A LONG-TERM VIEW OF MENA’S ECONOMIES AND LABOR MARKETS
Demography and growth These historical demographic changes have had important implications for macroeconomic indicators. In high-income countries, the choice of whether to look at GDP growth or GDP per capita growth has become almost irrelevant, but in countries that experience
FIGURE 3.8 Sectoral contribution to annual employment growth in a typical country in MENA and in Brazil, Indonesia, and Malaysia, average 2000s
Percent
as suggested by the later decline in fertility in Djibouti, Iraq, and the Republic of Yemen. Infant mortality (figure 3.11c) also declined for all countries. From over 200 deaths per 1,000 children in the 1950s, rates are now well below 50 per 1,000, converging across groups of countries toward one-digit deaths per 1,000. This trend is evident throughout the post- independence period, suggesting that health and sanitation improved even during periods of economic stagnation. The combined effect of fertility and mortality changes is that the natural rate of increase of the population has slowed significantly since the 1950s, although it remains positive in all countries. However, to explain recent changes in population growth, we must also look at net migration (figure 3.11d). Two different patterns emerge. The GCC, and to a minor extent the low-income countries, shows much sharper fluctuations in net migration rates. These countries have been largely receivers of immigrants, and immigration flows have played a very important role in population trends over relatively short spells of time. The Maghreb and Mashreq countries show much less variation over time, and for long periods their net migration was negative. The most important migration flows within the MENA region are explained partly by differentials in economic conditions across countries (GCC and neighboring countries) and partly by the displacement of people due to conflicts (Djibouti, Iraq, Lebanon, and the West Bank and Gaza). Maghreb countries experienced periods of large emigration flows, mostly to southern European countries such as France, Italy, and Spain, especially in the 1970s and 1980s.
97
140 120 100 80 60 40 20 0 –20 –40
Typical MENA country
Malaysia
Agriculture Trade, tourism, logistics, and communication Mining and utilities Financial and real estate services
Indonesia
Brazil
Manufacturing Government, administration, and social services Construction
Source: World Bank 2011. Note: MENA = Middle East and North Africa.
important short- and long-term changes in population size, GDP and GDP per capita are two very different measures. Figure 3.12 illustrates this phenomenon: the difference between GDP growth and GDP per capita growth is plotted for Egypt and Morocco. During the past decade, Egypt and Morocco had economic growth rates of around 4–5 percent per year, but between one-third and one-half of that growth was dampened by population increase.
Demography and the labor market From a labor market perspective, the balance between the working-age population (WAP) and the non-working-age population is crucial to an understanding of the changes in the main labor market indicators. It is important to discriminate between purely demographic factors and economic factors. Consider, for example, the three main labor market indicators: the