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Such money can potentially be allocated to priority areas: this is one positive potential. Another is that a major demographic transition has commenced, providing another potential gift, a "once-in-a-nation's-lifetime" opportunity to capitalize on the decline in fertility and population growth. On the other hand, MENA lags far behind other developing regions. On the technological front; educational access, education and training quality, the productivity of workers, and the efficiency of enterprises —again on the performance of MENA in restructuring its economies to meet with the quickly-changing trends in the international economy.
MENA has done very poorly in preparing itself for the many threats and opportunities of globalization.
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The challenge of globalization is fourfold. First of all, competition has moved from exclusive leadership in product invention and innovation, to competition for process-technology. This includes organization, management, production systems, inventory control, and marketing. Secondly, dynamic industries are no longer dominated by natural resources — petroleum, metals, minerals— and key-growth sectors apart from services are manufacturing industries based on electronics, new materials, biotechnology and chemicals.
Thirdly, the revolution in information and communications still unfolds at an amazing pace, and its implications are reduced costs of transactions, coupled with the ease with which trade, finance, and production decisions can be taken. Finally, international trade has been growing at a much faster pace than world output, fueled by the demolition of trade barriers and the operation of transnational corporations TNCs and their global networks.
In turn, the growth in trade has become the primary engine of GDP growth for those emerging economies that are catching up and whose incomes are converging with those of the advanced nations. Foreign direct investment FDI growth has outpaced that of world trade, while global capital flows to developing countries have dramatically declined. Thus, FDI has become a major vehicle for accessing capital, technology and export markets.
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As a result of globalization the role of the state is changing. It is shifting from producer and planner to facilitator and arbitrator. The "model" state is no longer dominating the market. Instead, it pursues an explicit or implicit industrial policy, targeting sectors with dynamic advantage and promoting clustering of enterprises into formal production networks.
It is reforming its administrative and legislative structure, while promoting the reduction of transactions cost so that private agents can expand their operations. It is revising its social contract and encouraging the process of democratization. The "model" state is also retrenching from those activities that can better be performed by the private sector. But, at the same time, it is redeploying its resources in favor of social spending for the poor. Only few MENA countries are seeing serious work on all fronts, but such work will truly transform the state into the model that is needed for the next millennium.
Poverty remains at the heart of the development challenge. Economic growth and technological progress are proceeding at varying if slow paces in most of our MENA countries, and yet we can observe that the poverty gap is growing both in relative and absolute terms. Economic reform and structural adjustment programs have been accompanied by major reductions in public investment and social spending in those areas that touch the poor most directly, including significant cutbacks in food and energy subsidies, and in the development of infrastructure in poor regions.
The departure of a strong and dominant public sector has meant fewer jobs for the educated middle and lower classes, and inferior work conditions in the informal sector.
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Meanwhile, higher unemployment due to structural adjustment is accompanied by a decline in the living standards of a sizeable proportion of households. Such a decline directly affects the extended family system. The poor have relatively larger household sizes and experience higher unemployment rates, especially for women. In fact, studies for Egypt and other MENA countries show that women tend to be the first victims of economic reform, not only in terms of losing jobs but also in being pulled out of the education system.
It has been shown that women suffer from a chronically low participation rate in the MENA labor forces, and that households headed by women are much more highly represented among the poor in urban and rural regions. The severity of the problem of poverty cannot be overstated.
Those who suffer are not only those in our present, but also in our future generations. What is at stake is the social cohesion of the nations in the region; their breakdown seriously threatens stability and invites both extremist and fundamentalist expansion. Unfortunately, social scientists have so far excelled at characterizing the many facets of poverty but have failed to converge in providing a comprehensive policy agenda to resolve the problem at its roots. More of this typical and narrowly focused type of research will only confirm the inextricable links between the characteristics of the poor with reference to their consumption, savings, and reproductive behavior on one hand, and their access to education, health and employment opportunities on the other.
What is sorely needed is quality, micro-level research into the behavior of the poor, and into the mechanisms that can work to deliver social services and technical extension so as to maximize on the response of households and micro-enterprises in accessing such facilities. For instance, why is it that poor households resist sending their female children to school?
What are the factors that limit poor women's participation in wage employment in the traditional small-enterprise sector? Which elements of micro-finance programs can help relieve the constraints on access for the majority of micro-firms? Improved data collection is also necessary if the progress in human development and poverty alleviation is to be measured and policymakers held accountable for results. The parallels between household decisions and company decisions are of enormous importance, and the various social-science disciplines have much to learn in exchanging their thoughts and sharing their concepts and approaches.
What we must understand and appreciate is that all of the social disciplines matter. The fact that the poor tend to have larger families is a conscious decision that can only be influenced by changing a broader set of conditions that the poor face. The fact that they will not send their girls to school or access health facilities cannot be answered by decrees from officials or by media persuasion. Similarly, the fact that micro-enterprises tend to have below-average productivity, provide poor working conditions, and avoid tax and social security payments is primarily a function of entrepreneurial behavior in the face of limited access to markets, to credit and to technologically superior work methods.
In both the households and the micro firm examples, simply accessing social service facilities, infrastructure, and extension service centers cannot ensure an effective response — unless these programs are adapted to the specific needs and attributes of the socioeconomic context. And, unless they address all of the complex factors that impact on behavior. A second and equally important area of analysis is how to reform and upgrade the existing systems of education, training, health, social security, and other areas that relate to social infrastructure and safety nets.
The entire region suffers from technically obsolete and poorly balanced systems that favor the advantaged and neglect the primary services that meet the needs of the poor. The problem of upgrading quality while raising the equity of our social services deserves considerable attention from both specialists and generalists.
It also brings to focus the underlying budget constraints at both central and local government levels. The bottom line to a fair and effective system for the provision of public goods lies in the ability to appraise priorities, to catch up in the introduction of state-of-the-art pedagogical and health systems, and to calculate the opportunity costs of any one reform program against those of alternative programs that may be less capital- or technology-intensive, and yet more inclusive of the poor. While focusing on access to and quality of social services and social infrastructure, researchers must not lose sight of the broader picture whereby the provision of public goods and income distribution are but two of the several claims on the state's budget.
What prevents key ministers taking action, even when such action is plainly in the "overall interest of society"? Why do policymakers ignore the glaring inequities, inconsistencies, and waste in distributing budgets across functional lines and within them? Why is it so difficult to reorient resources from open-ended to targeted programs, from administrative costs to actual delivery expenditure, from formal to informal agents, from rich to poor?
The answer simply lies in the absence of sufficient pressure for change, in the lack of transparency in budget procedures and accountability for performance, and in the fact that those who stand to gain are the silent majority and the poor. Most MENA countries are still in transition and the autocratic state is only slowly starting to devolve its dominant hold on power, resources and decision-making. This brings in the entire realm of institutional economics, governance, budget procedures and public administration: all must receive the attention of researchers.
How does one meet with the development challenge in MENA? Four sets of actions on the part of social scientists apply. The need for social scientists to work together.
The development process is multi-dimensional. Economics is but one of the key ingredients to estimating the costs and benefits of development programs, to the evaluation of policy options, to summarizing the overall coherence of development plans and budgets over the medium- to long-term horizon.
Issues of governance bring in political, judicial, and legislative dimensions to understanding institutional bottlenecks and proposing reforms. Anthropology, demography, and sociology are essential to the understanding of the characteristics of poverty and estimating the response of various segments of population to policy initiatives.
Urban planners, education specialists, environment and engineering specialists must also contribute their technical expertise on the how to raise the quality of life. In short, all work within a broader and consistent agenda that pulls a closely knit and converging platform of action together and that meets with the multifaceted challenge of development is urgently required. The need to paraphrase the results of solid research into practical policy making implications.
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Publication, dissemination and networking means giving voice to those interest groups that are scarcely heard in the policy-making arena. Social scientists must, therefore, work with NGOs to identify leadership in quality and effectiveness. NGOs are the only channel available that allow the poor to participate in civil society. The NGOs are slowly organizing themselves so as to speak with one voice, have a well-defined constituency, and a clearly articulated agenda.
NGOs must then seek to have these agendas adopted by the intellectual community, members of parliament, and the media. If development is to be human-centered and respond to the needs of the most vulnerable and disadvantaged in society — women, children, the rural and urban poor, and the informal sector — all members of civil society must lend support to prioritization in favour of their access to and quality of social services and social infrastructure. Moreover, the issue of equitable and effective governance must also be addressed by NGOs, particularly since the poor are the most likely to be excluded from the institutions of the state.
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The need for NGOs to organize and better articulate their action plan for development. For NGOs to play their development role to the full, they must be able to influence policy through successful interventions and a voice that carries weight, credibility and practicality. Unfortunately, there is only a small number of NGOs that can implement innovative and successful programs, or achieve significant scale in their programming, along with a capacity to reach the poor at the local level.
However, there is a relatively new set of actors —development intermediaries — who can adopt many legal forms, and who can act as a bridge between large governmental and donor programs and local communities.
Some are involved at the national and at the grassroots level, others in capacity-building and networking with NGOs. These are the agents of change who will — if suitably promoted by donors and the intelligentsia— bring about effective communications with policymakers. The need for regional development intermediaries to act on behalf of regional social scientists and organize a channel of communication for networking among themselves, and with development agencies and key policymakers in the region.
The purpose should also be to create a self-sustaining and growing core of well-informed policymakers who are regularly acquainted with the work on hand. Their sources of information comes from their network via regular meetings, a quality newsletter that disseminates ideas, research results, and practical experiences.
The newsletter uses non-technical language, as do policy briefs on specific issues. Intermediaries would be responsible for synthesizing the results of work completed by MENA social scientists. On their behalf, they would integrate related research from regional and international organizations as well as outline progress in the implementation of any NGO action plans. Such intermediaries would also develop a set of indicators related to real budget expenditure on each social service on a per capita basis, across MENA countries. This would enhance the sense of competition among policymakers across and within countries of the MENA region.
Indicators would also include regional and international best practices to serve as benchmarks, and would promote an understanding of successful reform experiences in such systems as education, literacy programs, child care, health care, social security, micro-finance, and extension services. This paper aims to identify the key issues and debates facing development efforts in the Middle East and North Africa, with a focus on areas where gaps in research-based knowledge represent the most serious constraints.
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It is divided into two sections. In the first, a broad overview of the regional context is given, suggesting current and future challenges and opportunities for development. Within each of these subheadings, a "development problematic" is first outlined, followed by an analysis of major specific research issues which are currently being debated.