Under the banner, Making Reforms Work in MENA” dialogue within plenary sessions and workshops of the MDF5 hosted in Lebanon last month proves that reform in our region has become a matter of urgency in the purest sense and while the Arab world has now recognized that there is a need for institutional, social, and economic reform it remains unable to push through the implementation phase of the process.
What is reform?
Simply defined, reform is change in policy which should benefit society as a whole. Policy can be economic, political, social, judicial, administrative, electoral, and so on. It can mean reform of a whole institution, a system, a set of laws, or the way a certain bureau functions. Reform can mean change, improvement or full elimination in preference of new steps towards more efficient access and delivery of goods and services to everyone in society. It will not come in one magical stroke but has become a necessity for all Arab countries. These countries realize the need to catch up with the rest of the globalized world. Depending on their views of the causes of delay in arriving at efficient productivity and development for all, participants in the MDF5 differed in their approaches to the implementation of reform. Those who examined current institutions and active policies came up with suggestions for ways forward tackling specific projects, while others continued to blame “the west”, “colonialism” or even the “Ottoman rule” for their current woes.
The Middle East and North Africa Development Forum (MDF)
Organized by the World Bank Group, the United Nations Development Program (UNDP) and Middle East and North African think-tanks, the MDF draws policymakers, civil society actors, thinkers and representatives of international organizations and the private sector to engage in open policy dialogue to promote social, economic and political development in the region.
According to the World Bank, the MDF collaboration is dedicated to: (i) empowering civil society to participate in shaping public policy; (ii) contributing to national and regional policy debates in key areas; (iii) improving the extent and quality of research on economic and social policy issues; and (iv) creating vibrant networks of development actors in the region. In Lebanon’s case, a fifth key use of the MDF can be added: gathering international support and networking with international development organizations for upcoming reform initiatives.
Since its inception, the MDF has convened four times: Marrakech 1997, Marrakech 1998, Cairo 2000, and Amman 2002. At Beirut 2006 the MDF host partner, the Lebanese Center for Policy Studies, brought together 750 experts from civil society, government institutions, the private sector and the international community to discuss “how to make reforms work in the region”. Participants gathered from the Middle East, North Africa, Iran, Turkey, Europe and USA to discuss pillars to achieve reform in the region, mainly: political will for reform, empowerment of the private sector, equality, transparency, judicial reform, capacity building, and democratization.
The three days consisted of workshops and plenary sessions revolving around 14 themes which developed as a result of collaboration since Amman 2002. They included judicial reform, sustainable development and poverty alleviation, rethinking the role of the state, trade reforms in MENA, institutionalizing and accelerating economic reforms, corporate social responsibility in businesses, enhancing the MENA business environment, gender in institutional reforms, social and public sector reform, the role of youth in promoting good governance, reforms aimed at better city performance, capacity and knowledge building for the rule of law, next generation initiatives and the role of parliamentarians in championing reform. There were also side activities (or action-oriented meetings) discussing derivative issues.
MENA: Needing reform but stuck in implementation
There are several perspectives that support the need for reform in the MENA region. This region has achieved much progress in raising the status of living and the level of income per capita has risen almost seven times since the mid 1960’s (when real income per capita was $1.6 per day) according to Mustapha Nabli, Chief Economist and Sector Director at the MENA Vice-Presidency of the World Bank.
Poverty dropped in the mid 1980’s to 25% and social development indicators showed much progress in education, life expectancy, child mortality rates and so on. However, since the 1980’s progress has been stalled. Although some human development indicators continue to improve (such as mortality rates and illiteracy), poverty reduction has stopped (still at 20-25% of population on less than $2 per day, and with a larger population today, this indicates a large increase in the number of the poor); GDP per capita remains flat and there have been no gains in the standards of living on average. There has been an increase in certain incomes, yet the poverty ratio remains unreduced in the Arab societies; meaning worse conditions with a growing population
In addition to a chronological comparison, a geographical one shows that the MENA region is lagging compared to progress in the rest of the world in its pure economic indicators, business climate, governance and gender employment. Much of what is considered “good” performance is actually not good enough when considering the rate at which this score came about, or when comparing to other ‘middle income’ regions. Despite improved performance, per capita GDP growth in the region remains below 4% a year, well below the average of 4.5%-5% for all developing countries. For the non-oil countries the rate is much lower at 2%-2.5%.
A third way to look at the need for reform in the MENA region is through looking at the future and the challenges its poses to the region: Water and the environment is the biggest challenge for the area causing much conflict and instability. In addition, the demographic change and dynamic has delayed the expected impact of growth. The growth of the labor force is expected to reach the unprecedented rate of 3.5-4% per year for the next 20 years (without counting the female workforce). As societies are becoming more educated and women are increasingly entering the market, unemployment poses another huge challenge for the region. According to the World Bank’s Vice-President of the MENA region, the region must create some 90 million jobs over the next 20 years – at twice the pace of the past 40 years – to absorb those seeking jobs today and new entrants. This also means much reform is needed before the region is swamped by a growing population under the poverty line; towards increasing the rate of growth, strengthening the role of the private sector, providing better, higher paid jobs for both men and women. A simple, logical equation was proposed in the MDF whereby when the costs of non-reform (or the status quo) are higher than its benefits, it is time to reform!
Lebanon: Good timing and determination
Lebanon stood out in the forum as an example of a nation that, as Prime Minister Fuad Seniora described, in his opening address, “is more determined today than ever to engage in democracy, rebuilding the state, empowering governance and achieving real and wholesome reform.” Despite difficult political and economic circumstances, there is a general agreement that an institutional malfunction exists, and that it is time to implement good governance, transparency, social security, and a recovering economy with job opportunities. In his speech, the prime minister encouraged civil society and the intellectuals to push for reform from within, despite some interest groups’ opposing efforts; emphasizing that we must learn from each other and be aware of where we stand within the region: how we affect others and how others affect us.
The MDF5 offered a timely window of opportunity for Lebanon the host. According to Chantal Dejou, World Bank representative for MDF, Lebanon was chosen because there was a sense of momentum and historical change in the country during the past year. Choosing Lebanon as a venue for this prestigious event not only offered proof of international support for Lebanon and its efforts to recover, it highlighted the case of Lebanon today and brought it to the attention of primary donor bodies which were present at the MDF5.
This is particularly important given that the country is preparing for the Beirut I donor conference; grouping Lebanon, the European Union, the United States, United Nations, International Monetary Fund and Arab countries and set to take place by the end of this year with the goal to attract financial assistance to help the government reduce its $38 billion debt. Another reason the MDF5 was timely and very relevant is Lebanon’s current efforts for reform, pegged on the paper proposed by Minister Jihad Azour, being discussed at the cabinet and introduced to President Bush during Prime Minister Seniora’s recent visit to Washington, proposes the following ‘pillars’ of the reform program: growth-enhancing reform measures; privatization program; prudent monetary policy and financial sector reform; social sector reform; and fiscal adjustment and structural fiscal reforms. The MDF5 highlighted the importance of themes very relevant to these pillars: economic growth, privatization, role of the state, corporate social responsibility, and trade reform. It also offered networks and facilitated actual projects awaiting sponsorship and partnership, through its selection of participants and international bodies.
As with the larger region, before funding is requested and approved, a broad-based consensus must be reached on the reform needed in the country. Sectarianism, political corruption, and the weakness of the public sector are accused as main causes of the failure of the economic sector in Lebanon. As former Economy Minister Dimianous Qattar told the Beirut Daily Star, “in order to carry out true reforms [in Lebanon], three steps should be taken. Forbidding MPs from becoming ministers as well, because MPs are the ones who punish ministers, and one cannot punish oneself. The second is supporting the Central Inspection apparatus, and the third is protecting solutions arising from Beirut 1.”
An urgent agreement must be made on the need to separate social and economic files from politics. The probability of success in achieving positive change in Lebanon is a function of how vested interests will fight to maintain their privileges, the government’s credibility in addressing real national challenges, the public sector’s ability to provide basic needs and services regularly to its people, the efficacy of the parliamentary system, the capability of the judiciary body, and the role played by parties within and without the Lebanese borders, still wielding particular influence in the country. Finally, the people’s trust in a reformed Lebanon must be gained. Otherwise, they will neither stay in the country to enjoy the fruits of reform, nor invest in the economies currently struggling to recover. But Lebanon today has a drive that may make it the first of the MENA countries to demonstrate that, war-torn or not, reform is possible and accountable governance is the way toward a dignified, prosperous life.
The MDF brought together scholars, lobbying activists, policy makers, and international donors in a unique opportunity that facilitates arriving at what best suits the MENA region for its progress and development. Participants were allowed to exchange notes on what works and does not work in their own experiences in their countries and they took off after establishing inter-regional and international networks for collaboration of development efforts within the region. Invited participants met on the final working day to discuss the future of MDF and sustaining its funding. The goal is that such efforts as the MDF touch the daily realities of the people outside the forum, and so we stand in hope that sustaining the forum does not distract the high profile players from the future of our region and sustaining its development.
