Employment Creation and Social Protection in the Middle East and North Mrica Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Mediterranean Development Forum The Economic Research Forum for the Arab Countries. Iran and Turkey Cairo. Egypt The World Bank Washington. DC Employment Creation and Social Protection in the Middle East and North Mrica Edited by Heba Handoussa Zafiris Tzannatos An Economic Research Forum Edition The American University in Cairo Press Cairo • New York The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors and should not be attributed in any manner to The American University in Cairo Press, the Economic Research Forum, or the World Bank, to its affiliated organizations, or to the members of its Board of Executive Directors or the countries they represent. The American University in Cairo Press, the Economic Research Forum, and the World Bank do not guarantee the accuracy of the data included in this publication and accept no responsi­ bility for any consequence of their use. First published in 2002 by The American University in Cairo Press 113 Sharia Kasr el Aini, Cairo, Egypt 420 Fifth Avenue, New York 10018 www.aucpress.com in association with The Economic Research Forum for the Arab Countries, Iran and Turkey 7 Boulos Hanna Street, Dokki. 11123 Cairo www.er!org.eg and The International Bank for Reconstruction and Development / THE WORLD BANK 1818 H Street, N. w., Washington, D.C. 20433, USA Copyright © 2002 by The International Bank for Reconstruction and Development / THE WORLD BANK All rights reserved. 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Dar el Kutub No. 16710/01 ISBN 977 424 700 0 Printed in Egypt Contents Contributors VI Abbreviations and Acronyms VII AboutMDF IX Foreword XI Preface Xill 1 Matching Education to Demand for Labor 1 in the MENA Region Victor Billeh 2 Government Employment and Active Labor Market 21 Policies in MENA in a Comparative International Context Alan Abrahart Iqbal Kaur Zafiris Tzannatos 3 Labor Representation in the Age of Globalization: 49 Trends and Issues in Non-Oil-Based Arab Economies Noha EI-Mikawy Marsha Pripstein Posusney 4 National Versus Migrant Workers in the GCC: 95 Coping with Change Maurice Girgis 5 Social Protection in the Middle East 121 and North Africa: A Review Zafiris Tzannatos 6 Poverty and the Labor Market in the Arab World: 173 The Role of Inequality and Growth Ali A. G. Ali Ibrahim A. Elbadawi 7 Human Development and Poverty in the Arab States 195 Moez Doraid 8 Enhancing Women's Economic Participation 237 in the MENA Region Valentine Moghadam Contributors Ali Abdel Gadir Ali is Economic Advisor, Arab Planning Institute, Kuwait. Alan Abrabart is former State Director of the Department of Employment, Education and Training, Australia. Victor Billeh is Regional Director, UNESCO Regional Office for Education in the Arab States, Beirut, Lebanon. Moez Doraid is Coordinator, Sub-Regional Resource Facility for Arab States, United Nations Development Program (UNDP). Ibrahim A. Elbadawi is Lead Economist at the Development Economics Research Group (DECRG), the World Bank. Maurice Girgis is Managing Director, LTC Techno-Economics Research Group, Inc. Iqbal Kaur is a social protection specialist at the World Bank, Middle East and North Africa Region, Human Development Network. Noha El-Mikawy is Senior Research Fellow, Center for Development Research, University of Bonn. Valentine Moghadam is Director of Women's Studies and Associate Professor of Sociology, Illinois State University. Marsha Pripstein Posusney is Associate Professor of Political Science at Bryant College and an adjunct associate professor of international relations (research) at Brown University. Zafiris Tzannatos was formerly Sector Manager, Social Protection in the Middle East and North Africa Region, at the World Bank, where he is current­ ly Adviser to the Managing Director. Abbreviations and Acronyms ALMP Active Labor Market Policies CDD Community Driven Development CDF Comprehensive Development Framework CFS Consumer Food Subsidies CNAC Caisse Nationale d' Assurance et de Chomage CREDlF Center for Research, Study, and Documentation of Information on Women DE Diversified Economies ECA Europe and Central Asia EN Entraide Nationale (Morocco) ERF Economic Research Forum ERSAP Economic Reforms and Structural Adjustment Programs ESA Employee Shareholders Associations ESCWA Economic and Social Commission for West Asia ETUF Egyptian Trade Union Federation EU European Union FDl Foreign Direct Investment GCC Gulf Cooperation Council GDl Gender Development Index GDP Gross Domestic Product GEM Gender Empowerment Measure GNP Gross National Product HDI Human Development Index HPI Human Poverty Index ILO International Labour Organization IMF International Monetary Fund JD Jordanian Dinar JNCW Jordanian National Committee for Women KD Kuwaiti Dinar LAC Latin America and Caribbean LCHR Land Center for Human Rights LIC Learning and Innovation Credit LIL Learning and Innovation Loan LMIS Labor Market Information System MDF Mediterranean Development Forum MENA Middle East and North Africa MOE Ministty of Education MOHE Ministry of Higher Education MOP Mixed Oil Producers MOP Ministry of Planning viii Abbreviations and Acronyms NDP National Democratic Party NGO Non-Governmental Organization NHDR National Human Development Reports NICs Newly Industrialized Countries OECD Organization for Economic Cooperation and Development OED Operation Evaluation Department ORT Oral Rehydration Therapy PAYG Pay As You Go PN Promotion Nationale PP Primary Producers PPP Purchasing Power Parity PRSP Poverty Reduction Strategy Paper PWP Public Works Program SEWA Self-Employed Women's Association SFD Social Fund for Development SME Small and Medium-sized Enterprise SOE State-Owned Enterprise TFP Total Factor Productivity UAE United Arab Emirates UN United Nations UNDP United Nations Development Program UNESCO United Nations Educational, Scientific, and Cultural Organization UNICEF United Nations Children's Fund VET Vocational Education and Training VT Vocational Training VTC Vocational Training Corporation (Jordan) WBG West Bank and Gaza WDI World Development Indicators WID Women in Development WSSD World Summit for Social Development YR Yemeni Rials About MDF The Mediterranean Development Forum (MDF), launched in 1997, is a partner­ ship of ten Middle East and North Africa region (MENA) think tanks and the World Bank Institute. The partnership is dedicated to providing policy support for . development actors, research, and the capacity-building of think tanks, and to cre­ ating networks in the MENA region. The partnership's work culminates in a forum held every eighteen months. The forum is a crucial component of the MDF initiative because it provides a rare opportunity for MENA experts, high-level government officials, and civil soci­ ety representatives to meet and engage in a dialogue to set the region's development agenda. MDF already makes a unique impact on the region. Its first conference, held in Marrakech, Morocco, in May 1997, focused on the interplay of civil socie­ ty, business, and government as they engage in efforts to boost the region's compet­ itiveness. The discussions that took place at its second conference, held in September 1998 also in Marrakech, broke new ground on the most crucial issue fac­ ing the developing world: how to enhance public participation in the development process. Its third conference, held in Cairo, Egypt, in March 2000 under the title "Voices for Change, Partners in Prosperity," examined the relationship between eco­ nomic growth, employment, and poverty, and forms the background to this book. The September 2002 forum is planned to take place in Amman, Jordan. As a direct result of the MDF partnership, the following projects have emerged in the past few years: programs on decentralization and governance in the West Bank and Gaza; programs on quality education emphasizing gender; the Network on Women Evaluators; the Network of Lawyers Reforming NGO Laws; the "Meet the Civil Society" Initiative; the MENA Data Initiative; and the MDF publication series. Foreword This is the third book published on behalf of the Mediterranean Development Forum (MDF), a partnership of ten Middle East and North Africa region (MENA) think tanks and the World Bank Institute. The volume is a joint publication with the Economic Research Forum for the Arab Countries, Iran and Turkey (ERF): The MDF publication series is based on conferences that the MDF partnership holds every eighteen months. This particular volume, Employment Creation and Social Protection in the Middle East and North Africa, includes papers originally pre­ sented at the Third Mediterranean Development Forum, which took place in Cairo, Egypt, in March 2000. This publication, by presenting some of the most noteworthy contriburions, hopes to capture the spirit and magnitude of the conference. More than 125 speak­ ers debated innovative and cutting-edge development issues with an audience of over 600 of the region's most influential thinkers and practitioners, including