The Arab SpringFive Years Later

Hafez GhanemWorld Bank Vice President for MENA

Research Fellow, ERFNonresident Senior Fellow the Brookings Institution

What caused “the Arab Spring” ?

Average GDP Growth Rate for Arab Countries in Transition, 1991-2010

Country 1991-94 1995-99 2000-04 2005-10

Egypt 2.4 5.8 3.9 5.9

Jordan 6.4 3.6 5.6 6.6

Morocco 3.1 2.3 4.7 4.6

Tunisia 4.6 5.2 4.5 4.4

Yemen 6.3 5.1 4.3 4.6

Source: Data from International Monetary Fund, World Economic Outlook, Author’s Calculation

Dissatisfaction and Unhappiness among Surveyed Arab Countries in Transition

Egypt Iraq Jordan Morocco Brazil India Indonesia Malaysia0

5

10

15

20

25

30

35

40

45

50

DissatisfiedNot happy

Source: Data from World Value Survey (2005-09) Egypt 2009, Iraq 2006, Jordan 2007 Morocco 2007. Brazil 2006, India2006, Indonesia 2006, Malaysia 2006

GDP Growth and People’s Satisfaction• Despite increase in GDP per capita, Egyptians felt worse off.

Gallup Inc., “Arithmetic of Revolution” and IMF World Economic Outlook for data on GDP per capita

2006 2007 2008 2009 20100

5

10

15

20

25

30

35

40

Poorest 20% Richest 20% Egypt Total GDP per Capita%

$ 5,508

$ 5,904

$ 6,114

$ 6,367

• Public Perceptions & GDP per Capita (PPP)

1

Tunisians’ Reasons for Revolting against President Ben Ali

Weak economy

Corruption

Lack of p

olitica

l freedom

Want more Isl

amization

Don't know

- 10.0 20.0 30.0 40.0 50.0 60.0 70.0

Source: Arab Barometer Survey, wave 3 (2012-2014)

Most Excluded Groups

•Youth•Women•Smallholder Farmers

Youth Unemployment Rate Country Youth Male Female

ArabEgypt 24.8 14.7 54.1Tunisia 29.4 27.8 32.7Algeria 21.5 18.7 37.6Syria 20.4 16.4 43.5Saudi Arabia 30.0 23.5 54.8Bahrain 5.0 2.5 11.6Qatar 1.2 0.5 7.0

ComparatorIndonesia 21.4 21.0 22.0Malaysia 11.4 11.0 12.0Brazil 17.8 13.8 23.1

Source: International Labor Organization(2010 and 2011)

%

Female Labor Force Participation Rate (%)

Female Labor Force Participation across Country 2010

Aggregate Human Opportunity IndexEgypt by Region 2009Category Metropolitan Lower Egypt Upper Egypt Borders

Education 76 78 70 77

Housing 89 77 68 75

Early Childhood 77 69 65 55

Nutrition 77 77 75 65

Source: World Bank (2012)

High rates of rural poverty (headcount index, percent)  National

povertyRural poverty

Urban poverty

Egypt 25.2 32.5 15.3Mauritania 42.0 59.4 20.9Morocco 9.0 14.5 4.8Tunisia 15.5 22.6 9.0

Source: World Development Indicators, World Bank

Four Priority Areas• Institutional Reforms to improve Implementation of Policies and Programs•Reforms of the Business Environment, especially for SMEs and Entrepreneurship•Rural Development and Support to Lagging Regions• Improving the quality of Education

Summary of Planning Experience of East Asia, Japan, Indonesia, and MalaysiaCountry Summary of Planning Structure/ProcessJapan Stakeholder inclusion through Economic

Council (“Shingikai). Income-Doubling Plan as a guiding vision.

Indonesia Stakeholder inclusion through Development Planning Committee

Malaysia Prime Minister’s Office as a strong Implementation body. Strong Monitoring System

Key Issues for Institutional Reform•Inclusiveness & Accountability•Introduce Inclusive Planning•Enhance Implementation Capacity•Monitoring and Evaluation•Reform Economic Institutions

SMEs and job creation in the Arab world

Source : World Bank

Policy Constraints to Small Business (% of Entrepreneurs Saying it is a Major Constraint)  All

EntrepreneursYoung Entrepreneurs

Licensing & Registration

61.3 64.0

Labor Law 32.3 35.7Labor Inspection 44.9 49.2Tax Rates 68.6 66.7Customs Duties 5.8 5.8Tax Administration

65.0 63.0 Source: Ghanem (2013)

Reform of Business Environment for SMEs and EntrepreneurshipChange Business Environment that favors few connected Large Farms • Tax Reform• Simplify official permits and licenses• Remove restrictions on international trade• Fight Corruption• Intervention beyond Credit Programs• Reform of Education System

Primary School Net Enrollment Rate, 2002–11

Djibouti

Mauritania

Yemen

Palestine

JordanQatar

LebanonSyr

ian

Morocco

AlgeriaEgyp

t

Saudi A

r...Oman

Tunisia20

30

40

50

60

70

80

90

100

2001/22010/11

Prim

ary

Net

Enr

ollm

ent R

atio

Arab Learning Barometer: Percentage Not Meeting the Basic Learning Level

CountryPrimary Secondary

Numeracy Literacy Numeracy LiteracyBahrain 33 -   47 -Jordan - -   45 48.1Kuwait 70 -   - -Lebanon - -   27 -Morocco 74 79   64 -Oman 54 53   61 -Palestine - -   48 -Qatar 45 40   46 63.4Saudi Arabia 45 35   53 -Syria - -   57 -Tunisia 65 -   39 50.1United Arab Emirates

36 36   27 31.0Source: Steer, Ghanem and Jalbout (2014)

Education for Greater Inclusion

Quality of Education•Curricula and Teaching Method•Hold schools and teachers accountable for learning

outcomes

Relative importance of Agriculture (percent)

Rural Population/Population

Employment in Agriculture/Employment

Agriculture GDP/GDP

Algeria 27 12 8Egypt 56 29 15Mauritania 47 38 14Morocco 43 40 15Libya 22 3 2Tunisia 34 16 9

Source: Arab Organization for Agricultural Development, Statistical Yearbook, 2012

Relative Importance of Holdings of less than 5 Hectares

Share in Total Holdings

Share in Land Area

Algeria 55.4

11.3

Egypt 98.2

70.7

Morocco 69.8

23.9

Tunisia 53.5

10.9

Source: FAO, Agriculture Census Data

Average Size of Family Farms

Algeria Egypt Morocco Tunisia

1.8

0.7

2.1 2.2

Source: FAO Agriculture Census Data

Inclusive Agriculture and Rural Development • Improve Access to Market, Reduce Role of

Intermediaries• Improve Access to Financing and Investment

Resources• Improve Access to Land• Improve Research and Extension Services• Special Program for Women and Youth Farmers •Reform Producer Organizations and Cooperatives•Adjust Climate Change

Role of the International Community

•Long Term Vision•Inclusive Growth and Social Justice•Peace and Stability in the MENA are Global Public Goods