arab development challenges report 2011

8/2/2019 Arab Development Challenges Report 2011

1/172

Unted Natns Deepment Prramme

ArAb DeveloPmeNt

ChAlleNges rePort 2011ToWARDS ThE DEvEloPMENTAl STATE iN ThE ARAB REgioN

Empowered lives.Resilient nations.


2/172

Unid Nain Dpn PaRena Centre r Arab States, Car1191 Crnce E N, Wrd Trade CentreBuac, Car, EyptTe: +202 2770201F infain: p://aaa.undp./Cpyrt 2011, UNDP. Cer Pt by: Saem Mamed



3/172


4/172

ArAb DeveloPmeNtChAlleNges rePort 2011:

ToWARDS ThE DEvEloPMENTAl STATEiN ThE ARAB REgioN

2011



5/172

Unid Nain Dpn PaRena Centre r Arab States, Car1191 Crnce E N, Wrd Trade CentreBuac, Car, Eypt

Te: +202 2770201F infain: p://aaa.undp./Cpyrt 2011

Te anayss and pcy recmmendatns tsReprt d nt necessary reect te ews te UntedNatns Deepment Prramme, ts Execute Bardr ts Member States. Te Reprt s spnsred by teUnted Natns Deepment Prramme PertyTematc Trust Fund.


6/172Arab Development Challenges Report 2011 | ii

Report Team

Task LeaderMona Hammam

Core Team

Khalid Abu IsmailNoha El MikawyMohammad Pournik

Contributing Authors:

Radhika Lal, Rathin Roy

Contributing International Organizations

FAOILOOXFAM

Authors of Background Papers

Asmaa Abdel Nabi, Khalid Abu Ismail,Marwan Abi Samra, Ali Abdel GaderAli, Gihan Abou Taleb, Lahcen Achy,Merve Arabaci, Rudiger von Arnim,Hannah Bargawi, Heba El Laithy, Noha ElMikawy, Kishan Khoday, Fatima Hachem,

Mohammad Mohieddin, Ahmed Moustafa,Abdel Hameed Nawar, Terry McKinley,Jennifer Olmsted, Mohammad Pournik,Codrina Rada, Racha Ramadan, RaquelRamos, Rathin Roy, Abdel Khalek Touhami

Advisory Group

Mahmoud Abdel Fadil, Ibrahim Awad,Abdallah Dardari (Principal Adviser), IbrahimEl Badawi, Ibrahim El Souri, Terry McKinley,Zafiris Tzannatos, Salma Zouari

Readers groupMain ReportAli Abdel Gader Ali, Yahya AlMutawakel, Hazem Fahmy,Aref Tarabichi

Background PapersHeba El Laithy, Lamia ElMoubayedBissat, Reinhard Honert, Rabie Nasr,Marwan Owaygen, Sanjay Reddy,Dorothea Schmidt , Nadine Sika

UNDP Regional Center for Arab

States, Cairo

Noeman El Sayad, Adham Hassan,Reem Hazem, Noureen Ramzy,Mariam Sharbash

EditorsEmilia Garofalo, Mona Naguib


7/172i | Arab Deepment Caenes Reprt 2011

Ts secnd Deepment Caenes Reprt, cmn at a tme wen te ren s passntru a crtca strca juncture, attempts t beynd te numbers t uncerprcesses tat ae underpnned mutuay renrcn drers sca, ecnmc andptca excusn. Te reprt was ed by te Unted Natns Deepment Prrammes(UNDP) Rena Center n Car (RCC). its cre team s cmpsed RCCs Perty andgernance Practces. Te reprt s te resut rutu cabratn between te UNDP,internatna labur oce (ilo), Fd and Arcuture oranzatn (FAo) and oXFAM aswe as eadn rena and nternatna experts.

As n te rst Deepment Caenes Reprt, wc was pubsed jnty wt te lASand endrsed by te Arab Ecnmc and Sca Deepment Summt n 2009, ts reprtarues tat te deepment mde wed n te Arab ren can be paced n a mrescay just undatn. it attempts t se rddes suc as weter nequaty s w andary stabe, as te data sw, r and rsn as bsered by te naked eye. it as amst determne weter te ren s truy ded mass perty r te wrn yardstckwas used t measure t. on bt tese cunts, te reprt casts dubt n te abty current data t reect te reaty ers sme pnters r mre n dept wrk t cse teap between data and reaty.

Te reprts man cncusn s tat n rder t respnd t te demand r dnty, scajustce and reedm, te state needs t adpt a Deepmenta state mde tat s based n

a new sca cntract mutua accuntabty and sed te renter based ptca ecnmymde. Ts wud mean tat te state becmes mre respnse and accuntabe t tectzen and aw r te ctzen t take a mre practe re n sceta aars and break tecus pattern dependence n te state tat as been te amark te Arab scacntract.

Te reprt as arues r redenn te re te state n te ren and ts reatnspwt te market. Te Arab street as made cear tat t s n ner wn t acceptsubstandard pubc serces and a prate sectr made up ptcay we-cnnectedbusnessmen w earn ue prts by rtue ptca cnnectns, wc aw temt ad taxes and care nn-cmpette prces. Rater tan cnsdern tat teres a dctmy between te state and te market, te reprt empaszes te symbtcreatnsp between te tw: te state prdes te requred supprt r a ursn,ncuse prate sectr, wc n turn exercses sca respnsbty by payn taxes andensures decent wrkn cndtns r ts wrkrce.

We capabe and accuntabe states can cane a t tru mre prudent use natna resurces, t s cear tat rena ecnmc cperatn s crtca r awnArab cuntres t break ut ter current patterns unbaanced deepment, areydmnated by extracte ndustres. Strner ecnmc nteratn can ep create a market 350 mn pepe. it sud deay ne bt prate and pubc nestment ws

Fwd y Dic f UNDP

rina Cn f Aa sa, Cai


8/172Arab Deepment Caenes Reprt 2011 |

rm -rc Arab cuntres t te ess deeped rens. Te ren can create structuressmar t Eurpean Unn structura unds tat ad a cruca re n actatn te ptcaand ecnmc transrmatn Span and Prtua wn ter demcratc reutns.Te ree w ds, serces, capta and sustanabe mratn abur cud aw

te ren t enance ts capactes r d prductn (partcuary -aue crps) andseected nce- manuacturn sectrs.

Pubc debate wat needs t cane sud ay te undatns r sustann temmentum te Arab Sprn. Tere s n reasn r ts ren nt t attan te bestdeepmenta utcmes, en ts substanta nanca, uman and natura resurces.Een n te current dcut ba ecnmc and ptca cntext, an Arab resurence spssbe ny te enery te rens yut s marsaed t turn te rens caenesnt pprtuntes.

Pa loiC UNDP Rena Centre r Arab States, Car


9/172i | Arab Deepment Caenes Reprt 2011

on 29 Marc 2007, te Summt te leaue Arab states caed r a Speca ArabSummt t be excusey deted t te dscussn ecnmc, deepmenta and scassues. Te mtatn r dn suc a specazed Arab Summt was a wdey saredcnsensus ew tat empass n deepmenta ssues cud substantay enance Arabcperatn n a pase dmnated by sme ptcay dse ssues. Mreer, tere wasrecntn amn Arab pcy makers tat te ren s passn tru a crtca strcajuncture wt treats nt ny t natna securty, but as t sca and ecnmc securty.

Te rst reprt, cmmssned by te lAS Mnstera Cmmttee n preparatn rte rst-eer Arab Ecnmc and Sca Deepment Summt n January 2009, was jnty prepared by te lAS and UNDP. Entted Deepment Caenes n te ArabRen t was dded nt tw umes: te rst and mre cmpreense umeaddressed a wde rane sca and ecnmc deepment caenes rm a umandeepment perspecte; te secnd cused n te d securty caene per se.Eac ume bean wt a reew deepment-reated styzed acts wc set testae r te dentcatn te caenes and ence pcy drectns and ptns.Te reprt was endrsed by te 2009 Arab Ecnmc and Sca Deepment Summted n Kuwat and a recmmendatn was made t ssue te reprt n a reuar bass.

Aanst ts backdrp, wrk bean n prducn a secnd Deepment Caenes Reprtntay cused n te mutpe underpnnns perty and unempyment, partcuaryat ter nexus wt ernance and enrnmenta caenes. Wt te eruptn teyut uprsns n te ren, te cus sted twards exprn aternate sutns and a

rane deepment pcy ptns t ep redress te underyn causes tat ae rse twdespread ppuar reances and dscntent. Tese reances were ceary encapsuatedn te case Eypt and Tunsa by te san: Bread, reedm and sca justce a san tatundernes te nterdependence ncuse ernance and ecnmc and sca ncusn.

Ts reprt anayses key nterckn deepment caenes n te Arab ren tat arete underpnnns te rwn mpetus r pste transrmate cane. it as seekst prde a menu ptns t address te caenes n a manner tat paes te wayr smt transtns and transrmatns tat are n drect respnse t te aspratns te Pepe te Arab ren tward uman dnty. Budn n practca experence andknwede at te ba, rena and natna ees, ts reprt ts ur understandn te trers at te cre te wae cntestatns n te ren and te means tru

wc Arab cuntres can transrm temsees rm renter t Deepmenta states. Tts end, te reprt presents Arab decsn makers wt a menu pcy ptns t mebeynd temprary Band-Ad sutns and t drecty address te deepment caenes.

Despte te enrmty tse caenes, te reprt s eneray ptmstc. Teautrs repeatedy make te case tat te man as perty reductn, ecnmcderscatn, empyment eneratn and d securty are attanabe and tat scajustce and equty, ce and accuntabty are ntrnsc t reacn tese as. Ts rens we equpped wt a are and yutu abur rce unry r decent empyment.

Fwd y rp tak lad


10/172Arab Deepment Caenes Reprt 2011 | i

it as ndustra and arcutura ptenta, knwede and expertse and te nancaresurces t use te mst up-t-date tecnes t ercme water scarcty prbemsand rase manuacturn prductty tat sustans te natura resurce base. it s nestedn prmtn te rens wn scentc and tecnca nnatns and n deern

quaty eat, educatn and sca serces t eeryne. As n te rst reprt,te autrs nte tat te attanment tese deepment as nes t a areextent n a er ee and a mre cncerted ert ntra-Arab rena cperatn.

mna haaReprt Task leader and rmer

Deputy Drectr UNDP Rena Bureau r Arab States


11/172iii | Arab Deepment Caenes Reprt 2011

AC Arab Cuntres

ADi Arab Demcracy indexADB Arcan Deepment BankAFED Arab Frum n Enrnment and DeepmentAhDR Arab human Deepment ReprtAlo Arab labur oranzatnAMgDR Arab Mennum Deepment gas ReprtANC Antenata Care vstsAohR Arab oranzatn r human RtsAPRM Arcan Peer Reew MecansmASEAN Asscatn Suteast Asan NatnsBNDES Brazs Natna Bank r Ecnmc and Sca DeepmentBRAC Banades Rura Adancement Cmmttee

CiS Cmmnweat independent StatesCv Cecent varatnCSo C Scety oranzatnsDhS Demrapc and heat SureysDR Deepn RenEAP East Asa & Pacc (deepn cuntres ny)ECA Eurpe &Centra Asa (deepn cuntres ny)ESCWA Ecnmc and Sca Cmmssn r Western AsaEU Eurpean UnnFAo Fd and Arcuture oranzatn te Unted NatnsFDi Fren Drect inestmentgCC gu Cperatn CuncgCF grss Capta Frmatn

gDP grss dmestc prductgET gba Empyment TrendsgFS gba Fnance StatstcsgNi grss Natna incmehCE hused Cnsumptn ExpendtureshDi human Deepment indexhDR human Deepment ReprthiC h incme CuntreshiES hused incme and Expendture SureyhPi human Perty indexiCRC internatna Cmmttee te Red CrssiCT inrmatn and Cmmuncatn Tecny

iFADinternatna Fund r Arcutura Deepment

iFPRi internatna Fd Pcy Researc insttuteilo internatna labur oranzatniMF internatna Mnetary FundiPCC inter-gernmenta Pane n Cmate CaneiTCB internatna Texte and Ctn BureaulAC latn Amerca & CarbbeanlAS leaue Arab StateslDC least Deeped CuntreslEED leadersp n Enery and Enrnmenta DesnliCs lw incme Cuntres

Acny and Aiain


12/172Arab Deepment Caenes Reprt 2011 | ix

MD Mut -DmensnaMDg Mennum Deepment gasMERCoSUR Sutern Cmmn Market (latn Amerca)MiC Mdde incme Cuntres

MiCS Mutpe indcatr Custer SureyMPi Mut-Dmensna Perty indexNgo Nn-gernmenta oranzatnNPl Natna Perty lneoDA oca Deepment AssstanceoECD oranzatn r Ecnmc C-peratn and DeepmentoR-hiC o-rc ncme cuntresoR-liC o-rc w ncme cuntresoR-MiC o-rc mdde ncme cuntresoP-hiC opr ncme cuntresoP-liC o-pr w ncme cuntresoP-MiC o-pr mdde ncme cuntres

olS ordnary least SquaresoPhi oxrd Unersty Perty and human Deepment intateoPT occuped Paestnan TerrtryPCBS Paestnan Centra Bureau StatstcsPCE Per capta cnsumptn expendturesPl Perty lnePoPs Persstent ranc putantsPPP Purcasn pwer partyR&D Researc and DeepmentRCCE Recurrent cnsequences capta expendtureRPl Reressn-based perty neSAS Sut AsaSFD Sca Fund r Deepment

SSA Sub-Saaran ArcaSSR Se Sucency RatSWFs Seren Weat FundsUAE Unted Arab EmratesUN Unted NatnsUNCTAD Unted Natns Cnerence n Trade and DeepmentUNDESA Unted Natns Department Ecnmc and Sca AarsUNoChA Te Unted Natns oce r te Crdnatn humantaran AfarsUNDP Unted Natns Deepment PrrammeUNECA Unted Natns Ecnmc Cmmssn r ArcaUNEP Unted Natns Enrnment PrrammeUNiCEF Unted Natns Cdrens Fund

UNiDoUnted Natns industra Deepment oranzatn

UNRWA Unted Natns Ree and Wrks Aency r Paestne ReueesUNSD Unted Natns Statstcs DsnUSD Unted States DarvATs vaue-Added TaxesWDi Wrd Deepment indcatrsWEo Wrd Ecnmc outkWFP Wrd Fd PrrammeWho Wrd heat oranzatnWhS Wrd heat SureyWTo Wrd Trade oranzatn


13/172x | Arab Deepment Caenes Reprt 2011

Fwad y Dic f UNDP rina Cn f Aa sa, Cai i

Fwd y rp tak lad i

Acny and Aiain iii

overvIeW 1

sCoPe AND methoDologY 15

ArAb DeveloPmeNt ChAlleNges 17

huan Dpn and huan Py 17

human deepment ans, but hDi st w cmpared t ncme per capta 17

human perty reductn but hPi st cmpared t ncme per capta 19

mny mic Py and expndiu Inquaiy 22

lw mney metrc perty but expsure t ecnmc sck 22

Te enma nequaty 26

h rena dspartes n mney metrc and uman perty n Eypt and Yemen 27

gw and sucua tanfain 29

vate and -ed rwt perpetuate structura retardatn 29

Prductn and exprts cncentrated n w aue-added ds and serces 35

epyn, scia Pcin and Fica Picy 38

Empyment ans despte demrapc pressure 38

Demand-sde cnstrants t Arab empyment 43

Sca prtectn s st a majr caene 46

is tere enu sca space r an empyment-centered transrmatn? 48

Wa scuiy, Fd scuiy and Cia Can 53

Water s an ncreasny bndn cnstrant n Arab deepment 53

Te decate trane d securty, d prces and d subsdes 55

Cmate cane: a ame-caner? 58

UNDerstANDINg AND resPoNDINg to AsPIrAtIoNs For DIgNItY 60

Fac f excuin ac rin 60

Prcesses excusn n mdde ncme cuntres 60

Prcesses excusn n east deeped cuntres 63

ta f Cnn


14/172Arab Deepment Caenes Reprt 2011 | x

gnanc Dfici Ppuain excuin 65

Structura drers excusn 67

insttutna drers excusn 68twad Accuna, Capa sa wi Incui Paicipain 71

lessns earned rm ptca and ecnmc transrmatn n ter cuntres 71

A new sca cntract 75

incuse ptca and ecnmc systems 76

suppi sca and lca l Iniiai 84

industra pcy 84

Arcutura deepment pces 86

Cmpette serce acttes and eecte sca prtectn 89

greenn te ecnmy and creatn jbs n te baran 92

rina Inain 93

hw can rena cperatn be expedted? 94

gd nebrd eect 95

Wa Can b Dn Nw? 96

Budn cnsttuences r mmedate actn 96

Ecnmc and sca pcy 97

gernance rerms 102

PromIses AND ChAlleNges oF the ArAb sPrINg 106

biiapy and rfnc 113

Annx ta 119


15/172xii | Arab Deepment Caenes Reprt 2011

Bx 1: human depratn under ccupatn: te case te occuped Paestnan Terrtry 21

Bx 2: Man appraces and measurements absute mney-metrc perty 23

Bx 3: Estmate nternatnay cmparabe perty nes 25

Bx 4: inrma sectr and te derence between empyment n te nrma sectr and nrmaempyment

43

Bx 5: Te mpact ack access t water n armn and erdn cmmuntes n te West Bank 54

Bx 6: Te mpact sarn d prces: Eypt 57

Bx 7: A scematc understandn excusnary prcesses n te Arab ren 61

Bx 8: incuse rwt stratees: key eatures te 2011 Sut Arcan empyment pan 78

Bx 9: Ratnae r and benets reducn ue subsdes n Syra 82

Bx 10: Brazan arcrat: acte state supprt n a pst-WTo Wrd 84

Bx 11: Eecte prductn subsdes: Farm input Subsdy Prram (FiSP) n Maaw 89

Bx 12: lessns earned rm Syras pst-1958 rura deepment experence 90

Bx 13: Fnancn r deepment n te cntext te Arab Sprn: pprtuntes andcaenes

94

Bx 14: Brazs prramme r purcase d rm amy armers (PAA) 99

Bx 15: Brazs Natna Bank r Sca and Ecnmc Deepment (BNDES ) 101

Bx 16: Te prcess cnsttutn makn 104

li f bx


16/172Arab Deepment Caenes Reprt 2011 | xii

Fure 1: gNi per capta ersus ybrd hDi r Arab and deepn cuntres, 2010 18

Fure 2: Prprtn pepe n n ess tan $1.25, $2.00 and $2.75 a day n Arab cuntres andter deepn rens and cane n perty rates (Percent), 2000-2009

22

Fure 3: Perty rates r Arab cuntres and deepn rens acrss a rane perty nes (n2005 PPP based n mst recent sureys), 2000-2009

23

Fure 4: Perty rates r te $2.00 (a) and RPl (b) nes n 2005 PPP, 1990-2009 24

Fure 5: headcunt perty and te human Perty index r Yemen, 2006 27

Fure 6: headcunt perty and te human Perty index r Eypt, 2008 28

Fure 7: gDP rwt rate based n tta gDP (A) and gDP per capta (B), 1970-2009 29

Fure 8: Dstrbutn Arab cuntres ersus rest te wrd accrdn t atty (standarddeatn) and aerae annua rea per capta gDP rates rwt, 1970-2009

30

Fure 9: Ecnmc transrmatn n oman (A), Tunsa (B), UAE (C) and Qatar (D), 1970-2009 31

Fure 10: Sares empyment n arcuture (A) and manuacturn (B) r Eypt, Tunsa andSyra, 1975-2010

32

Fure 11: Ecnmc transrmatn n Eypt (A) and Syra (B), 1970-2009 33

Fure 12: Ecnmc transrmatn n Arab cuntres (A), Sub-Saaran Arca (B) and East Asa &

Pacc (C), 1970-2009

33

Fure 13: Sectra cmpstn rwt rate aue-added r te deepn rens, 1970-2009 34

Fure 14: Aerae empyment and utput sares te Arab ren ncudn gCC cuntres (A)and wtut gCC cuntres (B), 1991-2004

34

Fure 15: Structure mercandse mprts (% tta mercandse mprts) r Arab cuntres,1995-2009

35

Fure 16: Structure cmmdty exprts r -pr cuntres, 1995-2009 36

Fure 17: Structure cmmdty exprts r Eypt (A) and Tunsa (B), 1995-2009 36

Fure 18: Structure manuacturn r -pr (A) and -rc cuntres (B) n 1990s and 2000s 37

Fure 19: Macnery and equpment as a sare tta manuacturn utput, 1990-2006 37

Fure 20: Manuacturn base r Eypt (A) and Tunsa (B) n 1990 and 2006 38

Fure 21: Structure serce exprts r Eypt (A), oman (B) and Tunsa (C), 1996-2009 38

Fure 22: Ae structure ppuatn r Arab cuntres, 1970-2050 39

li f Fiu


17/172xi | Arab Deepment Caenes Reprt 2011

Fure 23: labur rce partcpatn rates, Arab cuntres ersus ter deepn rens (A),acrss sub-rens (B) r ae rup (15+), 2009 39

Fure 24: oera unempyment rates (A) and yut unempyment rates (B) r Arab cuntresand sub rens, 1990-2000 and 2001-2011

40

Fure 25: Tta (A) and yut unempyment rates (B) r Arab sub-rens by ender, 2001-2011 41

Fure 26: Se-empyed n nn-arcutura empyment (A), 1990s-2000s and sare nrmaempyment n tta nn-arcutura empyment (B), 2000-2007

42

Fure 27: Sare wmen empyed n te nn-arcutura sectr (percentae tta nn-arcutura empyment) n Arab cuntres, 1990s-2000s (A) and n deepn rens, 2000s (B)

42

Fure 28: grwt empyment and rss xed capta rmatn n Arab cuntres, 1991-2008 44

Fure 29: Percentae unempyed wt unempyment benets (cntrbutry and nn-cntrbutry), 2011

44

Fure 30: inestment as (percentae gDP) n Nn-gCC Arab cuntres and deepn ren,1990-2010

46

Fure 31: outays by unctns r Eypt (A), Jrdan (B) and Tunsa (C), 2008 51

Fure 32: Fsca baance and Cnsumer Prce index (annua cane%) r -pr cuntres, 2002-2009 52

Fure 33: grss Natna Sans (% gDP), 1990-2000 and 2001-2010 52

Fure 34: Cutated areas per capta n Arab cuntres (ectares), 2003-2007 53

Fure 35: Tta renewabe water resurces per capta (m3/nab/yr), 2003-2007 54

Fure 36: Rat prductn t tta dmestc suppy n te Arab ren, 2004-2007 55

Fure 37: Rat cerea mprts t dmestc suppy n Arab cuntres, 2004-2007 56

Fure 38: Ecca tprnts and b capacty n Yemen (A), Mrcc (B), Syra (C) and Tunsa(D), 1961-2005

58

Fure 39: Eypt ncme perty (P0) (let) and uman perty (Rt) r Car, Aexandra andbttm tw ernrates n terms P0 r 2000, 2005 and 2008

61

Fure 40: gDP per capta ersus rue aw (A), ernment eecteness (B) and reuatry quatyestmates (C), 2009 66

Fure 41: vce and accuntabty r Arab and deepn rens (A) and r Arab Sub-rens,1996-2008

66

Fure 42: Crruptn Perceptn index (CPi) r Arab cuntres, 2000-2010 69

Fure 43: Arab Demcracy index ndcatrs, 2008 and 2009 70


18/172Arab Deepment Caenes Reprt 2011 | x

li f ta

Tabe 1: Rankn Arab cuntres n terms cane n hDi, 19702010 and 1990-2010 17

Tabe 2: hDi ap between Arab cuntres and y deeped cuntres n 2010 and ts percentaecane, 1970-2010

19

Tabe 3: Actua and estmated hPi r deepn rens and Arab cuntres, 1997 and 2007 20

Tabe 4: Natna perty nes and UNDP estmated reressn-based perty nes (RPl) (2005 PPPper capta, per day) r deepn rens and Arab sub-rens, 1990-1999 and 2000-2009

25

Tabe 5: Per-capta hused Cnsumptn Expendture (hCE) dered rm used sureysand natna ncme accunts (hCE*) (n 2005 PPP) and ter annua percentae cane r Arabcuntres, 1990-1999 and 2000-2009

26

Tabe 6: Current reenues net pratzatn mnus current expendture net subsdes andnterest payments (percentae gDP), 2000-2010

49

Tabe 7: Tax reenue (percentae gDP) n MiCs, 2000-2010 50

Tabe 8: open Budet index (oBi) r Arab cuntres, 2006-2010 67

Tabe 9: Rankn te judca ndependence and ernment aurtsm cmpnents tegba Cmpetteness index, 2010

70


19/172


20/172

oiw

Arab Deepment Caenes Reprt 2011 | 2

grwt ddends ae becme ncreasny cncentrated n te ands ptca and ecnmc etes wt

preerenta access t cruca assets and resurces. Ts was accmpaned by ncreasn cncern pcy makn

wt te cnsumptn and dstrbutn rents rm tese assets and resurces rater tan wt prmtn er

aue-added prductn tat prdes decent jbs and equtabe deery d-quaty basc sca serces.

Predmnanty, became embedded as te prme cmmdty rmn tebackbne te rens trade and prductn wt ts reenues nancn

uxury ds and serces n -rc ecnmes.

o-ed ecnmc rwt as ed t premature de-ndustrazatn and

renrced te subrdnate pstn te Arab ren n te ba erarcy

prductn. Te prcess as been marked by unbaanced deepment

wtn and between Arab cuntres tat as ndered manuacturn

and arcutura sectrs and ed t anaemc rwt utyn areas. As a resut, entre sements Arab scetes

ae been et ut te rwt prcess as cuntry ater cuntry cused attentn n rwt pes n partcuar

sectrs and erapc areas wtut cmpementary pces t wden te mpact te undertaken nestments.

Ts araated sub-natna mbaances and ncreased te rura-urban dde tru rent-based accumuatn nacttes suc as tursm, specuate rea estate r -end reta utets. At te same tme, t acceerated te rens

reance n mprts r mst ts basc necesstes. Ts ecnmc structure s respnsbe r te aure te Arab

ren t enerate decent and prducte jbs r ts pepe. Te rse n nternatna and dmestc d prces snce

2007 as as paced an erwemn burden n te we-ben mns te pr n rura and per-urban areas.

Te accumuatn arus sc-ecnmc dstrtns n a cuntry ke Eypt, r exampe, ntensed rura perty

snce 2000 and ncreased te ap between rura and urban dweers, urter exacerbatn an unsustanabe pattern

nterna rura-urban mratn.

Te styzed acts and anayses cntaned n ts reprt and n te backrund papers dcument te extent sc-

ecnmc dspartes and demnstrate tat te demand r transrmate cane s undamentay a reactn by a

wde sement Arab scetes t systematc excusn rm te benets ecnmc rwt and rm decsns wc

aect ter es. Ts s rerettabe n a ren tat ds enrmus deepment ptenta and wse eaders adpenty pprtuntes t adpt aternate pces tat cud ae respnded t ter pepes aspratns. Weak sca,

ptca and admnstrate accuntabty mecansms as we as ptcay-rented scecnmc pannn mdes

ae urter perpetuated structures neect ( te pepe) and prduced stensbe stabty r etes bus

t pepes sca, ecnmc, ptca, cc and cutura rts. Tus, ack respect r uman rts and suppressn

dssent, n a cntext were sca and ecnmc pces aured quck-xes rater tan n-term deepment

sutns, eectey ed t te squandern deepment pprtuntes.

Furtermre, snce ancent tmes, te pepe te Arab ren ae

pssessed tw eatures sca capta n mre prmnent rm tan n

mst ter scetes, namey, a sprt ecnmc ntate and a y

sustanabe ee sca cesn. Te aures n sme state-ed pcesadpted by mst Arab cuntres snce te 1960s ae crpped tat

entrepreneura sprt, we Wasntn Cnsensus pces undermned

sca cesn. Suc as been te mpact pubc pcy cces n tese

tw mprtant sca assets.

Atu te autrs reran rm detaed pcy prescrptns, tey prde seera pcy drectns and nsts

tat address ner term deepment caenes and ssues demcratc transtn. Te man cncusn, as n

te ADCR (2009), s tat Arab cuntres need a new deepment mde. Mn rm te prean rent-based

ptca ecnmy t a deepmenta state, weer, s pssbe ny tru te adptn ptca, sca and

admnstrate accuntabty mecansms tat prmte ncuse deepment n bt ptca and ecnmc

Growth dividends have become

increasingly concentrated in the

hands of political and economic

elites with preferential access to

crucial assets and resources.

Oil-led economic growth has led to

premature de-industrialization and

reinforced the subordinate positionof the Arab region in the global

hierarchy of production.


21/172

oiw

3 | Arab Deepment Caenes Reprt 2011

speres. Suc a st s cntnent upn te desn and mpementatn a new accuntabty ramewrk based

n te separatn pwers tat renders peratna a unctnn system cecks and baances and admts te

rt t nrmatn. Mst mprtanty, te me t a deepmenta state requres extense erts r te prper

manaement ur crtca resurces, namey: enery, water, arcutura and and uman resurces. o te ur

crtca resurces, ter tan nte and as, tw are n reat abundance and d sncant ptenta (renewabeenery surces and uman resurces) and tw (water and arcutura and) present tu and mtn cnstrants.

Ts reprt asserts tat n rder t re-pstn te Arab ren n a trajectry equtabe and sustanabe n-

term deepment, t s mperate t dese remeda pcy actns tat address majr ernance aures n te

manaement and utsatn tese crtca resurces, weter tey are scarce r abundant.

huan dpn and py in a way in

Ts reprt s ancred n UNDPs uman deepment apprac. it ews uman deepment and te reductn

uman perty, as utmate as sc-ecnmc pcy. As suc, prress n te ren sud be prmary

measured n terms trends n uman deepment and depratn. Wtn ts pre-anaytca cnceptn and based

n te mst recent data, te reprt nds tat sncant prress n umandeepment as been aceed n a Arab cuntres. Usn 1970 as te

base year, te ren appears t ae dne ery we n terms absute

canes n uman deepment, as ted n te 2010 gba human

Deepment Reprt. Ts s t be expected en te are nestments n

sca serces undertaken by mst Arab ernments and te extremey

w startn aues r a tree cmpnents hDi.

hweer, we take a ater startn pnt, te mprement ses muc

ts tter, wt te rate ncrease n te hDi stn t a dstnctey

swer pace snce 1990. Furtermre, te Arab ren as a we and mst

Arab cuntres ndduay sw a wer ee uman deepment tan ne wud expect based n ter ncme

ees. As uman depratn s a mrrr mae uman deepment, t s nt surprsn tat te human Perty

index as decned snce te 1990s, partcuary n -rc gCCs. hweer, t s st er tan expected cmpared t

ter deepn rens wt smar ees ncme per capta. it s as wrty t nte tat bt mprements n

uman deepment and reductns n uman perty are east ntabe n Arab lDCs.

Te MDgs as present an apprprate ramewrk t mntr deepment prress. Many cuntres te ren,

we an scred majr aceements n educatn and ender equaty, st a bend n MDg tarets reated t

materna mrtaty and access t sae water. Prress as as been sw n under-e nutrtn and mrtaty, adut

teracy and access t santatn.

Perty, weter measured n terms uman capabtes r n mney

metrc terms ncme r expendture, reects te cnerence sca,ecnmc and ptca excusns, wc s arn r te majrty te

Arab rura ppuatn. indeed, te seerty rura perty and te are

dspartes between rura and urban deepment reewed n ts reprt

are ndcate aed rura deepment pces. it s sucent t nte

tat 50% te Arab ppuatn s rura, we arcuture, ter prmary

ecnmc actty, accunts r n mre tan 15% Arab gDP.

A derent narrate Arab perty emeres based n te nternatna perty ne ($1.25 per persn per day),

wc ndcates bt a ery w perty ncdence and a ntabe decrease snce 1990. As arued n te reprt, ts

Moving from the prevailing rent-

based political economy to a

developmental state, however, is

possible only through the adoption

of political, social and administrative

accountability mechanisms that

promote inclusive development in

political and economic spheres.

The Arab region as a whole and mostArab countries individually show a

lower level of human development

than one would expect based on

their income levels.


22/172

oiw


perty ne s t w t aw r any bjecte cmparsn mney-metrc perty n Arab cuntres reate t

ter deepn rens. Tus, te reprt recmmends an aternate metdy tat aws perty nes t ary

accrdn t te cuntrys ee ncme.

gen ts aternate measurement apprac, wc appes day perty nes tat rane rm $1.5 t $3.5 dependnn te ee expendture per capta te cncerned cuntry, te man cncusn s tat mst Arab cuntres ae a

wer rate perty cmpared t ter ee per capta expendture. Ts

resut s expected en te ee sca cesn tat caracterzes

mst cuntres te ren, as mentned abe. hweer, te resuts

as ndcate tat te Arab ren as nt been successu n sncanty

reducn mney-metrc perty snce 1990. Te reasn, we knwn t

tse w are amar wt te resuts natna used ncme and

expendture sureys tat were cnducted snce te 1990s, s tat r mst

Arab cuntres per capta cnsumptn expendture dd nt rse n rea terms

t aw r any tanbe perty reductn and ncme dstrbutn dd

nt sw any sns majr mprement. Ts cntrasts wt substantancreases n per capta gDP er te same perd, as reprted by natna

accunts data. in addtn, te reprt sws tat te Arab ren s mst unerabe t ncreases n perty as a resut

scks, suc as rsn d prces and ecnmc recessn.

Terere, t wud be sae t cncude tat despte sme ntabe prress, te ren as eneray aed t transrm

ts masse -weat nt cmmensurate mprement n uman weben and decrease n uman depratn.

Furtermre, te absence eecte sca prtectn mecansms exacerbates te rsk an nt perty, as

te pr are at te recen end ecnmc systems tat aur patterns cnsumptn r te rc, suc as

nestment n uxury and specuate rea estate prjects, we tse sectrs tat can create decent and mre stabe

empyment pprtuntes anus. Fan t nsttute and respect mecansms partcpatn and accuntabty,

Arab remes mssed many pprtuntes r curse crrectn and een aed t understand pepes aspratns,

tus creatn cndtns tat ed t ppuar uprsns.

rn-ad nanc ain

Te prean rm te Arab sca cntract, was essentay ne were te ppuatn excaned ptca

reedm n return r te prsn certan serces, suc as state empyment, access t pubc eatcare and

educatn and exemptn rm r w taxatn. Ts sca cntract came under pressure eer snce te 1970s, due t

an ncreasn nabty te state t c-pt te educated yut nt wat used t be a reatey we pad c serce

tat acted as a mecansm r upward sca mbty. in cuntry ater cuntry snce 1980, te pubc sectr was

n ner abe t absrb eer-ncreasn numbers raduates prduced by te educatna system. Furtermre,

structura adjustment measures resuted n a decne n te rea ncme ernment empyees and n ernment

expendture n sca serces, cuped wt te ncreasn pratzatn suc serces wtut uarantees quantty r quaty. Ts prean sca cntract, understandabe n a rent-based ptca ecnmy, as awed

many Arab states t cntnue t w a nn-deepmenta pat.

Seera Arab cuntres ae appeared stabe n terms nety run systems and ruers. Tat stabty was

based n ppressn and suppressn uman rts and ctzens aspratns and ten sred up by externa

pwers wt ested e-stratec nterests, wc kept te rens ecnmes dependent n te sae prmary

cmmdtes and mprts a crtca e-sustann nputs (e.. d and ntermedate ds). Yet, stabty but

n patrnae and ppressn, as ppsed t a eaty sca cntract between te state and ctzens, renrces te

dre r quck returns n prate sectr nestments (e.. rea estate) rater tan te ner-term and jb creatn

The prevailing form of the Arab

social contract was essentially one

where the population exchanged

political freedom in return for the

provision of certain services, such as

state employment, access to public

healthcare and education and

exemption from or low taxation.


23/172

oiw


nestments requred t absrb a mre educated abur rce. Te sense nsecurty created by an acute awareness

by te busness sectr te ptentay expse sca cntext enerated by rsn nequaty and unempyment

urter eads t capta t r t nestments n quck return markets tat d nt prduce decent jbs. Capta t

s araated by te sare -tten weat n many Arab cuntres, as edenced by reprts tat ae recenty

emered abut ue assets wned by rmer ruers, mst wc s ed utsde te ren.

Te abe-nted eatures te prean ernance structures n te Arab ren ae ed t tw mutuay

renrcn prcesses: n pubc accuntabty te state and eer ncreasn cncentratn ptca and ecnmc

pwer n te ands a ew. Furtermre, te pwer structure reects te ntercked nterests tat cncentrate

autrty wtn a sma crce and preents rtatn pwer.

in act, reardess weter ne arees r dsarees wt nebera rerms, tey cud ae been mre paatabe

t Arab ctzens ad tey been accmpaned by we-tareted sca prtectn prrammes and partcpatn

representate nsttutns and syndcates n a transparent daue between wnners and sers tese rerm

prcesses. Te absence tese nsttutns urter renrced te renter

caracter te state. Cncurrenty, te deterratn n prducte sectrsand te preratn w aue-added serces caused an expansn

nrma acttes and unerabe empyment. Representate nsttutns

and remeda prrammes and nterentns t aeate te unntended

neate cnsequences bera ecnmc rerms were absent and tax

systems were nt deeped wt ppuar representatn n ptca

and esate decsn makn bdes tat manae pubc expendture.

Meanwe, batera and ba trade areements seerey mted te

pcy space aaabe t Arab ernments and urter cmpunded te structura decences Arab ecnmes

durn te rerm prcess. Tey were tus depred te requred exbty t deep sund trade and ndustra

pces t encurae te estabsment a mdern ndustra base and rant mre market access t sma and

medum enterprses.

gw wiu dcn pyn

Te pursut -ed rwt as resuted n weak structura undatns n Arab ecnmes. Te rwt prcessas been y ate, partcuary r -rc cuntres, wt perds rwt wed by years stanatn.Ts atty, cmbned wt ack a n term sn t mtate ts mpact, as adersey aected n-termprducte nestment.

Tese structura eatures ad a sncant mpact n empyment. oer te past tw decades te Arab ren as

recrded te est rwt rate empyment amn deepn rens. Te ren manaed t reduce te

era unempyment rate rm a ee 12% n 1990 t 9.3% by 2010, but te Arab ren st ds te est

unempyment rate amn deepn rens. Te decne n unempyment, mreer, can arey be attrbutedt te substanta decne restered n Aera. in act, unempyment rates ncreased n lDCs (rm 8% t 11%)

and n te MiCs te Masreq (rm 9.3% t 9.8%). Furtermre, atu decnn rm 30% n te 1990s, yut

unempyment std at 24% n 2009. Ts s mre tan dube te ba aerae 11.9%, we te sare yut

amn unempyed ppuatns was er 50% r mst Arab cuntres.

Te decne n unempyment s as smewat decepte n tat t many reects an ncreasn wnness t accept

any jb r smpy abandn a ute jb searc. A systematc expansn nrma empyment n Arab cuntres s

as a pweru sn ncreased unerabty and excusn rm decent wrk. i ne takes nt accunt te decnn

quaty jbs n er, t s cear tat te ren as nt manaed t wn te strue r decent jbs.

The region managed to reduce theoverall unemployment rate from

a level of 12% in 1990 to 9.3% by

2010, but the Arab region still holds

the highest unemployment rate

among developing regions.


24/172

oiw


Arab wmen n partcuar are expsed t unempyment and unerabe empyment. Te sare wmen wrkn

n nn-arcutura jbs s extremey w. At ess tan 20%, t s te west amnst deepn rens. Een Tunsa,

wc as te est percentae wmens partcpatn n te nn-arcutura acttes, as bend te aerae

r deepn rens. Wat s reater cncern s tat ts sare as remaned reatey cnstant snce te 1990s.

Te rens ncapacty t create decent empyment s smetmes attrbuted t te w quaty educatn andte msmatc between educatna utcmes and market demand. Te reprt arues aanst ts yptessby swn tat te mted abur demand r educated wrkers and sks s undamentay a demand-

sde prbem tat s csey asscated wt te structure utputrwt and nestment. Frm ts perspecte, unsatsactry aburmarket utcmes are prmary due t unaurabe macrecnmccndtns tat nbt nestment n xed capta and prducttyrwt, accmpaned by nadequate rwt abur ncme. indeedte reatey w nestment rat te ren (aerae 20% gDP)cmpared t 35% n East Asa s ndcate ts structura dect.

Te Arab ren aces a majr jb creatn caene. Nn-gCC Arab cuntres ae t create nnety tw mnjbs by 2030 n rder t reac u empyment and rase wmens abur rce partcpatn rate t 35% (wcs st 15 percentae pnts bew te aerae r deepn rens) at an estmated b $4.4 trn (ncnstant 2005 prces). Ts mpes an aerae annua nestment b $220 bn, wc s apprxmatey 50% te gDP tese cuntres n 2009. Te requred rate nestment s substantay er r lDCs at arund100% gDP, ceary requrn substanta externa supprt r ts reazatn.

T address te empyment caene Arab cuntres wud need t adpt mre accmmdatn macrecnmcand sectra pces. Ts reprt arues tat, despte te ba recessn, dmestc sca space s aaabe nmst cuntres r nancn te requred deepment transrmatn. Te cus Arab macrecnmc pcyterere need nt be n sca prudence r adequacy but n makn sure te sca space s used t dea wt

pressn bttenecks t expansn ecnmc acttes. Ts scenar rases te questn: sca space r wat?Te remst prrty s t use pubc nestment t actate ecnmc actty n tse rma sectrs wt ptenta r decent wrk. Ts wud cntrbute t te cmpetteness Arab ecnmes and encurae mrenestment n te prducte sectrs s tat te demrapc pprtunty, currenty present n te sare wrkn-ae ppuatn, s transated nt rea rwt.

Naua uc: a iu a an ppuniy f dpn?

Sustanabe use enrnmenta resurces s peraps te mst serus n-term deepment caene acnte Arab ren, wc, accrdn t te mst recent ilo and FAo data, empys ne-trd ts abur rcen arcuture and mprts mre tan tw-trds ts d needs. in a Arab cuntres, wt te exceptn

iraq, Sudan and lebann, te per capta sare renewabe water resurces as bew te nternatna waterperty ne (ne tusand cubc metres annuay). in Yemen, te per capta sare water as actuay reaced100 cubc metres annuay, a tent te nternatna water perty ne.

varus studes ae swn tat te ren s ne te mst seerey aected by ba cmate caneas ncreasn epsdes drut w amst certany ae a drect neate mpact n perty and nternamratn. A d case n pnt s Syra rm 2004 t 2009. in addtn t te perty mpact, successe druts,

as we as ter drn rces, ae resuted n waes nterna mratn tat added sncant pressure n

te aready deterratn pubc serces n Damascus and ts utskrts.1 gba d prce kes as ae a majr

mpact n perty n Arab cuntres. Te Arab lDCs are undubtedy te mst unerabe t d prce kes,

Sustainable use of environmental

resources is perhaps the most

serious long-term development

challenge facing the Arab region.


25/172

oiw


en te er sare d n ter basket cnsumptn and te weak cerae sca saety nets and dsubsdes. Wen rsn d prces are cmbned wt cmate cane, systemc enrnmenta deradatn andcnct, te resut s certan t be catastrpc, as te recent capter n te stry Smaas amne as pren.

Te curse s at te rn te Arab renter states autcracy, tecnca backwardness and ecnmc ratyand sca njustce. Te Arab ren as manaed t squander ts cnsderabe weat wt unsustanabepatterns prductn, prcn and cnsumptn tat ae created sme te est ees enery ntenstyper dar gDP n te Wrd. it as as ndered any serus scentc researc endeaur n renewabe eneryand n sme cuntres ke Yemen t as ed t rapd depetn under-rund water resurces. Sady, te buk ncreasny scarce water resurces n Yemen were drected t te prductn qat, a ppuar narctc pant.Tus te msmanaement natura resurces n Arab cuntres prdes te strnest exampe cmpundedaures n ernance and ecnmc pcy.

T make matters wrse, despte te accumuatn edence n te seemny ntractabe nature unempyment,perty and nequaty n recent years, tere was n serus attempt by te ernn ete t address te underynactrs tat mpeded prress n tese rnts. Ptca nsttutns aed t understand te need t estabs a brad-based and empwered prcess deepment pannn wt strnmntrn and eauatn deepment resuts and t create a strctsystem accuntabty t eectey address perty and sca njustce.instead, te daue wtn deepment crces cused n perty as atecnca prbem. Te prpsed tecnca sutns dd tte t addresste ernance and ptca ecnmy aures tat e at te eart teprbem. Een at te tecnca ee, perty aeatn nterentnssuc as cas transer prrammes, wc ae been successuy appedn many parts te wrd, aed t mpact perty as tey were cnceptuazed and mpemented n satn rma brader ramewrk pr-pr macrecnmc pces. hence, ecnmc pcy cntnued t mpers entreppuatn rups despte a myrad sca saety net prrammes reacn mns benecares.

Despte te enrmty d securty and water scarcty caenes and a strn nexus between perty andpr manaement natura resurces, Arab ernments ae swn nderence t te enrnmentacaene and te deterratn natura resurces n te ren. Te ren s marked by mted nestment nte manaement water resurces and mprement rratn and arcutura prductty.

A mre eecte mx pces tat deeps ncentes r nestment n renewabe enery and acees a raduatransrmatn n prcn and res water resurces s a prerequste r mprements n ecency resurceuse. As empaszed earer, ts pcy st sud be undertaken under te umbrea a new sca cntract based ndaue between te state and representate nsttutns. Te Arab deepmenta state can becme a eadn bape r researc, deepment and prductn renewabe enery. Te adptn new rratn tecnes,r exampe, s necessary r structura cane n te pattern and ecency arcutura prductn tat cud a

are part te Arab d nsucency prbem and cntrbute sncanty t aeatn te seerty rura perty.ony a new deepmenta state tat upds d ernance natura resurces nests n rura areas, arcuturaprductn and n scentc researc can transrm te enrmus enrnmenta caene nt a strc pprtunty.

Aa inain: a nd f a, n a fau f

it s se-edent tat Arab cuntres, weter rc r pr, can a benet rm rena nteratn, en ter cutura

amaamatn and cmpementartes resurce endwments. it s equay true tat tey wasted nnumerabepprtuntes t mpre deepment utcmes because tey ack ecnmc and ptca nteratn. oneexampe s te ss US$300 bn Arab weat n te bnk an eye2 durn te ba nanca crss

To address the employment

challenge Arab countries

would need to adopt more

accommodating macroeconomic

and sectoral policies.


26/172

oiw


2008, equaent t ne and a a tmes te annua nestment requred t address Arab unempyment rm2010 t 2030, wtut any cnsequences. Yet adcatn r Arab nteratn based n bsete, dmatc andten ptczed sans tat resrt t emtna rater tan edence-based aruments des mre arm tan

d t te cause Arab unty. in a areas, be tey sca, ptca r

ecnmc, a natna deepmenta state tat s renay nteratedw presere ts natna securty mre eectey tan a renter state tats ecnmcay and ptcay dependent n te nterpay eptca

rces cntred by cuntres utsde te ren.

Nt surprsny, te abty Arab cuntres t deend ter natnanterests aanst cntendn ren nterests as dwnded as Arab

ernments ae becme ncreasny cnstraned n exercsn serenty er many ecnmc and ptcadecsns. lc dctates tat any cuntry s t surrender part ts decsn makn autnmy, t ad better ds n aur a supranatna entty tat represents te cmmn nterests a uned rup, suc as n te case te Eurpean Unn, nstead renqusn t t ren pwers wse nterests are ten radcay ppsed

t natna nterests.

t ad aad: wa ud dn nw and w?

Te reatnsp between crces ptca, ecnmc, sca and enrnmenta excusn and rena marnazatnas created a cmpex and expse reaty. Ts can be remeded by radca canes, n rder t bud a crtcanumber renay nterated deepmenta states tat put pepe at te cre te deepment prcess. Sucstructura transrmatns d nt and cannt take pace ernt. Tme s needed r stabe, cnsttutna andppuar ernments t emere and r pcy bjectes t be prpery desned and panned. Furtermre and duet te we knwn nsttutna cnstrants and ptca reates acn Arab ernments n transtn, desn n-term sc-ecnmc pans n partcuar wud requre substanta preparatns t ensure tat pepes aspratns

are transated nt scay and enrnmentay easbe deepment

nterentns wt netated areement n trade-s between tewnners and sers partcuar pces and prrammes.

Te expectatns prduced by Arab reutns make t mperater Arab gernments and ter c scety and nternatna partnerst swty me twards meetn number crtca caenes, ntabycreatn decent wrk pprtuntes r yut and enune mprementn demcratc ernance. Tus, t s necessary t start wt pramatc

measures t reac te mnmum acceptabe ee empyment and rwt tat w prde a stabe ecnmcenrnment n rder t enabe demcratc transtn and sustanabe, ner-term deepment. Faure t d srsks causn sncant ecnmc sses tat mt erde muc wat as been aned n te ptca arena.

Terere, prrty sud be en t a packae measures tat are attanabe wtn te current reuatry andpubc admnstratn systems t respnd t te demands te Arab pepe. A successu transrmatn twardte deepmenta state s mre key n te mmedate term te cus s n a mted number key nsttutnstat aect te reatnsp between te state and scety. Ecnmc ssues, wc ae been centra t te Arabuprsns, are tran bend te ptca ssues n te pst-reutn pubc dscurse between te state, cscety and te internatna cmmunty, tus ptentay rskn te ersn ppuar supprt r demcratctranstn tey are nt prpery addressed. o prncpa cncern durn te transtn s t address te mmedatesca and mnetary pcy caenes tat netaby arse n perds nstabty. in partcuar, tere s need ra careu and manate assessment aaabe sca space t nance te rsn cams n current expendture,suc as demands r rasn waes and saares n Eypt and nnate scemes r creatn yut empyment.

A number of critical challengesneed to be addressed, notablycreation of decent workopportunities for youth andgenuine improvement indemocratic governance.

It is self-evident that Arab countries,

whether rich or poor, can all benefit

from regional integration, given

their cultural amalgamation and

complementarities of resource

endowments


27/172

oiw


Economic policy

Pubc nances tat are based n taxatn wtut representatn, as as been te case n mst Arab cuntres, areceary n ner tenabe. hence, erts t reamp sca space by examnn ssues suc as sustanabty pubc

debt and pubc nestment sud be cmpemented by strn mntrn and eauatn te mpact scapcy n deepment resuts (ncudn te trny ssue d and ue subsdes) and wder representatn nrmuatn sca pcy.

Smar t sca pcy, mnetary and excane rate pces ccupeda pta re n te unctnn te Arab renter ptca ecnmy.Smetmes excane rates were underaued t benet are exprters,w were ten part r cnnected t te run etes, wtut cncernabut te detrmenta mpact te resutant er prces mprted dsn pr and w ncme ames. oter tmes, ten n ne wt restrcteprescrptns t taret natn anded dwn by te iMF, excane rateswere eraued t sut te nterests mprters, w as ad cse tes ttese etes, wt utter dsreard te mpact n nestment n te prducte sectr and n cmpetteness caprducers n ba markets. Mnetary pcy and peratns te nanca sectr ae as been santed twardsprdn ceap credt t te ptcay we-cnnected we sma and medum enterprses tat are respnsbe rmst jbs are depred access t rma credt.

Wat s needed s a tru anayss mnetary pcy and mecansms tat determne excane and nterestrates and nrms r credt peratns banks tat am t supprt prducte sectrs and rms, partcuary sma andmedum enterprses. Ts, n turn, wud mandate a number measures tat ncude rasn te ecty crcuatnby taretn er credt t gDP rats and appyn mnetary and excane rate pcy ramewrks tat are rendytward empyment and uman-deepment.

Breakn te cus cyce ecnmc and sca excusn s cntnent upn puttn n pace mecansms rnancn empyment-ntense ndustra, arcutura and serce sectrs. Ts can be aceed by prdnpreerenta nterest rates t stratec sectrs, pubc and prate an uarantee actes and wern te requredresere rat r banks tat taret sma and medum enterprses, partcuary n rura areas. Furtermre, t strentente deepmenta re te nanca system and t reduce te cst brrwn t w be necessary t bettermanae qudty and suppy mney n suc a way tat ncreases te bankn sectrs return n equty. Tesecanes sud parae swt and eecte attempts t reduce systemc rsks, we takn a necessary steps t deawt are-scae deauts tat are expected n te cntext te current pst-reutnary ecnmc recessn.

Mst Arab cuntres as suer rm weak and ptczed busness enrnments tat mpede n-term pratenestment. An mprement n ts area, weer, requres muc tme and ert at te macr, nsttutna and sectraees. A key prrty remans te eauatn cmpetteness ndcatrs and measures tat can be easy mpemented

by exstn nsttutns, suc as canceatn a decsns tat mpede te mmedate estabsment new busnessesr expansn exstn nes, partcuary n abur absrbn, cmpette sectrs. lkewse, restn te mnmumcapta requred t rm a cmpany and streamnn restratn prcedures wud tremendusy mpre te busnesscmate. An mmedate mprement n trade actatn and supprt serces (custms, brders, transprtatn, nance,etc.) can be easy aceed by cancen a unnecessary prcedures and bstaces tat ten prde a breedn rundr crruptn and rctn between te pepe and tse empyed n pubc admnstratn.

Te ecnmc and sca excusn yut, exemped n ter ack access t decent jbs, n addtn t termarnazatn rm te ptca spere, s te surce muc te tensn wtnessed n te ren. indeed, wete unempyment rate s decnn, te buk jbs enerated s n w prductty acttes n te nrma sectr.

Public finances that are based on

taxation without representation,

as has been the case in most Arab

countries, are clearly no longer

tenable.


28/172

oiw


Unempyment s a serus prbem n te Arab ren, wc reprts te west abur rce partcpatn rate

n te wrd. interentns tat cntrbute t reducn unempyment by ncreasn decent jb pprtuntes n

te rma sectr are urenty needed r a successu demcratc transtn. Te reprt suests tw mmedate

nterentns: n te ne and t prpses a mre n-dept understandn abur market dynamcs wt a ew t

reducn suppy and demand sde bttenecks tat mpede attempts t create and access jbs. on te ter and,t recmmends manate use pubc prcurement prcesses t ncrease demand r cay prduced ds.

Ts can be accmpsed by nsstn n te use equpment and suppes tat are prduced by ca rms at

cmpette prces and ern pubc sectr saary ncreases n te rm ucers t be used t purcase a certan

rane cay prduced ds wt abur cntent.

Tese nterentns w make a sncant cntrbutn t reducn rctna unempyment and bst demand

r ca prducers w are adersey aected by pst- reutnary recessns. in addtn t wrkn n

macrecnmc pces t ncrease te demand r abur by ncreasn te nestment t gDP rat and ter

demand-sde nterentns, a seres measures n te suppy sde can be

taken t mpre te ecency te abur market. Tey ncude resn

abur aws t ensure wrkers rts, encuran rma and reuatnnrma empyment, creatn demand-rented trann prrammes

and extendn sca prtectn t a wrkers.

Tese steps sud cunter te expansn nrma and unprtected wrk

wc pays a ue re n te rmatn crces sca excusn and

perty n Arab cuntres. As te majrty wrkers excuded rm sca securty are se-empyed n arcuture

and n nrma SMEs, extendn cerae t te tw rups makes perect sense. Furtermre, en te anayss

sca space n ts reprt, te cst extendn suc cerae s nt utsde te reac te majrty mdde and

w ncme cuntres n te ren.

Income redistribution and social justice

Te ren s caracterzed by ncme and weat nequates tat are nt reected n gn cecents. in rder t

preent urter deterratn nequaty, tere s urent need r measures suc as eecte appcatn prresse

taxatn, especay ncme, prperty and capta ans taxes. Te state can as set mnmum waes and sca securty

stabzers n sca prtectn systems and pubc expendture pces. hweer, te majrty Arab cuntres r wc

detaed unctna budet breakdwns are aaabe aready spend upwards 5% ter gDP n sca prtectn,

ncuse enery and d subsdes. Ts means tat te ren aces a stark cce between eter cntnun wt

te current trend rsn, necent and pry tareted subsdes r creatn te requred space t uy respnd t

ppuar demands r pubc nestment n sca capta, prducte sectrs and pysca nrastructure. Te ssue s

mperate, partcuary r cuntres acn majr nrastructure dects. Ts ncreases te urency restn te

questn sca space, partcuary n mdde-ncme cuntres n transtn, suc as Eypt and Tunsa.

Infrastructure

Te weak nrastructure n Arab cuntres mpses transactn csts n ecnmc actty, wers te return n

nestment and bcks access te pr and rura dweers t basc mdern amentes. Fr exampe, pwer cuts n rura

areas preent cdren rm studyn at nt and cncs rm sercn patents. Because nestment n nrastructure

s te mst mprtant determnant successu transrmate cane n Arab scetes and n ter ecnmes,

Arab ernments sud cus durn te next tw years n enarn te sca space aaabe r nestment n

nrastructure and prrtze tese nestments wt a cus n mprn te access t ecnmc pprtuntes r

pr rura dweers.

In order to prevent further

deterioration of inequality, there isurgent need for measures such as

effective application of progressive

taxation, especially income,

property and capital gains taxes.


29/172

oiw


in mdde and w ncme cuntres, mted nanca resurces and nsttutna capacty mt preent rapd

mpementatn nrastructura prjects n an ecent and transparent manner. hence, t s adsabe t cme

up wt a pan t ncrease sca space and expand nsttutna capacty n te medum term. in te mmedate

term tere s need r a quck assessment te sca and ecnmc benets ptentay are nrastructura

prjects and embarkn n an pen and transparent debate t decde n te mst beneca and abe prjects.We budn up te capacty pubc nsttutns r eecte manaement deepment prjects, nnate

prject mpementatn mdates, ncudn cmmunty manaement sme smaer prjects and pubc-prate

partnersps r prjects wt quck nanca payback sud be expred.

Priorities for poverty reduction and inclusive development

Te prcess perty reductn durn te transtn perd must by necessty cus n reducn sub-natna

dspartes tru erapcay-tareted prrammes. Suc nterentns can be mpemented tru use

exstn perty mappn exercses. gernments and ter c scety

and nternatna partners sud cabrate t desn and mpement

suc prrammes wt cmpnents r pubc wrks, mcr nance, smabusness supprt, trann and expansn sca serces netwrks,

especay tse tat taret wmen, ncudn te prsn eat

serces, sc eedn, as we as cd eat prrammes.

it s wrt ntn tat sums ae been te scene sca and ptca tensns tat preceded te Arab Sprn. in

act, t may be arued tat te deterratn cndtns Arab ctes were cataysts ptca actsm tat pused

r reater sca justce. imprn te cndtns neected and decayn urban and per-urban areas prdes a

tremendus pprtunty r empyment and sca ncusn. Terere, ne pssbe mmedate ree measure t be

adpted by cuntres n demcratc transtn s t desn pubc wrks empyment prrammes tat mpre n

cndtns n areas nrma usn and urban decay. Suc prrammes may ncude ardabe sca usn

and mpred basc serces ncudn pre-scn and cmmunty care r te edery and te andcapped. in

act, te mmedate deepment eat, educatn and catna trann serce centres can be expected tcreate new empyment pprtuntes r unersty and sc raduates n ter cates.

T ensure te success tese prrammes, addtna nanca resurces wud be requred t und nddua and

cecte sma prjects tat serce decayn areas and ter nterands. it s urter necessary t empwer eected

ca ernments by n tem uman pwer, nanca resurces, trann and te capacty t bud and expand

te dman ca decsn makn.

in addtn, sma and medum szed twns must be ewed as pta areas n rena deepment netwrks and

a base r nteratn arcutura, cmmerca, ndustra, turst and serce acttes. Ts requres understandn

te sc-ecnmc and demrapc dynamcs and caracterstcs tese ctes s tat pressn nterentns are

dented n cperatn wt c scety and mpemented by eected ca cuncs. Furtermre, rura deepments dependent n nks between sma and medum ctes and ter rura nterands and sud ay te undatn r

renay baanced deepment.

Fr a sca justce aenda, natna deepment pcy prrtes sud cus n expandn pprtuntes t enae

n abe arcutura and nn-arcutura ecnmc acttes as a means cnrntn s and water deradatn

and rsn rates unempyment and perty (suc as n te case Eypt rm 2000 t 2009). it s edent

tat te current cndtns n rura areas te Arab ren requre brad structura canes tat am t acee

cmpreense rura deepment based n a mre dersed set ecnmc acttes. Cnsequenty, t s crtca t

mmedatey denty te causes persstenty rates perty n te mst depred areas te cuntrysde. it

The process of poverty reduction

during the transition period mustby necessity focus on reducing sub-

national disparities.


30/172

oiw


s as necessary t make aaabe te requred nanca and tecnca resurces t supprt te derscatn te

rura ecnmy by ncreasn prductty sma arms and mprn access t markets and credt n reasnabe

terms. Tese nterentns sud ncrease empyment pprtuntes n te arcutura and nn-arcutura base

rura ecnmy and at east ntay sw dwn te prcess rura-t-urban mratn, ayn te undatns r an

eentua mre erapcay baanced deepment.

gen te mted scpe r ncreasn arcutura prductn by expandn

te area under cutatn n mst Arab cuntres, wt te ntabe

exceptn Sudan, pubc nestments sud am t ncrease prductty

te mted stck arabe and, by ntay cusn n better dusn

exstn knww n mpred prductn metds and rendern te

apprprate nputs mre accessbe. in ts cntext, tere s ceary a need t

rest te way n wc current d subsdy prrammes wrk t render

tem mre eecte n prmtn prductn and eneratn reater

and mre stabe ncmes r te rura ppuatn, rater tan subsdzn

prducers n ren cuntres and urban cnsumers cay.

Dersyn ecnmc acttes n rura areas and swn dwn rura exdus as requres mprn sca serces.

Ts must be based n te prncpa reardn tese serces as a rt, a matter tat necesstates te prsn

decent educatn and eat serces t te prest erapc rens. Ts w nt ny ae a drect mpact

n empyment n tese areas but w as rant access t essenta serces t te prest te pr amn rura

ppuatns, especay sma peasants.

Te abe nted measures cannt pssby be successu n te absence an accuntabe and capabe state.

Experence wt past attempts at scay ncuse deepment ts te mprtance mprn te capacty

pubc nsttutns t eectey perrm ter unctns by prdn te pubc sectr wt te requste uman and

pysca resurces and nrastructure. Te tmey and cst-eecte mpementatn pubcy unded nrastructure

and serce deepment prjects wud as requre, as ted earer, an ecent and transparent system manaement pubc unds and pubc nestments.

gen te crtca nature water scarcty n mst Arab cuntres, state nterentns and state-backed pubc prjects

are needed t mpre water manaement wt a cus n prmtn ecent rratn tecny, estabsn

water user asscatns and jnt use underrund resurces and enactn mre ratna water prcn pces.

Beynd smpy creatn jbs, te prramme pubc wrks adcated n ts reprt can be made mre beneca

te nterentns respnd t crtca mpedments t sustanabe deepment n te ren.

Institution building and democratic governance

Despte te act tat perty and unempyment are amnst te mst mprtant actrs underyn te ppuaruprsns, t sud nt be rtten tat suc pr utcmes n te ecnmc rnt are arey te resut ernance

aures. one man underyn cause pr deepment utcmes as been te ack eecte mecansms by

wc te pepe cud d tse n pwer accuntabe r ter actns and demand curse crrectn wen pces

ad aderse mpacts. it s terere crtca tat a cuntres n tru prcesses demcratc transtn ensure

tat ctzens can d ter representates t accunt tru reey partcpatn n settn pcy and erseen

te mpementatn areed measures. Ts can ny be aceed rreersbe measures tat expand te scpe

ppuar partcpatn n w pubc assets are used are adpted and exstn Arab sca reatns pwer are

caned. Tese measures must ncude rerms t ensrne a prme re r c scety and ca ernments as

acte and ndspensbe partners n te deepmenta state. Abe a, te ndependence, nterty and ecency

One main underlying cause of poor

development outcomes has been

the lack of effective mechanisms by

which the people could hold those in

power accountable for their actions

and demand course correction

when policies had adverse impacts.


31/172

oiw


te judcary must be saeuarded, nt ny r te sake te ntrnsc aue a just system, but as as a crtca actr

r prmtn n term prducte nestment. Ts can be dne by creatn cndtns tat can uarantee mparta

enrcement cntracts and er redress n cases arbtrary actn by te state r ptcay we-cnnected etes.

As te ptca transtn n cuntry ater cuntry ets under way, te uncertantes surrundn te re te state

and pr track recrd te state n mpementn deepment nterentns, mt use tradtna mecansms t

mpement te needed pubc nterentns. Eected ca autrtes, as we as c scety actrs must tus carry an

added respnsbty n te manaement, mpementatn and mntrn

crtca mmedate deepment nterentns suc as manate

pubc wrks prrammes. Ts requres urent enabn measures (suc

as reewn aws ranzn te wrkns CSos) t renrce ter

deepmenta re wtut crcumentn ter tradtna sca unctns,

by enabn tem t mpement and ersee pubc prjects, ncudn te

manaement sma scae entures n rura and urban areas.

Te tradtna tp-dwn apprac ernments n te ren as as depred Arab ctzens eecte andaccuntabe ca admnstratns tat can act as mprtant cannes ppuar ance state actn by dn

te autrtes accuntabe. Terere, t s mperate t recnsder esatn ernn ca admnstratn,

partcuary tat wc reates t te rmatn ca cuncs wt ree eectns tat are supersed by mparta

eectn manaement bdes and t te budn admnstrate, execute and nanca capactes ca

autrtes t mpement deepmenta nterentns n an accuntabe manner. Ts mpes sme deree

decentrazatn tat enabes ca autrtes t mbze resurces and mpre ter manaera, pannn and

mntrn and eauatn capabtes.

insttutna weakness cnsttutes ne te mst mprtant causes sc-ecnmc and ptca excusn n te

Arab ren. Te weakness nsttutns respnsbe r prdn essenta pubc serces suc as sca securty,

eat and educatn s a majr cause arer and cumuate deepment aures n terms equtabe access tpprtuntes r sc-ecnmc deepment. hweer, nsttutna rerm s an nerenty n-term prcess tat

requres, rst and remst, execute autrtes t be seected based n mert rater tan yaty. Terere, tere s

a dre need r actns tat sna permanent rerm n te ernance pubc nsttutns. in ts respect, tere are

key nsttutns tat sud be en prrty n te mmedate term. Ter seectn must, curse, be based n te

extent ter mpact n deepment resuts at te natna ee. Typcay, tese nsttutns wud ncude taxatn

and custms autrtes, centra and pubc banks, deepment unds, n addtn t audt autrtes and ant-

crruptn and uman rts prtectn aences. Furtermre, t s mprtant t rese te ea cdes ernn

te c serce t ensure ter pressnasm and respnseness t te demands te pubc.

A successu transtn s predcated n te eecte re te judcary n pubc e. in te srt run, certan

measures can be undertaken t rerm te judcary system, especay wt reard t ts capacty t adjudcateecnmc dsputes and tate r cecte pubc nterest te pr and marnazed wse sca and ecnmc

rts are ten ated wtut redress. Measures mmedate urency n ts respect ncude abandnn any

erap between execute and judca autrtes, securn te ndependence and nterty te judcary and

te estabsment centres r dspute settement and arbtratn and specazed curts. it s we knwn tat n

tatn s an mprtant surce crruptn te judcary n many Arab cuntres. Terere, t s necessary t

ncrease te number judes and admnstratrs and t autmate curt wrk. one ssue undermnn aw and te

judcary n Arab cuntres s te cntradctn between aws and ea cdes, wc creates many ambutes tat

pen pprtuntes r arbtrary actn by aw-enrcement aences.

Institutional weakness constitutes

one of the most important causes

of socio-economic and political

exclusion in the Arab region.


32/172

oiw


Cncuin

T sum up, te deepmenta state entas ard cces tat ny a etmatey eected, respnse and accuntabe

ernment can make. N pcy peases eeryne a te tme. hence, manan sca cnct arund ard cces smprtant r te credbty and sustanabty te deepmenta state. incuse partcpatn n sca and ptca

nsttutns tat mbze and artcuate cecte nterests (be tey ptca partes, abur unns and pressna

asscatns, r c scety adcacy rups) utmatey enances te abty states t manae sca cnct.

Te transrmatn prcess Arab states s cntnent upn uprtn te ptca ecnmy excusn and ts

ppresse securty and stabty mde. Fe key nterreated ernance dects prde sme essns n wat t d

and wat t ad t ensure a successu transrmatn. 1) Te state as t am r rea rerm, nt just a aade, t

bud a bass r etmacy, eecteness and stabty. 2) Tere s need r a strn cnsttuency r sca justce and

accuntabe ernance. 3) Cmbatn crruptn, wc s a serus symptm ernance dect and a catayst

ppuar aner, requres te cmbned erts judca, admnstrate,

ptca and sca nsttutns. 4) Te new demcratc prcess sud bestrentened by reedm nrmatn (especay budet penness)

and uarantees tat cans w mntr and ersee securty and pce

serces and judca ndependence. 5) Transrmate erts ae t ben

wt rermn ca ernance n rder t uarantee equtabe deepment and accuntabty and respnseness

autrty t ppuar demands. Te nn Arab resurence as demnstrated tat curtan partcpatn n te

name securty r stabty as nt made ppresse remes resent. Ceary, te ny uarantee ncreased stabty

and ncusn n te uture s sustaned ppuar enaement n te ptca prcess truut te ptca cyce as

ppsed t nterudes ptca entusasm durn eectns. 3

Fwn te apprac te rst Arab Deepment Caenes Reprt, wc was jnty prduced wt te lAS

and endrsed by Arab eaders, wat s prpsed ere s nt meant as a cmpreense sutn t te ecnmc,sca and nsttutna caenes n Arab cuntres. Ts reprt merey ntends t prde a exbe menu pcy

ptns tat take nt accunt te specc needs, capabtes and aaabe resurces te ren. At te same

tme, ts reprt can becme an eecte t r enan n pcy debates at te natna ee tat dea wt

necessary measures t ensure tat deepment and ecnmc acttes cntnue at an acceptabe pace n te perd

transtn and t enact mmedate rerms tat wud pae te way r n-term deepment pannn.

it s as mprtant t nte tat ts s but te tp te ceber wat s requred by Arab eadersps n ts dcut

transtna stae. Ter erts w determne te ren w reress, as sme rces desre, t rent and dependency

r prress twards a deepmenta state tat breaks te destructe cnerence between te cus cyces

ptca marnazatn, ecnmc and sca excusn, enrnmenta deradatn and rena dsnteratn.

Fnay, we eery cuntry n te Arab ren s aected, weter drecty r ndrecty, at te marns r at te

cre, by ts seemn tda wae yut-ed ppuar uprsns, t s essenta t bear n mnd tat te extent and

mpact te deepment aures underyn ts rsn tde, as we as te means and measures eter taken r t

be taken t redress tem, w der rm cuntry t cuntry. it s as cruca t nte tat te curse, te dynamcs

and te utcmes transrmate cane prcesses w ary, smetmes cnsderaby. Terere, ur rena

enerazatns need t be adated by and apprpratey tared and cabrated t, te specctes, udtes and

dynamcs n eac cuntry cntext. in ts t, ts reprt sud be rearded as a n dcument.

A successful transition is predicatedon the effective role of the judiciary

in public life.


33/17215 | Arab Deepment Caenes Reprt 2011

scp and mdy

Ts secnd Arab Deepment Caenes Reprt respnds t te recmmendatn te 2009 KuwatArab Ecnmc and Sca Deepment Summt r reuar ssuance reprts n deepment caenesaced by te ren. in ts t, t ers sme aternates tat an awakened Arab ren can expre rbrnn abut ecnmcay, scay and enrnmentay sustanabe deepment. As ts precursr, tsreprt caenes accepted dmas and ers pe tat a derent utcme s pssbe. it ers aenues tcanne yun pepes ptenta and enery nt prducte acttes tus renrcn nascent demcracesby prdn te requred prducte base tat can wtstand te aares a ate ba market.

Ts reprt takes nt accunt a radcay caned Arab ptca cntext, by addressn tse key nterckn

deepmenta caenes tat are at te base te rwn mpetus r pste transrmate cane.our understandn s tat underyn te rsn tde ppuar demands r demcratc cane are majrdeepment aures, especay te dects n ernance, reedms and sca justce and, partcuary,at ter nexus wt macrecnmc pces (tru ter mpact n rwt, nequaty, perty andunempyment) and te enrnment n essence, aures n prmtn and prtectn uman and natnadnty. As te Ecnmst Maazne put t amn te many reasns r te Arab Sprn was a sense tatpaternastc autcraces are n way t run we-educated, Twtter-usn scetes. 4

Apprecatn te prerequstes uman deepment cas r a restn deepment stratees n amsta Arab cuntres. Suc a prcess requres a res k at deepment styzed acts. We numbers can bemseadn and sud be treated wt reat cautn, tere as t be a enera understandn te rder

mantude te derent prbems. T ts end, te reprt cntrbutes t an anayss te current status key arabes sc-ecnmc deepment and ter eutn and assesses te eutn er tme uman and ncme perty, as we as actrs tat can expan ts eutn usn a crss-cuntry emprcaapprac. Ts s, weer, suppemented by case studes cmmssned r ts reprt tat take nt accuntnatna cntexts and sub-natna specctes.

Te reprt attempts t anayze acts n rder t answer te wn e sets questns:

1. What is the state of human development and progress towards reduction of money metric poverty and

human deprivation relative to other developing regions?

2. What are the main features of long term Arab economic growth and what are its main drivers? Has the region

undergone any positive structural transformation? What are the main features of the Arab labour market?What is the order of magnitude of the employment challenge? Is there fiscal space to address Arab structural

economic deficits? If so, through which channels?

3. What are the characteristics of the food security challenge in Arab countries? What are the most likely

implications of climate change? Can green policies be a panacea for Arab development?

4. How do Arab governance systems and institutional structures impede Arab human and economic

development? How can governance systems be made more development friendly?

5. What are the main features of a new Arab social contract and a new development model? What are the most

pressing issues to respond to now?

scp and mdy

1


34/172Arab Deepment Caenes Reprt 2011 | 16

scp and mdy

Tese questns are answered wtn te ramewrk te cntestatn mement tat as spread truutte Arab ren, t recam uman and natna dnty, sca justce and reedm. on ssues reated tsca and ecnmc pcy, te reprt ws te anaytca apprac ered n te rst Arab DeepmentCaenes Reprt and n sx ntes cmmssned by te Unted Natns Department Ecnmc andSca Aars (DESA) 5 and UNDP, n majr and ntercnnected areas reeant t te rmuatn natnadeepment stratees: macrecnmc and rwt pcy, trade pcy, nestment and tecny pcy,nancn deepment, sca pcy and state-wned enterprse rerm. in partcuar, ts reprt and tspredecessr we a sncant nteectua debt t tw eadn deepment ecnmsts: lance Tayr and

Terry McKney.

Wt reard t data and nrmatn ncuded n ts reprt, seera surces were used, ncudn nternatnasurces suc as te Unted Natns Statstcs Dsn (UNSD) and ter UN ranzatns tat cect datan perty, empyment and te Mennum Deepment gas. Statstcs ncuded n ts reprt were asextracted rm rena Unted Natns bdes tat wrk n te Arab ren an wt ca natna statstcs.

it sud be nted ere tat te data aaabe at natna, rena and nternatna ees are caracterzedby many aps and ncnsstences. Wt respect t te cacuatn rena and sub-rena aeraes, tereprt wed te udenes prded by te UN statstca dsn r te cacuatn a reeant ndces.Estmates r rena and sub-rena aeraes were prduced and presented ny data were aaabe rat east 50% te reeant ndcatr r at east 50% te tta ppuatn Arab cuntres was cered.

Fr a systematc anayss deepment aceement n te ren, te reprt adpts tw man casscatnscemes dependn n te sutabty t te tematc area under nestatn. Tus, sectns n umandeepment, perty, empyment and ernance adpted te casscatn used by te Arab MDg Reprt(lAS and UN, 2010), wc rups Arab cuntres nt ur rups: gCC (Saud Araba, Baran, Kuwat, Qatar,oman and UAE); Masreq (Eypt, Jrdan, iraq, Syra, lebann and oPT); Mareb (Mrcc, Aera, Tunsa and

lbya) and lDCs (Sudan, Yemen, Djbut, Smaa, Cmrs and Maurtana). Te sectns n sca space andstructura transrmatn dstnus between a smaer rup Arab cuntres accrdn t te ecnmccntrbutn te and as sectr as ws: -rc cuntres (Baran, Kuwat, lbya, oman, Qatar, SaudAraba, UAE, Aera, Sudan 6 and Yemen) and -pr cuntres (Djbut, Eypt, Jrdan, lebann, Mrcc,Syra and Tunsa).

Fnay, te reader sud be aerted up rnt tat ts reprt w nt be dean extensey wt speca caser cnct cuntres, partcuary Paestne, Smaa and iraq. Ts s nt t underestmate te mpact cnctn uman deepment. T te cntrary, we beee te ssue s t mprtant t be anded supercay andwarrants speca attentn beynd te scpe ts reprt.



Aa Dpn Can

huan Dpn and huan Py

huan dpn ain, u hDI i w cpad inc p capia

Usn 1970 as te base year, te ren appears t ae dne we n uman deepment, as ted n te 2010gba human Deepment Reprt. Ts s t be expected, en te are nestments n sca serces undertaken bymst Arab ernments snce te 1970s and te extremey w startn aues r a tree cmpnents hDi. We tss an aceement wc te ren as reasn t be prud, rerettaby, te rate prress n uman deepmentswed dwn ntceaby snce 1990. Ts s ceary demnstrated n Tabe 1. Te mantude ts prress cud aebeen reater ad te ren adpted mre eecte pces r transatn ts matera weat nt uman weare. Tsnecency manests tse ceary wen ne cmpares perrmance n ncme per capta wt canes n uman

deepment acrss cuntres.

ta 1: rankin f Aa cuni in f can in hDI, 19702010 and 1990-2010

Surce: human Deepment Reprt, 2010.

in tabe 1 we see tat, cmpared t 4 te tp 10 mers ben Arab cuntres usn 1970 as te base year, nt a sne

Arab cuntry s amnst te tp 10 mers n hDi rm 1990 nwards. hweer, tree te tp mers n te earerperd, namey oman, KSA and Tunsa, cntnue t make remarkabe prress n hDi n te atter perd, ben paced

amnst te tp 20 mers, teter wt Mrcc. Aera demnstrates muc swer prress n te secnd perd,

due t te eect te prned nterna stre te cuntry experenced n te 1990s. Sudan, Kuwat, lebann and

Djbut, n te ter and, sw te swest rates mprement n hDi snce 1970. Djbut as sws cnsstenty

w rankns n terms prress n bt ncme and nn-ncme cmpnents hDi and remans amnst te wrst

perrmers wen ne ks at te perd snce 1990. Ts s a cear reectn te undamenta cnstrants t aces n ts

attempt t break ut a cus cyce msery tat s typca lDCs. Te pr perrmance lebann aanst a 1970

base s arey due t te neate mpact te n-runnn c war n bt ecnmc prsperty and prsn

quaty pubc serces. lebanns reate perrmance as mpred sncanty snce 1990, wt te end te c war,

hDIipn

rankCounty Name Non- IncomehDI ank

gDP gowtank

hDIipn

rankNon- Income

hDI ankgDP gowt

ank

1970-2010 1970-2010

1 oman 1 19 15 7 40

5 KSA 3 111 18 2 108

7 Tunsa 6 20 14 12 21

9 Aera 5 100 30 19 98

10 Mrcc 14 42 12 10 43

13 lbya 4 132 41 18 114

17 Eypt 25 39 21 28 3219 UAE 24 38 103 88 118

34 Baran 21 104 94 93 67

43 Jrdan 26 87 51 53 44

58 Qatar 73 121 104 104 58

67 Sudan 121 72 22 118 9

68 Kuwat 48 131 61 59 50

94 lebann 89 92 29 54 8

122 Djbut 117 133 100 109 130

Aa Dpn Can

2



Aa Dpn Can

wc ed t resumptn ecnmc acttes and mpred access t pubc serces. Te w rank Sudan cmes as

n surprse en tat te cuntry was at war wt tse amst eer snce ndependence n te 1950s. hence, een wen

dscery n te 1990s ed t a substantay mpred perrmance n te gDP per capta rnt, te rankn te

cuntry remaned pr n nn-ncme eements hDi because t experenced dcutes n transatn ans n ncme

nt mpred uman securty and prsn basc sca serces.

Fiu 1: gNI p capia u yid hDI f Aa and dpin cuni, 2010

Surce: Based n data rm human Deepment Reprt, 2010.

in ure 1 we cmpare perrmance n ncme per capta wt hDi acrss cuntres. A Arab cuntres (wtte exceptn Tunsa, Jrdan and Cmrs) e bew te reressn ne tat separates cuntres tat aeer gNi rank reate t ter hDi rank rm cuntres tat ae wer gNi rank reate t ter hDi rank. Tus,wt te exceptn Tunsa, a Arab cuntres, wc ae been dented by te ba human DeepmentReprt as tp-mers, st a bend n uman deepment reate t ter ncme ees. Smpy put, mstArab cuntres cud ae attaned er ees hDi ad tey been as eecte as ter peers n te deepnwrd n mpementn a uman centred deepment pat.

Ts pr perrmance n uman deepment, despte substanta nestment n eat and educatn, saruaby due t te mpact pr ernance structures n te eecteness tese expendtures. Praccuntabty ramewrks ae ed t rates crruptn and dsreard quaty ssues. ineecte r nn-exstent parent-teacer asscatns and mted prsn undn r peratns and mantenance pubcassets ae undermned te quaty educatn serces n partcuar. in act, many sc actes ae beenet n dapdated cndtns and wt nsucent suppes teacn ads.

Te eutn te hDi ap between Arab cuntres and te mre deeped oECD ecnmes s as drect reeance t any bjecte assessment ter uman deepment ans. Tabe 2 sws te resuts undertakn suc an exercse. Te rst cumn sws te hDi gap, wc s measured by te rat te hDi te deepn cuntry r ren t te hDi est deeped cuntres n 2010 (te atter s cacuated as tesmpe aerae te hDis r te ten cuntres tat ae te est hDis n 2010). Wen ts rat s deductedrm te crrespndn rat n 1970, a cuntry/ren tat s successu n csn te ap w sw a pstepercentae cane. Te secnd cumn reprts ts percentae cane. on ts bass, te trd cumn n tetabe ranks Arab cuntres and deepn rens accrdn t te prress aceed, r ack tere.

BahrainKuwait

QatarKSA

UAE

DjiboutiSudan

Algeria

Libya

Morocco

Tunisia

Egypt

Jordan

ACEAP ECA

LAC

SAS

SSA

DR

y = 0.2894x - 0.424R = 0.8813

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5

Hybrid HDI

Log GNI per capita

Developingregions

Arab LDCs

Maghreb

Mashreq

GCC



Aa Dpn Can

ta 2: hDI ap wn Aa cuni and iy dpd cuni in 2010 and i pcna can, 1970-2010

Surce: Autrs estmates based n data rm human Deepment Reprt, 2010.Nte: Reer t backrund paper Arab human Deepment: Penmena Prress r Mxed Resuts? by Abu-isma, et. a. r urterdetas n data and metdy.

Atu a Arab cuntres were successu n csn te hDi ap, ny oman s ranked wtn te tp ten hDi

aceers usn ts metdy. it s wed by Mrcc and Saud Araba (wc rank urteent and nneteent,

respectey). Cmpared t ter deepn rens, Arab cuntres ranked trd n terms cnerence wt y

deeped cuntres er te perd rm 1970 t 2010 and were utperrmed by te East Asa and Pacc and teSut Asa rens. As arued earer, tese resuts pnt t an aerae recrd uman deepment prress.

huan py ducin u hPI i i cpad inc p capia

Te Arab ren as manaed t rester respectabe rates decne n uman perty, wt te hPi ndexan rm 31 n 1997 t 23 n 2007. interestny, te rate decne n bt uman and ncme perty sws asubstanta decne rm 1990 nwards, at te same pnt wen structura rerm pces bean t take d. it sntewrty tat uman perty was reduced at an een swer rate r Arab lDCs wt te rate ny an rm40 n 1997 t 34 by 2007. Te est rate reductn n te hPi was aceed by te gCC (45%) wt remarkabeprress aceed by Kuwat, Qatar, oman and UAE. Amn te mre dersed ecnmes te Masreq and

Mareb, Syra and Aera were abe t reduce uman perty at a mre rapd pace.

We perrmed a smpe matematca exercse t assess te extent t wc ncreases n ncme ae beentransated nt decreases n uman perty. We und te prean enera reatnsp between ncme percapta ees and hPi and used ts nrmatn t arre at an estmate te expected aue te umanperty ndex r any en gDP per capta. Te expected r estmated aues hPi* were ten cmpared wtte actua hPi. i te rat te atter t te rmer was er tan ne, ts suested te cuntry r renad a er tan aerae ee uman perty tan wat ne wud expect, reate t gDP per capta. Asummary te resuts r Arab cuntres and deepn rens s swn n tabe 3.

County/reion hDI gap hDI gap hDI Ipn rank

Baran 0.91 14% 59Kuwat 0.94 3% 79

oman 0.87 88% 4

Qatar 0.93 6% 70

Saud Araba 0.88 49% 19

Unted Arab Emrates 0.93 23% 41

Djbut 0.51 20% 44

Sudan 0.52 40% 27

Aera 0.78 44% 24

lbya 0.89 29% 34

Mrcc 0.68 54% 14

Tunsa 0.80 47% 22

Eypt 0.72 41% 26

Jrdan 0.79 21% 43

lebann 0.84 3% 78

Arab cuntres 0.73 43% 3East Asa & Pacc 0.78 69% 1

Eurpe & Centra Asa 0.76 %-2 6

latn Amerca & Carbbean 0.84 14% 5

Sut Asa 0.62 50% 2

Sub-Saaran Arca 0.50 35% 4

Deepn rens 0.70 38%



Aa Dpn Can

ta 3: Acua and iad hPI f dpin in and Aa cuni, 1997 and 2007

Surce: Autrs estmates based n data rm oPhi and human Deepment Reprts (1995-2010).Nte: Reer t backrund paper Arab human Deepment: Penmena Prress r Mxed Resuts? by Abu-isma, et.a. r urterdetas n data and metdy.

We rst bsered tat actua hPi r Arab cuntres s sncanty er tan ter expected hPi (hPi*) cmparedt any ter deepn ren. Secnd, wtn te Arab ren, te actua t expected hPi s sncantyarer r Mareb cuntres. Trd, te Arab ren dd nt wtness any cane n te ap between actua andexpected hPi er te perd between 1997 and 2007, as ndcated by te zer percentae cane n te rat actua t expected hPi swn n te ast cumn. Furt, te stanatn te hPi t hPi* rat was nt unrmwtn te Arab ren. Te rat decned sncanty r gCC and marnay n te cuntres Mareb andMasreq. hweer, te Arab lDCs wtnessed an ncrease n te ap between actua and expected hPi ndcatn

a retrencment n uman perty reductn erts.

An addtna measure uman perty s und n te recent Mut-Dmensna Perty index (MPi) prducedby te oxrd Unersty Perty and human Deepment intate (oPhi) and UNDP n 2010, wc cers104 cuntres (ncudn 13 Arab cuntres). Accrdn t ts metdy, a used s dented asmutdmensna-pr t s depred n 3 10 ndcatrs wc, as n te hPi, are dded acrss tree dmensns depratn (eat, educatn and standard n).

County/reion hPI (1997) hPI* (1997) hPI (2007) hPI* (2007)

hPI/hPI*

(1997)

hPI/hPI*

(2007)

Cange in

hPI/hPI*Eypt 33.0 23.4 23.4 15.8 1.4 1.5 0.1

Jrdan 9.7 21.5 6.6 16.8 0.5 0.4 -0.1Syria 21.1 22.4 12.6 17.8 0.9 0.7 -0.2

lebann 11.2 14.7 7.6 11.1 0.8 0.7 -0.1

Mashreq 28.9 22.8 19.9 16.1 1.3 1.2 0.0

libya 18.1 13.7 13.4 10.2 1.3 1.3 0.0

Aeria 27.8 17.9 17.5 12.6 1.5 1.4 -0.2

Mrcc 37.8 22.1 31.1 19.0 1.7 1.6 -0.1

Tunisia 23.6 15.9 15.6 12.8 1.5 1.2 -0.3

Mahreb 30.4 19.0 22.1 14.9 1.6 1.5 -0.1

Mauritania 48.3 33.0 36.3 31.1 1.5 1.2 -0.3

Sudan 36.6 34.7 34.0 29.7 1.1 1.1 0.1

Yemen 43.3 43.8 35.8 27.8 1.0 1.3 0.3

Cmrs 32.3 35.1 20.4 39.7 0.9 0.5 -0.4

Djibuti 38.8 38.2 25.6 29.9 1.0 0.9 -0.2

lDCs 39.2 37.6 34.5 29.2 1.0 1.2 0.1

Bahrain 9.8 10.1 8.0 10.0 1.0 0.8 -0.2

oman 33.2 11.2 14.8 10.1 3.0 1.5 -1.5

Qatar 14.0 10.1 5.0 3.3 1.4 1.5 0.1

KSA 18.8 11.1 12.0 10.1 1.7 1.2 -0.5

Kuwait 13.6 10.1 4.7 8.6 1.3 0.5 -0.8

UAE 17.6 10.1 7.7 7.5 1.7 1.0 -0.7

gCC 19.2 10.9 10.8 9.4 1.8 1.1 -0.6

AC 30.5 23.5 22.8 17.9 1.3 1.3 0.0

EAP 18.3 23.4 9.9 17.8 0.8 0.6 -0.2

lAC 12.8 15.1 8.7 12.5 0.8 0.7 -0.2

SAS 37.4 34.5 29.4 26.8 1.1 1.1 0.0

SSA 40.4 39.2 35.9 34.3 1.0 1.0 0.0

DR 27.0 27.9 20.0 22.2 1.0 0.9 -0.1



Aa Dpn Can

israe pces and practces ae ed t te peraseness perty n te oPT caractersed, accrdn t te UNCmmttee n Ecnmc, Sca and Cutura Rts , as tesustaned r crnc depratn te resurces, capabtes,cces, securty and pwer necessary r te enjyment an adequate standard n and ter c, cutura,ecnmc, ptca and sca rts. (E/C.12/2001/10), para.8.As suc, t cannt be ready measured by te hPi, MPi r temney metrc natna perty ne.

Accrdn t te iMF, israe mpsed mement and accessrestrctns wn te Secnd intada ae restrctedmement pepe and ds and bstructed access rPaestnan arcutura r manuacturn prduce t ca,rena and nternatna markets causn te sectrasares manuacturn and arcuture t srnk rm 33percent n 1994 t 19 percent n 2010. Paestnan prduce s

as subjected t enty securty cecks tat ncrease tmeand cst, reducn ts cmpetteness n ba markets.

israe as as mpsed access restrctns nt and ut te gaza Strp snce te 1990s, rcn an amst cmpetebckade snce June 2007 wt a deastatn mpact n btte ecnmy and te 1.5 mn Paestnans w e ngaza. Snce ate 2008 israe as mpsed a buer zne tatet a sncant prprtn useds acn dcutyaccessn arcutura and, educatn and essenta eatserces. Mreer, a martme bckade restrcted access tte sea ean gazas sermen n dre perty.

Attacks and arassment Paestnan armers and destructn ter prperty by israe setters n n te West Bankas as prduced a sncant mpact n te abty Paestnan armers t enae n ed acttes. in te

rst sx mnts 2010 ane, te Unted Natns reprtedtat tusands e trees and crps ad been damaedn setter-reated ncdents. in a recent study, te israe NgoYes Dn dd nt nd a sne case were te israe autrtestk actn t brn tse ned t curt.

on 26 Juy 2010, setters went n a day rampae settnabaze seera eds n te ae Burn, near Nabus. Eentu te eds are n u ew te israe sders mannnte hawara ceckpnt sme 20 metres away, Yes Dn andte aers say te army dd ntn t stp te setters.Burn s cated n Area C te West Bank (under u israecntr), n a aey between tw muntans, n tp wcst tw israe settements, Yzar and Braca. A id, te ead te ae cunc, says tat setters ae caused te ss 16,000 trees n Burn er te past years and tat enceares eac autumn durn

arab development challenges report 2011

Documents