Distributional Impacts of COVID-19 in the Middle East and North Africa Region

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Distributional Impacts of COVID-19 in MENA

unhappiness have exposed structural issues that require policy attention both immediately and in the medium to long run. Building back better should offer the poorest and most vulnerable the opportunity to regain what they have lost. Labor market, social protection, and health and education policies should be (re)considered through a lens of equity and inclusion, and designed in a way that productivity and welfare are improved in a progressive way. In a sense, this crisis offers MENA a rare opportunity to correct previous structural imbalances while battling a pandemic.

Preexisting Structural Problems To better deal with these COVID-19-induced shocks, it is important to understand the long-standing structural issues that have faced MENA: low GDP growth; low employment, especially among youth and women; low human capital index; large state-owned enterprises; a large informal sector; poor foreign direct investment (FDI) inflows; a weak investment climate; and poor participation in global value chains. These problems have amplified the various impacts of COVID-19 and are impediments to a long-term growth path. So far, the growth rate in MENA has been modest when compared with other regions. From 2000 to 2019, MENA (excluding high-income countries) registered annualized GDP per capita growth of 1.4 percent, a little above the growth rate of 1.2 percent in Latin America and the Caribbean (figure 1.5). East Asia and Pacific (EAP) ranked the highest with 7.2 percent, followed by South Asia and Europe and Central Asia. However, MENA had a GDP per capita of US$4,174, more than double South Asia’s US$1,933 and Sub-Saharan Africa’s US$1,645. But with widening inequality and growing poverty during the pandemic, the economic outlook is grim. In October 2020, the International Monetary Fund projected MENA’s real GDP to drop by 4.1 percent in 2020, 1.3 percentage points more than expected in April of that year (IMF 2020). Employment among MENA’s working-age population remains low, with more than half unemployed. Although rising labor productivity has been driving economic growth in the region, MENA’s employment levels are dismal. In terms of output per worker, the region was third in 2017, at US$15,812, after Latin America and the Caribbean (US$18,684) and Europe and Central Asia ($19,219) (figure 1.6, panel a). However, it ranked the lowest in employing its working-age population, at 39 percent, behind South Asia at 49 percent (figure 1.6, panel b). In the lead were East Asia and Pacific and Sub-Saharan Africa, at more than 60 percent. In addition, MENA suffers from a low human capital index, with an average of 0.57 (relative to 0.48 in Sub-Saharan Africa, 0.59 in East Asia and


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Introduction

4min
pages 258-259

Transmission Channels

2min
page 260

Conclusion

2min
page 276

Large Poverty Setbacks

1min
page 269

Sensitivity Analysis

2min
page 272

Key Messages

1min
page 257

References

3min
pages 254-256

Sector and More Likely to Work in Sectors Affected during the Pandemic

2min
page 244

Impacts on Household Welfare and Poverty

2min
page 243

How the Study Is Conducted

3min
pages 236-237

Suffer the Biggest Income Losses

4min
pages 238-239

How This Study Fits into the Literature on Economic Shocks

4min
pages 234-235

References

3min
pages 228-230

Future Scenarios

2min
page 221

An Innovative Methodological Approach

11min
pages 205-210

Key Messages

1min
page 197

References

0
pages 195-196

Notes

4min
pages 193-194

How the Study Is Conducted

5min
pages 185-187

Precrisis Situation: Poverty and Labor Markets

2min
page 179

Introduction

2min
page 176

Notes

3min
pages 171-174

Key Messages

1min
page 175

Conclusion

2min
page 170

5.3 Most Djiboutians Are Returning to Normal Workloads

2min
page 158

Introduction

2min
page 152

References

3min
pages 149-150

Conclusion

2min
page 145

Key Messages

0
page 151

Which Households Were Most Likely to Declare Lower Living Standards

1min
page 142

during the COVID-19 Surge

1min
page 140

Distributed in Key Transmission Channels

1min
page 134

Phone Surveys to Quickly Check on Living Standards

1min
page 131

References

1min
pages 127-128

Conclusion

4min
pages 121-122

Key Messages

0
page 129

Introduction

2min
page 130

A Complex Link: Food Insecurity, Income Loss, and Job Loss

2min
page 117

COVID-19 Impacts on Household Welfare

2min
page 112

More Than Doubled

1min
page 111

Key Messages

0
page 101

Impacts on Employment: Work Stoppages

2min
page 85

Reference

0
pages 99-100

2.1 Limitations of Phone Surveys

2min
page 83

Conclusion

1min
page 98

to Paint a COVID-19 Picture

4min
pages 70-71

Key Messages

1min
page 77

Introduction

1min
page 78

Preexisting Structural Problems

2min
page 64

Introduction

4min
pages 56-57

Key Messages

1min
page 55

Future Shocks

2min
page 51

COVID-19-Induced Shocks

2min
page 58

Notes

1min
page 52

Message 2: COVID-19 Is Just One of the Severe Socioeconomic Challenges Facing the Region

2min
page 45

References

1min
pages 53-54

Variations in Size and Timing of Containment Measures

1min
page 60
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