Although the global financial and economic crisis has not spared the Arab states of the Middle East, its impact to date has been relatively limited to some parts of the region. However, by and large, for the time being, the Arab world is relatively well-positioned to cope with some of the more immediate challenges that a world in economic turmoil poses in the short run. Yet, there are reasons to believe that the simultaneous downturn of other regions, namely North America, Europe and South-East Asia, will eventually spill over to the countries in the region. Should this crisis continue and the global economy not pick up again, we expect that the potential of Arab states’ economies to provide employment opportunities and social protection will be substantially challenged. This policy note is purely intended to provide an assessment of the employment and social protection impact, and to suggest appropriate policy responses.