Living Better

• Author: Sena Eken, David A. Robalino, and George Schieber
• Position: Assistant Director in the IMF's Middle Eastern Department/Economist/Health and Social Protection Manager, in the World Bank's Middle East and North Africa Region

Improving human development indicators in MENA will require different approaches to health, education, and social protection

Since the 1970s, the MENA region has made significant progress on the social front. Fueled by paternalistic state welfare policies and funded by the 1970s oil boom, most countries drastically expanded access to publicly provided social services and developed extensive health, education, and social protection systems. Islamic traditions of charity (for example, Zakat) and family support networks also helped countries manage social and economic risks. As a result, social infrastructures expanded rapidly, and key social indicators-such as child mortality rates, life expectancy, and literacy-show dramatic improvements in most countries (see chart).

[ SEE THE GRAPHIC AT THE ATTACHED RTF ]

Nevertheless, major challenges remain. Poverty is a problem, with 30 percent of the region's population living on less than $2 a day. The low-income countries (Afghanistan, Djibouti, Pakistan, Somalia, Sudan, and Yemen) have alarming levels of infant and maternal mortality and illiteracy, with limited resources to tackle these problems. In the middle- and high-income countries, health, education, and social protection systems must concentrate on targeting vulnerable populations and ensuring equity, quality, efficiency, and financial sustainability in the provision of services.

But the demographic, economic, and institutional context for reform is not favorable. High, albeit declining, population growth rates, regional instability, and limited political empowerment differentiate the Middle East and North Africa from other regions. Population growth puts pressure on the demand for social services. Security concerns and political instability divert public resources away from development, discourage foreign investment, and restrain intraregional flows of goods and labor. The countries must also deal with economic and institutional constraints, including the dominant role of government, regulatory institutions that hamper private sector development, and lack of civil society involvement in decision making; weak governance and endemic corruption in many countries; slow economic growth, rigid labor markets, and rapid labor force growth, resulting in an average unemployment rate of about 15 percent, one of the highest in the world; rapid urbanization that is weakening traditional social protection systems; and pervasive gender inequalities.

What can be done to address the problems in the health, education, and social protection systems in the region? While the menu of policies is generic, each country's circumstances will dictate its priorities.

Health

Health systems in the region account for some 5 percent of GDP (about half of this spending is publicly financed), 4-10 percent of the public budget, and 2-5 percent of...