SEOW-MENA Sustainable Economic Opportunities for Women

The UNDP Arab Human Development Report (AHDR) clearly indicated that overall, development in the Arab region is largely hindered by a freedom deficit, gender inequality, and poor information and technology usage. More specifically, the regional average of Arab’s women’s literacy is no more than 50 percent whilst Arab women’s participation in political and economic life is the lowest worldwide! The AHDR strongly urged Arab states to address gender equalities through increasing public spending to bring about educational, political, economic and social empowerment for women.

A glance at the Arab regional context indicates the following:

• Declining economic growth
• High unemployment rates (especially among youth and women)
• Great income inequalities and a critical need to reorient resources towards excluded social categories (e.g., female headed households, rural areas, poor urban areas)
• A need to focus efforts on reprioritising budgets and service delivery from tertiary services for the middle class to primary services for low income women and men in urban rural areas
• Deficits of information, participatory processes and overall gender inequality

According to the World Bank report on gender, the region will face over the next two decades an unprecedented challenge. With the labour force totaling some 104 million workers in 2000 and expected to reach 146 million by 2010, and 185 million by 2020, some 80 million new jobs will be needed in the first two decades of the 21st century just to absorb new entrants into the labour market. No other developing region has experienced this magnitude and persistence of labour market pressures.

These new entrants are increasingly educated, young, and female. Labour force growth rates averaged more than 3 percent a year between 1970 and 2000. The labour force growth rate is forecast at 3.5 percent a year between 2000 and 2010, and not until 2020 will pressure on labour markets fall to the more moderate rates last witnessed in the 1960s. The projected growth of the female labour force at about 5 percent per year during the same period is even more challenging. Past modes of employment creation are therefore no longer sustainable.

Many of the region’s traditional systems for employment creation are fast coming to and end. The public sector represented a primary engine for job creation during the 1970s and 1980s and was still a major employer into the 1990s. Today, it accounts for a third of employment in the MENA region—and as much as 80 percent in several Gulf Cooperation Council countries.

But the public sector can no longer be the employment outlet it has been in the past. Across MENA evidence suggests that most branches of the public sector are overstaffed by as much as a third or more in some countries, steadily eroding productivity. But efficiency losses aside, the strategy of providing refuge to vast numbers of unemployed and new labour force entrants is simply no longer sustainable with the marked change in fiscal circumstances throughout the region.

Unless employment growth in the formal private sector accelerates, the rising numbers of new entrants will be pushed into the informal economy. MENA’s development has relied heavily on three financial sources: oil, aid inflows, and workers’ remittances. These three sources provided an essential supply of public revenues and private earnings, supporting large-scale public employment and sustaining a state-led development strategy based on central planning and economic and social policies for income redistribution and equity.

But all three sources are under great pressure. Oil and aid flows are declining and prices are projected to decline steadily over the next decade to levels that prevailed in the 1970s. Known oil resources will be depleted in about four decades in some countries (such as Algeria and Iran), and much sooner in others (such as Egypt and Yemen). Aid flows are expected to also decline, except in temporary periods of strategic importance and conflict resolution. Finally, labour remittances are not projected to increase significantly, a result of deteriorating prospects for labour migration.

Suggested economic transformation and deep reforms would generate millions of new jobs and more productive jobs in traded sectors across manufacturing and services. For instance, bridging only half the gap between the current 6 percent share of non-oil merchandise exports in total exports and its potential of 20 percent, with associated increases in domestic and foreign private investment, would create more than 4 million new jobs over the next five years. That is equivalent to cutting the unemployment rate by 4 percentage points of the labour force. Increasing the participation of women in the labour force to levels comparable to the highest performers in the region may add 0.4 percent or more to GDP growth. The broader reform agenda would bring even larger benefits.

Women’s participation in economic activity increased but remained low and constrained. Driven by dramatic increases in educational levels and improvements in health for women and reduction in fertility during the 1970s and 1980s, female labour force participation rates increased significantly over the last two decades in MENA, but remained among the lowest in the world and well below what would be expected given education levels, fertility rates, and age structure characteristics.

While the overall macroeconomic performance of the economy may have dampened the demand for female labour, other gendered economic constraints, such as wage discrimination and high unemployment rates, and social norms also contributed to this outcome. There are also legal and social constraints that continue to limit women’s access to opportunity and to discourage them from entering the workforce.

Gender and social constraints play the big and defining role in society in the MENA region. The patriarchal nature of Arab society institutionalises gender inequality, and keeps both official and unofficial discrimination between men and women alive. The choice of women’s place and nature of employment is seen and judged in this light, as are her mobility and access to self-improvement opportunities. Furthermore, she rarely keeps her income to herself as it usually controlled by her male guardian.