Toward a New Social Contract in the Middle East and North Africa

Toward a New Social Contract in the Middle East and North Africa

Tarik M. Yousef

School of Foreign Service

Georgetown University

The Social Contract in MENA

Between the 1940s and 1950s, governments established redistributive and interventionist social contracts:

Principle features included:– Emphasis on equity in the design of economic and

social policy.– Central planning and state management of markets.– Adoption of ISI and protectionism.– State as provider of welfare and social services.– Focus on “unity of the nation” in the political arena.– Corporatist structures of representation.

Demography Has Undermined the Existing Social Contract

• MENA started with the highest fertility rates in the 1950s.

• The region experienced a slow and extended fertility decline until the 1980s.

• It witnessed a massive reduction in fertility in the 1990s.

Population Trends in MENA, 1950-2025

0

0.5

1

1.5

2

2.5

3

3.5

4

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Ave

rage

Ann

ual G

row

th (P

erce

nt)

0

100

200

300

400

500

600

Per

sons

(mill

ions

)

Population (left axis)

Population Growth (right axis)

From Delayed Transition to an Extended Youth BulgeFrom Delayed Transition to an Extended Youth Bulge

MENA’s slow and extended demographic transition has implied that the region would have an extended and large youth cohort.

Percentage Growth in the Youth Populations of Developing Countries (annual average rates)

0

0.5

1

1.5

2

2.5

3

3.5

Southeast Asia Latin America Sub-Saharan Africa Middle East and NorthAfrica

1950-70 1970-90 1990-2010

Percent

Source: United Nations (2002).

From Delayed Transition to Rapid Labor Force GrowthFrom Delayed Transition to Rapid Labor Force Growth

MENA’s slow and extended transition has also implied that the region would have the highest and most persistent labor market pressures anywhere in the world in the past half-century.

Labor Force Growth Rates by Region, 1970-2010

0

0.5

1

1.5

2

2.5

3

3.5

4

South Asia East Asia Latin America andthe Caribbean

MENA Sub-SaharanAfrica

1970-1980 1980-1990

1990-2000 2000-2010

Young Workers Are Increasingly More EducatedYoung Workers Are Increasingly More Educated

• MENA witnessed the fastest expansion in educational attainment in the world between 1980 and 2000.

• As a result, the new generations of workers, male and female, are the most educated in the region’s history.

Average Years of Schooling by Region

0

1

2

3

4

5

6

7

Sub-SaharanAfrica

South Asia MENA SoutheastAsia

Latin Americaand the

Caribbean

East Asia

1960

1980

1999

Source: Barro-Lee 2000.

Demography and Education Are Feminizing the Labor Force Demography and Education Are Feminizing the Labor Force

•Female labor force is growing annually by over 5% due to the effects of demography and higher participation.

•As a result, the share of females in the labor force has risen from 26% in 1990 to close to 32% in 2000.

Change in Female Labor Supply in MENA, 1950-2020

0

10

20

30

40

50

60

1950s 1960s 1970s 1980s 1990s 2000s 2010s

Per

cen

t

0

1

2

3

4

5

6

An

nu

al G

row

th (

Per

cen

t)

Participation rate (end of decade, leftaxis)

Average annual labor force growth (rightaxis)

Gender parity labor force index (end ofdecade, left axis)

Youth High Unemployment in the 1990s Unemployment falls disproportionately on the youth, with their share in the unemployed ranging from 36% in Morocco to 73% in Syria, and a MENA average of 53%.

Youth Unemployment as a Share of Total Employment in MENA (percent)

0 20 40 60 80

Morocco 2000

West Bank and Gaza 2000

Qatar 1997

UAE 2000

Yemen 1999

Jordan 2001

Bahrain 2000

Egypt 2000

Algeria 1992

Syria 1998

Source: ILO 2003b and ILO 2002; except for Jordan, AREUS 2001.

Female Unemployment Is Rising Since the Early 1990s

Unemployment rates tend to be higher for females, close to 50% higher than unemployment rates for males. Like their male counterparts, unemployment rates are highest for educated females.

Unemployment Rates by Gender in MENA (percent)

0

5

10

15

20

25

30

35

40

Algeria2000

WestBank and

Gaza2001

Jordan2000

Morocco1999

Tunisia1997

Bahrain2001

Qatar2002

Yemen1999

Iran 2000

Syria 2001

Egypt2000

Lebanon1997

SaudiArabia1999

UAE 1999

Kuw ait2003

Female Male

Source: For Algeria, Jordan, Syria, Egypt, West Bank and Gaza, Yemen, ILO 2003b; for Tunisia, INS 2001; for Bahrain, Qatar, Saudi Arabia , Kuw ait and UAE, Girgis, Hadad-Zervose, and Coulibaly 2003; for Iran HEIS 2000; for Morocco, LSMS 1999; for Yemen, NPPS 1999.

Economic Exclusion Mirrors Political Exclusion

Index of Governance Quality

-2 0 2

MENA15

Non-MENA Developing

EA6

LA6

CE6

OECD

MENA has a significant governance gap compared to the rest of the world especially in the areas of political inclusion and public accountability.

But It Especially Affects Women in the RegionBut It Especially Affects Women in the Region

Improvements in health and education indicators have not translated into greater political empowerment for women. For example, women have the smallest share of seats in national parliaments of any region.

Female Representation in Parliaments

0% 0%1%

2% 2%3%

4%5%

6% 6% 6%

11%12% 12%

15%

Kuw

ait

UA

E

Yem

en

Lebanon

Egypt

Jord

an

Iran

ME

NA

13

Alg

eria

Moro

cco

Bahra

in

Djib

outi

Tunis

ia

Syria

World

Youth, Exclusion and Conflict

Youth Bulges and Domestic Conflict

Expansion of education

Youth bulgesLack of

employment opportunities

Limited political recruitment

Youth grievances

Domestic conflict

Source : Urdal (2001).

Large young cohorts experiencing economic dislocation and political exclusion often present fertile ground for identity groups seeking change through violent means.

Toward A New Social Contract Toward A New Social Contract

• The economic difficulties of the past two decades have called into question the status of the region’s postwar social contract especially among the youth.

•States and societies are confronting the reality that the old model is no longer sustainable.

•If states can no longer serve as the guarantors of “well being”, they can become partners in creating opportunities for future generations.

•But this requires governments to redefine their role in economy and society. In other words, a new vision of state-society relations.

• Governments will need the instruments to manage the difficult transition under conditions of economic volatility and social vulnerability.

•To move forward, governments themselves must link economic performance to governance. They must create mechanisms to ensure their own accountability.