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Income Inequality in the Middle East
Since 1980, the high growth rates in Asia, particularly in China and India, have led to a significant increase in income for the bottom 50 percent of the global population. While this signifies growth and a reduction of poverty levels, it does not signify a decrease in global inequality or in the income inequality in the Middle East.

Income Inequality in the Middle East

There are two types of income inequality: between-country income inequality and within-country inequality. Although the high growth rates of India and China have led to a decrease in between-country average inequality, within-country inequality has only increased. Simply stated, a look into individual countries will show that the rich are getting richer while the poor are getting poorer.

The World Inequality Lab, composed of over 100 researchers and economists, recently published the “World Inequality Report 2018.” The report underscores that collecting macro and microeconomic data on inequality is difficult, especially since many countries do not release or even produce income and inequality data and statistics.

Despite these limitations, the researcher and scientists found a new methodology to source the necessary data. One of the key findings of the report was that income inequality in the Middle East is the highest, while the lowest in Europe. In the Middle East, the top 10 percent take 61 percent of national income.

Causes of the Fiscal Inequalities

Income inequality in the Middle East is a result of multiple factors. On one hand, the disparate urban-rural income gap plays a large role in skewed income distribution, especially in countries like Egypt, Yemen and Tunisia. Because rural communities are further away from commercial ports and main markets, they have less access to imported commodities, such as rice and wheat.

This limited access to basic needs increases malnutrition and poverty rates in these countries, thereby furthering the economic divide. This economic inequality has played a role in the Arab Spring uprisings and demonstrations, polarizing these countries not just economically, but also politically.

The World Inequality Report predicts that if countries continue to operate “business as usual,” then global, within-country inequality will only increase. However, the report suggests that if countries follow the trajectory of Europe over the past decades, then global income inequality can be reduced.

Attainable Solutions

The United Nations Economic and Social Commission for Western Asia advocates for the following proven tools to combat income inequality in the Middle East:

  • Tax progressivity
  • Increased equal access to education
  • Increased fiscal transparency
  • Investment in reducing public debt

The World Inequality Lab has already made attempts to increase fiscal transparency, using national income, wealth accounts, household income and wealth surveys, tax income and inheritance data to estimate figure on inequality and wealth in the Middle East.

International Support

Additionally, UNICEF is working to strengthen the education systems in the Middle East by working closely with both federal and local governments. The Life Skills and Citizenship Education Initiative under UNICEF aims to integrate core life skills, such as critical thinking and problem-solving, into the current education systems.

And finally, having a sense of awareness about global income inequality can also play a role in combating income inequality. Simply knowing that within-country income inequality is increasing despite the reduction in global inequality is important in addressing the issue.

Shefali Kumar
Photo: Flickr

Causes of Poverty in IranWith a population of more than 79 million people, Iran is a large country in Western Asia, bordered by Turkmenistan, Iraq, Afghanistan, Pakistan and Armenia. Sadly, of the millions of citizens in this country, 18.7 percent live below the poverty line. There are many causes of poverty in Iran, but two major causes have caused a crisis in the country during the last several years.

Unemployment
Iran’s economy began to struggle in 2014 when a subsidy program adjusted the prices of fuel, the country’s largest export. In 2015, the economy somewhat improved in the first half of the calendar year and the oil and fuel sector prospered. Meanwhile, unemployment in other job sectors increased. By 2016, the unemployment rate reached a three-year high of 12.7 percent, though labor participation increased from around 35 percent to about 40 percent since 2014. An unemployment gender gap was noted in 2016 as well, as unemployment rates for men and women were 21.8 and 10.4 percent respectively.

In 2014, however, Iran saw the height of the unemployment crisis when the rate of unemployed women was estimated to be 46 percent and youth unemployment was twice that of general unemployment.

Additionally, the standard monthly income for families averaging five people per household is about $600, which is considered significantly below the poverty line. In 2014, Parliament’s Plan and Budget Committee announced that 15 million Iranians were living below the poverty line, or 20 percent of the population, and seven million of those people did not have access to any services that might offer them support or assistance.

Internal Corruption
In 2014, news broke that a merchant with close ties to the Iranian government facilitated many oil and gold transactions through the Turkish People’s Bank and embezzled a significant amount of money, putting the country into serious debt. Later, many other fraudulent investors were reported to be active in the oil industry, and though over $1 billion in debt was reported, the guilty were not punished. Between 2013 and 2014, 4,000 cases of embezzlement and theft were reported, most of them being cases of illegally importing luxury cars, hidden monopolies and smuggling, to name a few, but no names of the guilty parties were ever disclosed.

In 2014, Iranian president Hassan Rouhani took office with the determination to develop an effective strategy to reduce poverty for Iranians. Rouhani established a three-part policy to assist the most vulnerable populations and curb inflation, which ended two years of negative growth. Officials under the Rouhani administration provided food aid to about seven million citizens in poverty. Though many aid projects under the administration were criticized for potentially adding to the budget deficit, such policies and programs seek to give immediate help to those living in absolute poverty, and the administration continues to fight for the poor and make food security its number one priority.

These causes of poverty in Iran have led to justified tension and fear among the public and the government that conditions and employment rates will deteriorate further if changes to the subsidy program do not go into effect, and if eliminating government corruption is not made a higher priority. Those changes are key to improving Iranian lives.

Olivia Cyr

Photo: Flickr

Education in the UAEEducation in the United Arab Emirates (UAE) has undergone significant changes since the small Arab nation was founded in 1971. At that time, options for students were few and far between, but this has changed significantly in recent years.

The UAE currently offers every citizen education completely free, from kindergarten to even university. The government even funds the educational endeavors of students if they seek to further their studies abroad. Moreover, the literacy rate in the UAE is 93.1 percent for males and 95.8 percent for females, according to recent estimates. This is a significant increase from the rate of adult literacy in 1975, which was only 54 percent for men and 31 percent for women.

University enrollment rates similarly paint a more optimistic picture of the educational landscape in the UAE. About 95 percent of all girls in their final year of high school apply to university, while 80 percent of males in their final year of high school apply to university. However, education in the UAE still requires improvements in order to produce competitive students in today’s world. This is evidenced by the goals of the UAE Vision 2021, the government’s five-year plan to push the country to innovate and develop, where education is given immense importance in order to secure the future prosperity of the nation on the world stage. The UAE hopes to diversify its economy, especially by investing in the very citizens who are likely to play a major role in its future growth.

Furthermore, the benefits of improving education in the UAE are by no means vague or illusory. Indeed, Dubai Cares, the philanthropic organization based in the UAE, attempts to address poverty across the globe by means of education. This program is devoted to combating poverty and hunger through education via a variety of means – one in particular is to establish school programs that ensure the children are being fed in countries ranging from Ghana to Palestine. Dubai Cares firmly believes that in education lies the key to effectively fighting poverty. Another prominent example is investing in girls’ education, believing that doing so enlightens others and results in health benefits that will affect future generations.

The intersection of education and philanthropy is hardly a surprise. Educating others gives them the tools to make proper decisions that are in their long-term interest. It helps them pull themselves out of poverty and also avoid it in the future. The future returns of such an endeavor cannot be lightly dismissed, since educated parents are likely to instill the same values in the younger generation.

Mohammad Hasan Javed

Photo: Flickr

Top Developments in the lives of the Iraqi Kurds: Why it MattersThe fight against ISIS and the turbulence in the Middle East has adversely impacted Iraqi Kurds recently. The poverty rate in Iraqi Kurdistan has quadrupled to 15 percent, largely due to the fight against ISIS, civilian casualties, the influx of refugees and insuperable pressure on resources. One in 10 Iraqi Kurds live below the internationally recognized poverty line.

Since 2014, over a million refugees have arrived in Iraqi Kurdistan. In 2015, the World Bank estimated that the Kurdistan Region needs $1.4 billion in humanitarian response. The number of internally displaced persons to the region continues to increase.

The Kurds are an important ethnic group in the Middle East, often recognized for their efforts to achieve self-governance. Iraqi Kurdistan is a rather controversial oil-rich region, with especially large reserves in the province of Kirkuk. The Kurdistan Regional Government (KRG) has been the ruling body of Iraqi Kurdistan since 1992. In 2005, the Iraqi Constitution officially recognized the autonomy of the Kurds in the Kurdistan Region of Iraq.

The Iraqi Kurds have played a pivotal role in the combat against ISIS. The Iraqi Kurdish forces are a vital part of the U.S. coalition against the Islamic State. Despite accounting for close to 20 percent of the population in Iraq, the Iraqi Kurds have suffered a slew of human rights violations over the years and have been oppressed due to their “minority” status. In most recent years, these attacks can be traced back to the time of Saddam Hussein and the Gulf War.

Moreover, the KRG faces many obstacles in its path to win a pending referendum and mend the infrastructure and administration in the country. The economy, resources and commerce of the region is in a poor state. The government is facing problems in financing the incomes of the people in many conclaves, as individuals are only receiving about half of their monthly salaries. The KRG is also working on improving the transparency and accountability of state financial institutions and businesses in the region to regulate the channeling of public funds.

Even though unemployment has peaked at more than 13.5 percent due to labor immobility and the lack of labor market reforms, the World Bank is still spearheading reform plans for the future. The Iraqi Kurds face a rather uncertain future ahead of them, given the clamorous events of the past and present. Self- determination has been an unavailing right for many. In a landmark move, a referendum is being called for Kurdish independence from Iraq.

However, the referendum is being eyed with a great degree of skepticism from the U.N., Iran, Turkey, Iraq and the United States. Iraqi President Haider al-Abadi is demanding a suspension to the referendum scheduled to be held on September 25, given the precarious position the region is currently in. Many are reminded of the Arab-Israeli conflicts that still impact many countries in the Middle East.

Many leaders have expressed that the referendum vote could potentially destabilize the region further, threaten Kurdish minorities and negatively affect the campaign against ISIS. Russia remains a strong ally of the Iraqi Kurds and is a major contributor to Kurdish oil and gas revenue. This will help bolster the region’s economic potential. Israel also remains another country pledging their support for the vote.

Furthermore, supporting the Iraqi Kurds’ right to establishing a sovereign state could also create safe zones and conclaves. This could effectually deal with the refugee crisis plaguing Iraq currently and help offer a more sustainable solution to the problem in the long run.

Contrary to what many entities believe, the vote could prove to be successful in ushering more progress and development, both socially and economically. It can also pave the way for improved relations in the region and put an end to the suppression of Kurds in many landlocked regions in the Middle East and finally liberate an important minority group.

-Shivani Ekkanath

Photo: Flickr

Causes of Poverty in KuwaitDespite being one of the wealthiest countries in the region, many of the citizens of Kuwait live in squalor and poverty, while their countrymen revel in the wealth of the nation. While Kuwaiti government officials deny the existence of extreme poverty in their country, and accurate data on the extent of its poverty is hard to come by, accounts coming from within the country help indicate what the causes of poverty in Kuwait are.

Kuwait has a GDP per capita of over $70,000, indicating that the roughly four million inhabitants should have plenty of wealth to support themselves, even in countries with costs of living much higher than Kuwait’s. Kuwait is also one of the most charitable countries in the Middle East and the world as a whole, according to the Charities Aid Foundation World Giving Index, with millions of dollars committed to charitable causes every year. Given these two factors, it would not be unreasonable to presume that the standard of living in Kuwait must be quite good.

However, most of this wealth appears to be consolidated in the top several percent of Kuwaiti citizens. Kuwait is a nation whose wealth is built on the back of its natural oil reserves, which comprises nearly the entirety of Kuwait’s industry. The large dips in oil prices over the past decade have begun to pressure the Kuwaiti economy, as 2015 marked its first budget deficit in decades.

There is undeniable wealth present in the country, which manifests itself in areas such as Kuwait’s excellent public infrastructure; nearly the entire country lives in an urban area and has easy access to clean water, sanitation and medicine. Yet the nation only employs just over 75 percent of its citizens, which leaves nearly one in four workers without an income to support their families. Though unemployment is just one of the causes of poverty in Kuwait, other causes are pointed to by Kuwaiti citizens themselves.

Writing in a column for the Kuwaiti Times, Thaar Al-Rasheedi talks about the divide between the wealthy and the poor, which he believes to include some 90 percent of Kuwaiti citizens. He points to the over a half million Kuwaiti who live in rented houses, and another 100,000 people who have applied for a house from the government but have yet to receive their housing. The reason for this, Al-Rasheedi points out, are the exorbitant prices on everything in Kuwait. “Salaries are high but, on the other hand, there is hardly a citizen who still has a single dinar by the 15th of each month,” Al-Rasheedi writes.

He goes on to note that many Kuwaiti are forced into “intentional poverty” for half of every month to be able to afford enough food to survive until their next paycheck. Meanwhile, the oil tycoons live comfortably off their millions and tell the rest of the world that there are no poor people in Kuwait.

Though the poor of Kuwait seem to be largely glossed over, at least by the Kuwaiti government, citizens of the nation feel it is a very real issue, and the causes of poverty in Kuwait stem largely from the extreme top-heaviness of wealth distribution in the nation.

Erik Halberg

Photo: Flickr

Oman Poverty RateThe dichotomy of the Middle East region in terms of wealth and quality of life is one that truly boggles the mind. One need not search very far to learn of the tragedies that have befallen countries like Iraq, Syria, and Libya in the 21st century. The war-torn images of these countries are sketched into the collective Western mind. Simultaneously, countries like Saudi Arabia, the UAE and Qatar are home to some of the world’s greatest cities, fabulous wealth and futuristic-looking technologies.

What often goes unnoticed are the countries that fall somewhere in the middle; ones that are not ravaged by war nor blessed with a plethora of natural resources such as oil. The Sultanate of Oman is one such example.

Poverty is a fact of life for many Middle Eastern countries, but Oman is one of the bright spots in the region in terms of poverty reduction and efforts to elevate the quality of life of its citizens. The Oman poverty rate has been on the decline in the last decade and shows signs that it will continue to do so.

Oman created a national strategy in 1970 to spur development in all aspects of life in the country. At that time, Oman had almost no formal education system; by 1999, over 70 percent of children were in primary school. Moreover, in 1970, the life expectancy at birth was near 51 years; that has increased to 78 in 2014, an almost 53 percent increase, which outpaced the world average in the same time frame by 30 percent. Oman’s poverty rate has been reduced significantly because of these improvements.

Since 2000, Oman has reached eight of its Millennium Development Goals, most notably in providing education for all, including women and children, as well as reducing the number of people suffering from extreme hunger.

Entrepreneurial activity is also on the rise in Oman, sponsored mainly by Startup Oman, a Muscat-based fund that facilitates and promotes young Omani entrepreneurs. This fund aims to reduce poverty while simultaneously encouraging creativity in the economy.

The fishing town of Duqm is being radically transformed, thanks in large part to Chinese investments, into one of the country’s central economic hubs. This has boosted employment and spurred economic activity, providing economic opportunities for Omanis.

Even amid a geopolitical spat between other Gulf countries, Omani ports are benefiting from an unusual uptick in traffic, which has resulted in increased economic activity for Omani businesses and workers. While Oman may not want to be seen as profiting from the current row, it will likely solidify its position as a neutral arbiter in regional disputes, as it has for decades. This trend, in tandem with a reduction in Oman’s poverty rate, will allow it to establish itself as a peaceful and prosperous nation in the region.

The combination of government initiatives, foreign investment and an educated population has allowed Oman to improve the lives of its citizens, which is worthy of high praise considering the situation facing other countries in the Middle East.

As long as the government continues to focus on reducing the Oman poverty rate, the Sultanate will surely establish itself as a bright spot in the Middle East.

Daniel Cavins

Photo: Flickr

Causes of Poverty in Oman
Despite Oman’s vast oil reserves, large segments of the population still suffer from poverty. The main causes of poverty in Oman are unemployment, underpayment and lack of economic diversification.

In recent months, the sultanate has received attention for reaching a number of its Millennium Development Goals. Between 1990 and 2015, Oman more than halved extreme poverty and child mortality rates, achieved universal primary school enrollment and promoted gender equality in education.

Nevertheless, thousands of migrant workers still live in poverty, and 40 percent of Oman’s own citizens remain unemployed.

Due to lax labor laws, companies in Oman are not required to pay migrant workers minimum wage. This inequality, coupled with the fact that foreigners are excluded from the 100-rial ($263) monthly allowance distributed by the Omani government, has pushed many migrants into slums. As a result, an estimated 100,000 workers in Oman live like second-class citizens.

Because migrant workers can work for less than minimum wage, many of Omani’s own citizens have a hard time finding work. Despite the sultanate’s recent achievements in primary school enrollment, many Omanis lack the higher-education skills necessary to compete with low-cost foreign labor. For these reasons, almost 40 percent of Omani nationals are unemployed.

Historically, the high unemployment rate has not weighed on Oman’s economy because oil revenues have enabled the government to distribute allowances to its citizens. Since 2014, however, global oil prices have fallen by 50 percent. With oil accounting for 46 percent of Oman’s GDP and 84 percent of government revenues, the price decrease has forced the government to tighten its budget and start taxing citizens—instead of distributing allowances.

Unless the oil market turns around or Oman begins taking serious efforts to diversify its economy, the causes of poverty in Oman may multiply and its progress toward the Millennium Development Goals may reverse. Poverty in Oman will only continue to get worse if changes are not made at a national level.

Nathaniel Sher

Poverty in Bahrain
The road to and away from poverty is rarely an uncomplicated one. Poverty in Bahrain is one such nuanced phenomenon. The country officially reports that zero percent of people live below the poverty line, and the country excels in many social and political sectors. However, impoverished people do exist in Bahrain, albeit in small numbers. The following are nine important facts about Bahrain, concerning both its causes of poverty and its successes.

  1. The Al Khalifa family created Bahrain in 1782 when they captured land from the Persians. Throughout the 19th century until independence in 1971, Bahrain existed as a British protectorate in an effort to ensure security over its lands.
  2. Sheikh Hamad came to power in 1999. In 2002 he pronounced Bahrain a constitutional monarchy, changing his status from amir to king. Now, Bahrain has one of the best political participation systems in the Persian Gulf, with a well-balanced elected parliament.
  3. Economically, the country once depended on oil reserves, but as those declined, petroleum processing and refining took on a more central role.
  4. The attempt to diversify the economy lost footing, and now oil comprises 86 percent of Bahraini budget revenues. In 2016, low oil prices generated a budget deficit of $4 billion (14 percent of the nation’s GDP).
  5. Despite economic strife, Bahrain’s unemployment rate is at a low of 5.3 percent.
  6. The causes of poverty in Bahrain have spared education. Bahrain’s education system is one of the best in the Persian Gulf, as it was the region’s first country to create a public school system and allow females into all education levels. Education is free for all children in Bahrain.
  7. Thanks to Bahrain’s outstanding education system, the literacy rate is 95.7 percent of the total population.
  8. Access to safe water and sanitation facilities is more than favorable. One hundred percent of the population has access to improved drinking water sources, and 99.2 percent of the population has access to sanitation facilities.
  9. Women’s rights in Bahrain are the most advanced in the Persian Gulf. Women have the right to run for public office, work alongside men in both the public and private sector and wear what they wish without restriction, such as wearing the veil.

If these facts say anything, it’s that a country’s poverty rate does not necessarily speak to the quality of basic human rights like education, water, sanitation, political participation and job security. A fluctuating oil industry is one of the main causes of poverty in Bahrain. However, with aluminum production, finance, construction, banking and tourism all gaining economic momentum, Bahrain may be within range of economic stability and a decrease in poverty.

Sophie Nunnally

Photo: Flickr

Yemen Poverty RateYemen is one of the poorest countries in the Arab Region and is home to ongoing civil conflict – which turned to Civil War in 2015. Of Yemen’s 26.8 million people, half of the population lives in areas directly affected by conflict. Basic services like healthcare and education are on the verge of collapse.

This unrest has taken a toll on the Yemen poverty rate. Before 2015, nearly half of Yemenis lived below the poverty line. As of 2017, the World Bank estimates that number has increased to 62 percent. Nearly 60 percent of Yemenis are food insecure. Since 2015, malnutrition has increased by 57 percent. About 14.4 million Yemenis do not have access to safe drinking water or sanitation.

As of early 2017, seven million people in Yemen were on the brink of famine. About 90 percent of Yemen’s food is imported, but it is difficult to get food into the country because there are few commercial importers willing to face the financial difficulties of doing so. The food crisis and increased Yemen poverty rate are partially driven by rising food prices and reduction in purchasing power.

Cholera is on the rise in Yemen. Cholera is a bacterial infection spread by water contaminated by feces – for most of the world, a disease that ended with modern sanitation. Today, it is still easily treatable with rehydration solutions and antibiotics. However, the government stopped paying civil servants in 2016, and sanitation strikes led to septic backups and garbage pileups that allowed the disease to spread in Yemen. The governmental healthcare system disbanded. Now, cholera has spread to 21 out of 22 of Yemen’s provinces. As of July 2017, the disease has infected at least 269,608 people and killed at least 1,614.

In January 2017, the U.N. Office for the Coordination of Humanitarian Affairs (OCHA) announced the death toll in the Yemen conflict had surpassed 10,000. The OCHA’s Jamie McGoldrick released another statement saying that up to 10 million people need “urgent assistance to protect their safety, dignity, and basic rights.”

With continuing violence and infrastructure breaking down, prospects for the Yemen poverty rate are grim. More than 70 humanitarian organizations have been working to help but are facing challenges due to lack of accessibility and poor infrastructure within the country. Lack of funds is also an issue; the U.N. appealed for $2.1 billion to assist people in Yemen, but only 7 percent of that appeal was met. For those who want to donate to humanitarian efforts, organizations like UNICEF, UNHCR, Doctors Without Borders, Oxfam and Save the Children are also doing essential work for the people of Yemen.

Hannah Seitz

Photo: Flickr

Jordan Poverty RateJordan, while small in size, is often seen as a focal point in many Middle Eastern conflicts. This, among other points of stress, has been a major contributor to the country’s economic struggles.

The Jordan poverty rate has taken some hits in recent years, with high unemployment and weak economic growth. Job growth is a particular challenge in the area. In 2016, unemployment was at 15.3 percent.

The World Bank reported that in April that there are over 650,000 Syrian refugees currently in Jordan, which has put a strain on the country’s economy.

Economic growth has slowed in recent years. In 2016, Jordan’s economic growth saw a slight decrease, from 2.4 percent in 2015 to 2 percent. The ongoing Syrian crisis and the closure of export routes to Iraq and Syria have contributed to the country’s state of minimal growth.

However, the Jordan poverty rate is expected to see improvement in the coming years. The World Bank reports that Jordan should see a 2.3 percent growth rate for 2017, and an average rate of growth of 2.6 percent between 2017 and 2019.

According to data from the World Bank, Jordan’s GDP is approximately $38.655 billion. Its population is approaching 9.5 million.

As of 2010, the poverty headcount ratio at national poverty lines was approximately 14.4 percent, according to data from the World Bank.

According to a report from the World Bank, Jordan has undergone massive reforms in respect to education, health services, privatization and liberalization.

Additionally, social protection systems and reformed subsidies have been introduced by the country’s government. While issues of investment and business exchanges are still present, these improvements have positively influenced the region’s economy and poverty rate.

Jordan’s proximity to major conflicts in the area has put a major strain on the country’s economy. However, Jordan’s government has major improvements in the works that will benefit the economy and the Jordan poverty rate.

Leah Potter

Photo: Flickr