Printer Friendly Version
The Middle East and Norht Africa (MENA) Social Protection program covers a wide range of policies and issues that aim at better risk management. These include preventive strategies (employment strategies aimed at reducing segmentations in the labor market through labor market reform, including specific measures to reduce informality, promote school to work transition, increase the efficiency of active labor market policies, and improve migration outcomes), mitigation strategies (social insurance coverage, including pensions, unemployment insurance, and disability benefits), and coping strategies (social safety nets – conditional and unconditional, specific youth programs, child protection, and social care). The following strategic engagements respond to challenges in the region and to the demand from government counterparts.
Employability: How to promote employment and create more and better jobs in MENA
Limited creation of quality jobs, low labor force participation and high unemployment rates are a primary concern to policy makers in the MENA region. The lack of job creation and, more importantly, of quality jobs has limited the extent to which the sustained economic growth of the past decade was widely shared and eventually translated in effective poverty reduction. Labor markets in MENA are traditionally characterized by large public sectors (although annual public sector growth has slowed from around 12% in the 1990s to around 3% at the beginning of the decade), a large and growing informal economy providing low-quality / low-value added jobs (it is estimated that 67% of the labor force is informal and produces a mere 27% of GDP) and sluggish creation of good, high-value added jobs. Employment rates in MENA are low by international standards (46 percent versus a world average of 60 percent in 2008) and are driven mainly by low employment and participation rates among women (30.8% in 2008). While unemployment rates have decreased from 14.1% in 2002 to 10% in 2007, they remain the highest in the world due to the rapid growth of the working age population (at 3% over the period 2000-2005), affecting disproportionately youth and educated labor market entrants. Low quality and insufficient employment also pose a risk to social cohesion and security, particularly in a region where a large cohort of unemployed and out of the labor force young people might feel disillusioned about its ability to productively participate in economic life.
The objective of the employability agenda in MENA is to improve employment creation and job quality through analytical and operational work on demand side (creation of good jobs), supply side (supply of skills that are needed by the market), and labor markets (efficient intermediation of labor demand and supply by institutions). In addition to employment in national markets, our work focuses on promoting employability in global and regional labor markets through improved migration management.
On the analytical side, comprehensive labor market studies help countries identify binding constraints to employment creation by looking at the macro-economic framework, investment climate, labor market policies, education, and social protection. The recently launched regional Flagship on Employability will consolidate evidence of past advisory services and be innovative by documenting labor market challenges and segmentations in the region, identifying likely causes, proposing concrete reform options, and stimulating the dialogue through a set of structured consultations and dissemination activities at the regional level. Operational interventions include the piloting and evaluation of youth employment programs (e.g., in Tunisia, Syria, Egypt, Yemen, and Tunisia) and planned pilot interventions in the field of migration management (e.g., Tunisia, Egypt, UAE). All interventions strive to include rigorous monitoring and evaluation (M&E). Such evaluations are crucial for informing decision to scale-up or redesign interventions and for contributing to the body of evidence-base knowledge on best practices.
Social Safety Nets (SSN): Protecting and Enabling the Poor and Vulnerable
Social safety nets (SSN) are a crucial component of a well functioning economy, as an instrument to enable investment in human capital, manage household risk, and promote equity. MENA’s countries spend significant amounts on SSN, but mostly on non-targeted subsidies that are inefficient, pro-rich, and can result in significant fiscal liabilities in times of crisis. Disappointing progress in human development outcomes and the recent crisis underscore important vulnerabilities. The 2008 fuel and food price crisis, for example, highlighted the fiscal cost and contingent liability linked to subsidy policy, but also the vulnerability of the poor and the associated suboptimal responses to shocks (selling assets, withdrawing children from school, mismanaged migration, children malnutrition). A few countries in the region (West Bank and Gaza and Yemen) have already started reforming their SSN to achieve better effectiveness and results. Thanks to these reforms, these countries were able to respond promptly and effectively to the most recent crises through rapid program scale up. The times call for broader reform to invest in human capital in MENA through productive and effective social safety nets.
With the objective of developing efficient, effective and sustainable Social Safety Nets (SSN), our work in MENA concentrates on three axes: (i) improving targeting and incentive mechanisms of existing programs for better equity and impact, (ii) developing institutional capacity for better administration and governance and (iii) prioritizing social needs so as to achieve fiscal sustainability. SSN are not only envisaged for risk protection, but they can also incorporate incentives to invest in human capital, such as health and education of children, and training of young entrants in the labor markets. Innovative approaches such as Social Funds (for example in Yemen), which allow communities to allocate social spending according to their own priorities, are also promoted.
On the analytical side, a recently launched regional study on social safety nets will take stock of existing promising experiences, identify new and emerging challenges to the poor and vulnerable in the region, and explore other, so far understudied yet important aspects of SSN, such as informal transfers (e.g. Zakat). On the operational side, recent activities include programs in West Bank and Gaza (Palestinian National Cash Transfer Program), Yemen, and Djibouti (an innovative workfare cum nutrition program).
Social Security Systems: Insure against Risk
All countries in the region have implemented defined-benefit pay-as-you-go pensions systems and a number of them have health insurance. However, social security coverage is limited (only 33% of the population in MNA is covered by mandatory pension); benefits for the affiliated are usually large, often redistributing from poorer to richer beneficiaries, and the existing rules often give incentives to game the system. Additionally, the increasing economic integration of MENA countries with the global economy has imposed important reallocations of resources across sectors and restructuring of public firms. Such changes have made unemployment insurance an increasingly relevant feature of social security, and a pre-requisite to engage in a domestic dialogue for labor market regulations reform. Efficient pension systems and well functioning unemployment insurance systems are important enablers for dynamic labor markets and, ultimately, growth.
Dialogue efforts are concentrated on reform of current defined-benefit, pay-as-you-go pension systems in order to improve their financial sustainability and equity. This work aims at (i) reducing the overly generous mandate of the schemes; (ii) facilitating labor mobility across sectors; (iii) bringing up to the standard benefit formulas and eligibility (iv) and supporting the development of the regulatory framework to promote the emergence of voluntary private pensions. Moreover, system designs are reviewed so as to improve incentives of firms and individuals to join social security systems and the formal sector. When possible, reforms pursue an integrated approach, which encompasses pension, unemployment insurance, and health insurance. World Bank engagement in countries such as Jordan and Egypt has supported the technical work leading to recent reforms.
All dollar figures are in US dollar equivalents. September 2010 For more information, please contact:
In Washington: Najat Yamouri, Phone: 1 (202) 458-1340; Email: nyamouri@worldbank.org
|
RSS