68272 April 2012 – Number 64 POVERTY IN MENA: ADVANCES AND CHALLENGES Tara Vishwanath and Umar Serajuddin1 MENA regional trend with country specific figures: The percentage of the poor in MENA, Introduction: Summary of global poverty rates On February 29, 2012, The World Bank released Figure 1: Percent of population living below $2 a an updated dataset of internationally day, by country in the MENA Region (PPP 2005)2 comparable poverty estimates. Poverty is assessed against two internationally comparable poverty lines: $1.25 and $2 a day per capita (measured using 2005 Purchasing Power Parity exchange rates). The new global estimates indicate a significant reduction in the proportion of world population below the $1.25 per day per capita poverty line, from 43.1 percent to 22.4 percent between 1990 and 2008. On the other hand, the reduction in the number of poor people is less impressive, mainly on account of population growth during this period. As a result, the number of the poor in 2008 was still as high as 1.29 billion people, although it fell Source: World Bank PovcalNet database3 from 1.9 billion in 1990. measured at the $1.25 poverty line, is as low as Among all regions, East Asia has made 2.7 percent in 2008 (and compares favorably impressive progress in the reduction of both with 6.5 percent in the Latin America and poverty rates and poor population. The Caribbean region). According to World Bank percentage of the poor, measured at the $1.25 estimates, in 1990, the figure stood at 5.7 poverty line, declined from 56 percent to 14 percent. Thus, in terms of combating extreme percent between 1990 and 2008, while the number of poor people also declined from 926 million to 284 million during the same time 2 For most countries, the poverty estimates for 2008 are not period. On the other hand, the progress in sub- derived directly from surveys conducted in 2008; rather, for Saharan Africa has been slow, although the those countries estimates are based on projections of poverty number of poor people declined in 2008 for the for 2008 based on older surveys. Note that Tunisia is in the process of revising its poverty measures which are likely to first time since 1990. affect its estimates. 3 Povcalnet allow users to compute poverty rates and populations setting the poverty line at any level following 1 the same methodology as the World Bank estimates poverty Tara Vishwanath and Umar Serajuddin. Middle East and North Africa Region, Economic Policy, Poverty and Gender Unit rates measured at the $1.25 and $2 poverty lines. See (MNSED), The World Bank. This Quick Note was cleared by (http://iresearch.worldbank.org/PovcalNet/index.htm?0) MNSED Sector Manager Bernard Funck. poverty and hunger, MENA has been very important, the MENA region includes several successful. post-conflict or fragile areas, such as Iraq, Yemen and the West Bank and Gaza. As a result, The $1.25 poverty line is the average for the countries remain highly susceptible to adverse world’s poorest 10 to 20 countries and includes economic shocks. no MENA country (not even Djibouti or Yemen, Figure 2: Percent of population living below $2 a the poorest two countries in MENA). Thus, the day and below $4 a dat, by region (PPP 2005)4 $1.25 poverty line reflects what ‘poverty’ means in the world’s poorest countries. A higher line of $2 a day, which is the median poverty line for all developing countries, is likely to be a more appropriate benchmark for the MENA region. About 14 percent of the region’s population lives below the $2 a day poverty line in 2008. This is relatively low compared to other regions in the world. It is quite similar to the Latin America and Caribbean region; only the Europe and Central Asia region has lower poverty rates. Moreover, using this benchmark, poverty has been declining over time in the region. In 1990, about a quarter of the population lived under $2-a day, compared with 14 percent in 2008. The Source: World Bank PovcalNet database5 number of poor people in MENA has also declined. Despite growth in population, the Data Availability and Access still remains a estimated number to people living under $2-a concern: The distributional data used to day fell from 53 million to 44.4 million between estimate the poverty numbers are drawn from 1990 and 2008. nationally representative household surveys, which are conducted by national statistical These aggregate figures conceal substantial offices or by private agencies under the variation in living standards within the region. supervision of government or international In Jordan and Tunisia, for example, the share of agencies and obtained from government the population living under $2 a day is in single statistical offices and World Bank Group digits. In contrast, in countries such as Djibouti country departments. Over time, data coverage and Yemen, a third or more of the population has been improving in all regions, but the lives below $2 a day. These two countries are MENA region (along with the Sub-Saharan also the only ones in MENA likely to fail to meet Africa region) continues to lag. the MDG goal of halving extreme poverty Few MENA countries provide full and speedy between 1990 and 2015. access to their primary household data to the World Bank. The conditions are improving The people of the region also remain highly vulnerable to poverty: a large proportion of the population is concentrated near the $2 poverty 4 For most countries, the poverty estimates for 2008 are not line. As many as 17 percent of Egyptians, 15 derived directly from surveys conducted in 2008; rather, for percent of Yemenis, 14 percent Iraqis and 10 those countries estimates are based on projections of poverty for 2008 based on older surveys. Note that Tunisia is in the percent of Moroccans live on no more than 50 process of revising its poverty measures which are likely to cents above $2 a day. affect its estimates. 5 Povcalnet allow users to compute poverty rates and Furthermore, the share of the poor population populations setting the poverty line at any level following jumps to 53 percent if the poverty line is raised the same methodology as the World Bank estimates poverty from $2 a day to $4 a day, a benchmark for rates measured at the $1.25 and $2 poverty lines. See poverty comparisons in the LAC region. Equally (http://iresearch.worldbank.org/PovcalNet/index.htm?0) April 2012 · Number 64 · 2 Contact MNA K&L: slowly with some countries providing greater, Laura Tuck, Director, Strategy and Operations. albeit not full, access to their most recent data. MENA Region, The World Bank However, several MENA countries either did not release the latest household survey data or Regional Quick Notes Team: Omer Karasapan, and Roby Fields they do not collect data frequently. For such Tel #: (202) 473 8177 countries, 2008 poverty estimates are projected using surveys conducted many years ago (e.g., The MNA Quick Notes are intended to summarize for six countries household surveys predating lessons learned from MNA and other Bank Knowledge 2006 are used). and Learning activities. The Notes do not necessarily reflect the views of the World Bank, its board or its Accuracy of estimates in the MENA region member countries. would improve if data is collected more regularly by individual countries as well as shared more rapidly. On an encouraging note, in the recently released 2008 poverty numbers, three MENA countries/territories are included for the first time (namely, Iraq, Syria, and the West Bank and Gaza). April 2012 · Number 64 · 3