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Inclusion and Resilience: The Way Forward for Social Safety Nets in the Middle East and North Africa
a contract; in Egypt, the share without social security coverage increased by 10 percentage points between 1998 and 2006; and in Morocco, 80 percent of the population is not covered by a pension. No system of income support for the unemployed has been developed, and workfare programs in the region remain limited in scope and scale.
Crises at the Micro Level: Idiosyncratic Shocks from Health, Job, or Asset Loss Households are exposed to multiple work- or business-, health-, and violence-related risks. When households are hit by these shocks, the result can be a significant loss of assets or income. Although household surveys usually do not capture household shocks and coping strategies, surveys conducted in Iraq, Morocco, and the Republic of Yemen are important exceptions and provide revealing information. Although some shocks are linked to the economy (for example, jobs and earnings losses are the most commonly reported major shock in Morocco), others relate to violence and conflict. (Loss of an asset or livestock due to violence and theft was the most commonly reported shock in Iraq during the war period, while death and serious illness of a household member were the most frequent shocks reported in the Republic of Yemen’s capital, Sana’a, in 2009–10.) Table 2.6 shows the incidence of these shocks, by type, as reported by survey respondents. As many as 15 percent of households in Iraq, Morocco, and Sana’a reported suffering at least one major shock during the previous 12 months. In the Republic of Yemen, the four worst shocks mentioned by households were death of a household member, serious injury or illness of a household member, loss of assets due to violence and theft, and job loss. The losses can be significant; for example, 58 percent of households in
The Challenge: Poverty, Exclusion, and Vulnerability to Shocks
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Iraq who suffered a major shock reported that they reduced the quantity and quality of their food as a consequence.
Coping with Shocks to Individual Households In the face of a major shock and in the absence of effective SSNs, households often rely on their own income, savings, and assets and on informal safety nets. In Morocco and Iraq, only about 1 percent of all households suffering major shocks reported receiving help from formal safety nets (that is, support from the government and nongovernmental organizations), as shown in figure 2.14. The most common coping strategies were using own income and savings and receiving help from informal safety nets (such as private support from family and neighbors). In this context, poorer families, with their limited incomes, savings, and assets, are again at greater risk.
Catastrophic and Impoverishing Effects of Health Care Costs Although social health insurance schemes and free health services are extensive in most of the Middle East and North Africa, many households still face large—indeed, catastrophic—health care costs. Catastrophic (health cost) effects are commonly defined as occurring when a household’s health care expenditures exceed 10 percent of its total expenditures or 40 FIGURE 2.14
Household Coping Mechanisms for Shocks in Iraq and Morocco, 2009–10 As a coping mechanism to one or more of the aforementioned problems, during last 12 months, has the household: Received help from government or NGO
TABLE 2.6
Sold or pawned assets
Incidence of Idiosyncratic Shocks in Iraq, Morocco, and the Republic of Yemen, 2009–10 Percentage of respondents reporting occurrence
Iraq
Morocco
Yemen, Rep. (Sana’a)
Lower wages or returns of family business Unexpected job loss or bankruptcy of family business Death of household member Serious injury or illness of household member Loss of asset or livestock due to violence and theft Another major problem At least one of the shocks mentioned above
5 7 2 3 13 2 15
6 5 4 0 1 1 15
0 2 5 4 2 3 15
Sources: Authors’ calculations based on data from Republic of Yemen’s Social Networks and Solidarity Mechanisms Survey 2010; IHSES Iraq 2009; and MHYS Morocco 2010.
Received help from friends or neighbors Asked for loan Received help from family Used own income or savings 0
10
20 30 40 Households answering “yes,” % Iraq Morocco
Sources: Authors’ calculations using Iraq IHSES 2009 and Morocco MHYS 2010. Note: NGO = nongovernmental organization.
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