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Economic development in the Arab world

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As mentioned on today’s edition of Fareed Zakaria’s GPS, the 2002 Arab Development Report identified three key elements that were keeping the Arab League, which includes most of the Middle East and Northern Africa, from achieving increased levels of human development. The three are freedom, the empowerment of women and education. Here is the report.

The sad news is that almost 10 years later, that region isn’t much better off. According to an April 2011 report from the International Monetary Fund, the region faces serious economic challenges in recovering from high unemployment and the effects of the social unrest that has swept across the region (known as the Arab Spring):

The key policy challenges across the region are daunting. For oil importers, the main priority is to raise growth and tackle chronically high unemployment, especially among young people. For oil exporters, the focus should be to strengthen or develop fi nancial systems and promote economic diversifi cation. Recent increases in public spending on non-energy-related sectors should be helpful in diversifying activity toward these sectors and rebalancing regional growth. …

In most MENA economies, chronically high unemployment, especially among young people and the educated, is a long-standing challenge that now must be tackled urgently. h e fact that unemployment has remained high for so long suggests that the problem is largely structural—stemming from skill mismatches, labor market rigidities, and high reservation wages. A lasting solution to the region’s unemployment problem will require a combination of permanently higher and inclusive economic growth and reforms to improve the responsiveness of labor markets.

Also according to the IMF, the collective GDP of the Arab League is abysmally low. Estimates from 2007 show that Arab League nations had a GDP (purchasing power parity) of about $2.765 trillion, while India alone had a GDP of $2.818 trillion in that year.

As for education, a 2008 report from World Bank reveals that unemployment was averaging 14 percent in the Middle East and North Africa, which is higher than most everywhere else in the world other than sub-Saharan Africa, and the region has yet to see the positive gains in education that have been shown in parts of Latin America and in other developing regions. This part of the introduction to the report tracks the changes in education in the MENA in the last half century:

Since the early 1960s, the MENA region has registered tremendous gains in terms of more equitable access to formal education. In the 1950s, very few children, particularly girls, were attending formal schools. Now most countries in MENA register full or close to full enrollment in basic education and secondary and tertiary education rates equivalent to countries in other regions at comparable levels of development. Moreover, the region no longer has severe gender disparities in secondary and tertiary education. As a result, most MENA countries have been able to achieve a significant decline in fertility and infant mortality, as well as a rapid increase in life expectancy. The World Bank is proud of being a partner of the region over the course of this impressive evolution.

Notwithstanding these successes—and the considerable resources invested in education—reforms have not fully delivered on their promises. In particular, the relationship between education and economic growth has remained weak, the divide between education and employment has not been bridged, and the quality of education continues to be disappointing. Also, the region has not yet caught up with the rest of the world in terms of adult literacy rates and the average years of schooling in the population aged 15 and above. Despite considerable growth in the level of educational attainment, there continues to be an “education gap” with other regions, in absolute terms.

Women, of course, continue to be forced to wear burkas across the region and educational and career opportunities for half of the MENA population are even bleaker.

Zakaria didn’t mention it — probably because it would have been too controversial for his show — but one fact that is hard to ignore is the pervasiveness of religion in the region. For the faithful, education and economic advancement aren’t exactly high priorities in these regions, and that has been borne out by centuries of religious feuding, wars and general social turmoil, so much so that any kind of educational and economic advancements in the Middle East and Africa will have to take place in spite of the religious fervor that continues to dominate. History has shown that the least developed nations in the world have also been the most superstitious and religious, with the United States being the most obvious and glaring exception.

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Written by Jeremy

September 11th, 2011 at 3:45 pm