• Growth and poverty

Growth and poverty

Despite steady growth in most Arab Middle East and North Africa countries, the region has achieved very modest gains in reducing poverty or increasing employment. In fact, poverty and unemployment, especially among the young, are widespread. This paper provides an assessment of economic growth, employment and poverty reduction in the Arab MENA region.

The author provides an overview of economic growth, poverty and inequality, takes a look at employment and labour markets and linkages between growth employment and poverty. He finds that the majority of the poor are working in rural areas and in low productivity activities. Where new jobs are being created, they are often not accessible to the poor, who do not possess the necessary skills. In addition, many of the countries analysed in this paper have a significant population who living just above the poverty line so they are vulnerable to any negative changes in their household income and in the national or regional economy.

Recommendations include: 

• employment policies that put emphasis on strengthening the growth-employment nexus by promoting job creation and improving access of the poor to such jobs 
  
• target poverty reduction policies aiming to improve income earning opportunities for the poor and raise their incomes 
  
• provide an enabling environment to help channel remittances to productive investment creating jobs and improving productivity 
  
• anti-poverty policies should be put in place to provide support for those who are just above the poverty line and therefore vulnerable to any minor deterioration in either macroeconomic conditions or their household economy

MENA countries that have been successful in tackling poverty and vulnerability have relied on a range of policies addressing the points above as well as increasing social expenditure to improve health, housing, education and sanitary conditions for the poor as well as putting in place income support measures and maintaining subsidies on goods supplied by the poor. Successful anti-poverty policies have also improved the poor’s access to financial (e.g. through microfinance) and other productive resources. However, the author warns against a 'one size fits all' approach, stressing the differences between countries in the region.

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