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Background Guide

ECONOMIC AND SOCIAL COUNCIL

(ECOSOC)

Agenda

“Discussing the Socio Economic Spillovers in Unstable

Middle Eastern and North African Regions“

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Letter from the Executive Board

Greetings delegates, It is a pleasure to welcome you to this committee of the 2019 DRS MUN. We

sincerely hope that being a part of the conference is an intellectually a

learning experience for you as well as for us. The committee will be

contemplating the agenda ― Discussing the socio-economic spillovers in an

unstable Middle East and North African (MENA) region.

The purpose of this background guide is to equip you with a brief knowledge

about the committee as well as the agenda. However, do not assume that only

the content of the background guide can replace the individual research.

We look forward to see you at the Conference!

Regards,

Varun Srinivas Purnima Kasi

(Chairperson) (Vice-Chairperson)

Tarun Agarwal

(Rapporteur)

*Every delegate should submit a position paper by 5 P.M First day of the conference if he/she wants

to be eligible for awards*

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Introduction to the Committee

The Economic and Social Council is the principal body for coordination, policy review, policy dialogue

and recommendations on economic, social and environmental issues, as well as implementation of

internationally agreed development goals. It serves as the central mechanism for activities of the UN

system and its specialized agencies in the economic, social and environmental fields, supervising

subsidiary and expert bodies. It has 54 Members, elected by the General Assembly for overlapping

three-year terms.

As a principal organ of the United Nations, ECOSOC is responsible for addressing some key emerging

problems, which are outlined in its annual report to the General Assembly. In addition, ECOSOC

coordinates funding mechanism and takes the lead role in formulating policy goals and frameworks for

short and long-term programs, with particular emphasis on achieving the Sustainable Development

Goals by 2030.

ECOSOC engages a wide variety of stakeholders – policymakers, parliamentarians, academics, major

groups, foundations, business sector representatives and 3,200+ registered non-governmental

organizations – in a productive dialogue on sustainable development through a programmatic cycle of

meetings. The work of the Council is guided by an issue-based approach, and there is an annual theme

that accompanies each programmatic cycle, ensuring a sustained and focused discussion among multiple

stakeholders.

ECOSOC plays a key role in coordinating activities and programs through the expansive UN system for

humanitarian, development, and various other issues. The Council has demonstrated a commitment to

mobilizing resources to tackle key priority issues, including the promotion of development and the

formation and maintenance of international partnerships. It has also initiated collaboration across UN

entities to ensure political commitment to the 2030 Agenda and the SDGs, which has been seen as a

―paradigm shift‖ for operations across the UN. The contributions of the Council, both as a forum for

discussion and in providing policy guidance, are significant, and its role will continue to grow in the

post-2015 era, which requires clear organizational leadership and strong monitoring mechanisms to

assess the progress towards and remaining challenges to achieving the SDGs.

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The Agenda

“Discussing the Socio Economic Spillovers in Unstable

Middle Eastern and North African Regions“ Understanding MENA

The Middle East and North Africa (MENA) is a region encompassing approximately 22 countries in the

Middle East and North Africa. It is an economically diverse region that includes countries with a

common heritage, vastly different levels of per capita income, and a common set of challenges.

Historically, dependence on oil wealth in many countries and a legacy of central planning in other

countries have played major roles in shaping the region's development strategies.The 24 MENA

countries and territories, which include about 7.7 percent of the world's population share common

challenges and cultural links distinct from neighboring economies. The region accounts for about three-

fourths of the world's proven reserves of crude oil and the GDP of the MENA region's oil exporters

account for about two-thirds of the region's GDP. Of the 24 countries and territories, 13 are oil-

exporting countries. Two of the most notable defining characteristics among MENA countries are the

availability of oil resources and the size of their native populations. Based on these two factors, MENA

countries can be classified in three main groups:

1) Resource-rich, labor-abundant countries are producers and exporters of oil and gas and have large

native populations, which represent almost the totality of their residents.

2) Resource-rich, labor-importing countries are producers and exporters of oil and gas and have large

shares of foreign or expatriate residents, who represent a significant percentage of the total population,

even the majority in some cases.

3) Resource-poor countries are small producers or importers of oil and gas.

Economic Outlook

The MENA region as a whole failed to generate high and sustained growth rates. In contrast to other

developing countries, the region underperformed since the 1970s and, as a result, did not reap the full

benefits of globalization and world economic integration.

Growth

Real per capita GDP growth in the MENA region during the last 30 years has virtually stagnated

compared to the rest of the developing world. In part, this reflects the extended weakness in the oil

markets as producers outside of the MENA region gained market share at the expense of oil exporters in

the region. In addition, the region's high population growth dragged down the rate of growth of per

capita GDP.

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Unemployment

Economic growth and job creation are closely linked. They form a nexus that is an important part of any

strategy to alleviate MENA's high and persistent unemployment, given the predominance of the young

population in the region and its high unemployment rate.

Global Integration

Common measures of globalization illustrate the MENA region's relatively weak integration with the

world economy. The region receives only one-third of the FDI expected for a developing country of

comparable size, and most is concentrated in a handful of countries.

Factors affecting the region's performance

1) High Population Growth and Low Productivity

With a 2.5 percent annual increase over the past 20 years, the MENA region has had one of the highest

rates of population growth in the world.

2)Lagging Political and Institutional Reforms

Despite its geopolitical importance, the MENA region's influence in the global economic system

remains weak. Political fragmentation, recurring conflicts, and authoritarian rule have hampered the

development of democratic institutions and remain major obstacles to economic reform.

3)Large and Costly Public Sectors

A large and inefficient public sector can impose significant costs on the economy in a number of ways,

such as crowding out private sector demands for credit; high cost of revenue collection; delays in

awarding licenses, permits, and contracts; arbitrary enforcement of existing regulations and laws;

complex and opaque court systems with high case loads; poor quality of institutions; and poor delivery

of other public goods and services for which the public sector has the main responsibility, such as the

rule of law and protection of property rights.

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Social Outlook

The Middle East and North Africa faces significant challenges, including situations of armed conflict,

the rise of violent extremism and the counter-terrorism narrative affecting civil and political rights as

well as deeply rooted discrimination against groups. The region is also affected by long-standing

conflicts/disputes, such as the Israeli occupation of Arab territories. MENA region is experiencing

tremendous challenges especially with the humanitarian crisis, displacement and decreased access to

services; stagnant economic growth and high unemployment; food insecurity and escalating malnutrition

rates. While good progress has been made in the eradication of extreme poverty in the MENA region, a

significant proportion of children continue to live in households below the nationally defined poverty

line.

In addition to monetary poverty, multidimensional poverty is a key challenge facing the region. The

Arab Poverty Report launched recently in September 2017 indicates that around 40.6 per cent of

households live in poverty, out of which, 13.4 per cent in extreme poverty. For children,

multidimensional poverty is more prevalent, where 44.1 per cent of children are living in

multidimensional poverty, out of which, 24.7 per cent are in extreme multidimensional poverty.

Inequities are very high between rural and urban areas and wealth quintiles.

Social Protection is a mechanism that can effectively address monetary and multidimensional poverty

facing children in MENA region. Currently, public spending on social protection in MENA is far from

adequate in benefits and scale, and a large share still goes to subsidies and not focused on poorest and

most vulnerable children. Although the percentage of children 0-14 in MENA is around 32%, only

0.8% ofGDP is spent on child-focused social protection.

Key issues of major social groups

1) Youth and women: Around two-thirds of MENA’s population is under the age of 30. Youth need

greater access to economic opportunities, quality education, recreation, and political participation. This

lack of access, in combination with rising expectations brought about by education and the information

revolution, creates frustration among youth and may even threaten the social fabric. The region has

shown remarkable progress in improving human development indicators (especially in education and

health) for women over the last couple of decades. Nevertheless, persistent gender-based inequalities

contribute to women’s social, economic and political exclusion and so retard national development.

2) Urban and rural community institutions and local governments: Societies in MENA have a high

degree of social organization and networks of solidarity. However, many have also known the social and

economic costs of violent conflicts that have brought destruction, loss of lives, created poverty, distorted

development priorities, and greatly weakened social cohesion. Rapid urbanization and modernization, on

the other hand, have weakened the institutional structures of communities. These institutions are no

longer able to fully mitigate social tensions, especially in the context of rapid population growth,

urbanization, high unemployment and a depleted natural resource base.

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3) Citizen-state interface: MENA is being transformed by an information revolution that provides its

citizens with unprecedented access to regional and global information which can no longer be controlled

by governments. However, insufficient public access to information and inadequate disclosure of

government transactions reduce accountability and limit the private sector’s and citizens’ ability to

access opportunities. This is further compounded by insufficient mechanisms to provide feedback on the

quality of government services; and by constraints on civil society to monitor government performance,

organize complaints and advocate on behalf of the poor.

4) Minority social groups: Particularly vulnerable groups are people with disabilities, children at risk,

people with human immunodeficiency virus/acquired immunodeficiency syndrome (HIV/AIDS) and

refugees. With regard to HIV/AIDS, very low overall prevalence rates (0.2%) represent a unique

window of opportunity to act decisively and in a timely manner. Conversely, there is a risk that

complacency may lead to inaction and to increased vulnerability to the epidemic, especially among

vulnerable groups, in a context characterized by stigma, lack of information, fear and denial.

Longstanding Urgent Challenges

Social and political instability are certainly having a negative impact in MENA countries. However, they

also represent a unique opportunity for political, social, and economic change and progress. Importantly,

the Arab Spring has put the enduring weaknesses of MENA countries into the spotlight. Although high

unemployment rates, rampant corruption, lack of government transparency, lack of political

representation, and cronyism have been long-lasting problems in the region, the call of citizens for

greater political and economic freedom underscores the urgency of addressing those issues. The MENA

governments that have started processes of transition or reform are the main responsible actors for

steering change in the direction that their citizens demand. But the international community has also an

important role in supporting those governments and citizens through this process of change. The start of

the Arab Spring was certainly influenced by relatively temporary factors such as rising prices and the

contagion or inspirational effect of demonstrations occurring in other MENA countries, prominently in

Tunisia and Egypt. However, the main drivers of protests were of structural nature, notably economic

and socio-political factors that influence and strengthen each other and that explain why the fairly

positive macroeconomic performance of many countries in the region has not been translated into better

living standards and prospects for the majority of their populations.

1.Maritime Piracy

Yet another threat that an unstable MENA region poses is that of maritime piracy. A politically unstable

Somalia has already proven to the world that maritime piracy around the oil-rich region can choke

global trade. If instability in the Middle East furthers piracy, sea lanes may not be able to facilitate the

all-important oil trade that they currently do. Yet again, this will lead to higher economic price of fuel,

and hurt the poorest sections of the global population through its socially regressive effects.

2.Youth Unemployment in the MENA Region

Unemployment in the MENA region is the highest in the world and largely a youth phenomenon. The

share of youth (ages 15 to 24) in total unemployment at least doubles the total rate. Moreover, at about

25%, the youth unemployment rate in the MENA region exceeds that of any other region in the world –

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a rate that reaches up to about 30% in Tunisia. The recent social and political events in the region have

contributed to a decline in economic activity and to increased unemployment. In 2011, unemployment

has increased in the MENA countries, with the largest increase registered for Tunisia (about 7

percentage points) and Egypt (about 3.5 percentage points). Unusually, education in this region is not a

guarantee against unemployment. In fact, unemployment tends to increase with schooling, exceeding

15% for those with tertiary education in Egypt, Jordan, and Tunisia. In most regions of the world, the

duration of unemployment spells is shorter for youth than for adults, reflecting the natural tendency of

youth to more frequently move between jobs. In most MENA countries, however, youth unemployment

appears to be the result of waiting for the right job. Thus, unemployment spells may be longer,

especially for educated youth, who may require more time to find a good job match for their skills. This

is an important point, because it is the duration of unemployment, rather than its occurrence, that is most

detrimental to human capital accumulation. High labour force growth, skill mismatches, labour and

product market rigidities, large public sectors, and high reservation wages have been key factors behind

the large and persistent level of youth unemployment. A large pool of hapless youth stranded in the

middle of tense conflicts may well be left with the only option of turning into future flagbearers of

fundamentalist armed struggles across the world, making international commerce even more fragile and

susceptible to security threats.

3. Decline in Oil Prices

The over-50 percent decline in world oil prices—from US$115 a barrel in June 2014 to less than US$50

today—will have significant consequences for the economies of the MENA region. According to the

World Bank’s latest MENA Quarterly Economic Brief, the oil importers that are expected to gain

include Jordan, Tunisia, Lebanon, and Egypt. The trade balances for these countries could improve by

up to 2 percent of GDP. The oil exporters will likely run larger fiscal and current account deficits or

their surpluses will shrink substantially. ―Oil importers will benefit from lower import and fuel subsidy

bills, while exporters—some of whom depend on oil for 80 percent of their income—will lose export

and fiscal revenues,‖ said Shanta Devarajan, World Bank Chief Economist for the Middle East and

North Africa region. Yemen and Libya are among the most vulnerable oil producers while Iran and Iraq

could experience a worsening of the oil trade balance (net oil exports) in excess of 10 percent of GDP in

2015. The oil-exporting countries of the Gulf Cooperation Council are in a much better position due to

their ample reserves, but they too could endure over a US$215 billion loss in oil revenues, more than 14

percent of their combined GDP. Oil importers such as Egypt, Jordan, and Lebanon face a risk as their

economies receive large flows of remittances and aid from the GCC. However, based on previous

episodes, the MENA Quarterly Brief concludes that lower oil prices will likely lead to slower growth,

but not a decline in remittances. Judging by the futures market, where the price of oil for delivery in

August 2015 is US$56 per barrel, there is little optimism about a recovery in oil prices.

Socio-Economic Spillovers

1. Migratory Movements

The Middle East and North Africa region continues to face multiple and complex emergency situations

on an unprecedented scale, that are likely to pose further overwhelming challenges in 2015. This region

is also one of origin, destination, and transit of refugees and migrants. Many of those caught up in mixed

migratory movements are victims of smuggling and trafficking as they face perilous journeys, notably

by sea. The humanitarian situation in Syria remains extremely challenging. In the fourth year of the

conflict, there are more than 3 million Syrian refugees in the region. In addition, over 50,000 Syrians

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have sought asylum in more than 90 countries outside the region. Inside Syria, an estimated 10.8 million

people are in need of humanitarian assistance, including some 6.5 million internally displaced people

(IDPs). In Iraq, the deteriorating security situation and armed conflict in Anbar and Ninewa

Governorates have triggered new waves of internal displacement. As estimated by the Government of

Iraq and the Kurdistan Regional Government (KRG), some 1.8 million people were displaced by

insecurity in Iraq between January and September 2014, and heavy fighting has continued to force

people to flee to other parts of the country. The security situation in Libya is increasingly volatile with at

least 140,000 Libyans displaced within the country by recent fighting, as of September 2014. Yemen

continues to face a complex humanitarian situation characterized by ongoing insecurity, localized

conflicts, water scarcity and the extreme poverty of growing numbers of the population. These

challenges are exacerbated by rising prices and economic difficulties that contribute to reduced access to

food and safe water, basic state services and livelihood opportunities. Yemen's malnutrition levels are

among the highest in the world. The number of people internally displaced rose significantly in 2014 as

a result of recent conflicts, with over 334,000 people registered as IDPs across the country. In addition,

Yemen hosts 246,000 registered refugees, 95 per cent of whom are Somalis.

Challenges

In addition to the sheer scale of needs, increasingly complex protection issues are arising from the

unstable and unpredictable political situations in the region. Insecurity is challenging the delivery of

humanitarian operations and limiting access to people of concern. Countries in North Africa continue to

face the challenges posed by mixed migratory movements, including smuggling and trafficking, of

migrants and refugees, in transit to Europe or to other destinations in North Africa. The movements of

increasing numbers of refugees and migrants who resort to dangerous boat trips across the

Mediterranean, at grave risk to their lives, are an ever-growing concern. With more than 85 percent of

refugees living among host communities across the region, the dire situation of urban refugees demands

special attention. In particular, many Syrian refugees in large cities are living in extreme poverty and are

being forced to resort to harmful coping mechanisms for their survival.

References

1. ECOSOC Official Webpage

http://www.un.org/en/ecosoc/about/index.shtml

2.http://www.menaregion.com

3. OECD Official Webpage

www.oecd.org/mena/investment/49171115.pdf

4. IMF Official Website

http://www.imf.org/external/pubs/ft/reo/2014/mcd/eng/pdf/menacca 0514.pdf

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5. World Bank Official Website

http://www.worldbank.org/en/region/mena/publication/menaquarterly-

economic-brief-january-2015-plunging-oil-prices

6. UNHCR Official Website

http://www.unhcr.org/pages/4a02db416.html

7. usaid.gov/pdf_docs/pbaab449.pdf

8. Youth Unemployment in the MENA Region: Determinants and Challenges

by Masood Ahmed, Director, Middle East and Central Asia Department,

International Monetary Fund; Dominique Guillaume, Deputy Division Chief,

International Monetary Fund; Davide Furceri, Economist, International

Monetary Fund. Published in the World Economic Forum’s Addressing the

100 Million Youth Challenge—Perspectives on Youth Employment in the

Arab World in 2012, June 2012

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ALL THE BEST

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Annexure

IMPROVEPEDIA 2018 ©

IMPROVEPEDIA 2018 ©

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IMPROVEPEDIA 2018 ©

IMPROVEPEDIA 2018 ©

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IMPROVEPEDIA 2018 ©