Historically across the Middle East, local government has typically been associated with poor planning and inefficiency in execution. Sidelined to central planning agencies, local government is at the frontline on the pressing issues of effective governance and public sector service delivery — the two cornerstones to successful government. As citizens' expectations rise and competition over foreign and domestic investment grows, there is a spurred interest in strengthening local and municipal government. Below, we outline the challenges associated with the lack of decentralized government in the Middle East and steps that can be taken to address them. 1. Uneven regional development The most obvious impact of the traditional emphasis on central government planning is uneven development between the main cities and rural areas, as well as the centers of main cities and the suburbs. In Saudi Arabia for example, this has led to the emergence of a “wealthy corridor” of business and employment between the three key cities; Dammam, Riyadh, and Jeddah. In Egypt, the level of centralization is reflected in the daily commute of approximately 4 million Egyptians from the suburbs to Cairo for work. As the absorptive capacities of city centers peak, the implications of these development patterns for the Middle East are devastating. The International Monetary Fund's “Regional Economic Outlook” for 2010 estimated that the Middle East would need to generate at least 18.5 million jobs to sufficiently address the needs of its emerging “youth bulge,” unemployment rates for which average at 10 percent across the region. The generation of employment opportunities will require investment flows that rely on a strong infrastructure base and a stable skilled labor market. This essentially translates into structured and steady investment in the physical and social capital of the regions and the empowerment of local governments to develop and implement innovations that make their local jurisdictions competitive. 2. Poor service delivery Service delivery is a core function of local government and represents the first and most direct experience citizens have with their government. Low training budgets and limited career potential in local government agencies, coupled with the more typical efficiency and performance-related challenges in government, has made service provision outside the city capital highly challenging. Amongst the countries of the Gulf Cooperation Council, award programs that aim to instill a sense of competition and “excellence” in the delivery of public services have been developed. The most notable of these is the Dubai Government Excellence Program (DGEP). Despite the many strides made by the DGEP and similar programs, they do not address the structural issues underlying service delivery, and significant investment is still needed in strategy formulation, performance management and capacity building. 3. Weak institutional structures From as early as 2003, the World Bank has identified the lack of accountability and inclusiveness as the main culprits of weak economic performance in the Middle East. Corruption and the consequent marginalization of local community groups can be attributed to a number of factors, all of which relate to poor institutional structures found throughout the region and particularly rampant at the local government level. With administrative lines haphazardly drawn by legacy colonial powers, in many instances, local authorities battle over jurisdictions with local tribes who enjoy considerable legitimacy, power and knowledge of the local context. To address this challenge, governments must strengthen their institutional structures and adopt participatory, inclusive approaches to strategic planning that ensure that the needs of local stakeholders are met. More importantly, socio economic program, ranging from those targeting micro, small and medium enterprise development, to community funds and initiatives, should reflect the priorities and needs of local community groups from design through to implementation. Implications for the region As the region undergoes significant change, it is striking that many of the issues being raised by its citizens lie at the heart of local governments' inability to meet their expectations and needs. Governments need to take advantage of the opportunities these changes bring by making strong shifts in policy that take stock of the potential that effective and efficient local government planning and implementation has to offer. On a strategic level, significant investments are needed to develop strategic local city plans that distinguish constituencies and highlight their competitive edge. Considerable room also exists for the development of national and regional platforms for innovation, knowledge sharing and cooperation — a key feature of successful economic groupings and global cities elsewhere. On a more operational level, improving service delivery is key. This will require a shift to more inclusive and participatory governance models that engage private sector and community stakeholders on a regular basis. Underlying these models is an effective management system that tracks performance and ensures that it is aligned to the strategic plan. Finally and most importantly, is the need to strengthen institutional structures and local governance systems. Extending beyond the mere definition of roles and responsibilities, or even the development of competitive, transparent and consistent remuneration models, his key factor relates to the instilling of the public sector ethos. It requires a holistic reassessment of the role of local government administrators and the value that they bring to the public. In summary, a more action-oriented agenda towards local planning and development is a priority for governments in the region. Strong and concerted moves towards holistic and innovative strategic planning, participatory governance and devolution with strong accountability structures, is now more pressing than ever, and cannot be achieved without adequate capacity building at the local levels. The message that has consistently rung through recent events is that “business as usual” in local government is no longer an acceptable option for the people of the Middle East. Hazem Galal is PricewaterhouseCoopers' Global Cities and Local Government Network Leader and Nesrine Halima is Regional Manager for PwC's Government and Public Sector Group.
