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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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Critical Reforms Needed to Reduce Inflation and Accelerate the Recovery

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While the government took measures to protect the economy against a much deeper recession, it would be essential to set policy foundations for a strong recovery, according to the latest World Bank Nigeria Development Update (NDU).

The NDU, titled “Resilience through Reforms”, notes that in 2020 the Nigerian economy experienced a shallower contraction of -1.8% than had been projected at the beginning of the pandemic (-3.2%). Although the economy started to grow again, prices are increasing rapidly, severely impacting Nigerian households. As of April 2021, the inflation rate was the highest in four years. Food prices accounted for over 60% of the total increase in inflation. Rising prices have pushed an estimated 7 million Nigerians below the poverty line in 2020 alone.

The report acknowledges notable government’s policy reforms aimed at mitigating the impact of the crisis and supporting the recovery; including steps taken towards reducing gasoline subsidies and adjusting electricity tariffs towards more cost-reflective levels, both aimed at expanding the fiscal space for pro-poor spending. In addition, the report highlights that both the Federal and State governments cut nonessential spending and redirected resources towards the COVID-19 response. At the same time, public-sector transparency has improved, in particular around the operations of the oil and gas sector.

The report however, notes that despite the more favorable external environment, with recovering oil prices and growth in advanced economies, a failure to sustain and deepen reforms would threaten both macroeconomic sustainability and policy credibility, thereby limiting the government’s ability to address gaps in human and physical capital which is needed to attract private investment.

“Nigeria faces interlinked challenges in relation to inflation, limited job opportunities, and insecurity”, said Shubham Chaudhuri, the World Bank Country Director for Nigeria. ”While the government has made efforts to reduce the effect of these by advancing long-delayed policy reforms, it is clear that these reforms will have to be sustained and deepened for Nigeria to realize its development potential.”

This edition of the Nigeria Development Update proposes near-term policy option organized around three priority objectives:

  • Reduce inflation by implementing policies that support macroeconomic stability, inclusive growth, and job creation;
  • Protect poor households from the impacts of inflation;
  • Facilitate access to financing for small and medium enterprises in key sectors to mitigate the effects of inflation and accelerate the recovery.

“Given the urgency to reduce inflation amidst the pandemic, a policy consensus and expedite reform implementation on exchange-rate management, monetary policy, trade policy, fiscal policy, and social protection would help save lives, protect livelihoods, and ensure a faster and sustained recovery” said Marco Hernandez, the World Bank Lead Economist for Nigeria and co-author of the report.

In addition to assessing Nigeria’s economic situation, this edition of the NDU also discusses how the COVID-19 crisis has affected employment; how inflation is exacerbating poverty in Nigeria; how reforming the power sector can ignite economic growth; and how Nigeria can mobilize revenues in a time of crisis.

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Indonesia: How to Boost the Economic Recovery

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Indonesia’s economy is projected to rebound from the 2020 recession with 4.4 percent growth in 2021. The rebound is predicated on the pandemic being contained and the global economy continuing to strengthen, according to the World Bank’s latest Indonesia Economic Prospects report (“Boosting the Recovery”), released today.

The report highlights that although consumption and investment growth were subdued during the first quarter of 2021, consumer sentiment and retail sales started to improve during the second quarter suggesting stronger growth momentum. However, it also notes that pandemic related uncertainty remains elevated due to risks of higher viral transmission.

“Accelerating the vaccine rollout, ensuring adequate testing and other public health measures, and maintaining strong monetary and fiscal support in the near term are essential to boosting Indonesia’s recovery,” said Satu Kahkonen, World Bank Country Director for Indonesia and Timor-Leste. “Parallel reforms to strengthen the investment climate, deepen financial markets, and improve fiscal space for longer-term sustainability and growth will be important to further build consumer and investor confidence.”  

The report recommends the government to develop a well sequenced medium-term fiscal strategy, including clear plans to improve tax revenues and fiscal space for priority spending. It also highlights the importance of maintaining accommodative monetary policy and stimulating private credit to support the real sector while monitoring external and financial vulnerabilities.

The report highlights the critical role of adequate social assistance in mitigating rising poverty risks. It finds that maintaining the 2020 social assistance package in 2021 could potentially keep 4.7 million Indonesians out of poverty.  

This edition of the report also looks at the possibilities for Indonesia to boost higher productivity jobs and women’s economic participation.

“Indonesia has reduced poverty through job creation and rising labor incomes over the past decade. The next stage is to create middle-class jobs that are more productive, earn higher incomes, and provide social benefits,” said Habib Rab, World Bank Lead Economist for Indonesia. “While the crisis risks have exacerbated Indonesia’s employment challenges, it is also an opportunity to address the competitiveness and inclusion bottlenecks to creating middle-class jobs and strengthening women’s participation in the economy.”

The report recommends a four-pronged reform strategy to address these jobs-related challenges:

  • Mitigate employment losses by maintaining adequate job retention programs, social assistance, training, and reskilling programs until the recovery is stronger.
  • Boost productivity and middle-class jobs by promoting competition, investment, and trade.
  • Equip the Indonesian workforce to hold middle-class jobs by investing in education and training systems and programs to improve workers’ skills.
  • Bring more women into the labor force and reduce earning gaps between men and women by investing in child and elderly care and promoting private sector development in the care economy.

The Indonesia Economic Prospects Report is supported by the Australian Department of Foreign Affairs and Trade.

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Inequality Has Likely Increased in PNG, with Bottom 40% Hit Hardest by Latest Outbreak

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A joint World Bank and UNICEF report based on mobile phone surveys of Papua New Guinean families has found that while there was a slight recovery in employment between June and December 2020, people in the bottom 40% of wealth distribution remain the hardest hit by the Coronavirus pandemic.

Conducted in December 2020, this second World Bank survey (the first was conducted in June 2020), shows that inequality has likely increased in PNG in the year since the pandemic began, and that the current COVID-19 outbreak is expected to deepen inequalities even further.

“According to the report, there were positive signs that PNG was starting to recover from the initial shocks of the pandemic between June and December 2020,” explained Stefano Mocci, World Bank Country Manager for Papua New Guinea. “However, it was largely wealthier households who were experiencing the fastest recovery in employment and income. In contrast, in areas with above average poverty, there were still high job losses.”

“Given a possible third wave of COVID-19 infections has strong potential to cause further declines in employment and income, social and economic support needs to be targeted to those most vulnerable – the bottom 40% – to try and lessen the widening inequality gap.”

“Little is known about how COVID-19 affects children in PNG,” expressed Judith Bruno, acting UNICEF PNG Representative. “Overwhelmingly, households with children under the age of 15 considered COVID-19 as a major threat to household finances and reported decreases in access to basic services, including water supply, sanitation, health care, and mental health and psychosocial support.”

“This World Bank and UNICEF collaboration will help policy makers and responders to better protect children from the virus, promote safe and continued access to services, and prevent children and their families from further economic hardship.”

Other key findings from the second of five planned World Bank surveys include:

·        For those still working, more than 75% of respondents reported receiving the same income as usual in the past week, compared to less than 50% in June (the strongest gains were for those in the top 40% of wealth distribution);

·        Rural households, and those in the bottom 40% of wealth distribution, were most likely to see decreases in money sent by friends or family.

·        77% of households were somewhat worried, or very worried, about their household finances in the next month.

·        33% of households in the bottom 40% of wealth distribution were unable to buy their preferred protein, compared to just four percent of households in the top 40%.

·        Less than 10% of primary and elementary school students participated in distance learning while schools were closed, but there were no significant differences between boys and girls returning to school and no evidence that the pandemic has widened the education gender gap.

·        Compared to the rest of the country, households in the National Capital District (NCD) were more likely to report deteriorations in theft, alcohol and drug abuse, violence by police and domestic abuse since June 2020 – all indicators of rising tensions in the capital, Port Moresby.

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