Analysis & Opinions - Agence Global

Why We Should Worry About the Arab Region

| Feb. 10, 2019

BEIRUT — A great menace hovers over the Arab region and its people, and has started to nibble away at their societies and countries. Our region now is made up mostly of poor and vulnerable families, and it is corroding and fragmenting from within. Unlike the popular media images abroad of vast Arab wealth, the reality is the exact opposite. The Arab region is fracturing and disaggregating into a small group of wealthy people, a shrinking middle class, and masses of poor, vulnerable, and marginalized people who now account for 2/3 of all Arabs. Some 250 million people, out of a total Arab population of 400 million, are poor, vulnerable, and marginalized, according to important new research by Arab and international organizations.

The most significant new evidence for this trend comes from Multi-Dimensional Poverty studies conducted by Arab and international organizations. They give us a more accurate and complete picture of the actual conditions of our ravaged populations. This is complemented by annual region-wide surveys by Arab and U.S.-coordinated academic groups, especially the Doha-based Arab Center for Research and Policy Studies and the U.S.-based Arab Barometer (a consortium of U.S. and Arab research institutes) that show that on average some 70% of surveyed Arab families cannot easily or at all meet their basic monthly needs.

The Multi-Dimensional Poverty (MDP) figures indicate that poverty rates are as much as four times higher than previously assumed. This is because the MDP measure of poverty and vulnerability that has been applied by economists at UNDP, the United Nations Economic and Social Commission for Western Asia (ESCWA), the World Bank, the Oxford Poverty and Human Development Initiative, and other institutions has given us a much more accurate picture of poverty than the previous reliance on measures such as $1.25 or $1.90 expenditures per day. The main reason for the greater accuracy is that MDP poverty measures capture the very rich and very poor that previous studies had missed, and also define poverty more accurately in terms of families’ core needs and capabilities.

In ten Arab states surveyed by ESCWA, 116 million people were classified as poor (41% of the total population), and 25% were vulnerable to poverty, according to Dr Khalid Abu-Ismail, chief of the Economic Development and Poverty section of UN ESCWA, based in Beirut. The “vulnerable” families live right on the edge of poverty, but they simply cannot afford any increase in prices, taxes, or fees, which would immediately plunge them into poverty.

This may explain why tens of thousands of people have demonstrated against their government policies recently in Iraq, Lebanon, Tunisia, Sudan, and other Arab countries, with a strong emphasis on resisting new taxes and price increases.

Even when the World Bank’s poverty measure of less than $1.90 daily expenditure per capita is used, in the period 2011-2015 extreme poverty in the Middle East increased from 2.7% to 5% — and the Middle East was the only region in the world where this indicator increased in that period. Consequently, the middle class in non-oil-producing Arab states has been shrinking from 45% to 33% of the population, according to ESCWA economists who have analyzed this issue. Greater inequality seems to be moving alongside greater poverty and vulnerability.

Not only are Arab poverty and vulnerability much higher than previously thought; the poor and marginalized also are destined to suffer for generations, for two reasons. First, because early childhood development conditions and a family’s highest attained education level are two credible predictors of life-long poverty — and both are problematic in many Arab areas.

Second, because Arab economies in today’s conditions cannot generate sufficient quality jobs to increase family incomes and reduce poverty rates. Dr Abu-Ismail explained in several interviews here that in recent decades most Arab families experienced social and economic mobility that would reward them for their educational or employment efforts by improving their income and well-being. More recently, however, he said, higher social capabilities in health and education often did not translate into better lives, mainly because not enough decent jobs were available. So many people panicked about their and their children’s future prospects.

To complete the ignominious circle of misery that plagues the hundreds of millions of stressed, often desperate, poor Arabs who are a majority of their populations, these people also lack the political rights to credibly express their grievances or to participate meaningfully in decision-making that could turn around their imperiled countries.

The political consequence of all this is that many Arabs have become increasingly marginalized and alienated from the economic mainstream, and also, in many cases, from the political and national institutions of their own country. Citizen alienation from the state combines with rising disparities in every dimension of life that are now well measured both quantitatively and qualitatively, such as gender, ethnicity, rural-urban location, education, health, security, wealth and poverty, self-confidence, trust in government, and others.

As a result, the citizens of once homogeneous Arab states have fractured into several distinct groups: a small wealthy class, a shrinking middle class, and a big majority of poor, vulnerable, and desperate people. Perhaps a majority of Arab citizens no longer feel they can rely on their states and governments for their identity, security, opportunity, voice, basic needs, and other critical factors that shape both healthy citizenship and a dignified human life. Such men and women who become alienated from their state seek identity and allegiance in institutions beyond the state that meet their needs, such as religion, tribalism, ethnicity, criminal networks, or militancy.

The existing Arab governments and private sectors simply cannot generate the number of new jobs needed to reduce poverty in the decades ahead; the IMF and others say we need 60-100 million new jobs by 2030, and 27 million jobs in 2018-2023, to meet the needs of new graduates, reduce existing unemployment, and raise family incomes.

This means that Arab labor markets will continue to be defined heavily by informal labor, which is now estimated to account for some 50%-60% of all workers. Labor informality, due to its lack of worker protections, is a major cause of poverty and vulnerability, and thus a guarantor of permanent poverty for the informal worker’s family.

The widespread poverty, vulnerability, and inequality that threaten our current and future well-being are consequences of the bad policies of widely incompetent Arab elites — but also aided by important contributions from aggressive regional and international powers that support those elites and stoke the many wars in the region.

All these issues now form a single destructive cycle of low-quality governance, stagnant economies, deteriorating education and health services, insufficient quality jobs, and widespread warfare — not to mention degrading environments, water shortages, food insecurity, incoherent urbanism, and rampant corruption. This bundle of factors is perhaps the greatest shame of a modern Arab region that is failing its people, because it is failing its century-old tests of statehood, sovereignty, and citizenship.

Rami G. Khouri is senior public policy fellow and adjunct professor of journalism at the American University of Beirut, and a senior fellow at the Harvard Kennedy School’s Middle East Initiative. He can be followed @ramikhouri

Copyright ©2019 Rami G. Khouri — distributed by Agence Global

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For Academic Citation: Khouri, Rami.“Why We Should Worry About the Arab Region.” Agence Global, February 10, 2019.