For recent Lebanese graduates, prospects for obtaining skilled jobs aren't good. Though Lebanon boasts some of the region's highest levels of education and most open financial sectors, the country's youth struggle to find work. While the government is working to tackle the issue, underlying obstacles may prove too difficult to overcome.

Youth unemployment in Lebanon was 35% in 2010, and it took university graduates roughly one year to find a job, according to UN estimates. In the short term, economic growth alone won't likely create many jobs. While the Lebanese economy averaged 8% annual growth from 2007-2010, it expanded only 1.5% in 2011. Even if growth accelerates to 6% per year as expected by 2016, translating those gains into jobs will be a challenge.

The unusual nature of the country's financial sector is one factor exacerbating unemployment. Counter-intuitively, although Lebanon's financial sector is massive relative to the rest of the economy, it provides little in the way of jobs. A World Bank report from March noted that Lebanon's $7-8 billion of annual capital inflows and remittances mostly end up in banks and real estate, bypassing productive sectors that can spur long-term sustainable growth.

Domestic and regional instability along with weak government policy also complicate job creation. Lebanon's tourism sector was hit hard by unrest in Syria, experiencing a 24% decline in 2011. Domestically, the time lost to the formation of a new government last year is estimated to have tied up $2 billion worth of investments and held up the creation of 6,000 jobs in the tourism industry. Political considerations and partisan infighting frequently hinder reform as well. Bickering over the composition of an oversight committee, for instance, has slowed oil exploration in the Eastern Mediterranean.

In its report from March, the World Bank recognized that, "many reforms have been identified since several years and they only need the political will to implement them."

'Brain drain' further plagues Lebanon's economy since many of the most educated citizens emigrate to find work or better pay. By one estimate, the average Lebanese working abroad earns 31.6% more than he would domestically. As of 2000, Lebanese citizens working abroad constituted about 15% of the labor force. About 70% of these highly educated Lebanese live in the United States, Canada, or Australia.  Though they send much of their earnings home by making deposits it in Lebanese banks, these absent workers are not present to spur domestic innovation and start businesses, both important elements in a strong economy.

The pains of unemployment hurt even more during rising inflation. From August of last year to this year, prices increased by 9.3%. Housing has become particularly expensive, with prices rising 40% from 2008 to 2011, and then by another 40% since last August alone. A 2011 survey found Beirut to be the most expensive Arab city for 120m2 apartments, a phenomenon fueled in part by foreign real estate buyers, mostly from the Gulf, who have pushed out expatriate Lebanese buyers now comprising only 40% of the market.

Even those youth with jobs may find their pay increasingly inadequate. While a new draft law would increase the wage scale of public workers, Prime Minister Najib Mikati has given the measure only lukewarm support, and the matter is currently under consideration in Parliament. Governmental stalling on the issue has drawn ire from many of Lebanon's unions, and strikes by public workers have become a familiar scene in recent months. However, paying for the hikes is also a cause for concern among many since the increases could cost the treasury $1 billion a year, with funding requiring higher taxes and new fees.The IMF, World Bank, and some Lebanese private sector groups have registered strong opposition the wage increases.

Though faced with tough conditions, Lebanese youth have a few reasons for optimism. For one, tourism appears not to have worsened since the drop in 2011, suggesting the industry could bounce back quickly. Also positive is the government's "New Entrants to Work" program, launched in September. Drawing on technical and financial assistance from the World Bank, the initiative combines worker training, job placement assistance, and financial incentives for employers. Whether or not the program will be large enough to make a sizable difference remains to be seen. Furthermore, there is a rising entrepreneurial scene in Lebanon encouraging budding entrepreneurs to start their own businesses, thus spurring economic productivity and job creation. The Lebanese jobless can also draw some comfort from the strong projections for economic growth through 2016.

Nonetheless, the absence of deep structural reform makes it unlikely that significant progress will be made converting economic growth into new long-term jobs. One study identifying Lebanon's shrinking middle class and increasing poverty highlights an ominous trend. In the medium term, domestic peace and regional stability may hold the most promise for job prospects.