Washington Conference Describes “Development Challenges” in Region

by Delinda Curtiss Hanley

For the second year in a row, the World Bank and the Middle East Institute jointly hosted a conference on Dec. 4 entitled “Development Challenges in the Middle East and North Africa.” Participants were invited from the State Department, Middle East embassies, the media, Middle Eastern activist groups, and interested potential investors.

In their opening remarks, Kemal Dervis, vice president of the Middle East and North Africa (MENA) region at the World Bank, and Ambassador Roscoe Suddarth, president of the Middle East Institute, gave overviews of the challenges facing the MENA region.

With the end of the Cold War, the aftermath of the Gulf war, the ups and downs of the Middle East peace process, and the rise of “fundamentalism,” the region’s leaders and business people need a coherent vision for an economic strategy, Dervis said.

He noted, however, that MENA countries have accomplished a lot. In comparison to the rest of the world, poverty in MENA is low. Countries of the region also have educated a large number of citizens (primary school enrollment rose from 61 percent in 1965 to 98 percent in 1991). Infant mortality is down (in Egypt infant mortality has gone from 145 per 1,000 live births to 66 in a 25-year period), and life expectancy is up (Jordanians and Tunisians can expect to live 67 years).

There is much that still needs to be accomplished, Dervis added. Population growth is creating staggering employment pressures. “Thirty-five percent of the young people in Algeria are unemployed. The country has serious political problems. That’s no coincidence,” Dervis said. Human resource development is a major concern.

Describing his own concerns about the “serious population problems” in the MENA region, augmented by his observations during trips to the area in the past year, Ambassador Suddarth noted that the “pressure of population is staggering.”

The first topic of the conference was “Education: How it Can Make a Difference.”

Jacques Baudouy, manager of the human resources division of the Middle East department of the World Bank, told participants: “We have reached a turning point in 1996.It’s very promising. We are beginning to see the results of new economic growth in MENA. There is a 5 percent growth despite the peace problems in the Middle East. There is a 30 to 40 percent growth rate in exports in some sectors of Egypt. Non-traditional exports are increasing in the Gulf. Tunisia is moving toward an open economy. Jordan has a 6 percent growth rate with an inflation rate below 5 percent. There is growth in the private sector and the number of middle class entrepreneurs is growing. Remittances coming into Egypt from workers in foreign countries are between $5 billion and $6 billion a year. This money is going directly into the fabric of Egyptian society, and creating entrepreneurs in villages. The private sector is beginning to drive the economy and become the engine of growth,” which no longer depends solely on the state, as in the past.

“The private sector is beginning to drive the economy.”

Baudouy said Egyptian President Hosni Mubarak and other leaders are turning outward and taking their place in the global economy. But the challenge in the region remains immense. Unemployment rates are the highest in the world. The population is continuing to grow at 2.7 percent a year. Jobs for 47 million new people entering the labor force will have to be found by the year 2010. The number of unemployed, now about 9 million, is conjectured to rise to 15 million by 2010.

Willem Van Eeghen, a senior economist at the World Bank, discussed how education in the region has evolved “from a privilege to a right.” He went on to say, “From 1960 to 1985 there has been an expansion in education in every country, an expansion in enrollment and average years of schooling.” Countries of the MENA region now spend almost as much as Asian countries for lower income education.

One immediately visible result is that women with higher education have lower fertility. Jordanian women without higher education have 5.1 children, but with higher education they have 4. In Yemen, the comparable figures are 7.5 children and 5.1 children. Infant mortality, too, is much lower for parents who have attended secondary school. There also are monetary benefits to education, with earnings increasing 12 percent for each year of education. Clearly, Van Eeghen pointed out, education leads to an improved quality of life throughout the world.

So why is educational reform necessary in MENA? Unemployment is an even bigger problem there than in the West, Nagat-El-Sanabary, a human capacity development specialist at Development Alternatives, Inc., said. The odd thing is that many of the unemployed have had a lot of education. Another anomaly is that although educational growth should lead to economic growth, in 1970 productivity in the region went down. If educated laborers are less productive, the quality of education received by MENA students may need improvement, El-Sanabary said.

International Tests

She noted that Jordan is the only MENA country that has applied international tests to discover if its education is internationally competitive. The results showed Jordanian students scored just under Spain and the United States in math and science achievement tests. The tests also showed that analysis, deduction, analogy, problem solving and adapting to change by learning are all skills on which Jordanian educators must focus. “Students know the rules but they can’t apply them,” El-Sanabary said. These skills would improve the productivity in the workplace.

“Educational growth has come at the expense of educational quality,” maintained El-Sanabary. “To provide education to all who needed it meant the quality decreased,” she said. “Many people get fine, quality education, but women and the poor have a hard time getting a good education. It is as rare for any child not to go to school now as it was for our grandparents to go to school.”

The second topic of the conference was “Environment and Habitat:Bringing ‘Rio’ and ‘Istanbul’ to MENA.” This discussion focused on the environmental challenges facing the region and the roles the government and the private sector should take in solving the problems. Nemat Shafik, the manager of the private sector team in the MENA region at the World Bank, said, “The government needs to shift from being the player to a referee role.”

“Sixty million people are breathing dangerously polluted air,” said Anand Seth, division chief of the technical department, environment division, describing the current MENA situation. “This air can cause respiratory diseases and four points in IQ loss in children due to lead pollution in the air. If nothing changes in 10 years, there will be an increase from 60 million to 160 million people exposed to polluted air.”

MENA countries also have to deal with water scarcity, with many countries consuming more than 100 percent of their renewable supplies, Seth said. The water pollution problem affects safe drinking water, infant mortality, fish harvests, and even tourism. Solid and hazardous waste management also is a high priority. MENA needs to switch from fuel oil to natural gas, and to unleaded gasoline for cars. The private sector will need to expand its role to finance clean technology and to provide environmental services.

The final part of the conference dealt with World Bank Country Operations and Business Opportunities. The speakers discussed the ways the World Bank is encouraging the private sector and governments to solve MENA’s problems, and the vital assistance both are providing in all phases of development.