Publication: Balancing Act: Jobs and Wages in the Middle East and North Africa When Crises Hit
Loading...
Files in English
6,089 downloads
Date
2023-10-05
ISSN
Published
2023-10-05
Author(s)
Elmallakh, Nelly
Lotfi, Rana
Suvanov, Ilias
Editor(s)
Abstract
Covid-19. The Russian invasion of Ukraine. Commodity price volatility. The rise of global inflation and interest rates. Currency depreciations among indebted middle-income economies. And now, natural disasters. As a sequence of events, the consequences can be both tragic and long-lasting. After analyzing the macroeconomic prospects of the Middle East and North Africa (MENA) Region, this edition of the regional Economic Update assesses the human toll of macroeconomic shocks in terms of lost jobs and deteriorating livelihoods of the people of MENA. Growth is forecast to decelerate in 2023 after experiencing an oil-price induced growth spurt in 2022 among the high-income oil exporters of the region. Yet as the region continues to recover from the impact of the COVID-19 shock and navigates the heightened volatility in its terms of trade, the region’s labor force is contending with the ramifications for their livelihoods of the inflationary pressures associated with currency fluctuations in some countries. The authors estimate that the macroeconomic shocks of 2020-22 led to an additional 5.1 million individuals becoming unemployed in MENA. Will these shocks permanently scar the hard-working people of MENA? The report answers this question by highlighting the trade-offs facing labor markets when facing macroeconomic shocks. A critical trade-off pertains to the loss of jobs versus decreases in real incomes, neither of which is desirable. The report advocates for maintaining the flexibility of real wages and discusses policy options to support the most vulnerable.
Link to Data Set
Citation
“Gatti, Roberta; Lederman, Daniel; Elmallakh, Nelly; Torres, Jesica; Silva, Joana; Lotfi, Rana; Suvanov, Ilias. 2023. Balancing Act: Jobs and Wages in the Middle East and North Africa When Crises Hit. MENA Economic Update, October 2023. © World Bank. http://hdl.handle.net/10986/40390 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Related items
Showing items related by metadata.
Publication Growth in the Middle East and North Africa(Washington, DC: World Bank, 2024-10-16)This issue of the MENA Economic Update presents a summary of recent macroeconomic trends, including an update of the conflict centered in Gaza and its regional spillovers, alongside an analysis of factors that shape the long-term growth potential of the region, with special attention to the persistent effects of conflicts. A modest uptick in growth is forecast for 2024, which nonetheless masks important disparities within the region. The acceleration is driven by the high-income oil exporters, while growth is expected to decelerate among developing MENA countries, both developing oil exporters and developing oil importers. Despite current challenges, the region can dramatically boost growth by better allocating talent in the labor market, leveraging its strategic location, and promoting innovation. Closing the gender employment gap, rethinking the footprint of the public sector, and facilitating technology transfers through trade under enhanced data quality and transparency can help the region leap toward the frontier. Peace is a pre-condition for catching up to the frontier, as conflict can undo decades of progress, delaying economic development by generations.Publication Shifting Gears: The Private Sector as an Engine of Growth in the Middle East and North Africa(Washington, DC: World Bank, 2025-04-23)The Middle East and North Africa (MENA) region is estimated to have grown at a modest rate of 1.9 percent in 2024 and is expected to grow moderately at 2.6 percent in 2025. This is against a backdrop of increased global uncertainty, particularly in trade policy. The region is far from the frontier in standards of living, largely due to low productivity. This issue of the MENA Economic Update sheds light on a critical engine of productivity growth: the private sector. Businesses create jobs, boost livelihoods, and serve as a bastion of innovation in the economy. The MENA private sector, however, is not dynamic and is ill prepared to absorb shocks. To boost the performance of the private sector, governments in the region may need to rethink their role in engaging with markets including improving competition, the business environment, and the availability of data. Additionally, private sector businesses in the region can increase performance through better management practices and harnessing untapped talent in the region.Publication Conflict and Debt in the Middle East and North Africa(Washington, DC: World Bank, 2024-04-15)The global economy is in its third year of deceleration amidst declining inflation and oil prices. The MENA region grew at 1.9 percent in 2023 and is forecasted to grow at 2.7 percent in 2024. And for the first time since the pandemic, MENA oil exporters and importers will grow at similar rates. The tragedy of the conflict in the Middle East has increased uncertainty. Rising debt leaves many countries in the region exposed. This report unpacks the nature of debt in the region. Oil importers have been unable to either inflate or grow out of debt. Exchange rate fluctuations, and particularly stock flow adjustments (SFA) play a sizeable role. The report highlights the need to address debt transparency. Extrabudgetary items, especially for developing oil importers, need to be accounted for. Primary balances are key, but only to the extent that they capture the true state of government finances.Publication Altered Destinies: The Long-Term Effects of Rising Prices and Food Insecurity in the Middle East and North Africa(Washington, DC : World Bank, 2023-04-06)Growth is forecasted to slow down for the Middle East and North Africa region. The war in Ukraine in 2022 exacerbated inflationary pressures as the world recovered from the COVID 19 pandemic induced recession. The response by central banks to raise rates to curb inflation is slowing economic activity, while rising food prices are making it difficult for families to put meals on the table. Inflation, when it stems from food prices, hits the poor harder than the rich, thus compounding food insecurity in MENA that had been rising over decades. The immediate effects of food insecurity can be a devastating loss of life, but even temporary increases in food prices can cause long-term irreversible damages, especially to children. The rise in food prices due to the war in Ukraine may have altered the destinies of hundreds of thousands of children in the region, setting them on paths to limited prosperity. Food insecurity imposes challenges to a region where the state of child nutrition and health were inadequate before the shocks from the COVID-19 pandemic. The report discusses policy options and highlights the need for data to guide effective decision making.Publication Inclusion and Resilience : The Way Forward for Social Safety Nets in the Middle East and North Africa, OVERVIEW(Washington, DC, 2012-09)The report aims to meet two broad objectives: (a) enhance knowledge about the current state of existing social safety nets (SSNs) and assess their effectiveness in responding to new and emerging challenges to the poor and vulnerable in the region by bringing together new evidence, data, and country-specific analysis; and (b) open up and inform a debate on feasible policy options to make SSNs in the Middle East and North Africa more effective and innovative. First chapter, 'a framework for SSN reform,' describes and illustrates the reasons for the region's growing need for SSN reform and establishes the framework for renewed SSNs. It identifies key goals for SSNs (promoting social inclusion, livelihood, and resilience) and illustrates how these goals have been achieved in some parts of the region and elsewhere. Second chapter, 'key challenges that call for renewed SSNs,' analyzes the challenges facing the region's poor and vulnerable households, which SSNs could focus on as a priority. Two large groups are at higher-than-average poverty risk: children and those who live in rural or lagging areas. The chapter examines factors such as inequality of opportunities and lack of access to services that can perpetuate the lower human development outcomes among the poor in these groups. It also describes the challenge of vulnerability. Finally, it identifies particular social groups that are at a higher risk of exclusion from access to services and employment. Third chapter, 'the current state of SSNs in the Middle East and North Africa,' analyzes SSN spending and assesses different aspects of the SSN systems' performance. Fourth chapter, 'the political economy of SSN reforms in the Middle East and North Africa: what do citizens want?' presents new evidence on citizens' preferences concerning redistribution and SSN design, using newly collected data. It also discusses how political economy considerations could be taken into account in designing renewed SSNs in the region. Fifth chapter, 'the way forward: how to make safety nets in the Middle East and North Africa more effective and innovative,' proposes an agenda for reform and the path for moving forward, using global experience and the evidence presented in the preceding chapters.
Users also downloaded
Showing related downloaded files
Publication Working Without Borders(Washington, DC: World Bank, 2023-07-24)Online gig work poses both opportunities and challenges for governments and workers. On the upside, it offers prospects for income generation, especially in developing countries, where most people work in low-productivity, low-quality, often informal jobs. The virtual and often temporary nature of gig work also provides flexibility for often neglected groups such as women, youth, migrants, and people with disabilities. These jobs could be a stepping-stone to bet¬ter-quality jobs for low-skilled workers by helping them learn critical digital skills and close the digital divide. But most gig jobs offer little to no protection for workers, with uncertain income streams and no clear career pathways. Depending on local labor regulations, many gig workers are not protected against unfair practices, abuse or injuries while working. Gig work also raises challenges for managing data security and privacy. The report examines how countries can navigate the promise and perils of online gig work. It reveals that the online gig workforce is much larger than previously assumed with an estimated 154 million to 435 million Online gig workers around the globe. For the first time ever, the report mapped and tracked regional platforms and gig workers who work in languages other than English. Key messages are: • Online gig work is expanding, accounting for up to 12% of the global labor force and is a growing source of income for millions. • Demand for online gig workers is rising faster in developing countries than in industrialized countries. • Local gig platforms play a vital role in the local labor market, but they face challenges in establishing a viable business model, and opportunities for long-term growth. • Online gig work can support inclusion by providing work opportunities for youth, women, and low-skilled workers. • Gig workers, like most other informal sector workers in developing countries, are often outside the purview of labor regulations. • The gig economy can offer opportunities locally to build digital skills, increase income-earning opportunities, and facilitate social protection coverage of informal workers.Publication Business Ready 2024(Washington, DC: World Bank, 2024-10-03)Business Ready (B-READY) is a new World Bank Group corporate flagship report that evaluates the business and investment climate worldwide. It replaces and improves upon the Doing Business project. B-READY provides a comprehensive data set and description of the factors that strengthen the private sector, not only by advancing the interests of individual firms but also by elevating the interests of workers, consumers, potential new enterprises, and the natural environment. This 2024 report introduces a new analytical framework that benchmarks economies based on three pillars: Regulatory Framework, Public Services, and Operational Efficiency. The analysis centers on 10 topics essential for private sector development that correspond to various stages of the life cycle of a firm. The report also offers insights into three cross-cutting themes that are relevant for modern economies: digital adoption, environmental sustainability, and gender. B-READY draws on a robust data collection process that includes specially tailored expert questionnaires and firm-level surveys. The 2024 report, which covers 50 economies, serves as the first in a series that will expand in geographical coverage and refine its methodology over time, supporting reform advocacy, policy guidance, and further analysis and research.Publication How to Protect, Build, and Use Human Capital to Address Climate Change(Washington, DC: World Bank, 2023-12-14)To respond to climate change effectively, human capital needs to be at the heart of policy responses. This policy note demonstrates the impacts of climate change across the lifecycle and provides a framework of policy and program interventions to protect, build, and use human capital to minimize climate change impacts and create opportunities for more sustainable and inclusive development on a livable planet. By demonstrating the scope of impacts of climate change on people and people’s potential to contribute to climate action, the note also makes a case for prioritizing human capital investments as part of countries’ Nationally Determined Contributions (NDCs) and other climate strategies.Publication Latin America and the Caribbean Economic Review, October 2023 - Wired(Washington, DC: World Bank, 2023-10-04)Latin America and the Caribbean continues to face adverse global headwinds: high interest rates, modest G-7 growth, soft commodity prices and uncertain prospects in China will all depress growth. Well-grounded policy responses have led to largely recovering employment and income losses from the pandemic and falling rates of inflation. However, the region faces the mutually reinforcing triple challenges of low growth, limited fiscal space, and citizen dissatisfaction. Expanding digital connectivity offers a possibility to make progress on all three fronts. To maximize the social benefits of connectivity as well as to ensure that it does not exacerbate spatial, educational, gender or racial inequalities, three challenges are important to address: first, expanding coverage to the remaining unconnected areas as well as improving the quality of service; second, increasing the productive use of existing infrastructure, and; third, as with any other infrastructure "hardware," investments in "software" - such as digital and traditional skills, managerial capabilities, supportive regulatory frameworks, and deeper financial markets are critical.Publication Altered Destinies: The Long-Term Effects of Rising Prices and Food Insecurity in the Middle East and North Africa(Washington, DC : World Bank, 2023-04-06)Growth is forecasted to slow down for the Middle East and North Africa region. The war in Ukraine in 2022 exacerbated inflationary pressures as the world recovered from the COVID 19 pandemic induced recession. The response by central banks to raise rates to curb inflation is slowing economic activity, while rising food prices are making it difficult for families to put meals on the table. Inflation, when it stems from food prices, hits the poor harder than the rich, thus compounding food insecurity in MENA that had been rising over decades. The immediate effects of food insecurity can be a devastating loss of life, but even temporary increases in food prices can cause long-term irreversible damages, especially to children. The rise in food prices due to the war in Ukraine may have altered the destinies of hundreds of thousands of children in the region, setting them on paths to limited prosperity. Food insecurity imposes challenges to a region where the state of child nutrition and health were inadequate before the shocks from the COVID-19 pandemic. The report discusses policy options and highlights the need for data to guide effective decision making.