When countries in the Middle East and North Africa (MENA) achieved their independence, formal social protection schemes established by former colonial powers were, to varying degrees, assimilated or mimicked by the State, particularly pension systems for government and formal-sector workers. These systems, however, have proven to be highly subsidised and regressive in terms of income distribution in the face of large segments of the population engaged in the informal sector (or rural work), who have remained excluded from formal social protection unless eligible for some social assistance programmes, mostly with lower coverage and benefits. In fact, a significant share of the social expenditure with a social protection function in most of these countries was assigned to universal or quasi-universal subsidies of fuel and staple foods.
Today, formal non-contributory social protection systems in the region are undergoing significant reforms. There is widely acknowledged evidence that subsidies are badly targeted and, therefore, inefficient in the fight against poverty and vulnerability. Similarly, there is the perception—often backed by evidence— that non-contributory social protection systems are also badly targeted, excluding the poorest and most vulnerable people and benefiting those who are not in any immediate need of aid. Many countries are phasing out subsidies and redirecting social investment into direct, in most cases, targeted cash transfers. Some are adding conditional cash transfers to their social protection systems, as well as new or reformulated old-age pensions and disability grants.
This wave of non-contributory social protection reform now faces three great challenges. The first is stunted economic growth in most countries of the region, largely caused by the global economic crisis and falling oil prices. Coupled with their demographic features, this translates into high unemployment rates, particularly among the youth. The second challenge is rising inflation rates—partially driven by the phasing-out of subsidies.
The combination of higher food prices and unemployment leads to increased poverty and greater demand for the support of non-contributory social protection.
The third challenge is the proliferation of conflicts and their consequences. Most of the millions of people displaced by these conflicts find refuge in neighbouring countries, and their personal tragedies are amplified by hunger and disease. Providing for these refugees adds to the already difficult task of supporting poor and vulnerable nationals.
This issue of Policy in Focus gathers articles from leading scholars, researchers and practitioners to discuss these challenges from different perspectives. They examine the current state of non-contributory social protection in the MENA region as a whole and in specific countries, and explore how these countries have been coping with and learning from the recent economic and humanitarian crises. We hope that these distinct views will help increase awareness and stimulate new debates regarding these complex topics.