MENA: Global Action is Urgently Needed to Reverse Damaging Jumps in Extreme Poverty | WPN World People News

For the second time, the rate of extreme poverty in the Middle East and North Africa (MENA) region jumped again, nearly doubling between 2015 and 2018, according to a new World Bank report.

The World Bank’s biennial Poverty and Shared Prosperity report finds that the rate of extreme poverty in the MENA region rose from 3.8% in 2015 to 7.2% in 2018 — the latest year for which data is available. This followed another rise in poverty in the region from 2.3% to the levels in 2015. According to the report, the latest jump in poverty in MENA was driven largely by the effects of ongoing conflict in Syria and Yemen, but this does not fully account for the economic downturn in Lebanon.

"These sobering new figures are a wakeup call for how significantly conflict, climate change, poor governance — and now the COVID-19 pandemic — combine to devastate lives, livelihoods, and region-wide prosperity," said Ferid Belhaj, World Bank Vice President for the Middle East and North Africa. "We are continuing to help MENA countries stop the spread of the disease and protect and care for their people. At the same time, we are committed to helping the people of MENA build a new social contract, where transparency, governance, the rule of law and regional integration can alleviate poverty and give everyone, in every country, a chance to achieve their aspirations."

The report also estimates that the current poverty level in the MENA region is, depending on the scenario, up to 7.9%, as the disruption of the COVID-19 pandemic compounds the forces of conflict and climate change. As the pandemic intensifies the rise in poverty in the region, it threatens to push at least an additional 3 million people into extreme poverty. Recent projections indicate that, in the short run, the rise in poverty may be much worse — potentially even doubling, for certain countries, the number of poor.

"The pandemic is creating a group of new poor who had previously been relatively spared: Those in urban areas and small and informal business owners are particularly impacted," said Nadir Mohammed, the World Bank’s Regional Director for Equitable Growth, Finance, and Institutions for the Middle East and North Africa. "Unemployment, already exceptionally high before the COVID-19 pandemic, has worsened and reduced the already very limited job prospects for the region’s youth and women. Phone surveys show that families are depleting their savings and that food insecurity is on the rise."

The dual shocks of the pandemic and the collapse in oil prices have exacerbated MENA’s underlying structural issues and affected all aspects of MENA’s economies. The pandemic has deepened pre-existing inequalities in the region, exposing vulnerabilities in social, political, and economic systems, which are, in turn, amplifying the impacts of the pandemic itself. The expected costs are about 3.7% of the region’s 2019 GDP — roughly $100 billion.

The World Bank’s multi-phased response in MENA is aligned with the Bank’s global COVID response framework and regional strategy. Under the first phase, the Bank is supporting public health and emergency social assistance across the entire region to procure essential supplies, strengthen surveillance, and boost public health capacity. Across the region, the World Bank has provided almost $700 million in emergency support to help with the most urgent public health needs, including seven new operations and redirected funding from 10 existing projects.

The World Bank is also supporting individuals and helping countries expand social safety nets, including cash transfers for the most vulnerable, as well as supporting small businesses. This is critical, given the dual nature of MENA’s labor market, with many informal workers that have limited job security and social protection.

As part of an effort to facilitate economic recovery and longer-term sustainable development, the World Bank is supporting governments to expand the scope and targeting of cash transfer programs to direct funds to the most vulnerable households and those that may have lost their jobs or sources of income. World Bank teams are working with country authorities on the preparation of cash transfer programs in Lebanon, Morocco, Djibouti and Yemen. These programs are in addition to the Bank’s support for cash transfer programs during the past fiscal year in Egypt and Jordan.

World Bank Group COVID-19 Response

The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. We are supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs. We will be deploying up to $160 billion in financial support over 15 months to help more than 100 countries protect the poor and vulnerable, support businesses and bolster economic recovery. This includes $50 billion of new IDA resources through grants and highly concessional loans.

Source: World Bank