The Global Environment Facility (GEF) is an independent funding mechanism with its own review and approval process. It partners with a number of institutions, including the World Bank, to prepare, supervise and implement its grants to developing countries.
Small and medium-size enterprises (SMEs) are becoming more of a priority for policymakers in the Middle East and North Africa (MENA). Seen as the driving force of many MENA economies, they help stimulate economic growth and encourage innovation and competition. They also play a huge role in creating more jobs in countries where these are urgently needed.
Al-Arabiya reported a few weeks ago that the political crisis in Ukraine and Russia is threatening the availability of food in Egypt and Jordan. Food prices becoming hostage to political crises is certainly not a new phenomenon: food plays an important role in the stability of societies through its availability, affordability, and quality. We learned this lesson from the 1789 French Revolution and more recently, many commentators link soaring food prices in 2010 with the events leading up to the ‘Arab Spring.’ The latter is not surprising when Arab countries import 56% of their cereal consumption, and some Arab countries import 100% of their wheat consumption. These recent market dynamics have led many countries to revisit their food security strategies with an eye to securing food supply.
There is a vigorous debate over the reasons pertaining to the food price increases in 2008, 2010, and 2012. Many highlight the effects of seasonal, short and medium term factors such as weather changes and biofuel-related crop conversions as well as long term factors such as population growth, income growth, and climate change. These price increases in food have enormous effects on people, for example, the 2008 food crisis pushed 105 million people into poverty.
- private sector
- land governance
- environmental and social performance standards
- King Abdullah’s Initiative for Agricultural Investment Abroad
- banned food exports
- food crisis
- Arab Spring & food
- agriculture FDI
- foreign direct investment
- Political Risk Insurance
- Agriculture and Rural Development
- The World Region
- Middle East and North Africa
- Saudi Arabia
New entrants to the working age population in most Middle East and North Africa countries encounter economic structures and policies that have long failed to generate an adequate number of new jobs. In recent years, about 5 million people per year have reached working age but only 3 million of them have found jobs. Unfortunately, ongoing political turmoil and associated economic conditions and policies suggest that the jobs challenge will continue to fester for years to come. However, help may be on the way from a “curiously unnoticed” source: falling fertility rates.
Guest workers have played an integral role in the Gulf since the 1970s where the demographic changes accompanying these labor flows occurred at an extraordinarily rapid pace. The region’s aggregate population has increased more than tenfold in a little over half a century, but in no other region of the world do citizens comprise such a small proportion of the population. While this ‘demographic imbalance’ makes the Gulf unique, what differentiates it is not its economic and demographic expansion through migration but the degree to which the region’s governments have excluded foreign workers from being integrated into the national polity. This exclusion of foreign workers is a result of a conscious policy.
Labor migration to Gulf Cooperation Council (GCC) countries are mostly governed under a sponsorship system known as Kafala. Migrant workers require a national sponsor (called Kafeel) and are only allowed to work for the visa sponsoring firm. The workers must obtain a no-objection certificate from the sponsor to resign and have to leave the country upon termination of the usual 2 to 3 years’ contract before being allowed to commence a new contract under a new sponsor. Tied to the sponsor, the migrants become immobile within the internal labor market for the duration of the contract. Consequently the sponsors benefit from non-competitive environments where they extract substantial economic rents from migrant workers at the expense of inducing significant inefficiencies in production.
The Kafeels pay workers an income above the wage in their country of origin and obtain economic rents equal to the difference between such earnings and the net marginal return from employing the migrant worker. Migrant workers are paid the initial nominal wage throughout the entire contractual period. They are even made to accept lower wages than contracted initially. Immobilized by labor restrictions, workers cannot command a higher wage even when there is demand for their services by rival firms willing to hire them in order to avoid the cost of hiring from abroad. Kafeels have also found other ways of extracting rents in recent decades by indulging in visa trading. They allow their names to be used to sponsor foreign workers in exchange for monetary gains.
Arguably, rents per-se should not directly create adverse effects because they are essentially redistributive transfers. Earnings paid to migrants are sufficient to motivate them to migrate. The migrants do not leave. But this view is over-simplistic. The combination of short contracts, flat wages, and lack of internal mobility kills the incentives for migrant workers to exercise higher effort levels in production and engage in activities that enhance their human capital. Any productivity gain would go to the sponsor in the form of rents. The system provides incentives to entrepreneurs to concentrate on low-skills, labor-intensive activities where the extraction of economic rents is easier. Such sponsor-worker behavior explains for instance why despite the massive investments in Dubai, the economy-wide efficiency levels (average labor productivity) have not improved in the last two decades while in Hong Kong, they doubled and in Singapore quadrupled.
Source: FlickR Creative Commons
Small and Medium Enterprises (SMEs) in the Gulf Cooperation Council (GCC) countries differ from SMEs elsewhere in that they employ mostly expatriate workers and very few of their own nationals. How do we know this? We see it in the labor force statistics: The share of expatriates in the private sector labor force ranges from 80% to 98% in the six GCC countries— Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE)— the lowest being in Oman and Bahrain, and the highest in Qatar and the UAE.
It’s the first class of an adult literacy program for young Moroccan women. Ghita comes to the front of the class, picks up a piece of chalk and carefully draws a line on the blackboard. It is the letter alif, the first letter of the Arabic alphabet, one of the simplest to recognize and write: a single downward stroke.
Following Russia’s annexation of Crimea after the popular voting in early March, the European Union and recently the U.S. and Canada have imposed their first round of sanctions—an asset freeze and travel ban on some officials in Russia and Crimea. This week NATO's foreign ministers, warning that Russian troops could invade the eastern part of Ukraine swiftly, ordered an end to civilian and military cooperation with Russia. Should the crisis escalate, potential fallout on Middle East and North Africa (MENA) countries is likely. The effects would be transmitted directly through trade and indirectly through commodity prices.
At the heart of the upheavals that swept across the Middle East region during the Arab Spring was the call for more transparent, fair and accountable government. In the aftermath of the uprisings, specialists are left to address the issue of transition to democratic rule. In doing so, they have to answer the following questions: how can we systemize the culture of accountability and democratic governance? How can we channel the popular energy of street mobilization into a powerful institution that keeps duty-bearers in check?
- social accountability
- Social Development
- Middle East and North Africa
- Yemen, Republic of
- West Bank and Gaza
- United Arab Emirates
- Syrian Arab Republic
- Saudi Arabia
- Iran, Islamic Republic of
- Egypt, Arab Republic of