in rural areas who started to benefit from community-based tourism in the last two years will lose their income due to the currently stagnant travel industry; which employed more than 55,000 directly and more than 130,000 indirectly.
In Palestine, the case is no different, where the mostly impacted small-size enterprises employ 50.5% of the total number of employed persons, while medium-size enterprises employ 26%, and big enterprises employ 23.5%.
The bright side
The bright side however is that technology-related activities in Jordan increased by 11.64% between 2014 and 2018, and annual revenues increased up to $300 million during the same period. Around 89% of Jordanian households use the internet and 90% of them have smartphones. Jordan has spent the last few years positioning itself as a technology hub not only in the region, but worldwide. Many of the multinational technology companies in Europe, North America, and Asia outsource their technical support services to Jordan.
In Palestine, 60% of the population uses the internet, and 59% of the population uses the internet through their mobile phones. The small volatile economy is also witnessing a growth in ICT exports through outsourcing.
Globally, the digital economy has always been a robust, resilient, and sustainable solution for unemployment. But probably not when the share of Digiwork in the overall economy is low, despite its fast growth. While development opportunities in the field were always within our sight, it is now the right time to seize it with a firm grip. It is time to adapt to the new reality, and navigate through change to recognise the needs and rights of digital labour.
Why digital labour?
While millions of workers try to adjust to the “new normal” of working from home, digital workers are living their just “everyday normal”, doing business as usual in a global market that is valued at more than $4 billion.
The drivers of the gig economy, Millennials and Generation Z, make the majority of the population in Jordan, which has a median age of approximately 24, as well as Palestine, which has a median age of about 21. In the last few years, the number of Palestinian accounts at international freelnacing sites surpassed 12,000.
Digiworkers are the most flexible, adaptive, and resilient to crises. For them, work is not linked to a place, but a web-based activity. They are already practised at living with financial instability, market uncertainty, and fluctuating demand. Although the amount of gigs and outsourcing has plummeted during the pandemic (subject to the type of industry), it will grow in accordance with the current lifting of lockdown measures.
Furthermore, the vast amount of SMEs and startups in such economies poses another great opportunity for the growth of the digiwork economy. The number of workers and the extent of the enterprise’s agility are two main determinants of remote-working. Small to medium enterprises are more ready to adopt technology and perform digital work than their large traditional counterparts.
COVID-19 is confronting the whole world with the skill-gaps and flaws in labour markets and policies. It clearly revealed how non-immune our economies are to a pandemic with two unprecedented socio-economic symptoms: social distancing and workplace closures.
A decent digiwork system and policy could be a solution, or at least, a sustainable adaptation to a novel problem that cannot be solved any time soon. The current situation, now with greater reason, needs a robust labour force that can stand strong to fuel and drive the economy at a time of closed borders and virtual communications.
In developing economies, Digiwork can enable the national workforce to enter new and wealthier labour markets. But in order to unlock this potential, the economy has to offer its labour an adequate access to technology, the education and skills to utilise it, and a convenient labour legislation
Greater inclusion
Whether a worker operates from the heart of a city centre, a rural area, or a refugee camp, the digital platform can tell no difference. Regardless of the worker’s religion, race, or sexual orientation, the possibility of getting an equal work opportunity is much higher, especially when operating at a global level. People with disabilities can equally secure jobs and gigs, as long as they have access to a computer. Even students can subscribe to digital platforms and take micro tasks to make a living during their studies.
The digiwork economy can generate and tap into a diverse talent pool, comprised of workers from underserved and marginalised areas, individuals with caretaking responsibilities (providing care for children or elderly family members), women with less opportunities, refugees, quarantined individuals, or simply workers with wanderlust to operate from anywhere around the world.
Education is key
“Investing in human capital will guarantee the most economic and social return for the Kingdom” said H.E. Mothanna Gharaibeh, Minister of Digital Economy and Entrepreneurship, Jordan
According to the World Bank, 1 in 5 jobs in MENA requires digital skills, which are alas scarce. Building the digital skills of youth, women, and refugees will empower the economy to meet rising market demand for skilled workers in innovation and technology.
In Jordan, the World Bank approved $200 million in March to create more job opportunities through skills-building for freelancers, public schools education, and work-spaces for underserved communities. In Palestine, Leaders International has partnered with GIZ in early 2019 to equip the Palestinian digiworkers with the right skills and knowledge to expand through the Xpand Freelance Agency Program.
Investing in education will enable young workers, entrepreneurs, and freelancers to take advantage of digital platforms, harness new business opportunities, and digitally expand into new markets.
Types of digiwork
According to ILO, different types of Digiwork platforms are distinguished based on the locus of performance of work and the process involved. Type A consists of platforms and applications that allocate tasks to workers to perform them offline in a specific geographical area, e.g. Airbnb, Uber, food delivery, and home repairs. Labourers in transportation and tourism are the most vulnerable to the COVID-19 pandemic, and most probably, during the post-COVID-19 era due to consumers increasing cautiousness towards social one-to-one interaction. On the other hand, food delivery services and others will gain momentum, although they expose workers to higher health risks.
Type B is all about crowdsourcing. It involves outsourcing a function or task to an individual or network of freelancers and consultants in the form of open calls, and it is divided into three subtypes. The First, is micro, small, repetitive, and low skill-level tasks that require no direct contact between digital workers and clients. The second is macro and skill-specific, requiring direct and frequent contact between the client and the worker, for instance, programming. These types of gigs can be found at websites like Freelancers and Upwork. The third is related to platforms that offer creative tasks, open to talented workers and specialists who are required to participate in a contest to win the job, such as 99designs and Innocentive.
Crowdsourcing or Type B, is the most resilient to COVID-19, as it encourages social distancing and requires services that can be performed and delivered remotely.
Policy Implications
Development in the digiwork economy demands the adaptation of regulations, policies, and economic mindsets. An active role of the government, civil society, and development actors can unfold the overlooked potential of digiwork. A potential that offers a win-win situation for both businesses and digital labourers if the following conditions are met:
- Digiworkers can enjoy flexible working hours while maintaining a certain level of job security
2. Specialised and skilled Digiworkers can license or register their work and expertise to differentiate their qualifications from less-skilled labour
3. Digital work is protected by intellectual property rights
4. Digiwork platforms are given the needed support to utilise and advance technological innovation
5. Both sides can exchange benefits in a decent, fair, healthy, and safe digiwork environment.
A multi-stakeholder and multi-sectoral approach would help initiate a dialogue and streamline concerns and preferences of all parties involved and affected by digital work. These stakeholders may include digital platforms, digital workers, NGOs, think tanks, labour associations, trade unions, and development agencies.
Stakeholders should be able to address the future of digital labour, discuss best practices followed in similar economies, share knowledge, highlight their business interests, and diagnose opportunities and threats. To facilitate this dialogue, development efforts should conduct further research, incentivise and raise awareness of stakeholders, partner with academia, and build the capacity and technical knowledge of involved stakeholders.
Through policy dialogue and knowledge sharing, the ecosystem will be capable of promoting the foreseen outcomes of the digiwork economy, most importantly innovation, social inclusiveness, new-markets penetration, improved working conditions, and economic resilience to crisis akin to COVID-19.