DUBAI, Feb. 10 (Xinhua) -- Arab youth unemployment is the highest in the world, said International Monetary Fund (IMF) Managing Director Christine Lagarde here on Saturday, warning of dissatisfaction and a rise in social tensions.

Lagarde made the remarks at the third Arab Fiscal Forum, mentioning the Arab youth unemployment at an average of 25 percent. "This could easily lead to dissatisfaction, a rise in social tensions, and a collapse in social trust," he said.

"Over 27 million hopeful young people will join the workplace over the next five years, anxious to be included," she added. However, "so far their aspirations are unfulfilled, and their understandable frustration is compounded by perceived unfairness."

The former French Minister of Finance quoted a survey which "found that more than 60 percent of people believe that connections matter far more than qualifications for getting a job," pointing at the Arabic culture of "wasta," which describes the supportive culture of tribal and family relations.

This system "reduces incentives to invest in skills and knowledge," she said. "It can magnify the sense of dissatisfaction, distrust, and resentment -- and it is ultimately self-defeating."

She urged Arab governments to invest into education and to reduce the public wage bill in order not to miss the global recover.

"As you all know, the global economic recovery has strengthened and growth at a pace of 3.9 percent in 2018 and 2019 is back on, with 75 percent of the world economy sharing in the upturn. Yet this tide is not lifting this region enough," said Lagarde.

She appreciated that government jobs can serve as a significant social "safety valve." Yet she added that when the public sector supports every fifth job, it comes with tremendous costs -- "for fiscal sustainability, for the development of a dynamic private sector, and for governance."

She also urged Arab peoples to get back to their roots as "the Arab nations once led the world in the pursuit of knowledge, in scientific innovation -- and indeed in the idea that inclusion, fairness, and decency are the hallmarks of civilization."

IMF is a Washington-based international organization of 189 countries whose mission is to foster global monetary cooperation and ensure continuous financial stability.

Lagarde has been at the helm of the IMF since July 5, 2011 and started her second term in July 2016.