AFD, World Bank, ILO
November 2011
Reflection note on EM5, a joint CMI programme Renegotiating citizenship: Employment and social protection1 policies, pillars of a new social contract in the MENA region?
The post-independence models of public solidarity are wearing out in the MENA region. To varying degrees, this trend affects the states’ social fabric and government legitimacy, and has contributed to unprecedented popular unrest. Despite important historical differences among countries, the social contract between state and society has relied on costly and weakly targeted subsidies on essential goods and services (water, bread and essential foodstuff, petrol and electricity), and a “right” to public employment for the educated2. The liberalisation policies of the 1990’s were predicated upon the continuation of these modes of national solidarity, complemented in varying degrees by weakly targeted voluntary tithes within the religious communities. At the turn of the 21st century, (i) the massification of higher education, (ii) the demographic transition in the MENA region, and its effect on the number of young people entering the labour market, as well as women joining the workforce, combined with (iii) a labour market of insiders and outsiders, (iv) increasing international product market competition, and (v) the steady increase of the price of raw materials, has put these production and redistribution models under stress. The perpetuation of the redistributive models in the new contexts has gradually crowded out fiscal space for structural reforms, and produced an impression of downward social movement among part of the middle classes, as well as pauperisation in marginalized areas – both rural and urban, especially as growth models are to be reinvented. This delicate situation creates potential for long-lasting social unrest, with a population recently awakened to the power of ‘voice’ in the Arab Spring. In Tunisia, Egypt, Morocco as elsewhere in the region, there is increasing awareness that governments will need to negotiate the transition to new types of employment and social protection strategies – a process that will imply a more inclusive dialogue, including representatives of civil society. This renegotiation of the social contract will imply reconsidering actions both in the short (emergency response) and long terms (structural reforms, including compensating the potential losers compared to the status quo). Indeed, while the emergency social programmes put in place following the Arab Spring risk undermining long-term reforms, they could also plant the seeds of new social protection policies and safety nets. For this, they would need to be endogenous (i.e. the product of local political compromises), sustainable (i.e. not exercising an excessive strain on the countries’ public finances) and conducive to higher employment in the long term. The links between education, employment and growth models is another aspect to be reassessed in the framework of the renegotiation of the social contracts. International donors active in the region (World Bank, ADB, ILO, EC, AFD, etc.) are reconsidering their operations in the MENA region in light of these new dynamics. Each donor will be redefining its strategy, based on very different experiences and understandings of “social protection” and “the social contract”. Yet any attempt to impose readymade models from the outside will be resisted, and will slip against the specificities of the region.
This programme would adopt a large definition of « social protection », as the protection against various economic and social risks. It would thus cover promotion (getting people into employment, and improving employment), prevention (social insurance – health insurance, pension, unemployment insurance) and protection (against poverty and vulnerability: social safety net). Striking the balance between production and protection is key to the success of the EM5 program, but more largely of employment and social protection strategies in the region. 1
2
The IMF writes “Recent fiscal policy measures highlight the urgent need to develop better-targeted social protection mechanisms. MENA stands out compared to other regions for its heavy reliance on universal price subsidies as a social protection tool. Food and fuel subsidies amount to 8% of GDP in the MENA region. […] There is also scope to improve income support in the region. In particular, the region needs to strengthen and modernize the existing social insurance programs and expand their coverage, and to introduce national unemployment insurance as an essential complement of any labor market reform.” (Economic Transformation in MENA: Delivering on the Promise of Shared Prosperity, May 2011).
This questioning of past government and donor practices provides a unique window of opportunity for more interaction between these two sets of actors, as well as for exchanges of experience within the region. The objective of collaboration on this issue would not necessarily be to make practices and policy recommendations converge, but rather to share an understanding of each party’s core competences, discuss ongoing and finalized studies and provide a pallet of policy instruments based on the complementarities of donors’ international experiences and the governments of the Southern and Eastern rims of the Mediterranean. Rather than another international initiative on employment and social protection in the MENA region, the “EM5” programme would be a platform to maximize the synergies between initiatives in the fields of research, policy and operations. It could mutualise costly yet crucial evidence-generation exercises (evaluations, the gathering of data on key social indicators), and provide a framework around which governments (ministries of labour/employment, social affairs and economics/finance), international donors and representatives of civil society (including representatives of the private sector, labour unions as well as other non-profit actors) could discuss the diagnosis as well as policy options. This concept note and logframe on a collaboration within the CMI on employment and social redistribution policies aims at structuring the discussion on what types of collaborations could make sense in this unique moment for the region and its international partners. Members of the EM5 network are not expected to take part in all EM5 activities, but rather encouraged to collaborate on the components that correspond to their activities and areas of expertise. * Programme duration: 3 years * Pilot institution: to be determined among the partners of the workshop in Tunisia (AFD, World Bank, ILO, EC). Other partners may wish to collaborate on certain components of the programme, such as the DFID. * Aims: The EM5 programme aims to provide a platform for key national stakeholders and international development partners to share information, understand policy alternatives, and identify potential solutions, for the sustainable and inclusive reform of social contracts in the MENA region Specifically, the programme aims at contributing to: - Enhanced North-South and South-South dialogue and cooperation ; - Greater social inclusion, especially in the years of political and institutional reform ; - Laying the basis of more sustainable modes of social protection, and public and private employment better linked with training and education. * Specific objectives: The social measures (employment and social protection) take into account relevant international experiences, are adapted to national and regional context, and do not undermine the countries’ macroeconomic equilibriums. They: • focus on benefiting the poorest or most vulnerable; • are financially sustainable and self-supporting where possible; • foster social and political inclusion of the marginalized, including youth, women and migrants.
Results 1. Use of relevant international experiences of social measures (employment and social protection) in view of adapting them to the national contexts
Activities
Comments
1.1.
Workshops gathering international employment and social protection experts
First workshop : organised in Tunis on 14 - 16 June 2011 (on demand of Tunisian employment ministry)
1.2.
Targeted exchanges with experts and key national decisionmakers
Similar workshops should be held in Cairo, Algiers, Rabat, and/or Amman. AFD offers to host Cairo workshop in march/april 2012. In addition to regional best-practices, opportunities for South-South cooperation (beyond the region) will be explored.
2. Access to real-time information on relevant international experiences and studies
3. Commissioning of targeted research pieces destined to investigate the underpinnings of the social contract in the MENA region and individual countries
4. Impact Evaluation, evidence generation, and needs assessments
5. Operationalisation of the programme’s findings through pilot schemes, which could be cofinanced by several programme partners
3
2.1.
E-manual on CMI website, replicable on other portals
2.2.
Sharing of studies and evaluations of relevant programmes in the region and elsewhere on the CMI’s website
2.3.
E-community on social measures in contexts of transition accessible to all members
3.1.
Research working group to discuss complementary research pieces commissioned by programme partners
3.2.
Workshops between researchers and programme partners
4.1.
Rigorous impact evaluation design
4.2.
Targeted surveys
4.3.
Additional modules for existing national surveys / baseline data
5.1.
Pilot schemes and broader cofinancing of programmes would be encouraged
5.2.
Technical assistance on employment and social protection programmes in the region could be coordinated (who does what where?)
note that this may alter the implementation structure
Output of Tunis workshop: - CMI portal in the three languages (currently in translation) - Knowledge-sharing brief destined to decision makers in Tunisia and the broader region - Supply and demand matrix of technical assistance in Tunisia on national and local social measures - Sharing of EU report on social protection in developing countries
This transversal component can take place throughout the duration of the programme – and beyond. Given the context-specificities of employment and social protection, background studies in sociology will be key to donor context-awareness, and to stand clear of imported or ready-made projects. The pilot schemes mentioned below could be accompanied by rigorous impact evaluation designs3. Surveys at baseline and at completion could measure key performance indicators. The donor group could work with Statistical institutes to add modules to existing surveys. Needs assessments exercises could be held jointly, or their results shared in the EM5 network. In Tunisia: ILO support to authorities to define a methodology for the involvement of local communities in the choice and design of social measures.