Deep Socioeconomic Disparities Exacerbate Arab Tensions

This paper is part of ACW’s fourth book, titled The Arab World Beyond Conflict.

The far-reaching turmoil that plagues most Arab countries today reflects problems that have festered for decades, such as sectarian tensions, political violence, civil wars, foreign military interventions, and widespread human vulnerability due to poverty and unmet basic needs. To fully understand current Arab events and trends we must grasp the arc of the twentieth century as it relates to the conditions and fates of the 22 Arab states that were born in it. Such a long view shows that most Arab states performed well in the first half century of their independence, achieving significant and sustained state-building from the 1920s to the 1970s. This included growing middle classes and several generations of citizens who expected that their future and that of their children would continue to be promising.

Weakness Sets In

The 1975-85 decade was a transition period that saw contradictory trends. Bursts of development—due mainly to massive availability of oil and gas income that permeated the entire region—alternated with periods of regression due to oil price drops and structural stresses that saw the sustained development of the previous half century run into serious constraints. The half century since 1970 has been characterized by erratic development, with pockets of sustained and equitable growth, entrepreneurship, and innovation amid stagnation, regression, and today’s most recent serious regional threats: growing poverty, vulnerability, and disparities that have started to threaten the stability and viability of some states.

The Arab political economy model of rentier states that had generated growth and relative equality for five decades slowly weakened after the 1970s, for many reasons. The end of the Cold War reduced the strategic value of some states to their superpower patrons. The direct and indirect negative impacts of the century-long Arab-Israeli conflict contributed to military rule in key Arab states, ushering into power often incompetent and corrupt leaders and their crony capitalist friends, cousins, and allies. By the 1980s, the former Arab nationalist developmental states increasingly had become family-run security states, as citizens became consumers and once sovereign states became outsourcing or commission agents for foreign powers. Domestic autocracy and incompetence coincided with continued high population growth rates and lower economic growth, as corruption and environmental deterioration also expanded steadily. Non-stop foreign military intervention in Arab lands since Napoleon landed in Egypt contributed to the wars and domestic destruction that some countries suffered—as we witness still in the continued fighting in Syria, which includes big powers along with direct regional interventions by states like Iran, Turkey, Israel, Saudi Arabia, the United Arab Emirates, and others.

These and other trends slowed the developmental thrust of the first half century of Arab statehood, bringing us to the point today of what might be called the de-sovereignization of many Arab states that rely for their survival on foreign military or economic support and endure the humiliation of foreign armies fighting at will inside their lands. It is not too harsh to conclude that many Arab countries during the past century have broadly failed the triple tests of sovereignty, statehood, and citizenship.

Our recent awareness of greater poverty, inequality, and desperation among Arab families does not mean that these problems only reflect events of the past few years. The region has witnessed numerous early warning signs since the 1970s that things were not going smoothly for all members of society.1 Yet decision-makers ignored all the signs and persisted with policies that brought the Arab states to their current condition, including corruption, lack of decent jobs, state cronyism, environmental degradation, low social protection, and declining educational standards. Throughout the past four decades, national economic growth measures inadvertently exaggerated the well-being of state and society and failed to capture the rising levels of poverty and vulnerability among families who used to be counted among the middle class/middle-income category. Those shortcomings of technical measurement or political awareness are no longer valid today.

Challenges to Sovereignty, Statehood, and Citizenship

In the context of this erratic historical legacy, the most significant dynamic that now shapes Arab countries is the fragmentation of many individual states and the entire Arab region itself. Consequently, we now pass through the second great fragmentation and reconfiguration of the modern Arab world. The first one occurred in the decades after World War I, when Ottoman and western colonial control gave way to the creation of new and independent Arab states. Today we experience the second Arab fragmentation and reconfiguration, as individual countries continue to polarize, fragment, and even shatter in a few cases, and the entire region has lost its integrity as a single Arab cultural and national unit.

Poverty, vulnerability, and inequality are core causes of the current collapse of state integrity and regional unity, as desperate individuals and families seek any source of assistance that will keep them alive and safe. The consequences of this continuing and painful trend are already visible throughout the region, in polarization and fragmentation in social, economic, political, ethnic, sectarian, and other fields. Almost every dimension of life that is now measured well by polls, surveys, and studies—gender, ethnicity, rural-urban location, education, health, security, wealth, poverty, self-confidence, trust in government, and others—reveals disparities and inequalities that continue to increase across the Arab region (with the exception of generally more homogeneous populations in energy-producing states with their more modest populations in relation to their ample income).2

A Dismal Socioeconomic Record

The realities and threats that define the Arab region are captured most dramatically in new evidence from Arab Multidimensional Poverty (MDP) studies3 by Arab and international organizations; these provide a much more accurate picture of the real conditions of our populations, where more than two-thirds of households in the non-oil-producing countries are poor or vulnerable.4 This is supported by evidence from region-wide annual surveys by academic groups in the United States and Arab countries showing that in non-oil-producing states outside the Gulf region, an average of 60-70 percent of surveyed Arab families cannot easily or at all meet their basic monthly needs.5 Most previous measures of well-being developed by the World Bank, donors, national statistics agencies, and others mostly measured family incomes and expenditures and defined national economic growth in macro terms of total national income and GDP growth. These often reflected solid macroeconomic annual growth rates of 5-7 percent—for instance, in the years just before the 2010-11 Arab uprisings6—which did not capture the lack of improvements in family conditions, the declining middle class, rising poverty, and widespread concerns for the future. The MDP studies, on the other hand, more accurately reflect national economic realities and the distribution and prevalence of wealth and poverty, in large part because they capture both the very wealthy and the very poor who often were missed in traditional studies.7

Significant research in recent years has been conducted by economists at the United Nations Development Programme (UNDP), the United Nations Economic and Social Commission for Western Asia (ESCWA), the World Bank, the Oxford Poverty and Human Development Initiative, and other institutions. They have used the MDP measure to gauge poverty and vulnerability more accurately than the previous reliance on money-metric measures such as $1.25 or $1.90 in expenditures per day. The Multidimensional Poverty Index, published by UNDP and the Oxford Poverty and Human Development Initiative, provides many critical insights into this issue.8

The MDP approach more accurately measures real life conditions of families because it looks at a range of key indicators in health, education, and living standards (including nutrition, child mortality, years of schooling, sanitation, electricity, drinking water, and assets). ESCWA’s analysis of conditions in Arab countries over the past 20 years reveals dangerous and persistent trends. The most striking is that actual levels of poverty and vulnerability in the Arab region are higher than previously thought, with some two-thirds of citizens being poor or vulnerable.9 The MDP figures indicate poverty rates as much as four times higher than previously assumed. In ten Arab states surveyed by ESCWA, 116 million people were classified as poor (41 percent of the total population), and 25 percent were vulnerable to poverty. In Egypt, poverty increased from 19.5 percent in 2005 to 28 percent a decade later.10 If the level of 66 percent poor/vulnerable holds for all the non-energy-rich Arab states, this could mean that 200 million or more people are poor or vulnerable, out of a total Arab population of 400 million.11

Even when the World Bank’s poverty measure of less than $1.90 daily expenditure per capita is used, in the period 2011-2015 extreme poverty in the Middle East increased from 2.7 to 5 percent—and the Middle East was the only region in the world where this indicator increased in that period. Consequently, the middle class in non-oil-producing Arab states has shrunk from 45 to 33 percent of the population, according to ESCWA economists.12 They see middle income families continuing to slide into vulnerability, and vulnerable families in turn still falling into poverty.

The vulnerability measure is as striking as the poverty figure because vulnerable families on the edge of poverty who suffer a catastrophic event that reduces or entirely eliminates their income quickly plunge into poverty, for they usually have no savings or major assets and mostly do not enjoy insurance or social safety net protections. The income of middle-class families is not high enough to protect them from price increases or new tax burdens, which would drop them into the poverty category.13 One reason for the continuing demonstrations against government policies in many Arab countries in recent years has been the imposition of higher taxes and fees on citizens, which some demonstrators explicitly express, such as in the 2018 demonstrations in Jordan. In addition, once they sink into the ranks of the poverty class, they likely will stay there for decades, due to prevailing economic realities and the lack of social safety net programs across the region. Poverty/vulnerability rates are high and families who plunge into poverty cannot easily find relief because most economies grow slowly. Even those that grow at a 5 percent rate have little impact on the poor; this is because new jobs are not being created fast enough and the middle class continues to shrink, with the vulnerable and poor segments of society growing.

To make things even worse, we cannot expect any speedy economic improvements that can lower poverty and vulnerability, given that almost all the drivers of substantial economic growth in needy Arab lands are stagnant or declining; these include tourism, labor remittances, direct foreign investment, trade income, foreign loans and grants, and other factors. Such a grim economic environment is often due to the direct damage of wars in the region, but also to the loss of confidence among many investors.

The political consequence of a growing number of poor and vulnerable Arabs is that many of them are also increasingly marginalized and alienated from the mainstream of economic growth—and in many cases, from the political and national institutions of the state, which often drives them to consider leaving the country.14 In other words, citizen alienation and a larger gap between citizens and state lead to a fragmented and polarized society, to the point where it is safe to say that we cannot speak any more of a single “Arab world” that reflects an integrated and homogeneous group of like-minded states and societies. We can only speak today of an “Arab region” whose population comprises four distinct groups: wealthy and professional people who earned money in legitimate or corrupt ways and have no material concerns in life for themselves or their children; a shrinking middle class; over 50 percent of the population who are poor or vulnerable; and a small number who have exited state and society to find refuge abroad, or at home, in tribal, ethnic, or religious groups, criminal networks, or militias and terror groups—because their states failed them in terms of jobs, income, social and economic justice, opportunities, and basic human needs and social services. Many in this last group remain physically in the Arab world, but they operate outside its formal political and economic institutions. They look elsewhere, outside the state, for their identity, security, opportunity, voice, basic needs, and other critical factors that once defined the relationship between the state and its citizens.

The poverty/vulnerability and marginalization indicators are not only worsening in most cases, but they also seem to have become chronic. This is indicated in MDP studies that show that two factors significantly are associated with a family’s chronic poverty and vulnerability over successive generations: a low education level of the oldest family members, which condemns most uneducated workers to informal jobs that lack worker protections and result in family vulnerability; and poor social services during early childhood years, which retard child development and impact negatively on a person’s potential for decent education and employment. One of the reasons why so many Arab citizens are frustrated with their governments’ performances in recent decades, according to analyses of the UN ESCWA, is the deteriorating quality of state-provided social services, which include education and early childhood development needs.

These and other factors in family life now are all linked in a vicious cycle that augurs poorly for Arab well-being in the coming decades because this scale and depth of pauperization and vulnerability cannot be reversed quickly. The new reality today is that once you are poor in the Arab region, you and your descendants almost certainly will be poor for many decades.

One reason for this conclusion is that new job opportunities on a large scale simply are not on the horizon. The sustained expansion in employment opportunities in the industrial, tourism, agriculture, and service sectors that characterized the Arab developmental spurt in the second and third quarters of the 20th century has long ended. Projections by the IMF and others indicate that the Arab region must create 60-100 million jobs by 2030, and 27 million jobs in the period 2018-2023, in order to reduce unemployment significantly, absorb new job market entrants, and increase incomes for millions of families.15 The prevailing policies and management capabilities of current Arab governments and private sectors show no signs of being able to achieve anything near this level of new job opportunities.

For another thing, most Arab labor markets will be defined heavily by informal labor for years to come. Recent regional studies16 suggest that labor informality averages in the range of at least 50-60 percent. This makes it likely that poverty and vulnerability will persist and even expand, due to the erratic and low pay and the lack of protections that workers in the informal economy suffer. Less than one-third of Arab workers enjoy the benefit of pension funds, and informal workers usually lack legal protections such as minimum wages, maximum working hours, workplace safety rules, retirement and health insurance funds, training and promotion opportunities, and other critical elements of decent employment. Informal Arab workers in cities or on farms do manual labor that requires back-breaking toil but no critical thinking, and it rarely offers workers opportunities to acquire new skills or benefit from training in new fields. Workers with low and irregular pay, with no chance of improving their lot in life and no means of politically expressing their grievances, only experience heightened feelings of dehumanization and social marginalization—and such sentiments can easily spill over into political alienation which some studies suggest can drive some susceptible individuals toward violence.17

A critical link in this cycle of informal-labor-linked poverty is the education system, which generally performed well in the first half century of Arab statehood; however, it has faltered in recent decades and become a major contributor to the human distress outlined in this chapter. The declining quality of public education in most of the non-energy-producing states with the largest Arab populations is reflected in universal testing scores. These show that as many as half the students in primary and secondary schools across the Arab region are not learning, as they do not meet minimum reading, writing, and mathematics levels for their ages.18

Chances are that most of these non-performing students will drop out before completing primary or secondary education. Many others remain in school and are routinely graduated to the next level of schooling, to avoid exposing the severe weaknesses and incompetent management that plague public education. It is estimated that over 20 million school-age young Arabs are out of school today, and nearly half the 75 million in primary and secondary school are likely to drop out before their graduation date. Here alone is a cohort of some 50 million young Arabs today whose lack of education will guarantee them a lifetime of low-quality well-being as they struggle to make ends meet, for the most part in the informal labor sector.

Equally troubling are the several reasons why youth drop out of school early or do not learn anything in school. Some must leave school to work and contribute to their family income. Poor school environments are also a problem. Regional surveys show that most students in Arab primary and secondary public schools do not feel safe physically, emotionally, or socially, which either drives students out of schools or explains their low academic performance if they stay in school. The wars in Syria, Iraq, Palestine, Yemen, Libya, and Somalia are a major reason for the large number of out-of-school children, especially among refugees and internally displaced families. This problem continues to worsen, with UN figures showing a total of 30 million displaced Arabs and 60 million people who need essential aid just to survive (food, water, shelter, and medical care).19

This rather catastrophic regional human development situation is widely ignored in the Arab and international media and is rarely discussed or analyzed in the Arab public spheres. The poor and vulnerable Arab citizens continue to increase in numbers; moreover, they enjoy no voice or accountability to improve their lot in society through political action. They are invisible people who do not exist in the mainstream media or the international arena, and often they are not visible even to the political elites who manage Arab countries. The combination of economic desperation at the family level, with an almost total lack of political opportunities for a redress of grievances, now routinely leads to outbursts of demonstrations, as we have witnessed in 2018 in Jordan, Sudan, Lebanon, Iraq, Syria, Morocco, Algeria, Tunisia, and other Arab lands. Citizens’ legitimate grievances are rarely acknowledged and addressed. If this situation continues to expand the pool of poor, vulnerable, and marginalized Arab men, women, and youth, we should not be surprised to see them directly or indirectly contribute to the stresses, conflicts, and national fragmentation that plague so many Arab countries today, and these are often linked to political violence and warfare.

The fact that two-thirds of our fellow Arab citizens are poor, vulnerable, and marginalized, with little hope of improving their conditions in the near future, should be taken as the latest early warning sign that deep dysfunctions in our societies must be addressed as soon as possible, if we want to avoid further bouts of violence and upheaval.

< Table of contents

1 Rami G. Khouri, “Many Early Warning Signs Signaled Current Arab Disarray,” Cairo Review of International Affairs (2016),
2 Nandini Krishnan, Gabriel Lara Ibarra, Ambar Narayan, Sailesh Tiwari, and Tara Vishwanath, “Uneven Odds, Unequal Outcomes: Inequality of Opportunity in the Middle East and North Africa,” World Bank Group, 2016, See also Khalid Abu-Ismail, “Rethinking Inequality in Arab States,” ESCWA and Economic Research Forum, July 2018,
3 “Policy–A multidimensional approach,” Oxford Poverty and Human Development Initiative, See also “The 2018 Multidimensional Poverty Index (MPI),” UNDP, Human Development Report,
4 Khalid Abu-Ismail and Bilal Al-Kiswani, “Multidimensional poverty in the poorest parts of MENA: agenda for action,” Economic Reform Forum, February 13, 2018,
5 “2017-2018 Arab Opinion Index: Executive Summary,Arab Center Washington DC, July 10, 2018, See also “Arab Barometer Wave IV 2016-2017,” Arab Barometer,
6 MENA Economic Monitor, “Inequality, Uprisings, and Conflict in the Arab World,” World Bank, October 2015,
7 See “Beyond Income: A broader picture of poverty,” UNDP, 2018, Also, see Piecing Together the Poverty Puzzle, World Bank Group, 2018,
8 See “Policy–A multidimensional approach,” and “Multidimensional Poverty Index.
9 Abu-Ismail and Al-Kiswani, “Multidimensional poverty.”
10 Ibid.
11 Ibid.
12 Author interview with ESCWA economists, September 2018.
13 Khalid Abu-Ismail, Beyond the rentier state: Can regionalism work for Arab states?” Project on Middle East Political Science, 2018,
14 Fares Braizat,” Why Jordanians are leaving!” The Jordan Times, Dec. 22, 2018, Ec0cHY. Also see Fares Braizat, “The Politics of Renaissance,” The Jordan Times, Nov. 24, 2018,
15 IMF consultation, Beirut, Lebanon, August 2018.
16 “Arab Watch on Economic and Social Rights 2016–Informal Labor,” Arab NGO Network for Development (ANND), 2016,
17 Universitat Autònoma de Barcelona, Neuroimaging shows social exclusion spurs extremism in those vulnerable to radicalization,” ScienceDaily, January 10, 2019,
18 Liesbet Steer, Hafez Ghanem, and Maysa Jalbout, “Arab Youth: Missing Educational Foundations for a Productive Life? Brookings Institution, February 2014,
19 Author interview with ESCWA officials, Beirut, August 2018.