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Women’s Economic Activity in the Mashreq Countries Would Boost Growth and Prosperity

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Women’s labor force participation in the Mashreq countries remains among the lowest in the world and is likely to be exacerbated by the COVID-19 pandemic. Addressing prevailing social norms, legal constraints, and market failures can boost women’s share of the labor market participation in Iraq, Jordan, and Lebanon and help their economies grow, according to a new World Bank report released today.

In fact, if the three countries’ targeted increases in participation of five percentage points over five years are not only met but also continued for a further decade, annual economic growth would be increased by 1.6 percentage points in Iraq, 2.5 points in Jordan, and 1.1 points in Lebanon by 2035.

The State of Mashreq Women report provides a comprehensive, data-driven picture of women’s access to economic opportunities in the region. It examines the reasons behind low women’s labor force participation and calls for action to provide the needed support systems, services, and legal framework to incite more women to access the labor market.

Less than 15 percent of women work in Iraq and Jordan, placing these countries among those with the lowest female participation rates in the world, only after war-torn Syria and Yemen.

In Lebanon, only 26 percent of women work. Participation is particularly low for the less educated. While two-thirds of women with tertiary education are either employed or seeking a job, this amounts to only a small proportion of the total female population in these countries (around 12 percent in Iraq, 27 percent in Jordan, and 31 percent in Lebanon). Labor force participation is generally higher among younger women.

In Lebanon, women aged 15 to 44 are twice as likely to participate than those aged 45 to 64, suggesting a generational shift that is not seen in Iraq and only partly in Jordan. Younger women are also more likely to work in Jordan, but for those aged 25-34 participation rates reach only around 35 percent.  In contrast, for those older than 35 it is 20 percent or lower.

In all three countries, getting married and having children is associated with lower probability of participating in the labor market, albeit with some noticeable differences. It is worth noting that in all three countries men experience the opposite profile, with higher participation rates for married men and those with younger children than their unmarried counterparts. 

Securing and expanding economic opportunities for women is at the heart of the World Bank’s agenda,” said Saroj Kumar Jha, World Bank Regional Director for the Mashreq. “Women should have equal chances to engage in economic life, make their voices heard and fulfill their aspirations. This can promote growth, prosperity, peace and stability in the Mashreq countries.

While low female labor force participation rates are partly due to low job creation in Iraq, Jordan, and Lebanon due to structural economic problems and challenges, additional barriers related to the role of women in society and within their families specifically affect the access of women to the labor market.

The report summarizes the barriers to women’s economic participation—combining a life-cycle approach to analyze each constraint as it occurs at a particular critical point in a woman’s life, while recognizing that this experience will be different for women of different socioeconomic backgrounds. It argues that women encounter barriers at four critical turning-points of their lives: getting ready, entering and remaining, getting married and having a child. At each of these turning points, societal views and expectations of the role of women can influence how they see themselves and what they aspire to and significantly affect their decision to withdraw from the labor market or never enter it. Additional barriers that restrict women from taking on paid work include employer discrimination, legal restrictions, violence against women in the workplace, access to assets, and mobility constraints. The report also quantifies how relevant each of these barriers are. 

Going forward, the report offers policy recommendations to enhance female labor force participation in Mashreq countries. Beyond the creation of additional jobs, governments can boost women’s access to the labor market by making public transportation safer; reviewing certain laws and regulations and closing certain gaps between the law on paper and the law in practice; increasing the supply of childcare services of good quality; and addressing social norms that prevent women from earning their own income. 

The digital economy can also contribute to promoting women’s labor force participation by allowing women to work from home with flexible hours,” said Matthew Wai-Poi, one of the lead authors of the report. “However, the prevailing digital gender divide means women have less access to the internet and mobile connectivity and fewer digital skills than men.  This issue is exacerbated for less educated women. Without action to close the digital gender gap, those opportunities could become another barrier.

This first State of the Mashreq Women report was produced as part of the Mashreq Gender Facility, which provides technical assistance to Iraq, Jordan and Lebanon to enhance women’s economic empowerment and opportunities as a catalyst towards more inclusive, sustainable, and peaceful societies, where economic growth benefits all. 

About the Mashreq Gender Facility: 

The Mashreq Gender Facility (MGF) is a 5-year Facility (2019-2024) that provides technical assistance to Iraq, Jordan, and Lebanon to enhance women’s economic empowerment and opportunities as a catalyst towards more inclusive, sustainable, and peaceful societies, where economic growth benefits all. Working with the private sector, civil society organizations, and development partners, the MGF supports government-led efforts, country level priorities, and strategic regional activities that strengthen the enabling environment for women’s economic participation and improve women’s access to economic opportunities. The MGF is a World Bank – IFC initiative in collaboration with the governments of Canada and Norway. It is mainly supported by the Umbrella Facility for Gender Equality (UFGE) with contributions from the governments of Australia, Canada, Denmark, Finland, Germany, Iceland, Latvia, Netherlands, Norway, Spain, Sweden, Switzerland, the United Kingdom, the United States, and The Bill & Melinda Gates Foundation.

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How Iraq Can Turn Economic Diversification into Growth and Stability

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Nearly two decades after the 2003 war, Iraq finds itself at a crossroads: caught in a fragility trap and faced with increasing instability and multiple crises, Iraq is projected to have the worst annual GDP growth performance since the fall of the Saddam regime. Yet even in the midst of the COVID-19 pandemic, an oil price shock, and recent protests, Iraq can take the path toward sustainable growth, peace, and stability and improve living standards for its people. 

These are the findings of the World Bank’s new Iraq Country Economic Memorandum, titled Breaking Out of Fragility. The report examines why Iraq has not managed to escape the fragility trap. It details what the country can do to turn crises into opportunity, diversify its economy away from the oil sector, and sustain future growth. The report highlights nonetheless that the path will demand persistence, and Iraq will face much uncertainty as it tries to address its long-lasting challenges and change the status quo.

Economic diversification, through reforms and developing the private sector, is critical to reduce the continuous challenges Iraq is facing,” said Saroj Kumar Jha, World Bank Mashreq Regional Director. “This Country Economic Memorandum provides a roadmap to help Iraq and the Iraqi people re-think the existing economic model, build a more diversified economy that creates opportunities for all Iraqis, and rebuild the social contract. The World Bank will be a committed partner in helping Iraq move down the path of reform to ensure peace and stability and give all Iraqis a chance to fulfill their highest aspirations.” 

Breaking out of Fragility details how, for decades, Iraq’s oil wealth allowed the country to obtain upper income status, while in many ways the country’s institutions and social and economic outcomes resembled a low-income fragile country. Oil revenues eroded the country’s economic competitiveness, reduced the need for taxation, weakened the accountability link between citizens and the state, and fueled corruption. 

The COVID-19 pandemic and the oil price shock have thrown into stark relief how much Iraqis have lost in the last two decades. The education system, which once ranked near the top of the MENA region, is now near the bottom. Iraq’s labor force participation is mired at 42%. Combined with one of the lowest female labor force participation rates in the world, Iraq faces low levels of human capital, deteriorating business conditions, and one of the highest poverty rates among upper middle-income countries. 

Breaking out of Fragility outlines key pathways for Iraq to achieve sustainable growth after closely considering the country’s complex political economy. The report highlights that Iraq’s priority should be to refocus the country’s political settlement on development, and improve transparency in the management and allocation of its oil wealth and public resources. The report also underlines the urgent need for Iraq to rebuild the confidence between citizens and the government by strengthening citizen engagement and government accountability in the delivery of priority services and infrastructure, responding to youth demand for jobs and tackling socioeconomic inequalities.

Despite Iraq’s current political and economic challenges, three areas of focus can help lead to economic diversification, growth, and stability:

First, maintaining peace can, by itself, be a strong driver of growth. Iraq’s per capita GDP was about one fifth lower in 2018 than it would have been if not for the conflict that began in 2014, while non-oil GDP was one-third lower. In countries that have undergone a vicious cycle of violence and fragility, coordinated policies from a broad coalition of actors are critical to maintaining “peaceful pathways” and kickstarting a virtuous cycle. The report finds that, in the short term, Iraq should focus on reforms that expand social safety nets for the poor and most vulnerable, improve delivery of basic services such as education and health, and ensure greater transparency in the functioning of the government institutions. 

Second, tapping into Iraq’s export potential to help diversify the economy away from oil production and toward trade and integration. Iraq’s geographical position has the potential to make the country a regional logistics hub; however, Iraq’s logistical performance lags behind its peers so much that it is instead a regional bottleneck. 

Third, reviving Iraq’s agriculture sector to serve as a key pillar of a more diversified, private sector-led economy. Agriculture production; food processing; and related services including logistics, finance, manufacturing, and technology have large potential to expand and create jobs. The agri-food sector has not been subject to the same level of government control as other sectors, so it is well positioned to develop new methods and adopt the latest technologies to maximize its competitive potential. 

The latest Country Economic Memorandum builds on two previous reports, from 2006 and 2012, which noted the need for Iraq to move from conflict to rehabilitation; from state dominance to market orientation; from oil dependence to diversification; and from isolation to regional and global integration. 

Breaking out of Fragility builds on those recommendations by 1) conducting a close analysis of Iraq’s underlying fragility and political economy challenges and their implications for a diversified growth model; 2) analyzing Iraq’s growth characteristics and the country’s potential for and benefits from economic diversification; 3) assessing Iraq’s potential for trade and regional integration to create growth; and 4) reviewing Iraq’s agriculture sector and its potential to support economic diversification. 

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Curbing Corruption in the Midst of a Pandemic is More Important Than Ever

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Progress against corruption can be made even under the most challenging conditions, a new World Bank report finds. At a time when unprecedented levels of emergency funds have been mobilized to respond to the COVID-19 pandemic, the report offers a fresh look at some of the most effective approaches and tools to enhance government accountability.

Enhancing Government Effectiveness and Transparency: The Fight Against Corruption focuses on ways to enhance the effectiveness of anti-corruption strategies in the sectors most affected. It serves as a reference guide to policy makers and anti-corruption champions as further work is needed to sharpen the application of traditional tools.

“The COVID-19 pandemic has resulted in large scale emergency spending by governments at rapid speed to revive the economy as well as protect the poor and vulnerable who suffer disproportionately. As countries embark on the road to a more resilient and inclusive recovery, prudent use of scarce resources in a transparent manner is critical,” said World Bank Managing Director Mari Pangestu, “Progress is possible in all environments and we are committed to work closely with our partners in government, civil society, and the private sector to address corruption and its corrosive impacts.”

Some of the unprecedented emergency spending against COVID-19 has occurred without adhering to the regular checks and balances. While speed is understandable, without proper controls, it exposes governments to a variety of corruption risks that may undermine the effectiveness of their responses. To foster greater accountability, the report calls on governments to clearly articulate their actions, enforce rules, address violations, and remedy problems as quickly as possible, and in a transparent manner.

The report covers five key thematic areas: public procurement, infrastructure, state-owned enterprises, customs administration, and service delivery, and cross-cutting themes such as open government initiatives and GovTech, with case study examples from around the world. It will help equip public sector officials and civil society with a modular set of approaches and tools that can be drawn upon and adapted to their specific country context. 

The report’s case studies show that measures to curb corruption are often opportunistic, targeting specific areas of vulnerability where and when the political space allows. But even when actions have apparently limited impact, they can provide important foundation for future progress.

In Bangladesh, the implementation of the e-Government Procurement, combined with increased transparency and citizen participation, halved the number of single bidder tenders which improved competition significantly; increased the number of contracts awarded to non-local firms; and led to better prices with successful bidders.

Colombia updated its e-procurement system to publish data in an open way following international standards.  As a result, single bid tenders in the public roads agency, INVIAS, went down from 30% to 22%, while cities like Cali saw competitive processes increase from 31% to 56% in about two years.

In Ukraine, making wealth declaration forms of public officials available online was recognized by citizens and the international community as a key tool in the fight against corruption. The latest data shows that close to 5,3 million documents in the e-declarations system are accessible to the public. As of mid-2020, the High Anti-Corruption Court of Ukraine had 19 cases against officials accused of submitting false information in the Asset and Interest Declaration or intentionally not submitting a declaration.

In Afghanistan, the customs department has been progressively implementing a countrywide computerization of customs clearance operations. Although significant vulnerabilities exist and revenue loss at the borders remains a substantial challenge, revenue collected by customs has increased seven-fold between 2004 and 2019, and clearance time and the transparency of trade transactions has improved significantly.

The land reform program in Rwanda helped manage the conflicts around land and led to increased efficiency, transparency, citizen participation, and development of viable land governance institutions. Automation of land records reduced bribes paid to land registry officials as the information was in public domain.

“Institutions are incredibly important for implementing government policies, engaging civil society, and ensuring greater transparency in government operations,” said Ed Olowo-Okere, World Bank Global Director for Governance, “The global report highlights the importance of complimenting the traditional methods of dealing with corruption with advanced ones like GovTech and e-Procurement to address corruption, even in the most challenging and fragile environments.”

The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. We are supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs. We will be deploying up to $160 billion in financial support over 15 months to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery. This includes $50 billion of new IDA resources through grants and highly concessional loans.

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A rapid rise in battery innovation is playing a key role in clean energy transitions

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Affordable and flexible electricity storage technologies are set to catalyse transitions to clean energy around the world, enabling cleaner electricity to penetrate a burgeoning range of applications. Between 2005 and 2018, patenting activity in batteries and other electricity storage technologies grew at an average annual rate of 14% worldwide, four times faster than the average of all technology fields, according to a new joint study published today by the European Patent Office (EPO) and the International Energy Agency.

The report, Innovation in batteries and electricity storage – a global analysis based on patent data, shows that batteries account for nearly 90% of all patenting activity in the area of electricity storage, and that the rise in innovation is chiefly driven by advances in rechargeable lithium-ion batteries used in consumer electronic devices and electric cars. Electric mobility in particular is fostering the development of new lithium-ion chemistries aimed at improving power output, durability, charge/discharge speed and recyclability. Technological progress is also being fuelled by the need to integrate larger quantities of renewable energy such as wind and solar power into electricity networks.

The joint study shows that Japan and Korea have established a strong lead in battery technology globally, and that technical progress and mass production in an increasingly mature industry have led to a significant drop in battery prices in recent years. Prices have declined by nearly 90% since 2010 in the case of lithium-ion batteries for electric vehicles, and by around two-thirds over the same period for stationary applications, including electricity grid management.

Developing better and cheaper electricity storage is a major challenge for the future. According to the IEA’s Sustainable Development Scenario, for the world to meet climate and sustainable energy goals, close to 10 000 gigawatt-hours of batteries and other forms of energy storage will be required worldwide by 2040 – 50 times the size of the current market.

“IEA projections make it clear that energy storage will need to grow exponentially in the coming decades to enable the world to meet international climate and sustainable energy goals. Accelerated innovation will be essential for achieving that growth,” said IEA Executive Director Fatih Birol. “By combining the complementary strengths of the IEA and the EPO, this report sheds new light on today’s innovation trends to help governments and businesses make smart decisions for our energy future.”

“Electricity storage technology is critical when it comes to meeting the demand for electric mobility and achieving the shift towards renewable energy that is needed if we are to mitigate climate change,” said EPO President António Campinos. “The rapid and sustained rise in electricity storage innovation shows that inventors and businesses are tackling the challenge of the energy transition. The patent data reveals that while Asia has a strong lead in this strategic industry, the US and Europe can count on a rich innovation ecosystem, including a large number of SMEs and research institutions, to help them stay in the race for the next generation of batteries.”

The joint study follows the publication earlier in September of the major IEA report Energy Technology Perspectives 2020, which has deepened the IEA’s technology analysis, setting out the challenges and opportunities associated with rapid clean energy transitions.

As governments and companies seek to make informed investments in clean energy innovation for the future, sector-specific insights like those offered by the joint study will be highly valuable, including for helping bring about a sustainable economic recovery from the Covid-19 crisis. The innovation study provides an authoritative overview of the technologies and applications receiving research attention – and of those that are underserved. It also shows where they stand in the competitive landscape.

Innovation is increasingly recognised as a core part of energy policy, and this year the IEA has been introducing more tools to help decision-makers understand the technology landscape and their role in it – and to track progress in innovation and the deployment of technologies. This includes a comprehensive new interactive guide to the market readiness of more than 400 clean energy technologies.

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