Green jobs for MENA in the age of AI: crafting a sustainable labour market

1989

Kamran Yeganegi
September 16, 2025

Arab economies face a dual transformation: the decarbonisation imperative driven by climate change; and the rapid digitalisation brought by artificial intelligence. This column argues that by strategically managing the green-AI nexus, policy-makers in the region can position their countries not merely as followers adapting to global mandates but as leaders in sustainable innovation.

In a nutshell

The global shift towards a net-zero economy could create 24 million new jobs by 2030, but also displace six million jobs in carbon-intensive industries; Arab economies risk losing more jobs than they gain during this transition.

Green technologies boost efficiency and resource sustainability; but they can also automate mid-skilled roles, undermining employment for workers with limited re-skilling opportunities, including graduates.

The question is no longer whether the Arab world must adapt to AI and decarbonisation, but whether it can build a labour market that turns these revolutions into engines of inclusive and sustainable growth.

Arab economies face a dual transformation: the decarbonisation imperative driven by climate change; and the rapid digitalisation brought by artificial intelligence (AI).

This convergence creates both opportunities and risks for labour markets that already suffer from high graduate unemployment and structural dependence on fossil fuel rents. While the green transition could generate millions of new jobs, AI could simultaneously automate existing ones, leading to a potential ‘dual displacement’ crisis.

This column examines how Arab countries can strategically align green job creation with AI adoption, drawing on regional examples and global evidence. It outlines policy measures to help to ensure a socially just and economically competitive transition.

The regional context: from rent dependence to resilience

The Arab region spans high-income rentier states, middle-income resource-dependent economies and fragile states. A shared vulnerability persists: reliance on carbon-intensive sectors and limited diversification into innovation-driven industries.

According to the International Labour Organization (ILO, 2018), the global shift towards a net-zero economy could create 24 million new jobs by 2030, but also displace six million jobs in carbon-intensive industries. Without pro-active policies, Arab economies risk losing more jobs than they gain during this transition.

AI as a double-edged catalyst

AI can accelerate the green transition through applications such as predictive maintenance in solar power plants (for example, Noor Abu Dhabi in the United Arab Emirates), smart water management in Jordan’s Disi project and precision agriculture in Morocco’s olive farms.

These technologies boost efficiency and resource sustainability. But they can also automate mid-skilled roles, undermining employment for workers with limited re-skilling opportunities. This is especially risky in economies where graduate unemployment rates exceed 25% (World Bank, 2023).

Bridging skills and sustainability

A sustainable labour market in the Arab world must integrate three priorities:

Re-skilling for the green economy: it is essential to shift technical and vocational education towards renewable energy engineering, sustainable urban planning, environmental data analytics and green entrepreneurship (IRENA, 2023).
Embedding AI literacy: that requires incorporating digital and AI skills into green job training so that workers can adapt to hybrid roles where AI augments human capabilities.
Inclusive labour policies: policy-makers should target green job creation towards women and rural communities to ensure that the green transition is also a just transition (UNDP, 2022).

Policy imperatives: avoiding a dual displacement crisis

To harness the synergy between green jobs and AI, policy-makers should not treat them in isolation:

Strategic industrial policy: diversification strategies should be aligned with green sectors where AI can enhance competitiveness, such as solar panel manufacturing, electric mobility and sustainable construction – for example, Saudi Vision 2030’s renewable energy initiatives.
Public-private innovation platforms: it is vital to foster partnerships between governments, universities and the private sector to incubate AI-driven green technologies tailored to regional needs.
Labour market forecasting: this requires using AI-based analytics to predict skill demand and shape targeted training programmes.
Social safety nets for workers in transition: it is important to provide targeted income support and retraining grants for workers moving from fossil fuel industries to green sectors.

A vision for 2035: beyond compliance, towards leadership

By strategically managing the green-AI nexus, Arab economies can position themselves not merely as followers adapting to global mandates but as leaders in sustainable innovation. Embracing a ‘dual transformation mindset’ – seeing disruption as a driver of resilience, equity and competitiveness – will be key.

Egypt’s most urgent priority is creating more and better jobs for its growing youth population. This column reports on the first Development Dialogue, an ERF–World Bank joint initiative, which brought together students, scholars, policy-makers and private sector leaders at Cairo University to confront the country’s labour market challenge. The conversation explored why youth inclusion matters, what the data show and how dialogue and the forthcoming Country Economic Memorandum can inform practical pathways to accelerate job creation.

Preparing youth for the workforce of the future

As economies undergo rapid digital and green transformations, young people face a growing mismatch between their skills and what the modern labour market needs. This column argues that enabling youth to compete in the workforce of the future requires systemic reforms in education, skills formation and labour market institutions, especially in developing economies.

Connectivity and conflict: understanding the risks of inequality in the Middle East

While high inequality does not always lead to conflict, new research reported in this column shows that widespread internet access acts as a catalyst, transforming economic grievances into political instability. For policy-makers in the Middle East and North Africa, this means that as digital connectivity expands, the security costs of ignoring economic disparities rise dramatically. The combination of idle youth, high inequality and high-speed internet is a volatile mix.

The political economy of stalled structural reforms in MENA

There is a persistent pattern to the structural reforms that are required to underpin economic progress in the countries of the Middle East and North Africa: ambitious strategies are announced and partially implemented, but ultimately they are diluted or reversed. This column argues that the repeated stalling of reform is not primarily a failure of economic design. Rather, it reflects deep-seated political economy constraints rooted in rent dependence, elite bargaining and weak institutional credibility. Without addressing these underlying dynamics, reform efforts are likely to remain symbolic rather than transformative.

Closing the gender gap in political participation in MENA

Women across the Middle East and North Africa participate less than men in politics – not only in political parties and elections, but also in petitions, boycotts, protests and strikes. This column reports evidence from ten countries showing that differences in education, employment and political attitudes explain part of this disparity, yet a significant gender gap remains.

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