The structural threat of poverty and inequality to the Arab Region

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External powers looking at the Middle East tend to focus on issues of high politics. That focus may blind them to the local, regional, and global factors which drive the ongoing political and sectarian tensions and armed conflicts across parts of the Arab region in the Middle East. Lurking beneath diplomatic manoeuvring is a dangerous pattern of new and deep structural threats that have converged in a cycle of poverty, inequality and vulnerability that seems likely to keep the region mired in stress and conflict for decades to come. These threats exacerbate existing antagonisms and armed clashes across the region, heighten social tensions, and ultimately lead to the fragmentation of both individual countries and the wider Arab region that had enjoyed some minimal commonalities and integrity in the past century.
These threats include, most notably, chronic and growing poverty, a very high rate of labor informality, increased vulnerability among middle income families, continued high population growth rates that outstrip economic growth, and expanding disparities and inequalities in almost every sector of life and society. As these combine with other political and material grievances that are common among majorities of citizens such as lack of water, affordable food, and decent housing, poor political participation and accountability, among others, they erode citizen trust in government institutions and lead to greater alienation among families that suffer two major pains: they feel they are not treated equitably, and are powerless to do anything about their condition.
Rami Khouri of American University of Beirut stressed that Arab governments and their external sponsors tend to prioritize the wrong threats. Most Arab governments continue to introduce superficial reforms in pivotal sectors such as education, employment, and anti-corruption, but their efforts mostly remain unsuccessful or limited in their impact. Simultaneously, the broader Arab trend in most countries since the end of the Cold War around 1990 sees steadily increasing pauperisation, vulnerability, perceived injustice and helplessness, and disparities. The extent, causes, and consequences of this troubling trend are crystal clear, yet they do not seem to elicit any serious response from Arab governments. The Arab region and many individual countries are literally being ripped apart by the consequences of decades of incompetent, autocratic governance, combined with continuing foreign military interventions and the impacts of the century-old Arab- Israeli conflict.
According to Rami Khouri, the symptoms of the systemic crisis started to appear several decades ago. They could have been alleviated much more easily at the outset had governments been more effective in recognizing and tackling the issues that plagued their citizens, especially corruption, insufficient decent jobs, state cronyism, and declining educational standards. Rather than dealing with these early signs of serious mass internal dysfunction, regimes focused on military security and internal repression. The outcome was to exacerbate rather than solve the threats to social cohesion and national well-being, which in turn contributed to the brisk emigration of educated youth, the collapse of political parties, the rise of sectarian groups and militias, and steady expansion in adherents to both nonviolent and militant Islamist movements.
Khalid Abu-Ismail, in his 2018 study entitled “Poverty and Vulnerability in Arab States”, stated that the actual levels of poverty and vulnerability in the Arab region are higher than previously thought, with some two-thirds of citizens falling into the categories of poor or vulnerable. The realities of declining family wellbeing were disguised by prevailing poverty measures based on daily expenditures, which did not accurately capture two critical trends: high levels of poverty, and rising levels of vulnerability among families that used to be counted among the middle class or middle-income category, but have gradually fallen into the poor or vulnerable categories.
Significant research in recent years by economists at UNDP, the United Nations Economic and Social Commission for Western Asia (ESCWA), the World Bank, and other institutions has used the Multi-Dimensional Poverty (MDP) measure to gauge poverty and vulnerability more accurately than the previous reliance on money- metric measures such as $1.25 or $1.90 expenditures per day. The Multi-Dimensional Poverty figures indicate poverty rates as much as four times higher than previously assumed. If this level of 66 percent poor/vulnerable holds for the entire Arab world, it means that some 250 million people may be poor or vulnerable, out of a total Arab population of 400 million.
The middle class in non-oil-producing states has shrunk from 45 percent to 33 percent of the population, according to ESCWA economists who have analyzed this issue. They see many middle income families sliding into vulnerability, and vulnerable families in turn falling into poverty. Khalid Abu-Ismail noted that the drivers of this increase in poverty and vulnerability have persisted or worsened since the 2010-11 Arab uprisings. They are likely to drive further families into poverty and vulnerability for years to come, given the current regional realities.
Khalid Abu-Ismail further argued that this trend seems to be directly associated with the steady recent decline in the quality of state-managed basic social services, mainly outside the Gulf region, including health care, education, water, electricity, transport, and social safety nets. The number of Arabs requiring humanitarian assistance to stay alive and minimally healthy, according to ESCWA calculations, is 60 million people in seven crisis states. They include many of the 30 million people who have been displaced in the Arab region in recent years.
The 2019 MENA Economic Monitor report indicated that once families fall into poverty, they are likely to remain there for generations to come. The steady, large-scale growth in new jobs in industrial, tourism, agriculture, and service sectors that absorbed new labor market entrants in the half-century after the 1950s has disappeared. IMF and other projections say the Arab region must create 60-100 million jobs by 2030, and 27 million jobs in the next five years, to reduce unemployment significantly. This is clearly a task that is well beyond the capabilities of the current Arab state system and its private sectors.
This suggests that informal labor will remain dominant for years to come in most Arab lands; this means we should expect continued and growing poverty and vulnerability, due to the erratic and low pay and the lack of protections that informal workers suffer. Informal-labor-linked poverty is also a consequence of poor education outcomes, with some universal test scores indicating that as many as half the students in primary and secondary school across the Arab region are not learning, and many will drop out before completing primary or secondary education.
to be continued next week…