Twenty-one billionaires in the Middle East and North Africa (MENA) saw their wealth increase by nearly $10 billion since the start of the COVID-19 crisis, according to a recent Oxfam report “For a decade of hope not austerity in the Middle East and North Africa: Towards a fair and inclusive recovery to fight inequality.” The region’s richest amassed more than double the regional emergency funds provided by the International Monetary Fund (IMF) to respond to the pandemic, and almost five times the United Nation’s COVID-19 humanitarian appeal for MENA.
Before the virus hit, the Middle East was already one of the most unequal regions in the world. The pandemic has exposed the deep inequalities and massive failures in economic systems in the Middle East which leave millions without jobs, healthcare, or any kind of social security. It has also deepened the gap between rich and poor. Only 11% of stimulus packages in the region focus on social protection and health measures. Nearly 90% of the region’s informal workers have been severely affected by lockdown measures. They have no unemployment insurance or welfare provisions to fall back on.
The report’s co-author, Nabil Abdo, set out his findings in a Good Society Forum webinar on 30 September. Noting that over the last decade, the tax burden on businesses has fallen while that on households has increased, Abdo proposed a solidarity net wealth tax of 5% on individuals with a net worth of over $1m. Increased tax revenues could be invested in improving public healthcare and rebuilding social protection systems. He also recommended that the savings from the removal of subsidies should be carefully targeted towards those with greatest need and to ensure a green recovery.
Sally Abi Khalil, the Country Director of Oxfam in Lebanon, emphasized that social protection is an effective tool to address rampant inequalities in the region. Social protection is an obligation of states, and is enshrined in the 1948 Universal Declaration of Human Rights as well as in the UN Sustainable Development Goals.
Lebanon is one of the most unequal countries in the world with 10% of the population owning 70.6% of the country’s wealth. Prior to the pandemic, according to Abi Khalil, Lebanon was already struggling to cope with the influx of Syrian refugees, an economic collapse, devaluation of the currency, rising inflation, increasing unemployment, lower remittances, less tourism, and a drop in health and education services. Lockdown measures have impacted the poor, lower income and middle class. Food insecurity is increasing. Added to this, the Beirut port explosion on 4 August caused devastating damage to the capital and people’s livelihoods. The number of poor in Lebanon has increased from 1.1m to 2.7m, with a dramatic increase in extreme poverty.
Abi Khalil identified social protection as a key response to addressing inequalities, noting how the concept has evolved from a safety net to a broader set of social policies and programs — run by multiple players that require adequate coordination. She highlighted the need for a comprehensive national protection framework; adequate financing; political will to meet the needs of refugees, minorities and the most vulnerable; and effective targeting to get people back into the labor force.
Abi Khalil acknowledged that Lebanon’s politicians were not losing sleep over inequality, but they were worried that the 2019 uprising and social movements had impacted their ability to continuing ruling. Although the protests this year are less, the pressure on politicians continues. There are demands for elections to be held based on a reformed electoral law to break the grip of sectarian parties.
Dr Charlotte Karam, Director of the Center of Inclusive Business and Leadership for Women at the American University of Beirut, is shifting traditional paradigms by examining the potential role of the private sector in addressing inequality. She is conducting groundbreaking research into the role that employers and businesses can play in assuring dignified work, narrowing the gender gap and in decreasing inequality. Female participation in the work force is low in the Middle East. And women are being affected disproportionately by the pandemic. Through her research, Karam has identified local “trailblazing employers” such as Zain telecoms in Kuwait whose leadership is 25% female. She is exploring ways to scale and mobilize such employers in order to create a community of “responsible employers”. But measuring and monitoring such trends is made even more challenging by the lack of reliable data.
Despite the great hardships, all three speakers noted that the grit, humanity, and innovation of the Lebanese people gives them hope for the future. A social solidarity economy is emerging in Lebanon. Communities are organizing to grow their own food. People are helping each other. The seeds are being planted for a better future. But these seeds need to be nurtured for the next generation to flourish.
The full webinar is available on Youtube.
By Emma Sky, Director Yale World Fellows and Co-Host of the Good Society Forum