The People Want Page 3
FIGURE 1.3 Average annual population growth rate (%). (Source: UNICEF)
It should also be noted that MENA GDP growth figures over the four decades in question have in large measure been determined by the sharp fluctuations in oil prices during this time, since oil is the region’s main export. Nevertheless, the variation in the real prices of crude oil—which soared between 1973 and 1981, then fell until 1986, only to increase again from 1988 onward—cannot explain the negative balance of the years 1970–90. Similarly, the steady but slight decrease in the prices of crude until 1998 and a new dip in 2008 did not suffice to counterbalance the hefty increase from 1998 to 2008.8
We can verify that the MENA region’s especially poor performance does not just reflect the vicissitudes of oil markets by looking at the years 2000–8, during which oil prices rose spectacularly. The real price of crude (in 1973 US$) went from $7.99 in 2000 to $16.04 in 2008; that is, it more than doubled (more precisely, it soared from 2005 on).9 Let us compare the total GDP average annual growth rates of the various developing regions of Africa and Asia in 2000–8 (Fig. 1.4).
The result is surprising. MENA’s growth rate is not merely far lower than South Asia’s and East Asia’s, it is below even that of sub-Saharan Africa. This comparison of total GDPs also neutralizes the impact of the demographic factor on per capita GDP growth, although it is perfectly legitimate to argue that the latter is the sole valid indicator of growth. Indeed, underscoring the oil wealth of this region of the world—richly endowed in both raw materials and capital, and with no shortage of labor supply, so that it has the three basic prerequisites for industrialization—throws the acuteness of the problem plaguing it into even sharper relief.
FIGURE 1.4 GDP average annual growth rate (%). (Source: World Bank)
However, as is well known, GDP has only limited validity as an index of development as opposed to growth, both because it fails to take the so-called informal economy into consideration and because it is hard to measure public services such as education or health in terms of money. Moreover, GDP ignores both environmental costs and the qualitative aspects of the public services just mentioned.10 To take these aspects into consideration, the United Nations Development Program (UNDP) has devised a “Human Development Index” (HDI) of its own. The HDI is, according to the official definition, “a composite index measuring average achievement in three basic dimensions of human development—a long and healthy life, knowledge and a decent standard of living.”11
As measured by HDI, the Arab states were outperformed by East Asia in the period 1980–2010 (Fig. 1.5), despite the fact that the Arab region is much richer. The PPP-adjusted per capita GDP was on average $8,256 in the Arab states in 2009, according to UNDP data, as opposed to $6,227 in East Asia.12 (“PPP” stands for “purchasing power parity”: simply put, a PPP-adjusted dollar has the same purchasing power in any given country that a dollar has in the United States.) Similarly, the disparity between the Arab countries’ and South Asia’s performance is, again as measured by HDI, far smaller than the disparity in wealth between the two regions (with a per capita GDP at PPP of $3,368 for South Asia).
FIGURE 1.5 Human Development Index (HDI), 1980–2010. (Source: UNDP)
POVERTY, INEQUALITY, PRECARITY
The social situation confronting the Arab region’s population can be summed up in three words—poverty, inequality, precarity—ironically reminiscent of the motto of the French Revolution: Liberty, Equality, Fraternity.
Poverty is, of course, a relative notion, even, or perhaps especially, when it is a question of expressing it in numbers. We need only consider how the World Bank revised its 1993 assessment of poverty in the world in 2005, using a new method to determine purchasing power parities. Rather like sudden currency devaluations and revaluations, the new estimates considerably modified the World Bank’s assessment of many countries’ relative wealth. Per capita GDP figures plunged dramatically in some cases and soared in others.13
One of the most striking results of this readjustment was a radical change in estimates of poverty in some countries. A good example is the claim that over forty percent of Egyptians live on less than $2 a day, a figure that has been endlessly bandied about, even in economic publications, since the protest movement in Egypt began in January 2011.14 This figure in fact stems from estimates based on 1993 purchasing power parities, which continued to appear in World Bank publications up to and including its World Development Report 2008, released in autumn 2007. This Report still estimated that 43.9% of Egypt’s inhabitants were living on less than $2 a day, on the basis of a survey conducted in 1999–2000. In World Development Report 2010, however, the assessment of the number of Egyptians living on that amount, based on the 2005 parities and a 2004–5 survey, fell to 18.4%. Conversely, the proportion of the populace living on less than $2 a day in Tunisia went from 6.6% when 1993 purchasing power parities were used, to 12.8% when they were replaced by their 2005 counterparts; both figures were based on the same 2000 survey. For a few other countries, such as Morocco and Yemen, poverty rate estimates were hardly affected.
The radical drop in the figures for Egypt, the MENA country with the biggest population, merely accentuates the difference between MENA and other parts of the developing world as reflected in statistics published by international institutions. Thus, according to World Bank data, the percentage of people living in extreme poverty—that is, under the international poverty line of $1.25 (PPP) per day—is lower in MENA than in all other developing regions. In 2008, it was 2.8% in MENA as opposed to 6.5% in Latin America, 14.3% in East Asia, and a shocking 36% in South Asia and 47.5% in sub-Saharan Africa. The percentage of inhabitants living on less than $2 a day was the lowest in MENA (and Latin America): again according to the 2008 figures, the rate was 13.9% in MENA and 12.4% in Latin America, compared with 33.2% in East Asia and the even more appalling rates of 69.2% in sub-Saharan Africa and 70.9% in South Asia.15
The fact remains that, according to the same data, the proportion of people living on less than $2 a day is high in several Arab countries, even if poverty is very extensive only in Mauritania, Sudan, and Yemen, as well as among Palestinians (particularly in Gaza). To restrict ourselves to countries for which estimates have been made in the last few years, those living on less than $2 a day make up 14% of the population in Morocco (2007), 15.4% in Egypt (2008), 16.9% in Syria (2004), 21.4% in Iraq (2007), 46.6% in Yemen (2005), and 47.7% in Mauritania (2008).16 The fact, for example, that in Morocco, which has the lowest rate of all the countries just mentioned, one inhabitant out of seven has to get by on less than $2 (PPP) a day means that a substantial segment of society lives in poverty. Morocco’s rate may, to be sure, seem relatively benign when compared with South Asia’s and sub-Saharan Africa’s. For the individuals involved, however, dire poverty is quite as onerous whether they represent one-tenth of the population or two-thirds of it. Indeed, poverty is even harder for the poor to accept when it affects a minority, which must daily be confronted with the sight of overconsumption and ostentatious luxury.
Yet these figures are highly dubious indicators of poverty. They are questioned in Arab Human Development Report 2003, the second in a series published by the UNDP. It affirms that “the data base on the extent and features of poverty and income distribution in Arab countries is extremely weak,” referring to estimates showing that “poverty in Arab countries is more widespread than is usually reported in international data bases, particularly those compiled by the World Bank and the International Monetary Fund” (IMF).17 Arab Human Development Report 2009, the fifth report in the same series, points out that “applying the two-dollar-a-day international line and the lower national poverty line respectively yields a virtually identical picture of extreme poverty in the region,” inferring that “it would be reasonable to expect a significantly higher percentage of the population at or below the upper poverty line.”18
The upper national poverty line defines the revenue needed to obtain both basic nutrition
and essential nonfood items in a given country, whereas people living at the lower poverty line have to make hard choices between these two kinds of minimum expenditure. The image that emerges when we focus on the number of people in the Arab region living below the “upper” line, which varies between $2.43 and $2.70 (PPP) a day, differs sharply from the one that appears when we apply the international poverty line of $2 (PPP) a day. According to the UNDP report, poverty rate statistics for the MENA countries for which such data (collected between 2000 and 2006) are available are as follows: 11.33% in Jordan, 23.8% in Tunisia, 28.6% in Lebanon, 30.1% in Syria, 39.6% in Morocco, 40.9% in Egypt, 53.9% in Mauritania, and 59.9% in Yemen. The average rate of poverty for all the countries in question is 39.9%. This is a much higher figure than the 16.9% of MENA inhabitants supposedly living below the $2 a day international poverty line.19
In an enlightening critique of the (under)estimates of Egyptian poverty in general and poverty in greater metropolitan Cairo in particular, Sarah Sabry provides one key to explaining the substantial disparity between the 18.4% of Egyptians living below the international poverty line according to World Bank statistics and the 40.9% of those living beneath the line of $2.70 a day according to national estimates. Sabry calls attention to “the large percentage of the population, almost 35 per cent, that is considered to live fairly close to the poverty line” and adds, “This means that small differences in methodology could have very large effects on the numbers of poor people in Egypt.”20 It should also be noted that it helps explain the recent jump in the proportion of Egypt’s population living under the lower national poverty level: from 19.6% in 2004–5 to 25.2% in 2010–11, according to national statistics.21
It is no wonder that what we have just noted about assessments of poverty also holds for assessments of socioeconomic inequalities. In World Bank data on the latter, figures based on surveys carried out after 2000 are available for only nine Arab states. In inequality statistics, Gini coefficients are used to measure inequality in income or expenditure on a scale running from 0, indicating absolute equality, to 100, indicating absolute inequality (one person receives or spends the total amount). The Gini coefficient for Japan and Sweden, the most egalitarian countries (in income), are 24.9 and 25 respectively; that for the Seychelles, the least egalitarian (in expenditure), is 65.8. The nine Arab states are located in a zone of medium to high consumption inequality, ranging between 30.8 for Egypt and 41.4 for Tunisia (Table 1.1). These are relatively average levels in comparison with India’s 33.4 and Indonesia’s 34, Iran’s 38.3, Turkey’s 39, Nigeria’s 48.8, the Philippines’ 43, or South Africa’s 63.1, to mention only countries for which the Gini coefficients bear on consumption inequality.
Like poverty level data, these data were also challenged in Arab Human Development Report 2003. Here again, Egypt is the touchstone for the international financial institutions’ statistics on Arab states:
Even when field surveys of income and expenditure (which constitute the basic source for estimates of income distribution) exist, such surveys suffer from defects that diminish their credibility, particularly with regard to the parameters of income distribution, as a result of bias in the collected data. In Egypt, for instance, relying on the results of income and expenditure surveys in the first part of the 1990s leads to an improvement of the Gini coefficient—i.e., income distribution becomes more equal. But this does not correspond to the overall economic situation, particularly unemployment and poverty criteria and the observations made of wealth distribution during the same period. . . . Labour’s share of the value added declined from nearly 40% in 1975 to nearly 25% in 1994, which indicates a deterioration of GNP distribution in favour of wealth returns.22
TABLE 1.1 DISTRIBUTION OF CONSUMPTION
The inequality estimates available for Arab countries are all based on the shares of overall consumption accruing to deciles or quintiles of the population classified according to per capita expenditure.23 These calculations provide a very rough idea of social inequalities. Income inequalities are necessarily much greater than inequalities in consumption, but it is impossible to determine them in countries lacking all transparency in this domain. It is even harder to shed light on inequalities in wealth distribution. Although Arab Human Development Report 2009 confuses consumption inequality with income inequality when it calls the latter “moderate” in the Arab countries, it nevertheless points out the divergence between this (mistaken) observation and social reality as experienced and perceived there. It also underscores the difference between inequalities in income and wealth:
Despite moderate levels of income inequality, in most Arab countries social exclusion has increased over the past two decades. In addition, there is evidence to suggest that the inequality in wealth has worsened significantly. In many Arab countries, for example, land and asset concentration is conspicuous and provokes a sense of exclusion among other groups, even if absolute poverty does not increase. Furthermore, the crowding of the poor in slums without sanitation, safe water, recreational facilities, reliable electricity and other services aggravates such exclusion. These trends, combined with high unemployment rates, result in the ominous dynamics of marginalization, visible in the high rates of urban slum dwellers in Arab cities and towns: 42 per cent in 2001.24
World Bank data indicate that the expenditure of the 10% of the population that consumes the most in all the Arab countries for which figures are available is 10.4 times higher, on average, than the expenditure of the 10% that consumes the least (see Table 1.1). These figures are hardly credible, even as far as the countries surveyed are concerned. Let us again take Egypt as our example: according to the same set of statistics, the bottom decile of the population has a 4% share of national consumption, while the top decile has a 26.6% share, that is to say, consumes (only!) less than 7 times as much. Anyone familiar with Egypt and Egyptian standards of living, however, knows perfectly well that the disparity between the expenditure of the poorest 10%—which lives mainly in rural areas—and richest 10% is much greater, to say nothing of income and wealth inequalities. If the World Bank’s figures were accurate, this would mean that, in a country in which more than 40% of the population lives on less than $2.70 (PPP) a day (the upper national poverty line), while 18.4% lives on less than $2 (PPP) a day (the upper international poverty line), the richest 10% spends less than $14 (PPP) a day, on average—that is, $420 (PPP) a month, or $155 at the market rate that prevailed in 2008.25 That seems highly unlikely.
The reported disparity in consumption levels in Qatar may seem more credible. According to World Bank data, the top decile there spends 27.6 times more than the bottom decile. This disparity will nevertheless seem to fall far short of the mark to anyone aware both of the wretched living conditions of the emirate’s most poorly paid Asian migrant workers, who comprise well over ten percent of the population and spend less than $75 per month, and, on the other hand, the frenetically conspicuous consumption typical of Qatar’s privileged social strata. Moreover, here as everywhere else, lumping all those in the top decile together masks the inequality that becomes immediately evident when we focus on the small percentage of super-rich at the tip of the social pyramid, whose extravagant consumption makes them all the more conspicuous.
Qatar is the richest state in the region in per capita terms. It vies with Liechtenstein and Monaco for the world title of the state with the highest per capita national income. Income inequalities between individuals in each of the Arab countries taken separately are exacerbated by inequalities in average per capita income between these countries. Country-to-country disparities are higher in the Arab region than in any other geopolitical region. They provide a good reflection of the inequalities that occur on a world scale, since this region includes countries whose per capita GDP is considerably above average for the group of the world’s richest countries, and others whose per capita GDP is considerably below world middle income (Table 1.2). Per capita GDP in Qatar was 66.6 times higher than in its neighbor Yem
en in 2008. If they were available, the figures for gross national income per capita, which takes into account the income that states and their citizens derive from foreign sources, would display even greater disparities.
Thus the Arab region, as we have seen, exhibits poverty and inequality rates that are quite high, although they are on average lower than those found in other developing regions in Africa and Asia. But MENA indisputably breaks a number of world records when it comes to the third element of our triad, precarity—understood as a combination of informal labor relations, unemployment, and underemployment.
TABLE 1.2 GDP PER CAPITA 2008 (CURRENT US$)
INFORMAL SECTOR AND UNEMPLOYMENT: THE BOUAZIZI SYNDROME
Mohamed Bouazizi was the young man who, by setting himself on fire in Sidi Bouzid, a city in central Tunisia, on 17 December 2010, triggered the revolutionary process that would spread to the whole Arabic-speaking region in the space of a few months. He has come to symbolize the millions of young people too poor to pursue their education beyond a few years at secondary level. The memorial statue representing a cart with two handles that was erected on the main square of his native city as a tribute to his martyrdom poignantly underscores the fact that his tragedy originated in his precarious condition as a poverty-stricken fruit-and-vegetable street vendor.