If the latest Arab awakening was about jobs and justice, then political reforms, unless accompanied with a levelling of the economic playing field, are unlikely to be sufficient on their own. The latent demographic pressures across the Arab world and the resulting youth unemployment have created an employment challenge that is both real and urgent. During the next decade an estimated 100 million jobs need to be created in the Middle East. The public sector, already bloated and inefficient, is unprepared to meet this employment challenge. Sooner or later, Arab policymakers will have to return to addressing a longstanding development challenge facing the region: economic diversification. In fact, the challenges of demography and diversification are intertwined. Without developing a robust private sector and without reducing the region’s dependence on natural resources, the gains that the Arab world has made in literacy and health cannot be translated into lasting economic prosperity.