The need to address vulnerability in the Arab world. Zafiris Tzannatos

Transcription

1 The need to address vulnerability in the Arab world Zafiris Tzannatos ILO Regional Seminar Rethinking social protection in a changing Arab region Amman, Jordan May 2014

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3 Finance and Development, 2013

4 Two Messages Social protection is needed The theoretical battle has been won (at least after 2008) More so in Arab countries that need further to Increase coverage among children, the youth, adults and the elderly, women and men Reduce leakages (to the upper middle class and the rich) through evidence-based analysis Improve deign through monitoring, evaluation and continuous reforms Involve social partners / stakeholders (increased citizen voice, more government accountability, improved social dialogue)

5 Old thinking, new facts Old debate efficiency versus distribution Economic reforms first, political reforms after Contentious assumptions: Less certain: more growth => more jobs => more income More certain: Unequal opportunities => unequal outcomes => lower growth All In all: Too little depends on you, circumstance is more important Recent facts: It is Not just jobs, but decent jobs Not just social protection, but what kind of protection and for whom Not just giveaways, but how (voice & accountability, social dialogue)

6 One word of caution: Arab averages How to define the Arab Region? Iran accounts for 46% of the population in the Middle East (excluding the GCC) Egypt accounts for 41% of North Africa (or is it in the Middle East?) Nationals in Saudi Arabia account for 78% of the nationals in the GCC countries Weighted or unweighted averages? There is a difference between The average Arab The average Arab country Does it matter if 55% of the population is under the age of 25 years? Do children matter for labor market outcomes? And what does low labor force participation rates for the youth mean, if the youth are in schools?

7 Low social protection (and increasingly privatized) % of informal workers covered by social protection

8 Before the financial crisis and the Arab Spring, few Arab countries provided unemployment benefits % of unemployed receiving unemployment benefit, latest available year Western Europe 68% North America 37% CIS 26% Central & Eastern Europe 24% World Asia 11% 15% Non-contributory Contributory LAC 6% Arab States 2% Africa 1%

9 Though everywhere the wage share declined over time, it collapsed in MENA, especially North Africa 9

10 Household final consumption expenditure, etc. (% of GDP) Similarly, household consumption declined as % of GDP 75 Household consumption as % of GDP by region, ) 70 SSA 65 Latin America 60 OECD South Asia 55 MENA 50

11 Public social spending is mistargeted (% of GDP)

12 Public spending does not reach the poor (percentage of the poorest 20% covered by the social safety net) MENA World East Asia and Pacific Europe and Central Asia Latain America and Caribbean

13 Why?

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15 Who among the poor deserve assistance? Opinions on causes of success among the Jordanian middle class, 2012

16 Citizens in Arab Countries Have Seen Slow Increases in Incomes and Have Had Low Voice CHN BLR AGO KAZ ARM You want to be here High: Income Growth Voice and Accountability KHM BTN GEO MNG VNM NGA MOZ IND TJK SLE LAO RWA ETH MDA UKR LTU RUS TCD MDV TZA ALB BGR TTO PAN CPV SVK LKA BGD ROM LVA EST AFG PERSTP THA POL MAR IDN GHA KOR JOR UGALBN TMP SRB ARG SUR HKG TWN IRN SGPTUR ZMBBIH DOM URY TUN KGZ QAT MLI MNE BWA MUS ECU BFA COL NAM SAM CZE MYS PHL CHL EGY COG NPL HRV BRA SVN OMN PAK NER PRY GUY MKD ZAF CRI VCT HUN ALG MWI BOL PNG SWE LBY ZAR SYR DJI MRT HNDSEN KEN LSO ISR DMA FIN GRC GMB SLV SLB ATG LCA AUS LUX SWZ VEN GRD IRQ SYC CYP MLT NZL DEU NIC BLZ AUT ISL GTM MEX BEN VUT BRBGBRBEL CAN CHE KSA BDI TON YEM ESP GIN FJI BHR JPN USA FRA NLD NOR CMRGAB KWT IRL JAM DNK GNB KNA UAE PRT TGO MDG COM ITA KIR BHS CAF HTI BRN But not here Even here Voice and Accountability-KKZ Index

17 Who needs social protection?

18 Quoted in the WEF 2012 report: Addressing the 100 Million Youth Challenge The Arab world must create up to 80 million new jobs by m/year The Arab world faces the daunting task of creating 80 million jobs over the next decade to keep pace with population growth 8m/year About the 100 million jobs needed by m/year By 2020, just to keep unemployment rates at present levels 80 million new jobs will have to be created. To actually bring unemployment rates down to more sustainable levels, a figure of 100 million new jobs is more appropriate m/year

19 Population and Labor Force Growth , 18 Arab Countries (excl. Comoros, Djibouti, Mauritania, Somalia) 233 Share in labor force Growth (54m) New jobs required: 54m Unemployed in 2013: 13m Total for 6% U-rate: 60m % 71% 19% Children (<15) Youth (15-24) Working Age (25-64) Elderly (65+) Population in 2010 Population in 2030 Labor force increase

20 Some good news (it was always good news but was missed) Status of Youth Change Total in million) 37,227 60,405 23,178 U-rate (U/(E+U)) 26% 25% -4% In school (S) 17% 32% 88% Employed (E) 32% 27% -14% Unemployed (U) 11% 9% -19% Inactive+NS 41% 32% -20% TOTAL 100% 100% (NS-NE)/Total 51% 41% -20%

21 Too many unemployed youth? In 1990, there were more than 30% unemployed youth than adults In 2010 there were 5% more unemployed adults than youth Ratio of youth-to-adult unemployment

22 All in all The problem is not the youth The problem is the economy and the adults and the adults control the economy and the youth

23 Thank you