Across the Middle East and North Africa a quarter of the population continues to live below the poverty line though access to education and health services has improved, writes Sherine Abdel-Razek The number of people enrolled in schools and covered by basic health services in 10 MENA countries increased significantly over the last two decades yet according to a recently released World Bank report the number of people living under the $2 a day international poverty line has remained at around 20-25 per cent of the region's population. One disturbing conclusion of the report -- Sustaining Gains in Poverty Reduction and Human Development in the MENA Region -- is that attempts to reduce poverty began to fail in the second half of the 1980s. Having fallen to 25 per cent in 1987 the figure for those living beneath the poverty line has remained more or less constant. The report compares recent economic growth and poverty reduction patterns with the situation in the early sixties to the mid- eighties when economic growth was driven by high rates of investment fed by high oil prices in some countries, or by high levels of borrowing in others. This period saw a significant decline in poverty rates until, by 1987, MENA registered the lowest levels of all developing regions. Free education and primary health care became available to increasing numbers of citizens while basic items such as food and fuel were subsidised and employment policies were geared towards guaranteeing jobs within the public sector. As time passed and states in the region departed from the centrally planned economic model they faced growing pressures. "Growth collapsed following a decline in the price of hydrocarbons, a main source of income for many countries in the region, and debt burdens became unsustainable due to low productivity growth," notes the report. This translated into a halt in progress in eradicating poverty. By 2001 approximately 52 million people were living beneath the poverty line, 11 million more than in 1987. Such are the social costs of economic growth rates falling behind the growth in population, commented Mustapha Nabli, chief economist at the World Bank for the MENA region, during the press conference that accompanied the release of the report in Cairo. Human development indicators, on the other hand, have registered steady improvements, both in terms of literacy and mortality rates, during the period in which poverty reduction has stagnated. Between 1985 and 2000 literacy spread to 69 per cent of the population compared to 47 in the previous two decades. Meanwhile the average number of years spent in education for those over 15 rose from 3.4 to 5.2, while infant mortality plunged from 108 to 46 per thousand births. In the same period average life expectancy has risen from 61 to 68. Yet the authors of the report suggest that the region has faced problems in translating its improved human capital into higher productivity, a result of deficient macroeconomic and structural policies. Recent research suggests that the impact of education on income is conditioned by the degree of openness of the economy, with barriers to trade and investment constraining the returns of any human development investment. The report also highlights the pressures faced by social safety nets across the region since the mid-1980s. Opportunities to ensure that social safety nets become efficient instruments in promoting poverty reduction have often been missed. While food and energy subsidies are effective in reaching a large number of people they are inefficient in terms of resource leakage to the non-poor. In Egypt, for example, 93 per cent of gasoline subsidies go to the richest fifth of the population. Cash handouts in MENA countries often better target the poor but they represent less that one per cent of GDP. The report not only diagnosed problems and their causes but also suggested ways to combat poverty, arguing that engineering accelerated growth rates is an essential prerequisite. To successfully promote growth, says the report, will require some basic realignments including enlarging the role of the private sector compared to that of the state, a shift from import substitution strategies to greater global integration and a move from reliance on oil as a major source of income to more diversified economic activities. The report predicts that in the wake of such realignments growth rates could increase by three per cent, bringing about an eight per cent drop in poverty rates by 2015 as an additional 22 million people are lifted out of poverty. Human development techniques, especially in the fields of education and health provision, could also help alleviate the problem. With education the report argues that greater emphasis should be placed on quality rather than the number of years spent at school. The low quality of education offered in state schools compounds the problems of the poor, who have no access to alternatives, as well as weakening economic competitiveness. On the health front MENA countries must work to iron out existing disparities between rich and poor with regards to child mortality and malnutrition rates which in turn requires better financing of health systems. Better access to education and health services for the poor must also be complimented by more effective social safety nets -- the report singles out unemployment insurance as ripe for overhaul -- which will demand more efficient utilisation of limited resources that must be directed to those most in need.
