Dubai: Countries in the Middle East and North Africa (Mena) face a number of challenges, including social and economic gaps between rich and poor, high youth unemployment, and persistent gender differentials in meeting the Millennium Development Goals (MDGs), according to the latest World Bank report released yesterday.
"There are considerable disparities among countries; per capita incomes vary from around $1,000 in Yemen and Djibouti to over $15,000 in Gulf countries," the report says.
"All countries in the region, with the exception of Djibouti, Iraq, and Yemen, stand to meet or narrowly miss most of the MDGs."
Dr. Amjad Hossain, Professor of Economics at Al Ain University, feels that the low-income countries in Mena should re-work their development strategies.
"The low-income countries in the region should develop their local development agenda, that will help them to aggressively pursue growth to ensure they meet the MDG targets," he said.
"Although the wealthy Gulf states could do more, however, I'm not so sure if the low-income countries could benefit from their support without building capacities."
The stark contrast in wealth distribution in the Mena leaves one wondering, are the wealthier countries doing enough for the low-income countries in the region?
Dr. Eckart Woertz, Director of Economic Studies at the Gulf Research Centre, said, the wealthier Gulf states could utilise oil windfall in a more productive ways, than channelling the funds into Sovereign Wealth Funds.
"Yes, instead of portfolio investments they rather invest via strategically oriented companies and funds like Saudi Basic Industries Corporation [Sabic], DP World, International Petroleum Investment Corporation [Ipic] etc," he said.
However, growth alone is not sufficient to achieve the MDGs, especially in the poorest countries or in poverty pockets in relatively richer countries.
"Greater investment in infrastructure is also essential in order to reduce social and spatial disparities are thereby create equitable growth process and social cohesion," it said.
Leaders' pledge
At the beginning of the current millennium, global leaders had pledged to reduce poverty by a half by 2015. World Bank on Monday published Unfinished Business: Mobilising New Efforts to Achieve the 2015 Millennium Development Goals, to take a stock of the situation.
Of the 84 developing countries with available data, 45 have already achieved or are on schedule to meet the poverty reduction target, the rest are off-track, the report said.
"Developing countries were making significant progress in overcoming poverty until the recent food, fuel, and financial crises. In 1981, 52 per cent of people in developing countries lived in extreme poverty; by 2005, that share had fallen to 25 per cent, with poverty falling sharply in East Asia, Latin America, and Eastern and Central Europe," the report said.
Achieving the MDGs requires a vibrant global economy, powered by strong, sustainable, multi-polar growth, underpinned by sound policies and reform at the country level, World Bank economists suggested in the report.
But this progress has not been shared by all.
"Sub-Saharan African countries continue to lag the farthest behind on the poverty reduction MDGs, despite very rapid growth and impressive reductions in poverty in a number of countries since the mid-1990s," it said.
Hunger and malnutrition rates have been falling, but progress on meeting the MDG of halving the proportion of people who suffer from hunger was almost completely reversed in 2008 with the spike in food prices.
"The World Bank now estimates that as a result of the food, fuel and financial crises, 64 million more people are living in extreme poverty in 2010, and some 40 million more people went hungry last year," it said.
By 2015, 1.2 million more children under five may die, and about 100 million more people may remain without access to safe water.
"As we take stock of the MDGs so far, we see the crises only made things worse, with too many of the world's people hungry, poor, or vulnerable to poverty, with too few jobs and too little access to services and economic opportunity," said World Bank Group President, Robert B. Zoellick.
"We must therefore redouble efforts to target support to the poor and vulnerable. We need to invest in what works and fix what doesn't. And as we do, we always need to keep in mind that this work is ultimately about empowering people. The human spirit can accomplish amazing things. We need to give everyone that opportunity."
Employment
Dominique Strauss-Kahn, Managing Director of the International Monetary Fund, on Monday stressed on job creation and reducing unemployment, "We must acknowledge that the crisis will not be over until unemployment decreases," he said.
"We must not expect that growth alone will automatically create the jobs we need--and set job creation as priority using all the available policy tools. We need to make the financial system an effective support of the real economy."
Strauss-Kahn delivered a speech in Oslo, a copy of which was made available to Gulf News. "The rules of the game have changed. The global economy after the crisis is not the same as before the crisis. So, in a nutshell, we need to think differently," he said.
However, there are opportunities for improvement in many of the countries, the World Bank said.
"Overall, the region has experienced a steady decline in the proportion of people living below $1.25 per day, from 4.3 per cent in 1990 to 2.5 per cent in 2009, while the proportion living below $2.00 per day declined substantially, from over 25 per cent to about 16 per cent," the report says.
Social and human development indicators for the region show marked improvement, World Bank said.
Significant advances have been made in reducing child and maternal mortality, and increasing school enrollment for both men and women.
"Development aid by GCC development funds and upgrading their capacities to engage more directly with projects could help the low-income countries to meet the MDGs," Dr. Woertz said.
"It is not just about writing checks but also about know-how transfer." Much of the region has been gradually moving towards universal access to primary education and the region has significantly increased gender parity in primary and secondary education, it observed.
"Conflicts in Iraq and West Bank and Gaza continue to pose an obstacle to achieving the MDGs. In some cases, inequality within countries is also a challenge.
Looking ahead, sustainable growth from a broad economic base is necessary for poverty reduction," the report said.
Note of caution
World Bank, however, has cautioned countries against complacence.
"In the wake of recent global crises, and with the 2015 deadline approaching, business as usual is not enough to meet the MDGs," the bank said.
‘"We need to do more, and do it better. With the commitment of donors to help mobilise the required resources, we will. IDA(International Development Agency -- A World Bank Group entity) is critical to the achievement of the MDGs and a strong replenishment is needed to match a high level of ambition going forward.
"The World Bank is using the full range of its financial and knowledge services to help create economic opportunities and improve the living conditions of millions of poor people in middle-income and low income countries, including through a more than doubling lending to $106 billion in FY09-10."
With only five years remaining before the target date, the need is urgent to intensify efforts to achieve the MDGs. This is especially the case for poverty reduction in Sub-Saharan Africa (SSA), where 38 percent of the population, or 366 million people, are likely be living on less than $1.25 a day in 2015.
Vulnerable areas
The region is not immune to financial crisis and the latest situation has proven it.
"Companies and financial institutions should reduce the gap in their assets and liabilities to reduce the impact of the financial crises that will make them more sustainable," Dr. Amjad Hussain, Professor of Economics at Al Ain University said.
"Moreover, the Middle East and North Africa is going to be affected by the global food price fluctuation that needed to be addressed. The Gulf states will continue to remain vulnerable to food price shocks in the near future due to heavy dependence on imports of food grains."
There was a move by some UAE and Saudi investors to buy farmlands in Sudan and Pakistan to build food stock.
"Even though they invest heavily in the Mena region to increase agricultural output, due to the harsh climatic conditions in the region this might not be enough to meet the requirements," he said.
Dr. Eckart Woertz, Director of Economic Studies at the Gulf Research Center, said, "This is a long term problem that will require long term solutions. We will have structurally higher food prices going ahead."
Millennium Development Goals (MDGs)
Over the last decade, International Development Agency (IDA) has worked with the 79 developing countries to reduce poverty
- More than 3 million teachers recruited and/or trained
- Over 2 million classrooms built or rehabilitated for over 105 million children per year
- Around 300 million textbooks purchased and/or distributed
- More than 47 million people provided with access to basic health or population services
- 2.5 million pregnant women provided with antenatal care
- 310 million children immunised
- 98 million children have improved nutrition
- About 2 million adults and children with HIV received antiretroviral therapies
- About 33 million mosquito nets purchased and/or distributed to prevent malaria
- Over 118,000 km of roads constructed; over 134,000 km of roads maintained
- Almost 1,700 km of railroads constructed or rehabilitated
- Over 1,600 bridges built or rehabilitated
- Over 113 million people given access to an improved water source
- Almost 500,000 improved community water points constructed or rehabilitated
- Over 1.5 million piped household water connections constructed or rehabilitated
- 5.8 million people provided with access to 600,000 improved sanitation facilities
Have your say
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