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MENA-Projektet Poverty in the Middle East and North Africa

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MENA-Projektet Poverty in the Middle East and North Africa MENA-projektet Poverty in the Middle East and North Africa A Survey of Data and Recent Trends Author: Willy Egset Delstudie 12, 2000 UD MENA-projektet Poverty in the Middle East and North Africa A Survey of Data and Recent Trends Author: Willy Egset 1 Text: Utrikesdepartementet, Enheten för Mellanöstern och Nordafrika, MENA-projektet Form och layout: Norstedts Tryckeri AB Omslag: UD-Redaktionen, Maria Beckius Artikelnr: UD 00.051 ISBN: 91-7496-207-8 Tryckt av Norstedts Tryckeri AB, 2000 2 Foreword In the autumn of 1998 a project group was set up at the Ministry of Foreign Affairs for the purpose of analysing the political, economic and social conditions in North Africa and the Middle East (the MENA re- gion). Within the framework of this project a series of special studies, including this one, have been commissioned. Solely the authors are responsible for the contents of each of these studies, which do not necessarily reflect the position of the Ministry of Foreign Affairs on the issue in question. This study contains a review of the poverty situation in the MENA region and cites, in particular, five country cases (Yemen, Morocco, Egypt, Jordan and Tunisia). Author of the study is Willy Egset, a researcher at the FAFO Institute for Applied Social Science in Oslo, Norway. The editor 3 4 Contents Abbreviations and acronyms ........................................... 7 List of figures and tables ................................................. 8 Executive Summary and Policy Recommendations ......... 9 Policy implications and recommendations .......................... 10 1 Poverty in the middle east and North Africa ............ 13 1.1. Levels of poverty: Low levels of absolute poverty when measured by male income, more poverty when measured by other indicators ..................................... 14 1.2. Internal distribution: Increasing risks for non-earners (women, youth and the elderly) ................................. 16 2 Processes of poverty and affluence in the MENA region ........................................................... 21 2.1. Natural resources: Many people, little rain, much oil ... 21 2.2. The process of labour migration ................................. 24 2.3. Population growth...................................................... 28 2.4. The labour market ..................................................... 29 2.5. Security: Peace and stability a key factor .................... 32 2.6. Social unrest: Potential for ”multilateral radicalisation” in the wake of reforms ......................... 34 3 Country cases ........................................................... 37 3.1. The Republic of Yemen: Serious poverty challenges ... 38 3.2. The Kingdom of Morocco: Substantial progress, but mixed achievements and a difficult future ................. 42 3.3. The Arab Republic of Egypt: Structural adjustment with increased poverty, but improvements on the horizon....................................................................... 45 5 3.4. The Hashemite Kingdom of Jordan: Failed growth threatens welfare and equity ...................................... 49 3.5. The Republic of Tunisia: Successful poverty alleviation during structural adjustment but sustained growth not secured .................................................... 52 4 Prospects for the future ............................................ 57 4.1. Structural adjustment and the poor ........................... 57 4.2. Entering global competition: From import-sub- stitution to export-led growth .................................... 58 5 Conclusion ............................................................... 62 References ...................................................................... 64 Appendix 1: Technical Background: Approaches and concepts used in poverty assessment studies ................... 68 Concepts of poverty ........................................................... 68 Common approaches to poverty measures ......................... 71 Concepts and technical terms............................................. 73 Appendix 2: Tables ......................................................... 77 6 Abbreviations and acronyms App. – Appendix EMA – Euro-Mediterranean Agreements ESCWA – Economic and Social Commission for Western Asia (United Nations) GCC – Gulf Co-operation Council (association of oil producing Gulf states: Saudi-Arabia, Kuwait, Qatar, UAE, Oman, Bahrain) GDP – Gross Domestic Product GNP – Gross National Product HDI – Human Development Index* HPI – Human Poverty Index* ILO – International Labour Organisation IMF – International Monetary Fund LDC – Least Developed Countries MENA –Middle East and North Africa PPP– Purchasing Power Parity* SAP – Structural Adjustment Program TFR – Total Fertility Rate* UAE – United Arab Emirates UNDP – United Nations Development Program WDI – World Development Indicators (A set of 500+ socio-economic indicators for 210 countries in time-series, published annually by the World Bank in print and CD-ROM) WTO – World Trade Organisation * See Appendix 1, Concepts and technical terms, for definitions. 7 List of figures and tables Figure 1 Population living below US$1 (PPP) per day by region ........................................................................ 18 Figure 2 Human Development Index scores and real GDP per capita by region ......................................................... 18 Figure 3 Human Development Index scores and real GDP per capita by country ................................................ 19 Figure 4 Maps w/ key indicators .............................................. 20 Figure 5 Oil resources in the MENA region ............................ 23 Figure 6 Water resources and withdrawals by country ............. 23 Figure 7 GCC work migration by countries ............................ 26 Figure 8 Population growth, various indicators ........................ 28 Figure 9 Employment ............................................................. 30 Figure 10 Defence expenditures in % of GNP. Selected countries .................................................................... 33 Table 1 Selected social indicators in MENA ............................ 19 Table 2 Absolute poverty by region ......................................... 77 Table 3 HDI values by region .................................................. 78 Table 4 HPI and HDI by country............................................. 78 Table 5 Social indicators ......................................................... 79 Table 6 MENA oil reserves by country (proven reserves by Jan 1998) .................................................................... 80 Table 7 Gender, social development ....................................... 81 Table 8 Defence expenditure (in % of GDP) .......................... 82 Table 9 Remittances in thousand USD ................................... 82 Table 10 Expected years of schooling ....................................... 83 Table 11 Malnutrition and maternal mortality, by country ........ 84 Table 12 Water, renewable resources and withdrawals ............... 85 Table 13 Economic growth, by country GNP (per capita growth (annual %)) .................................................... 86 Table 14 Real GDP per capita, by country and region ............... 87 Table 15 MENA growth rates 1988–2007 ................................ 88 8 Executive summary Poverty in the MENA region has four major characteristics, although reservations must be made regarding the availability of statistics and disparate ways of measurement for different countries: • The incidence and severity of poverty as measured by household in- come and consumption is less than in other developing regions of the world. Currently at 4.1 percent, the percentage of absolute poor has declined slowly over the past decade, according to World Bank fig- ures. Nevertheless, the absolute number of poor has increased due to population growth, reaching 10.7 million by 1993. On broader indicators of development – such as infant mortality rates, life ex- pectancy and literacy rates – MENA holds a middle position among the developing regions. The mismatch in MENA performance ac- cording to the two types of indicators raises concern over the effi- cacy of development strategies and relevant public policies in the region. • Important differences exist between and within countries. Yemen, Iraq, Morocco, Egypt, Djibouti and Sudan show high poverty levels. Women are disadvantaged, most particularly in the share of total income, literacy and education levels. There is higher concentration of poverty in rural than in urban areas, but there are indications of a shifting balance, and increasing urban poverty. Unemployment among youth, even educated youth, is high. • The MENA region is characterised by “primitive welfare states”. With varying degrees of success, most governments have tried to reduce income inequalities and poverty, mainly through government subsi- dies, a large public sector and a focus on education. • Based on predicted per capita economic growth for the next ten- year period, poverty levels in the region will probably increase gradu- ally in the short to medium term (2–4 years), and may stabilise in the longer term (5–10 years). The current opening of economies, 9 globalisation and structural adjustment challenge welfare policies. Reduced public spending combined with low or negative growth may increase poverty which is already aggravated by high popula- tion growth. Increased economic growth combined with adequate policies
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