Introduction

This book is the compilation of ten papers presented at a workshop organized jointly by the Arab Planning Institute (API) in Kuwait, and the African Training and Research Center in Administration for Development (CAFRAD) in Tangier, Morocco on December 1-3, 1998. The workshop aimed at discussing the means to build and sustain institutional capacity for social reforms, and analyzing the link between these reforms and poverty alleviation policies.Poverty is concerned with the relationship between minimum needs of people and their ability to satisfy these needs. Research on poverty is extensive due to the complexity of the problem, the proliferation and availability of data from household surveys, and the interest of international agencies, governments, and scholars in poverty analysis. Despite the spread of poverty research worldwide however, empirical evidence on poverty in the Arab countries is very sketchy and only few studies are available1. Most of the research conducted on poverty in the ESCWA region is reported in the ESCWA (1997) publication.Poverty constitutes one of the major social and economic problems. It reflects the malfunctioning of the social and economic systems. It stems from different sources, i.e. social, economic, and political factors, massive unemployment, low incomes, economic backwardness, social and economic exclusion and unequal income distribution, drought, environment deterioration, floods, civil wars, political instability and corruption. It also reflects the neglect by the governments of the most unfavorable and vulnerable people in the society, such as the disabled, the elderly, and female-headed households. Poverty also spreads out due to lack of proper social institutions (social security, pension funds, retirement plans, charities, etc.) and the lack of basic human rights and the proper laws and policies to protect them.Poverty is a worldwide phenomenon and has degraded human lives for centuries. Despite the huge progress in poverty reduction, it is estimated by the UNDP (1997) that about 1.3 billion people still live in poverty as compared to 2-3 billion three decades ago. The pattern and dynamics of poverty worldwide are very complex. It is concentrated in the south of the globe, mainly in Asia and the Pacific, accounting for 950 million of the 1.3 billion still living in poverty. Sub-Saharan Africa has the

highest proportion of people living in poverty and is considered a poverty stricken region and expected to worsen by the turn of the century. Latin America and the Caribbean also suffer from poverty but less severely. However, Eastern European countries have the highest growth of poverty. Despite the achievements of the industrial countries, it is estimated that about 100 million still live in relative poverty. Be that it may, poverty line is defined differently.People in Arab countries (ACs) constitute a total of 258 million. Little is known about the detailed poverty profile of each AC. On aggregate, the UNDP (1997) estimates that around 4 % of the population have daily spending less than US$1. However, the ESCWA (1995) has recently estimated the percentage of the poor in total Arab population for 1992 as ranging between 3 and 45% with an average of about 27 %. This figure may be underestimated as it excludes many countries, some of them suffering with widespread poverty, e.g. Sudan and Mauritania. Despite the good position of ACs as far as the severity of poverty is concerned, the figure conceals some realities of Arab poverty. Some Arab countries, i.e. Mauritania, Yemen2 and Sudan, are very poor and their situation is similar to that of Sub Saharan Africa. Other ACs with large population densities and severe economic problems such as the Maghreb countries and Egypt, might witness a tendency in poverty to worsen and acute urban poverty fueled by rising unemployment and inflation. Rich ACs, despite their financial wealth, still register some difficulties in eradicating poverty3 as measured by the Human Development Report (1997). However, some countries register a good record in welfare such as in the case of Oman (HDR, 1997).Poverty is traditionally measured by different statistical methods based on income and expenditure distribution which helps to establish some poverty line. Poverty indices include, among others, national and international poverty lines based on Purchasing Power Parity^ head count, poverty gap, Gini index, and the P-alpha index. The UNDP(1997) distinguishes between poverty from an income perspective, based on a predetermined poverty line called income poverty, and poverty from human development perspective called human poverty. The latter is built to reflect aspects of human development and welfare. It is measured by the lack of social welfare and the level of basic needs fulfillment. Given the multi-dimensionality of this concept, the UNDP developed a composite index of human poverty called Human Poverty Index (HPI)4. The novelty of this index is that it gives a contrasting picture on poverty to that given by measures of income poverty. This conclusion is true for the Arab region. Research on poverty is also expanding toward using large data sets

from surveys and using a micro approach in order to understand deeply this phenomenon and to design specific targeting policies. Some advanced econometric techniques are used to model poverty incidence using the Logit and probit models, and spell duration models to estimate poverty survival.Constructing a precise poverty profile requires a rich body of data in order to identify the poor, their characteristics and their place in the society. Poverty lines derived from expenditure and income surveys are only aggregate measures which reflect the extent and severity of poverty. More information is needed to understand poverty, to determine who the poor are, their characteristics, their location, causes for their poverty , and measures being undertaken to minimize, if not to eradicate their poverty.The research on poverty in Arab world is very sketchy and little is found in the literature. From available sources, only few ACs have estimated poverty lines (seven countries in the HDR, 1997). Country studies on poverty are very rare, probably with the exception of Egypt. Part of this situation is due to the lack of data5 and the absence of the analysis of available data. In this respect, it is worthwhile trying to build a poverty profile for the ACs using both income and human poverty approaches.If economic backwardness and explosive population growth which strains available resources are regarded as the major sources of poverty, by the same token, growth and distribution may also regarded a strong means of poverty reduction. However, without the proper social strategy and adequate institutions, growth could not lead to poverty reduction. In the fight against poverty, most governments try to implement policy packages adequate with the poverty profile of their countries. Rural poverty is mainly characterized by landless peasants. One strategy is to redistribute small lands and facilitate access to resources and assets. In the case of urban poverty, it is the fight against unemployment, easing access to informal markets (micro projects), providing shelter for the homeless, encouraging community help and charities in the process of fighting poverty and exclusion. It is also part of the poverty alleviation to provide social services and to enhance social security, to help the elderly and the disabled and all poverty-vulnerable groups.At the heart of the poverty alleviation program lies the role of the social security system. This institution provides social assistance in the fields of basic health care, unemployment benefits, old age pensions, employment injury, family size, maternity, invalidity and widowhood (ILO,1952). In developed countries, a formal social security system usually performs quite well, despite actuarial and fiscal imbalances, and most

vulnerable groups depend on it. However, in most developing countries, social security suffers from many shortcomings which effectively reduces its role in poverty alleviation (Guhan, 1994). This is primarily due to: (a) Availability varies across contingencies; (b) Limited coverage and widespread exclusion; and (c) Formal social security systems are inefficient and run into fiscal imbalances.Clearly, exclusive reliance on formal Western-type social security systems in the least developed countries (LDCs) would be inappropriate to alleviate poverty, since the incidence of poverty is very high, has been persistent overtime and is rooted in several structural features of their economies. Social security is mainly restricted by the limited scope of the credit and insurance markets. Social insurance is also limited by the labor market structure. This is mainly dominated by informal employment and extensive rural labor market. For this reason, neither Beeveridge, nor Bismarck’s social security type can provide a model for LDCs.Social security in LDCs will have to be viewed as part of and fully integrated with anti-poverty programs. Given a persistent poverty trend, the concept of social security has to extend considerably beyond the conventional social insurance model and encompass a large measure of social assistance. On the aggregate, these measures may be categorized into promotional, preventive, and protective.• Promotional measures include the wide array of macroeconomic measures of major importance to poverty reduction, operating at the macro and meso level and addressed primarily to the prevention of actual types of deprivation, such as primary education, primary health care, housing and shelter provision.• Preventive measures include direct measures for poverty alleviation, such as asset redistribution, employment creation schemes and food security.• Protective measures include specific actions (safety nets) for the protection against deprivation.Arab countries are a heterogeneous group made of poor, low-income countries such as Mauritania, Yemen and Sudan; middle-income countries such as Egypt, Algeria and Tunisia; and rich oil-exporting countries (the Gulf States). The poverty profiles of these groups are also heterogeneous. For the low-income group, the formal social security system would be limited for poverty alleviation, given low coverage and limited contingencies. The experiences of India and Bangladesh in poverty alleviation would be relevant for these countries.In the middle-income countries, the formal social security system plays a major role in poverty alleviation, given the predominance of the public sector, high levels of urbanization and extensive formal labor

markets. However, coverage is still limited and not all contingencies are provided. The national insurance system is operational, and these countries do not suffer from acute structural absolute poverty. Nevertheless, given limited public resources and the economic malaise of these countries, social security system performance is unlikely to meet poverty alleviation needs of the unemployed, the aged, the homeless, and provision for education and health care. Given the imbalance between the benefits provision and the poverty alleviation needs, the formal social security system needs major reforms to increase its efficiency and insure its financial solvency. The array of policies to be applied includes increasing the role of the private sector in providing private health insurance and private pension schemes. Privatizing social security systems may also help achieve efficiency and solvency. The experience of Chile and other Latin American Countries in this respect could prove helpful for Arab policy makers in this domain. The efficiency could also improved by abolishing universal subsidy and benefit provision and replacing it with tested targeting procedures. Rich Arab states have made considerable efforts in social policy and actually run a social security system based on a generous package. However, given their near absolute reliance on oil exports, the long-run financial soundness of this system is put into question. Most countries are engaged in a process of reforms to insure their soundness by changing the financial rules of this system.In the forefront of combating poverty lies the role of the health care system of any nation. Access to health care constitutes a major element in the fight against human misery, suffering and morbidity. Health care systems are of two types: (a) curative; and (b) preventive. In industrialized countries and some developing countries, health problems are related to longitivity, lifestyle and the environment. The challenge to this system is basically the financial burden, given the problem of population aging and the increased dependency ratio. In middle-income countries, considerable progress has been made in building health care systems based on primary health care. Despite the improvements in the health of the population, traditional causes of mortality, i.e. infectious and parasitic diseases, are still widespread. These countries also witness the spread of new health problems such as chronic non-communicable diseases associated with aging and modem lifestyle. Therefore, these countries face old and new health problems. Given limited public resources and the need to extend health care systems to provide services to excluded rural communities and the urban poor, reforms are essential for the soundness and efficiency of the health care system.For poor countries which witness difficult socio-economic conditions and limited financial and human resources to develop their

health sector the immediate task is to combat deplorable conditions of hygiene and health and combat malnutrition and communicable diseases. Health care systems are usually based on three elements:• Public systems: Universally available, and have preventive orientation and used in most LDCs for basic health care provision. These are usually financed by public funds through a wide varieties of health insurance and social insurance provisions.• Private health systems: Oriented to curative medicine with limited access for those who can afford.• Health insurance for workers and their families in modern, formal sectors: The health insurance is organized as part of the social security scheme.Access to health care in the ACs is unevenly distributed. Health expenditure per capita in the MENA region was US$77 in 1990 compared to US$1860 for advanced countries and the world average of US$323. The ratio of health care expenditure to GDP in the ACs was half of the world level of 8.0 %, and the life expectancy at birth was 61 years below the world average of 65 and far below the level of advanced countries of 76 years. The infant mortality rate was 11.1 per 1000 compared to just 1.1 per 1000 for developed countries. These figures show that health performance of the ACs is below world average and much more effort needs to be done. The picture of health care at the country level reveals more disparities and suggests acute health problems for Arab low-income countries such as Yemen, Sudan and Mauritania. The fight against poverty requires modernizing the health systems and upgrading the health standards of the population.