Demographic and Economic Material Factors in the Mena Region
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No. 3, October 2017 WORKING PAPERS DEMOGRAPHIC AND ECONOMIC MATERIAL FACTORS IN THE MENA REGION Musa McKee, Martin Keulertz, Negar Habibi, Mark Mulligan and Eckart Woertz This project has received funding from the European Union’s Horizon 2020 Research and Innovation programme under grant agreement No 693244 Middle East and North Africa Regional Architecture: Mapping Geopolitical Shifts, Regional Order and Domestic Transformations WORKING PAPERS No. 3, October 2017 DEMOGRAPHIC AND ECONOMIC MATERIAL FACTORS IN THE MENA REGION Musa McKee, Martin Keulertz, Negar Habibi, Mark Mulligan and Eckart Woertz1 ABSTRACT The Middle East and North Africa is one of the world’s most rapidly transforming regions, politically, economically, demographically and environmentally. Despite largely declining total fertility rates, the momentum of absolute population growth will mean that the region surpasses China in terms of total population by 2090. Land degradation, water stress and trends of urbanisation will also have significant impacts upon the future development of this region. In contending with the coming social, ecological and climatic shifts facing the region, policymakers will need to effectively capture the multi-faceted dynamics of these challenges but also opportunities. This paper outlines the key demographic and economic trends and transitions underway across MENA countries as material factors informing the efficacy of future policy responses to these emergent trends. Demographic trends in age-specific and gender ratios are discussed, before exploring transitions in fertility rates, migration, conflict, social welfare and urbanisation along with the possible implications of such transitions. Later, key economic factors are assessed, including correlations between resources endowments, labour market performance (particularly rates of youth unemployment), public debt and expenditure figures, and trade performance indicators. Considered together, a sub-regional disaggregation of these economic factors is presented, characterising emerging trends and challenges across the region and its broader integration into the global economy. INTRODUCTION The Middle East and North Africa (MENA) region is vast, rapidly transforming and heterogeneous. Since 2011, the region has experienced an eruption of conflict in several Arab countries. What was termed the “Arab Spring” led to a series of wars and conflict in countries such as Syria, Iraq, Libya and Yemen. Domestic strife and foreign intervention have led to “failed states” across the region (Müller et al. 2016, Kinsman 2016). This report provides an analysis of underlying material risks and opportunities that contributed to the Arab uprisings. Two of the key issues that have been and will continue to face the MENA region are demographic change and economic factors. Despite the many shared features among MENA countries, there is comparatively little regional integration or policy coordination on joint demographic and economic policies in comparison with many other regions. 1 Musa McKee currently consults the United Nations Economic and Social Commission for West Asia in Beirut on food security, technology and social protection. Martin Keulertz is Assistant Professor at the Faculty of Agricultural and Food Sciences, American University of Beirut (AUB). He is the director and chair of the AUB Food Security Programme. Negar Habibi is a PhD student in the Department of Political Economy at King’s College London. Mark Mulligan is Reader in Geography at King’s College London and Senior Fellow of UNEP-World Conservation Monitoring Centre. Eckart Woertz is senior research fellow at the Barcelona Centre for International Affairs (CIDOB) and scientific advisor to the Kuwait Chair at SciencesPo in Paris. 2 Middle East and North Africa Regional Architecture: Mapping Geopolitical Shifts, Regional Order and Domestic Transformations WORKING PAPERS No. 3, October 2017 This report provides an overview of demographic and economic material factors and emerging trends in the MENA region. By shedding light on key population statistics, the study first provides an overview of the strong population growth and migration patterns in the region. This feeds into an analysis of future population trends in the region up to the year 2100 to illustrate a more refined picture, based on total fertility rate (TFR) development and associated population dynamics. The determining role of population dynamics and the endowment of natural resources has long been acknowledged. However, shifting demographic patterns and economic exigencies create new development and security environments, with new challenges and opportunities for local populations and policymakers. The economic section of the report provides an analysis of economic indicators and development of the MENA labour market and of globalisation and trade patterns. This shows that population developments will be a key challenge for economic decision-making in the MENA region. The current economic model lacks dynamic private sector involvement in job creation, causing continued economic inertia in the region. In sum, the study identifies key demographic and economic choke points in order to provide recommendations for future interventions by the European Union (EU) and its member states to ensure political and economic stability for the 1 billion people who will live in its southern and south-eastern neighbourhoods by the year 2100. Figure 1 | Overview of MENA region Source: MENARA Project, September 2016, http://www.menaraproject.eu/?p=74. There are competing definitions of the MENA region and it is not always clear which countries are included under the umbrella term. Sometimes Mauritania and Turkey are included, for example, and sometimes not. Hence it is important to provide some geographical clarification. The MENA 3 Middle East and North Africa Regional Architecture: Mapping Geopolitical Shifts, Regional Order and Domestic Transformations WORKING PAPERS No. 3, October 2017 region as defined by the MENARA project covers a vast area comprising Mauritania, Morocco, Algeria, Libya, Tunisia, Egypt, Oman, Yemen, Saudi Arabia, United Arab Emirates, Qatar, Bahrain, Kuwait, Iraq, Iran, Sudan, Syria, Jordan, Lebanon, Occupied Palestinian Territories, Israel and Turkey (see Figure 1). For the purposes of this project, sub-regions have been identified, including the Maghreb countries in North Africa, the Mashreq countries/the Levant plus Turkey, the Gulf countries plus Iran in West Asia, and Egypt and Sudan. The MENARA study region is Europe’s southern and south- eastern neighbourhood. This is a key area for current and future foreign policymaking owing to its strategically important geopolitical role in the world and its demographic and economic prospects. This can be easily grasped from the ten take-away messages that we distil in this paper. TEN TAKE-AWAY MESSAGES ABOUT THE DEMOGRAPHIC AND ECONOMIC PROSPECTS OF THE MENA REGION 1. MENA’s population will be double that of Europe by 2100, with more than 1billion people. 2. MENA’s population will be bigger than China’s by 2100. 3. The demographic trend in the MENA region is towards a gradually ageing society. 4. The majority of MENA countries are resource-poor and labour-abundant. 5. Youth unemployment is one of the key economic challenges in the MENA region. 6. MENA economies are still not sufficiently diversified. 7. Moving away from exploiting oil and gas resources to industrial development holds great opportunities. 8. Public debt levels are increasing in resource-poor and labour-abundant economies. 9. MENA economies need greater investment in STEM subject skills (science, technology, engineering and mathematics) to prepare the younger generation for labour market demands. 10. The demographic and economic perspective of MENA is challenging, but there is also a “demographic dividend” if policies are steered towards economic inclusion of the younger generation. 1. DEMOGRAPHIC FACTORS 1.1 EMERGING TRENDS From the 1950s, many states across the region have pursued state-led models of development, supported by substantial public investment and often populist social policies (Cammett et al. 2015). State efforts to extend social welfare provisions, improved per capita physician ratios and life-expectancy, and declining maternal and infant mortality rates helped lead to half a century of rapid population expansion. Other countries, such as Israel and the Gulf states, saw rapid rates of migration from within the region and from Europe, North America and South Asia. However, from the mid-1960s, most countries across the region went through a “demographic transition” (see Gillis et al. 1992), where TFR began to decline, in part related to increased levels of education, family planning, urbanisation and shifting patterns of migration. 4 Middle East and North Africa Regional Architecture: Mapping Geopolitical Shifts, Regional Order and Domestic Transformations WORKING PAPERS No. 3, October 2017 1.1.1 ABSOLUTE POPULATION SIZE The total population of the MENA region has increased fivefold since the 1950s, from just under 110 million in 1950 to 569 million in 2017 (UNDESA 2017). Despite generally declining rates of fertility (discussed below), absolute population numbers are expected to further double to over 1 billion inhabitants by 2100, according to medium variant projections (Figure 2). By the end of the century, therefore, there will be more people in the MENA region than in China, whose population is expected to continue to shrink to