Foreword

As 2023 began, hopes were high in the Arab region that the shadow of COVID-19 would finally recede, paving the way for a return to normality after the challenges of 2022. Incomes were expected to rise, and prices expected to fall.

However, this anticipated uplift in general well-being failed to materialize. Instead, 2023 was marred by a succession of crises. From the devastating earthquake in the Syrian Arab Republic to resurfacing conflicts in the Sudan and natural disasters in Morocco and Libya, the region was forced to grapple with numerous challenges. Concurrently, perennial threats such as droughts, water scarcity, conflicts, hyperinflation, and institutional instability continued to erode the fabric of societies and economies. The resulting economic slowdown exacerbated poverty while constraining Governments' capacity to provide essential services, further deepening societal divides.

These crises often intertwined, triggering a cascade of interconnected challenges known as polycrises. The impact of these polycrises has been immense. It has led to loss of life, displacement, hunger, and diminished access to health care and education becoming everyday realities for many. Notably, inequality has soared, with marginalized groups – especially the poor, young people, and women – bearing the brunt of the consequences. This vicious cycle of inequality perpetuates a cycle of multidimensional disparities, amplifying the risk of future crises.

For the people of the region, navigating the hardships thrust upon them is a daily challenge. Their resilience in the face of adversity demands attention and action. Addressing their concerns is not only a moral imperative. It is also essential for fostering stability in the region.

However, amid the chaos lies an opportunity for collective action. With the 2030 Agenda for Sustainable Development within reach, there is a pressing need for accelerated efforts to achieve the Sustainable Development Goals (SDGs). Encouragingly, recent global gatherings such as the SDG Summit, the United Nations Water Conference and Conference of the Parties (COP) meetings have laid the groundwork for progress. From bolstering financial mechanisms to tackling inequality, there is tangible momentum for change.

In seeking to bring such change about, we must recognize the symbiotic cyclical relationship between crises and inequality. In designing interventions, we must pay continuous attention to breaking this cycle and safeguarding equality during times of crisis.

In the short term, national and international actors need to prioritize immediate humanitarian aid and social assistance. These must be backed by robust preparedness measures and must operate using flexible funding mechanisms. Embracing technology and partnering with local non-governmental organizations (NGOs) can enhance the effectiveness of aid delivery, especially for vulnerable groups.

In the medium term, there is a need to implement inclusive disaster response plans and measures to promote equality, such as progressive taxation and social insurance frameworks. Importantly, long-term development finance should not be diverted during crises: this risks exacerbating inequality and hampering long-term progress.

Here, the international community has a vital role to play. By providing rapid financing and support to crisis-affected countries, we can mitigate the severity of crises and bolster global security and sustainability.

In confronting the complex web of polycrises and inequality, proactive and coordinated action is paramount. Only through solidarity and shared commitment can we build a more resilient and equitable future for the Arab region and beyond.

Executive Summary

The world is currently being affected by a combination of interlinked environmental, economic, institutional and conflict-related crises. These crises can combine to create a polycrisis: a devastating phenomenon in which interactions among individual crises generate a level of harm that surpasses the cumulative impact of each crisis alone. Polycrises pose systemic threats across various aspects of life, undermining livelihoods and social systems. They challenge both individual and collective response mechanisms, reversing previous progress and achievements in sustainable development. This undermines the implementation of the Sustainable Development Goals and exacerbates deprivation, particularly for vulnerable and marginalized groups.

This third edition of the Arab Inequality Report finds that over the past nine years, the Arab region has grappled with a mounting number of interwoven challenges. In 2023 alone, the Arab region experienced elevated food prices, inflation stress, debt stress and debt-service stress, continuously high numbers of internally displaced persons and refugees, earthquakes, floods, droughts, heatwaves, and a resurgence of conflict, war and occupation. Not all countries have been affected equally. Nor have they responded equally. Some countries affected by converging crises have subsidized food prices, strengthened institutions, and invested in disaster-risk reduction and disaster-response mechanisms which have sheltered their populations from crisis. Other countries’ responses have been less effective, leaving people poor, hungry and homeless.

Our analysis suggests a concerning trajectory. Specifically, it suggests that the Arab region is edging towards a polycrisis. We expect that the consequences of developments in 2023, including the war on Gaza, will push the region as a whole into a sustained polycrisis. If such a polycrisis materializes, it threatens to exacerbate multidimensional inequality and roll back the hard-won development gains of several decades.

This report concludes that polycrises and multidimensional inequality are linked. A higher risk of polycrisis increases the likelihood of high multidimensional inequality. This combination will undermine societal resilience and heighten the impacts of crises, amplifying the suffering of those who are already marginalized. Inequality and crises are thus mutually reinforcing: crises create and intensify inequalities, while inequality can trigger or exacerbate crises.

The report highlights a difference in fortunes between countries in the Arab region. High-income countries have the lowest levels of multidimensional inequality and the least risk exposure to crisis; this risk exposure has even fallen in recent years. By contrast, low-income countries, which encompass one quarter of the region’s population, have higher levels of multidimensional inequality and are universally at high risk of polycrisis. Further, the situation in low-income countries is deteriorating, both in terms of inequality and the risk of crisis. Middle-income countries in the region, which are home to almost two thirds of the regional population, are rapidly approaching a crisis situation. They have so far managed to contain rising multidimensional inequality. Nevertheless, there is a growing risk that the rising risk of crises will translate into growing inequality in the future.

Economic and youth inequalities and inequality in access to food are deteriorating in the Arab region. Inequality in access to technology, by contrast, appears to be on a better path. There have been massive gains in access to technology as the Arab region has become increasingly interconnected.

For several reasons, youth inequality poses a particularly tough challenge. Educational attainment among young people in the region has increased since the Sustainable Development Goals were adopted. But this has increased the disparity between young people’s qualifications and the opportunities available to them. As well as wasting young people’s potential, this also threatens to perpetuate and even exacerbate existing disparities, posing a long-term risk to overall societal equality.

Inequality also gives fuel to extremism. Young people with qualifications but no jobs are vulnerable to being lured in by extremist groups offering them a sense of dignity and recognition. Sometimes, extremist groups offer social benefits and income; in an environment where the State cannot always be relied on to provide justice, extremist groups sometimes fill the vacuum, providing people with a sense of economic fairness where the State fails to do so.

It is clear, then, that economic and youth inequalities, and inequality in access to food, and social protection in the Arab region are significant concerns. If crises are to be avoided, resources need to be allocated and inclusive policies put in place as a matter of urgency.

Like previous Arab Inequality Reports, this report does not just analyse the challenges facing countries in the Arab region. It also offers practical policy solutions for regional action and national planning, advocating for reducing inequalities between countries. Importantly, these solutions start from the premise that development planning must always, by default, take the risk of future crises into account. The report suggests reforms to the global financial architecture to benefit both low- and middle-income countries, including reforms to debt rules, special drawing rights, and the role of multilateral development banks. It also proposes increased South-South and triangular cooperation, and urgent global and regional climate-change mitigation and adaptation measures.

At national level, the report puts forward both short- and medium-term measures. In the short term, emergency and contingency policies need to be revised. Fiscal policies need to be put in place to enable fast responses to crises, and national bodies need to improve the way they coordinate their crisis response, harnessing the full potential of community-driven approaches and new technologies. Transparency in government expenditure and humanitarian aid is also central to our recommendations. In the medium term, there needs to be a focus on policies aimed at building resilience. These include policies for introducing comprehensive social insurance schemes, improving the quality of education, and supporting financial inclusion and mainstreaming climate mitigation and adaptation measures. As an overall theme, the report recommends that policies should embrace the mutually reinforcing link between humanitarian, development, and peacebuilding measures.

The most vulnerable and conflict-affected countries require highly tailored solutions. Here, the report recommends investing in mediation and peacebuilding, including security guarantees, which are the socioeconomic underpinnings of peace. Importantly, it emphasizes approaches that respect human rights and seek to avoid creating future grievances. It advocates for involving women, young people, and community leaders in peacebuilding initiatives, and increasing participation in decision-making. Lastly, the report draws attention to the value of donors using local systems for aid delivery in conflict-affected countries. When donors use local systems, it increases societal resilience and preserves human and institutional capital. It also offers better value for money.

Innovative policy solutions require funding. With this in mind, the report ends with a section on national financing. Recommendations focus on adopting progressive income, wealth, and corporate tax policies; avoiding indirect taxation; reducing the cost of remittances; embracing public-private partnerships; and addressing tax evasion and illicit financial flows. Together with the actions on international financing described above, these measures could quickly provide a substantial proportion of the resources needed to significantly reduce inequality in the Arab region.

Introduction

Socioeconomic inequality is widespread in the Arab region. But it is not a problem that exists in isolation. The disparities affecting the region are influenced greatly by regional and global events.

Various developments in 2022 and 2023 had a negative effect on the Arab region. The war in Ukraine, for example, had a significant effect on food supplies. Before the war began, the region relied heavily on grain imports from Ukraine. In 2022, a mechanism – the Black Sea Grain Initiative – was established to stabilize grain shipments. Around 13 per cent of the region’s grain was imported under the mechanism when it was in operation; when it was suspended, food prices in the region rose.

The suspension of the mechanism also affected humanitarian assistance. Before the war, Ukraine was the source of 80 per cent of the wheat distributed by the World Food Programme (WFP). Some of the leading recipients of WFP wheat – Yemen, Sudan and Somalia – are in the Arab region. Now, increased prices have reduced the amount of wheat that the WFP can afford to buy. As a result, the WFP has been forced to reduce the amount of food in the rations it supplies to some countries. In the Syrian Arab Republic, the WFP no longer provides any assistance at all to 2.5 million of the 5.5 million people who previously relied on it. It is also struggling to provide assistance to the people affected by the recent earthquake in Morocco and the floods in Libya.

Inflation remained generally high in the Arab region in 2023. There were some exceptions: despite volatile oil prices, inflation in the Gulf Cooperation Council countries remained low due to balanced monetary and fiscal policies. Elsewhere, though, inflation has remained high, particularly in countries experiencing conflict or economic (typically currency-based) challenges.

The impact of high inflation is not felt equally among households. Low- and middle-income households will experience a greater reduction in real wages and purchasing power than high-income households, whose investments may even gain in value. The situation is even more acute in countries with high debt burdens. High inflation also limits the ability of Governments to borrow further funds, either in response to a crisis or to maintain social spending.

Debt levels across the Arab region also remained relatively high in 2023, though some countries had higher levels of debt than others. In high-income Arab countries, where oil revenues support public spending, public debt averaged 31 per cent of gross domestic product (GDP). In middle-income countries, though, the average debt level was 70 per cent of GDP. In low-income countries, the average was 83 per cent. As well as having higher debt burdens, low-income countries also pay higher premiums on their debt.

In 2023, natural disasters affected several countries in the region. The Syrian Arab Republic experienced a catastrophic earthquake in February 2023, which affected 9 million people. Over 6,000 people are estimated to have died, and around 5 million people were made homeless. The ongoing conflict further exacerbated the humanitarian crisis: it complicated efforts to bring assistance to the 4.1 million people living in vulnerable communities in the north-west Syrian Arab Republic, who were already dependent on humanitarian aid.

Somalia experienced both its worst drought in 40 years and damaging floods in March 2023, which displaced thousands of people from their homes. As a result, by July 2023, 6.5 million people faced food insecurity and the incidence of waterborne diseases had increased.

Conflict in the region intensified in 2023; the affected countries became even more dependent on humanitarian support. In April 2023, an outbreak of conflict in the Sudan resulted in massive displacement. Many of the people who were forced to flee had already been displaced by previous conflicts. It was estimated that by July 2023, 2.9 million people had been displaced, either internally or to neighbouring countries.

Throughout the summer of 2023, the Arab region experienced successive and prolonged heatwaves, affecting public health, agriculture, and electricity. Maize yields fell by 5.5 per cent, and an additional 37 million people were put at risk of contracting mosquito-borne diseases.

In September 2023, more than 11,000 people died in floods in north-eastern Libya. Thousands more were displaced, and 10,000 people remain unaccounted for. The lack of national capacity to respond to the crisis made Libya heavily dependent on external support and humanitarian assistance at a time when global humanitarian aid provision was already stretched.

In October 2023, Gaza witnessed the deadliest 100 days in a major conflict in the twenty-first century. The bloodshed was accompanied by a crippling economic crash; as a result, Gaza’s economy is now smaller than it was in 2000. In the first two weeks of the war, the number of people living in multidimensional poverty jumped from 45 per cent to 96 per cent.

Escalating conflict within the region has coincided with a period where global attention is increasingly distracted and reduced by an overwhelming number of crises. Global financial circumstances, and thus aid provision, are also increasingly constrained. This shift in attention and resource allocation has manifested itself in a reduction in the amount of foreign aid made available for refugees and internally displaced persons. As a result, refugees and internally displaced persons receive less in cash transfer payments and food, and less is invested into health and education services. These factors exacerbate the compound inequalities that refugees already face.

When they occur together, slow economic growth, high inflation, high debt, climate change, conflict, war, and occupation, ineffective institutions and limited resilience often limit the capacity of Governments to respond to a crisis.

Multiple shocks have a particularly significant effect on the most vulnerable people, who tend to have fewer buffers allowing them to protect themselves or to recover from the impacts of shocks. For example, internally displaced persons and refugees who have been further affected by conflict, war or occupation will have less access to essential and life-saving services. Children are gravely affected: their access to education and continuity of learning is often interrupted, sometimes indefinitely. The gap in educational attainment that this creates has a negative impact on their future job opportunities, and increases their risk of falling into poverty. The situation is particularly acute in cases where a large proportion of children suffer from malnutrition, such as in Yemen and Somalia.

This third edition of the Arab Inequality Report examines in detail the relationship between the risk of multiple crises and multidimensional inequality. It follows the same approach as the previous two editions, which examined the challenges of youth unemployment and food insecurity in the Arab region. This report analyses the challenges posed by the multiple overlapping crises facing the Arab region, and their effect on inequality. It assesses the problem of multiple inequalities in the region from different perspectives, analysing the extent to which countries are at risk of crisis, and it examines the relationship between crises and multidimensional inequality. As always, it concludes with practical policy solutions aimed at reducing inequalities.

The five chapters of the report deal with the relationship between inequality and the risk of crises in the Arab region based on an innovative data framework (Annex 1). The introductory chapter begins with an overview of key trends, including the impact of global shifts on countries in the region.

Chapter one follows with an assessment of multidimensional inequality, using an innovative framework developed to capture data pertaining to nine types of inequality: economic, gender and youth inequalities, and inequalities in access to health, education, social protection, food, finance, and technology.

Chapter two discusses the factors that turn a set of crises into a polycrisis. The analysis describes the risk of crisis using four primary areas of risk: the climate; conflict, war and occupation; the economy; and institutions. It then assesses the degree to which Arab countries are facing overlapping crises.

Chapter three brings together the foregoing discussions on the multidimensional inequality framework and the risk of polycrisis to assess the relationship between crisis and inequality at regional, sub-regional, and national levels.

Chapter four assesses the relationship between the emerging polycrisis environment and long-term sustainable development. It presents in-depth case studies of within-country inequalities using integrated statistical and Earth observation data, public perception data, and interviews with policymakers in the Arab region. It contains a detailed analysis of the situations faced in Lebanon, Morocco, Yemen, and Bahrain. This analysis concludes that the response to short-term crises often diverts resources away from long-term development goals and environmental sustainability.

Finally, chapter five proposes policy solutions that may prove effective in an emerging era of polycrises.

Key messages

In 2022, 52 per cent of people in the Arab region believed that economic conditions were getting worse.

The Arab region is the only region in the world where poverty rates are increasing.

The richest 10 per cent of people in the Arab region hold on average 44 times as much wealth per person as the poorest 40 per cent.

After falling in the preceding decade, wealth inequality has risen sharply in the Arab region since 2020. In 2020, the aggregate proportion of wealth held by the richest 1 per cent was 43 per cent; in 2022, this rose to 44 per cent.

Wealth inequality has increased in low- and middle-income countries.

The number of people in the Arab region living in extreme poverty increased by 42 million between 2015 and 2023.

The region has 150 million people living in poverty. Of these, 85 million live in extreme poverty.

Multi-dimensional inequality has reduced in terms of access to finance, health, education and technology, and gender inequality.

Food inequality increased between 2015 and 2021 in all country groupings in the Arab region.

Youth inequality increased between 2015 and 2021 in 18 countries in the Arab region.

A brief introduction to inequality

People living in the Arab region increasingly believe that inequality is problematic, and that it is growing (figure 1). Regardless of the absolute level of inequality, negative perceptions can have a damaging effect on people’s behaviour and decision-making. Over three quarters of people in Jordan, Egypt and Lebanon report that the gap between rich and poor has grown wider in the space of just one year.

Many people in the region also believe that they are becoming worse off, which is particularly damaging to social cohesion and stability.

According to Gallup data, 2022 marked a turning point in levels of public optimism. Previously, most people in the region had expressed optimism about the economic conditions in their region. In 2015, for example, 55 per cent of survey respondents stated that economic conditions in the region were improving. But in 2022, for the first time, a majority of respondents expressed pessimistic views: 52 per cent of respondents stated that economic conditions were getting worse. The year also marked a new high in the proportion of the Arab population finding it very difficult to live on their present income (23 per cent).

Measured by income inequality alone, the Arab region is the most unequal in the world. Some of this inequality is explained by differences between countries: there is a wide gap between the high-income countries in the region and the middle-income and low-income countries.

But inequality is not just a measure of relative wealth. It encompasses multiple and overlapping forms of relative deprivation, including access to basic services and group-based discrimination. Extreme inequality between different regions and between rural and urban areas within countries remains a challenge. Rural-urban disparities continue to increase rapidly, with significant effects on equality: people living in urban areas have better access to education and health-care services than those living in rural areas. Inequalities within cities themselves are also increasing.

Any framework that analyses inequality should cover both vertical inequalities (income and wealth-based differences between individuals and households) and horizontal inequalities (group-based disparities that include gender, race, urban-rural residence, religion, and other characteristics). The remainder of this chapter describes our innovative multidimensional inequality framework that we have developed specifically for this report. The framework considers inequality across nine dimensions: economic, gender and youth inequalities, and inequalities in access to health, education, social protection, food, finance, and technology. We have identified a number of relevant indicators under each pillar, and calculated a value for each pillar at the regional, sub-regional, and national levels. The framework then aggregates all of the identified sources of inequality to create one measure of multidimensional inequality per year per country, which is also presented at the sub-regional and regional levels. (Annex 1: Measuring multidimensional inequality)

1. An overview of multidimensional inequality

Figure 2. Multidimensional inequality

Across the region as a whole, multidimensional inequality fell slightly between 2015 and 2021. This fall was driven by decreases in high- and middle-income countries (figure 2). The situation in low-income, conflict-affected, and least developed countries, however, went against the overall trend. There, multidimensional inequality, which was already at a high level, has increased further.

Figure 3 maps the changing status of multidimensional inequality in the Arab region between 2015 and 2021.

Figure 3. Mapping multidimensional inequality

Across the Arab region, the most prevalent types of inequality are youth inequality and inequalities in access to food and finance (figure 4). While inequality in access to finance is declining, youth inequality and inequality in access to food are increasing.

Figure 4:Contributors to multidimensional inequality in 2015 and 2021

2. Economic inequality

In recent decades, the world has become increasingly connected, and low-income countries have grown more prosperous. As a result, economic inequality between countries has generally been declining. The Arab region is an exception to this overall trend. Inequality between countries in the region is rising, as the prosperity of high-income countries such as the United Arab Emirates and Qatar diverges ever further from that of lower-income countries such as Somalia and Yemen.

Even in countries where prosperity has been rising, the benefits of this prosperity are increasingly unevenly distributed, leading to increased intra-country economic inequality. Here, the Arab region is no exception. The Arab region is the only region in the world where poverty rates are increasing. Between 2015 and 2023, the number of people in the region living in poverty rose from 100 million to 144 million – an increase from 28 per cent to 34 per cent of the region’s population. The number of people living in extreme poverty also doubled from 34 million people in 2015 to 76 million people in 2023, an increase from 9 per cent to 18 per cent.

In 2015, high-income Arab countries had the highest levels of economic inequality in the region. Between 2015 and 2021, this was the only group of countries to experience a fall in economic inequality (figure 5). Nevertheless, their overall level of economic inequality remains high, exceeding the regional average.

Figure 5. Economic inequality

Between 2015 and 2021, low-income Arab countries saw a notable increase in economic inequality, an increase which was driven largely by rising poverty rates. As a result, low-income Arab countries became the country group with the largest economic inequality in the region.

3. Gender inequality

Female economic and political representation in the Arab region lags behind the global average, in part because of uneven access to essential services and social norms. Our measure of gender inequality shows a slight reduction between 2015 and 2021. This reduction is reflected across all country groupings. Gender inequality is lowest in high- and middle-income countries, and is highest in low-income, conflict-affected and least developed countries.

Figure 6. Gender inequality

4. Youth inequality

Young people are one of the most disadvantaged groups in the region, and yet one of the largest population groups. There are around 110 million young people between the ages of 15 and 29 in the Arab region; they make up around 30 per cent of the population. These young people are increasingly well educated: enrolment in tertiary education, for example, increased from 31 per cent to 35 per cent between 2015 and 2021. But they are also becoming more marginalized from meaningful political and economic opportunities. This exclusion poses significant risks to social cohesion in the region.

Figure 7. Youth inequality

The youth unemployment rate in the Arab region is the highest in the world. In 2021 it stood at 26 per cent, significantly higher than the global average of 15 per cent. Young women are particularly badly affected: 42 per cent of them across the region are unemployed. Added to this, 85 per cent of the young people in the Arab region who do have jobs are informally employed. This increases their vulnerability and erodes their productive potential.

In many countries in the region, young people face increasing barriers to political participation. The average age of parliamentarians across the region is growing. Many Arab countries have parliamentarians above the age of 90. Algeria and Bahrain are exceptions: there, 46.4 per cent and 42.5 per cent respectively of Members of Parliament are below the age of 45. If young people are not included in political processes, their risk of marginalization is liable to increase.

Between 2015 and 2021, youth inequality increased across the Arab region as a whole. This increase was particularly pronounced in low-income countries. The only country grouping where youth inequality fell was high-income Arab countries. But that fall was entirely driven by Saudi Arabia, where the labour force participation of young people aged between 25 and 29 increased from just 13 per cent in 2015 to 25 per cent in 2021. Algeria also experienced a notable decrease in youth inequality, driven by a sharp decrease in the average age of parliamentarians (figure 8).

Figure 8. Youth inequality at national level

5. Inequality in access to health

Inequality in access to health can severely affect people’s ability to engage meaningfully in society and the economy. People living in poverty, for example, are less able to afford nutritious food and quality health care; this puts them at greater risk of negative health outcomes. Informal workers may be unable to gain access to health insurance, and rural populations may have less access to quality health-care services.

Health inequality has improved marginally across the Arab region as a whole since 2015, but with significant differences between country groupings (figure 9). High-income Arab countries generally have the lowest levels of health inequality, and there have been improvements in both high- and middle-income countries since 2015. In low-income, conflict-affected, and least developed Arab countries, though, health inequality continues to rise. This rise is driven by an increased risk of spending on surgical care by individuals, and by falling government expenditure on health.

Figure 9. Health inequality

6. Inequality in access to education

Inequality in access to education tends to reinforce other inequalities. It has a lifelong impact on determining a person’s social mobility. The consequences of this can be passed on along generations.

Figure 10. Inequality in access to education

In the Arab region, inequality in access to education has fallen slightly since 2015 (figure 10). This is chiefly due to government-led investments and reforms in the education sector to reduce absenteeism, train teachers, and offer a wider curriculum.

Inequality in access to education is lowest in high-income countries, and highest in least developed countries. Between 2015 and 2021, it decreased most notably in middle-income countries. This decrease is reflected across a wide number of indicators in our analysis, demonstrating a widespread commitment to improving the delivery of the education sector. Promoting equality in access to education is key to fostering social mobility and reducing many other forms of inequality. Nevertheless, improved educational equality needs to be complemented by a corresponding increase in the opportunities available to young people after they complete their education. In the Arab region, such an increase has not materialized.

7. Inequality in access to social protection

Access to social protection can make it less likely that unexpected health, employment and environmental shocks will push people and their families into poverty. It can also reduce several other forms of inequality.

There is a clear divide in equality of access to social protection across the Arab region. In high- and middle-income Arab countries, inequality in access to social protection is low, and decreasing. But it is very high and increasing, albeit minimally, in low-income, conflict-affected, and least developed countries (figure 11).

Figure 11. Inequality in access to social protection

In high- and middle-income countries, the number of people receiving a pension has increased, as has government expenditure on social protection. Nevertheless, the overall proportion of the population with access to social protection has not changed significantly. This may indicate that beneficiaries of social protection are increasingly well catered for. But at the same time, a significant proportion of the population of the Arab region still has no access to social protection.

In low-income, conflict-affected and least developed countries, all indicators associated with social protection have shown a general decline between 2015 and 2021. Alongside inequality in education, inequality in access to social protection is the joint highest source of inequality in least developed countries.

8. Inequality in access to food

Access to food is an acute and growing source of inequality in the Arab region. In 2022, 181 million people in the region – 35 per cent of the population, and an increase of 12 million people on the previous year – were living with insecure access to food. Insufficient access to food forces people and their families to expend scarce time and resources on searching for safe food to eat. This erodes their productivity and undermines their chances of attaining a high-quality education or finding decent work. Food insecurity typically affects the already vulnerable most of all. It also frequently exacerbates gender inequality: women typically spend more time searching for food. Women also tend to eat last, preferring to feed their families first, so they are particularly affected by food shortages.

Rising inequality in access to food has occurred in tandem with rising food prices. Five countries in the region saw food price inflation exceed 60 per cent in 2023, while Lebanon and the Syrian Arab Republic experienced triple-digit food price inflation at 138 per cent and 105 per cent, respectively.

Inequality in access to food is the only form of inequality that increased across every income grouping between 2015 and 2021 (figure 12).

Figure 12. Inequality in access to food

In the Arab region, inequality in access to food is particularly pronounced in low-income, conflict-affected and least developed countries. In high- and middle-income countries, inequality in access to food has been cushioned to some degree by expansive fiscal policy and government programmes.

9. Inequality in access to finance

Access to finance can be used to support entrepreneurship, wealth accumulation, and economic growth. However, without universal access to finance, these possibilities will be limited to the more fortunate.

Levels of inequality in access to finance in the Arab region are high, particularly in low-income, conflict-affected and least developed countries. Nevertheless, inequality in access to finance is falling across all country group classifications in the region (figure 13).

Figure 13. Inequality in access to finance

10. Inequality in access to technology

Advances in technology offer enormous potential in expanding service provision to previously underserved communities. For example, technology can be used to expand financial inclusion, or to provide health care remotely in areas where medical specialists are scarce. However, if not all of the population benefits from them, advances in technology can become a source of further inequality.

Figure 14. Inequality in access to technology

Inequality in access to technology varies significantly across the Arab region, although it is generally improving. In high-income countries, inequality in access to technology is very low, because their populations tend to be well connected. The very minimal increase shown in figure 14 is due to the number of mobile phone subscriptions decreasing from an average of 1.7 to 1.4 per person.

Middle-income countries and conflict-affected countries have seen a substantial decrease in inequality in access to technology as their populations have become better connected. However, in low-income and least developed countries, inequality in access to technology remains high, threatening to leave millions of people disconnected.

Key messages

Short-term crisis responses undermine long-term development investments and environmental sustainability, perpetuating cycles of vulnerability.

Polycrises have a disproportionate impact on vulnerable families, forcing them to compromise on essentials such as meals, healthcare, and education. This exacerbatesinequalities.

Poor nutrition outcomes from polycrises have lasting repercussions on health and cognitive development, perpetuating intergenerational poverty.

In 2023, the Arab region was home to 25 per cent of the global population in need of humanitarian assistance. But it received only 32 per cent of the necessary humanitarian financing. This demonstrates a significant gap in support, despite escalating needs.

After a succession of crises in 2023, the Arab region is at risk of a polycrisis.

In 2023, various crises affected the Arab region. In February2023, a series of deadly earthquakes struck the Syrian Arab Republic, killing an estimated 6,000 people and leaving up to 9 million homeless and without drinking water, electricity, or fuel for heating. In April, fighting broke out in the Sudan between the Sudanese Armed Forces and the rebel Rapid Support Forces. One yearafter the violence began, more 8.5 million people had been displaced, and the delicately negotiated transition to peace and democracy in the Sudan was under serious threat. In September, two more natural disasters hit the region: an earthquake in Morocco and floods in Libya. In Morocco, a powerful earthquake killed 2,500 people and injured a further 2,500. The earthquake flattened many remote mountain villages and left others inaccessible due to rockfalls across access roads. In Libya, Storm Daniel burst dams and caused massive flooding that killed over 11,000 people and left 10,000 unaccounted for, and is estimated to have caused $19 billion in losses to buildings and infrastructure. It destroyed critical infrastructure in a region inhabited by 884,000 people, including 353,000 children, leaving many without access to electricity or water. In October, war broke out in Gaza. The degree of death and destruction, which ensued has been unprecedented in recent times. By April 2024, over 34,000 Palestinians had been killed in Gaza, 70 per cent of them women and children. A further 75,000 had been injured. The entire population faces food insecurity, and 1.1 million people are at imminent risk of famine.

Existing threats from multi-year droughts and water scarcity, long-standing conflicts, hyperinflation, collapsed currencies, and institutional instability continue to affect societies, economies, and households in various ways. These crises have interacted to create new crises, presenting the risk of a polycrisis.

Donors’ limited financial resources are being spread increasingly thinly across a multitude of crises. At the same time, the impact of these crises, including domestic economic and political instability, has reduced donor investments to humanitarian causes.

Even where donors have stepped in, Governments have been forced to increase expenditure on humanitarian emergencies, either by reallocating funds from long-term investments to short-term emergencies or by accumulating additional debt. Either way, the risk of polycrisis has caused a shift in funding focus from long-term sustainable development to short-term emergency response. This is particularly true for low-income countries, least developed countries, and countries in conflict, which are more at risk of crisis but have fewer available resources and greater long-term sustainable development financing needs. As a result, they risk being left even further behind in their efforts to achieve the goals of the 2030 Agenda.

Similarly, low-income households have less capacity to respond to shocks. A succession of crises has trapped them in a cycle of responding to their short-term needs rather than investing in their futures. Crises make families less able to prioritize children’s access to food, education, healthcare, safety and security; this will perpetuate intergenerational inequality.

A. Humanitarian organizations’ responses to crises and inequality

The succession of crises that have affected the world in recent years have significantly increased global demand for humanitarian assistance. This was particularly true in the Arab region, which in 2023 was home to one quarter of the world population living in need of humanitarian assistance. This figure is expected to rise to 30 per cent by the end of 2024.

B. Governmental responses to crises and inequality

Governments usually act to mitigate crises when they occur, and attempt to protect the population from their impact.During the COVID-19 pandemic, for example, many Governments focused resources on developing and distributing vaccines, as well as offering unemployment insurance and support to businesses and expanding health insurance coverage.

However, the extent of national responses varied. As with all crises, high-income countries were able to quickly mobilize affordable financing and reinvest it in their economies and societies. As a result, the impact of the crisis was more short-lived, and the economic recovery was fast. In some high-income countries, large and targeted government investments during the pandemic actually contributed to technological and environmental progress in the long term.

By contrast, many low-income countries entered the pandemic after years of steady debt accumulation, leaving them little flexibility, or fiscal space, to spend money on supporting vulnerable groups. As with most crises, governmental responses in low-income countries were often limited. The impact of COVID-19 continues to be felt today, as debt burdens have increased substantially, the cost of debt has increased amid rising interest rates, and businesses have not had the support to recover, which in turn has left unemployment high. Following COVID-19, there is even less fiscal space for governments to invest in social and economic services. This has triggered a deterioration in the quality of social services, and a corresponding rise in multidimensional inequality.

To some degree, COVID-19 increased global solidarity. Policymakers around the world recognized the global nature of the pandemic and sought to present a global response. Other crises, though, have shown less of a tendency to elicit global solidarity in this way. For years, world leaders have been trying to build a consensus on a fair global response to combat the impact of climate change and reduce greenhouse gas emissions. Up to now, though, such a consensus has failed tomaterialize. Conflicts, too, tend not to attract a unified global response. The risk of being dragged into conflict themselves or having to pick a side heavily disincentivizes global, regional, and national actors from providing support aimed at ending conflicts. Elsewhere, economicand institutional crises – particularly if they are the result of mismanagement – are also unlikely to elicit significant levels of global or regional support.

In addition to reducing public revenues, growing inequality has reallocated wealth holdings from the public sector to the private sector. This reallocation of wealth has an impact on national priorities: it leaves Governments less able to invest in social services, crisis mitigation, and achieving the goals of Agenda 2030. Growing private wealth holdings result in private sector investment to the detriment of public investments. Sometimes, the effect of this is partly mitigated by philanthropy: wealthy private individuals or companies donating money to social causes. But even where this occurs, private benefactors are unlikely to have the same reach as the public sector, and may be prone to channelling their donations towards specific social groups in accordance with their own priorities, jeopardizing inclusive sustainable development.

Consecutive shocks only accelerate this vicious cycle, leaving Governments increasingly limited in their ability to mitigate the impact of shocks and invest in social services that would otherwise reduce inequalities.

Polycrises have a long-term impact. As Governments are forced to respond to crisis after crisis and the impact of compound and overlapping crises intensifies, the effectiveness of their responses declines. Furthermore, short-term responses come at the cost of long-term sustainable development. Increasing short-term spending inevitably requires either reallocating funds from long-term investments to short-term crisis response, or raising additional debt. As interest rates rise, public debt becomes increasingly expensive to maintain, particularly for countries with low levels of income or a highrisk profile. Consequently,countries can find themselves in a cycle of high debt repayments, preventing them from making social investments in the medium to longterm. High debt burdens also reduce a country’s ability to react to future crises:they limit the amount of additional debt the country’s Government can mobilizein order to respond. They also make future borrowing more expensive: countries with high debt burdens have a higher risk profile, and are thus forced to borrow at higher interest rates.

According to the World Bank (figure 28), four countries in the Arab region –Somalia, Syrian Arab Republic, Sudan, and Libya – have the lowest level of fiscal space of all countries in the world. Lebanon also sits in the bottom ten. This means that these countries have limited capacity to support long-term sustainable development, and almost no capacity to respond to an additional shock or crisis. If a crisis were to hit these countries, it would have a catastrophic impact on people’s livelihoods and on long-term sustainable development.

Figure 28. Countries’ fiscal space and exposure to risk

Short-term crisis responses frequently sideline environmental priorities, with long-term consequences for combating climate change. For example, many countries have reintroduced fuel subsidies in response to the cost-of-living crisis. This may be appreciated by many households who would struggle to afford transport, electricity and heating without it. But it is a short-term response with negative long-term repercussions. Fuel subsidies represent a large sunk cost to Governments, and a further source of pressure on fiscal budgets; they also jeopardize the transition to renewable energies and reinforce the use of fossil fuels.

C. Households’and individuals’ responses to crises and inequality

Clearly, successive crises have a long-term and negative effect on households. Between 2015 and 2023,50million people in the Arab region fell into poverty, many of them due to crisis-induced shocks. Falling incomes and rising prices limit households’ abilities to buy nutritious food, and frequently force them to defer medical treatment and deprioritize spending on education. These short-term decisions have a long-term impact on the development and lifelong earning potential of the people concerned. Certain groups tend to bear the brunt of this situation. Low-income families, women, people with disabilities, informal workers, the urban poor, refugees,and internally displaced people are particularly prone to disruptions to their quality of life during times of crisis.

Crises have a damaging impact on nutrition. Falling incomes and rising prices frequently cause individuals to skip meals or to purchase cheaper, less nutritious food, increasing the risk of malnutrition. Poor nutrition is particularly detrimental to children and pregnant women; it can have a lifetime impact on cognitive and physical development and child health. Further, in the Arab region, women tend to be the last to eat, preferring to feed their families first; they are thus more likely to suffer in terms of nutrition. The urban poor are also particularly vulnerable to falling incomes and rising prices because they have no access to farmed products or land to grow food, and so will have to quickly adjust their consumption patterns, resulting in poor nutritional outcomes.

Crises and inequality also hamper access to healthcare. Delayed check-ups, caused either by an individual’s inability to pay or by the inability of public health providers to provide services during crises, can result in health complications and a deterioration in long-term health. Interruptions to the delivery of health care can severely impair the daily mobility of people with disabilities and people who are dependent upon medication and health services, bringing long-term consequences for these individuals’ ability to work and their overall quality of life.

Education is also frequently disrupted during crises. Sometimes, this is the result of individuals finding themselves unable to pay for education. Sometimes, it is the result of Governments being unable to invest in education, leading toa fall in quality. In some cases, displaced individuals no longer have access to schools. In other cases, household economic circumstances mean that children (frequently girls) are forced to drop out of school to generate income to support their families. Regardless of the reason behind it, foregone education has a permanent impact on children’s earning potential and the employment opportunities available to them.

Crises typically widen the gap between low- and high-paid workers, and between formal and informal workers. Low-paid, informal workers are less likely to have flexible working arrangements, and less access to social protection and employment protection. They are also more likely to be made unemployed during a crisis. Already the most vulnerable workers, they are likely to be the hardest hit by drops in income. Prolonged periods of unemployment will only exacerbate the exclusion they face: the accompanying loss of skills will further diminish their low human capital, making it even harder for them to find decent employment in the future.

Crises can also exacerbate technological inequality. The COVID-19 pandemic brought about a shift towards the increased use of digital technology. This included a transformation in the delivery of social protection provision, which began to be administered electronically rather than physically. This promises great efficiency gains and better targeting. But it also threatens to exclude people such as informal workers who are not recorded in systems, and people with limited access to digital technology. In this way, marginalized people risk being further left behind.

Refugees and internally displaced people are particularly affected by crises. During times of crisis, they face disrupted access to food, education, healthcare, shelter, safety, employment, and other necessities. The services provided to them when they settle temporarily are frequently overcrowded and of poor quality. Also, safety is often not guaranteed. As a result, women and girls often face overlapping inequalities: their access to school or health facilities may be hampered because of safety concerns.

Crises can thus have serious long-term consequences on multidimensional inequality, especially for vulnerable groups. These consequences can accompany individuals throughout their lives and be passed on to future generations.

Figure 29. People in need of humanitarian assistance in the Arab region

Crisis after crisis has reduced the resources available for humanitarian assistance and caused countries to change their financing priorities, often to the detriment of global humanitarian support. As a result, an increasing number of people in need are not being reached, disadvantaging them further and deepening inequality. Thus begins a vicious circle: as disadvantage becomes widespread and inequality rises, the risk of polycrisis and the need for future humanitarian assistance will only grow.

As Figure 29shows, the number of people in need of humanitarian assistance in the Arab region increased significantly during the years of our analysis. Since 2021, the number of people in need of humanitarian assistance has continued to grow, reaching 93 million in 2023.The figure also shows that the provision of humanitarian aid has failed to keep up with growing demand, as the number of people in need who have not been targeted for assistance has grown steadily, reaching a high of 25 million in 2022.In 2024, the number of people in need of humanitarian aid who have not been targeted for assistance is expected to increase further to 29 million.

Figure 30. Financial requirements for humanitarian assistance in the Arab region

Where people in need are not being targeted for humanitarian assistance, this is most often due to financial constraints. Figure 30 illustrates how financial requirements for humanitarian assistance in the Arab region have grown steadily since 2015, reaching $22.9 billion in 2023.Yet much of this financing was never received. In 2015, exactly half of the required financing was received; this fell to 32 per centin 2023. This has obvious long-term implications for the people who are excluded. It also has long-term implications for humanitarian organizations, as their credibility and effectiveness are diminished.

A. Lebanon: soaring inequality

Lebanon is currently in the clutch of severe and overlapping crises. These crises came to a head in October 2019, when large numbers of people protested against measures that had recently been proposed by the Lebanese Government amid rising unemployment and inflation, including a tax on WhatsApp calls and capital controls on customers accessing their dollar-denominated savings. The protesters sought to achieve far-reaching political change, including improved respect for civil and social rights and accountability for government corruption and mismanagement.

Soon afterwards, Lebanon fell into an economic and financial crisis described by the World Bank as one of the worst economic crises globally since the mid-nineteenth century. Between 2019 and 2021, per capita GDP fell by 37 per cent. Inflation has steadily risen, peaking at 171 per cent in 2022, and the Lebanese pound has lost over 90 per cent of its value since 2019.

Figure 31. Risk of polycrisis and multidimensional inequality in Lebanon (2015-2021)

At the same time, Lebanon is experiencing a refugee crisis. It is currently hosting about 1.5 million Syrian refugees, which makes it the largest host of refugees per capita in the world. Over one quarter of people living in Lebanon are refugees. Refugee inflows can support economic growth, but in the case of Lebanon, there are insufficient resources and opportunities to accommodate the refugee population, who now face acute vulnerabilities, extreme poverty (estimated to affect 90 per cent of refugees despite support from the Office of the United Nations High Commissioner for Refugees (UNHCR)), and limitations on access to food, healthcare, education and other basic services. The impact of COVID-19 and the Beirut port explosion have only exacerbated the crises and inequalities that the country faces. By 2021, the compound impact of these crises had led to 74 per cent of the population living in poverty.

In 2015, the risk of polycrisis and the extent of multidimensional inequality in Lebanon were both medium, similar to Algeria and Jordan. However, by 2021, the risk of polycrisis and extent of multidimensional inequality had both risen substantially. Lebanon became the only non-conflict country in the region to be at high risk of polycrisis.

The increasing risk of polycrisis in Lebanon was driven by an increasing risk of economic and climate crises. At the same time, the risk of an institutional crisis remained high. Meanwhile, multidimensional inequality increased between 2015 and 2021. The only forms of inequality that have fallen consistently over these years were gender inequality and health inequality. Youth inequality also fell during the same period – although we expect it to have increased since 2021 given the shrinking opportunities available to young people. Access to food, finance, technology, and economic equality all deteriorated significantly, while access to education and social protection remained limited. Figure 32 shows the overall impact this had on multidimensional inequality.

Gender inequality improved between 2015 and 2021 as the proportion of women employed or looking for work increased. Female labour force participation, although relatively low, improved from 26 per cent in 2015 to 28 per cent in 2021. The proportion of seats in parliament held by women almost doubled, albeit from just 3 per cent to 5 per cent. However, while women’s participation in the labour force and representation in parliament have improved, equality with men remains a distant prospect.

The interlocking crises in Lebanon have triggered rising inequality in multiple forms. Access to social protection and to education remain the largest sources of inequality in Lebanon; this was already the case in 2015, but the situation has grown more acute since then. Over the same period, Lebanon has experienced significant increases in inequality in access to food and finance.

Figure 32. Multidimensional inequality in Lebanon

Access to social protection was the greatest source of inequality facing Lebanon in 2015; this remained the case in 2021. The severity of inequality in access to social protection increased between 2015 and 2021: the proportion of the population who were able to access at least one social protection benefit more than halved.

Before the financial crisis, the social protection system in Lebanon was highly regressive. It prioritized social insurance (contributory based schemes that are frequently dependent upon employment, for example pensions, unemployment insurance, and health insurance in the form of pensions for public sector workers, who constituted 2 per cent of the population but received 93 per cent of social spending. Unemployment and informal working have risen during the crisis, but the social insurance has not been adapted to reflect this.

There has been some improvement in social assistance (non-contributory schemes that target acutely deprived households, for example cash transfers, food vouchers, and disability allowances), driven in part by the severity of the interlocking financial, economic and institutional crises facing Lebanon and the consequent increased vulnerability of the population. In 2021, as the financial crisis deepened, the Government developed the country’s first social registry, and quickly began registering beneficiaries. Within two months, 60 per cent of the Lebanese population had registered on the electronic DAEM platform, and by May 2023, 145,000 households were receiving regular monthly cash transfers. More recently, in April 2023, the Government launched the National Disability Allowance, the country’s first such scheme. This further expanded the pool of beneficiaries of social assistance.

The improvements of recent years are notable. Nevertheless, the country’s social assistance system is entirely financed by external donors. The crisis has eroded the Government’s capacity to finance any social assistance system on its own; this severely jeopardizes the sustainability of the schemes it funds. At the same time, the minimal availability of social insurance endangers the middleclass and risks pushing them into poverty, where they instead seek out donor-funded social assistance programmes.

Access to education is the second largest source of inequality in Lebanon; it deteriorated between 2015 and 2021. People in Lebanon are increasingly dissatisfied with the quality of education provided in schools (figure 33). In 2015, most people in Lebanon (74 per cent) were satisfied with the country’s education system. By 2022, 59 per cent of the population were dissatisfied with the education system, and 72 per cent of the population believed that children did not have the opportunity to learn and grow.

Figure 33. In the city or area where you live, are you satisfied or dissatisfied with the educational system?

In 2019, widespread protests caused schools to close as teachers and students were unable to safely gain access to school buildings. Soon after schools reopened, COVID-19 caused schools to close again. During the pandemic, many schools began to make use of online teaching. This increased inequalities between those children who had access to computers, reliable internet and a comfortable home environment to learn, and those who did not. COVID-19 has exacerbated inequalities by severely limiting access to education for children from more vulnerable households, while having a negligible impact on children from more fortunate households. Also in 2020, the Beirut port explosion damaged 178 public and private schools in Beirut (including91 public, 70 private, and 2 UNRWA schools), and displaced and traumatized thousands of children. Even after the explosion, Beirut residents had better access to quality education than those living elsewhere in the country. Publicly funded schools and UNRWA schools that serve Palestinian refugees have markedly higher student-to-teacher ratios than other schools, limiting the attention any student can receive. These ratios are particularly high in the Akkar, Baalbek, and Bekaa Governorates.

At the same time, the devaluation of the currency owing to the financial crisis had an impact on the value of public school teachers’ salaries. This led to a teachers’ strike in 2021, which again interrupted the delivery of education, particularly for less fortunate children. The financial crisishas also affected parents’ ability to pay for their children’s education. Lebanese children have been dropping out of school in large numbers to find work to support their families. Enrolment in education dropped from 60 per cent of young people in 2020/2021 to just 43 per cent in 2021/2022; in 2022, 40 per cent of young people said they or their families had reduced spending on education to pay for food, medicine or other essentials. Children who drop out of school to find work are unlikely to find meaningful employment opportunities and are instead likely to find themselves trapped in low-paid informal jobs, with little opportunity of career progression. This situation widens and entrenches the passing-down of inequalities across generations: parents’educational attainment levels are strongly correlated with their children’s educational outcomes. In Lebanon, 25 per cent of children – 15 per cent of girls, and 35 per cent of boys – born to parentswith less than a primary-school level of education will also not progress beyond the primary-school level. Only 30 per cent of children born to parents with less than a primary-school level of education will progress to tertiary education (46 per cent of girls and 22 per cent of boys). By contrast, if a parent has completed tertiary education, then there is a 0 per cent chance that their child will not progress beyond primary education, and a 98 per cent chance that their child will also progress to tertiary education.

Rising inequality in access to food and finance is a growing threat to Lebanon. These two forms of inequality worsened significantly between 2015 and 2021. Lebanon entered onto the World Food Programme’s list of hunger hotspots in 2021, triggered by the impact of the overlapping economic and institutional crises, and exacerbated by the pandemic. By 2021, 37 per cent of people in Lebanon were living infood insecurity (compared with 15 per cent in 2015), while 11 per cent were undernourished (6 per cent in 2015). The collapse of the currency and a triple-digit inflation rate plunged the majority of the population into poverty and made food unaffordable for many. At the same time, the Government reversed food and fuel subsidies due to an inability to pay. This further heightened food price inflation – which reached 228 per cent in April 2021 – and food insecurity.

In 2015, Lebanon had the second-highest level of financial inclusion among middle-income Arab countries. But as the financial crisis took hold, strict capital controls were introduced to the formal financial system. People sought to circumvent these controls by resorting toinformal banking. As a consequence, by 2021, the level of financial inclusion in Lebanon had become the second lowest among middle-income Arab countries. By 2021, only 21 per cent of Lebanese adults had a formal account at a financial institution (compared with 47 per cent in 2015). The value of savings in local currency was eroded by hyperinflation. And because of capital controls, savings in foreign currency cannot be accessed. As a result, mostpeople in Lebanon are unable to save or invest. This has increased economic inequality and made it impossible for many people in the country to finance emergency health care and education.

B. Morocco: deliberate policies to reduce inequalities

In 2015, Morocco was one of the three countries inthe Arab region which were least at risk of polycrisis. The country’s risk level was comparable to that of high-income countries. By 2021, it had increased slightly, driven by an increased risk of climate crisis, but it remained relatively low (figure 34).

Over the same time, under deliberate and targeted policies, multidimensional inequality in Morocco decreased substantially (figure 35).Only two forms of inequalityincreased between 2015 and 2021: inequality in access to food, which is probably linked to the risk of climate change, and youth inequality, reflecting a regional trend. There are numerous examples of the Government’s commitment to reduce inequality across multiple sectors, including the rural-urban divide, access to health and education, and gender equality.

Figure 34. Risk of polycrisis and multidimensional inequality in Morocco (2015-2021)

Figure 35. Multidimensional inequality in Morocco

In 2015, economic inequality and inequality in access to education were the most significant forms of inequality facing Morocco. Education is a fundamental driver of social mobility; educational inequality therefore has the potential to entrench inequality throughout the population and across generations. Between 2015 and 2021, Morocco put in place several targeted policies intended to deliver universal access to education.

In 2019, the Parliament of Morocco enacted a law which put the provisions of the2015-2030 Education Strategic Vision of Reform into legislation. This law has been hailed as pivotal in reducing inequalities in access to education in Morocco. Under the law, an additional 200,000 teachers will be recruited and trained. The compulsory school starting age was reduced from 6 to 4 years, and the minimum school leaving age was raised to 16 years. Steps were taken to facilitate access to vocational education, and measures were put in place to bridge the quality gap between private and public schools, which is perceived as a key source of educational inequality in Morocco.

These policies resulted in a steady increase in the number of schools in both rural and urban areas. Between2009 and 2019, the number of schools in Morocco grew by 15 per cent; by 2019, there were 5,038 urban schools and 5,994 rural schools in the country. The Government’s education budget also grew commensurately.

By 2021, there was more improvement in access to education than in any other area of inequality in our framework. Progress was driven by improvements across the board in secondary school completion rates, literacy rates and the number of adolescents out of school, and by an increase in government expenditure on education.

Economic inequality also decreased, albeit minimally, between 2015 and 2021. This decrease was partly the result of improvements to the tax system to increase efficiency, sustainability and equality. The country’s 2021 Finance Bill and its New Development Model were both intended to bring about a fair and balanced tax system which ensured fiscal sustainability and provided resources for socio-economic development, while still enabling high private-sector-led economic growth.In particular, the New Development Model focuses on broadening the tax base by combating tax evasion and by fairly taxing the wider private sector, ensuring that public expenditure is efficient in delivering economic development, social inclusion and social cohesion.

In 2022, because of the reforms made to its tax system, Morocco was among the top five improvers globally in Oxfam’s Commitment to Reducing Inequality Index. It rose by 116 positions to be the world’s best performer in equality-enhancing tax performance.

The risk of inequality in access to food has increased in Morocco since 2015. This increase is probably connected to the increasing risk posed by climate change, a risk which is acutely felt in Morocco.

Increases in both food insecurity and undernutrition meant that inequality in access to food increased between 2015 and 2021. Paradoxically, the country’s fruit and vegetable exports also increased over the same period (figure 36).

Figure 36. Growing agricultural exports and food insecurity in Morocco

This paradox is explained by inequality in food systems. Large farms have been able to adopt new technologies and practices and export their products to global markets. But small farmers in rural communities have been unable to invest in new systems and processes, presenting them with challenges in feeding their local communities. Further, as the impact of climate change has reduced their yields, small farmers’ ability to invest in their land has deteriorated, and inequality between farmers has widened. For the most remote and excluded farmers, many of the mechanisms immediately available to respond to a crisis have a negative effect on their long-term prospects. For example, selling livestock during a drought to purchase food for their family deprives farmers of the potential future income generated from the livestock.

The Government of Morocco has enacted many adaptation and mitigation measures to limit the impact of climate change on the economy and on the most vulnerable populations. These include advanced early warning systems to prepare for extreme weather events, anda second strategic plan for agriculture, “Generation Green 2020-2030”. Under this plan, 400,000 agricultural households will be brought into the middle class, support will be provided to young entrepreneurs, and 350,000 jobs will be created in high-value agriculture.

The Government is also putting policies in place to promote renewable energy from solar, wind and hydropower. By 2030, Morocco aims to generate 52 per cent of its electricity from renewable sources and to reduce greenhouse gas emissions by 42 per cent, supported in part by one of the largest solar power projects in the world, the Noor Power Station in Ouarzazate. As well as reducing emissions, these projects will also provide jobs for rural populations and improve access to energy for the previously excluded.

C. Yemen: inequality intertwined with crises

In 2015, Yemen was at high risk of polycrisis and had a high level of multidimensional inequality. By 2021, both of these had increased substantially.

By 2021, no country in the region was at greater risk of polycrisis than Yemen. Only one country, Somalia, had a higher level of multidimensional inequality (figure 37). Yemen is a clear example of how the risk of polycrisis can take hold of a nation as mutually reinforcing risks overlap, with a devastating impact on inequality.

Figure 37. Risk of polycrisis and multidimensional inequality in Yemen (2015-2021)

Nine years of civil war have eroded internal institutional capacity and caused an enormous economic decline. Since the start of the war, the economy of Yemen has halved in size as a result of movement restrictions, infrastructure destruction and widespread violence, which have brought a halt to economic activity. The war increased the risks of economic and institutional crises. But conversely, these risks also increased the risk of war: they impaired the functioning of institutions, making it more difficult for them to serve the population. As a result, desperation among the population increased, increasing military recruitment and increasing the intensity of war.

Yemen is also highly vulnerable to climate change. Rising temperatures and decreasing precipitation have increased the incidence of droughts and desertification. Desertification alone is estimated to reduce the available agricultural land area in Yemen by between 3 and 5 per centeach year, directly contributing to food insecurity. At the same time, the rising impact of climate change is triggering internal displacement, hunger and poverty, which fuel grievances and increase the risk of war and economic collapse.

In Yemen, war, economic and institutional crises and climate change are all reinforcing each other to devastating effect. As a result, Yemen faces one of the most severe humanitarian crises in the world. Two thirds of the country’s population – 22 million people are in need of humanitarian assistance, including 11 million children. The World Food Programme has described the country as a hunger hotspot “of very high concern” owing to the overlapping economic crisis and insecurity. One person in seven has been displaced – a total of 4.5 million people. Many of these people have been displaced more than once. One quarter of displaced households are female headed, and one fifth of these are headed by a woman under the age of 18.

Yemen has the highest levels of gender inequality and inequality in access to social protection and finance in the region. Economic and youth inequality are rising, as are inequalities in access to education, social protection and technology. Inequality in access to food has risen particularly sharply since 2015 (figure 38).

Figure 38. Multidimensional inequality in Yemen

As with the risk of polycrisis, all of these sources of inequality feed into each other. Increasingly unequal access to education, driven by increasing numbers of untrained teachers and adolescents out of school, will trap children into a cycle of poverty where they cannot afford access to health, food, finance, or technology.As their potential productivity declines, they will be left even further behind. Economic inequality will widen, and the vicious cycle of increasing and overlapping inequalities will continue. Rising levels of youth inequality, caused by a lack of opportunities available to young people, will only exacerbate this trend. As the productivity of the population declines, the Government, which is already preoccupied with a polycrisis, will have even fewer resources available to provide social protection to an increasingly needy population.

Children (box 16) and women (box 17) are being hit particularly hard by the impact of the polycrisis on inequality. Yemeni children and women are among the most malnourished in the world. Around 1.3 million pregnant or breastfeeding women and 2.2 million children under the age of five require treatment for acute malnutrition.

The multiple crises affecting Yemen have deepened existing gender inequalities, including participation in economic and political activity. Yemen is one of the only countries in the world that has no women in its parliament.

In 2015, 29 per cent of people in Yemen lived in extreme poverty. Since then, poverty has increased further. By 2023, as a result of a loss of job opportunities, productivity and investment in the country, 75 per cent of people in Yemen were living onless than $2.10 per day. Poverty does not affect all people equally: wealth inequality has grown in line with poverty to make Yemen the third most unequal in wealth distribution in the region.

When poverty rises, the need for social protection rises significantly. It also becomes harder for governments to provide social protection. In Yemen, the overlapping risks of war and climate change and an economic and institutional crisis have left theGovernment with minimal resources to respond to multiple crises and protect vulnerable groups. The impact of this was evident in the Government’s response to COVID-19. The Government was only able toimplement four policy measures to support the population. The value of these measuresamounted to only 0.2 per cent of the country’s GDP. The destruction of infrastructure during war and high numbers of internally displaced persons furthercomplicate the delivery of social protection.

Many humanitarian organizations have increased their presence in Yemen to bridge the social protection gap. But these organizations too have seen their efforts hampered by destroyed infrastructure and restrictions imposed on humanitarian activities.Female humanitarian workers, for example, have been prevented from working. This has particularly hamperedthe provision of services to other women and girls. The closure of roads around Taizz, the country’s third-largest city, has made it more difficult to provide aid to residents who are already experiencing severe shortages of food, medicine, and essential goods.

Figure 39. Have there been times in the past 12 months when you did not have enough money to buy food that you or your family needed?

Thepoly crisis, gender inequality and inequalities in access to social protection have had a disastrous combined effect on equality in access to food. More than half of people in Yemen – 17 million people are living with food insecurity. Of these, 6 million people are living with severe food insecurity.

Poverty and high food prices, exacerbated by the war in Ukraine, have rendered food unaffordable for the majority of the population. Before 2022, over one third of Yemen’s wheat imports came from the Russian Federation and Ukraine. By the end of that year, over seven in ten people in Yemen reported that they had been unable to afford food on at least one occasion in the past 12 months (figure 39).

A significant proportion of the Yemeni population relies on remittances –money sent by migrant workers to their families in their home country. Since the COVID-19 pandemic, the value of remittances has been falling.

Food security in Yemen has been exacerbated by various other factors. For example, the ability of humanitarian organizations to provide food effectively has been hampered by funding shortfalls and government-imposed restrictions. As a result, the WFP expects that unless additional funding is made available, it will be forced in 2024 to cut the food rations it provides to 4.4 million people in Yemen. Dry conditions in the summer of 2023 further exacerbated the food stress experienced by the Yemeni population.

D. Bahrain: falling inequalities, but growing risks

Bahrain stands out as an anomaly in the Arab region, exhibiting a unique combination of achievements and challenges in reducing inequality. Although it is one of the highest-income countries in the region, Bahrain has consistently been at moderate risk of polycrisis. This risk has increased over time. Remarkably, though, Bahrain has managed to significantly reduce inequality in various areas, particularly in access to social protection and education and in gender equality.

Figure 40. Risk of polycrisis and multidimensional inequality in Bahrain (2015-2021)

Figure 41. Multidimensional inequality in Bahrain

One of the notable successes of Bahrain lies in its comprehensive social protection system, supported by oil revenue. Under this system, all citizens receive free healthcare and education. They are also eligible for fuel and food subsidies, pensions, and unemployment insurance. During the pandemic, vulnerable migrants were even integrated into national social insurance programmes. In 2021, approximately 75per cent of people above retirement age were receiving a pension.

Despite these advancements, there remains room for improvement, especially in achieving greater gender equality and addressing emerging sources of inequality such as access to technology.

Between 2015 and 2021, Bahrain has made strides in gender equality: the proportion of seats in Parliament held by women has doubled from 8per cent to 15per cent, female unemployment has decreased, and the adolescent birth rate has fallenfrom 15 to 9 births per 1,000 women aged 15-19. Bahrain has been one of the top improvers in the Global Gender Gap Index, with significant enhancements in women’s economic and political participation. Since 2021, Bahrain has continued to achieve improvements in gender equality, with women’s average income doubling from $18,000 in 2022 to $36,000 in 2023. However, despite these improvements, the average woman’s income remains less than two thirds of that of a man.

Bahrain is still confronted by a number of challenges, particularly regarding youth inequality.

Despite wide-ranging government policies, only two fifths of young people – approximately half of all young men and a quarter of all young women – are part of the labour force. Among these two fifths of young people, unemployment is rising, from 5.5per cent to 7.2 per centbetween 2015 and 2021. Gender inequality persists in youth employment: the unemployment rate of young womenis 14.4 per cent, compared to 3.3 per centfor young men.

A lack of formal employment opportunities has pushed many young people into the informal sector, which currently employs one third of the labour force. People in informal employment are paid less than their counterparts in formal employment, and have less access to insurance, leaving them more vulnerable to unexpected events. This cements existing inequalities.

If Bahrain is to maintain its achievements in reducing inequalities, the successful inclusion of young people will be crucial. However, the country's growing debt poses a significant threat to sustainability. Between 2015 and 2021, the country's debt burden increased from 66 per cent to 127 per cent of GDP, with an estimated debt burden of 121 per cent of GDP in 2023.

High debt is frequently associated with growing debt service interest rates and, consequently, higher interest payments, reducing the Government's capacity to invest in social services. Investments in infrastructure, including addressing a housing shortage for low- and middle-income households, have contributed positively to reducing inequalities in housing access. However, the long-term viability of these investments is uncertain, with high debt potentially hampering economic growth and private sector development. This in turn jeopardizes the creation of jobs, which is essential for youth inclusion.

The rapid expansion of pension coverage in Bahrain has been impressive. But questions remain about the overall sustainability of the country’s pension system. Without reform, Bahrain is at risk of depleting its pension funds by 2030, exacerbating inequality and threatening the wellbeing of vulnerable groups.

Bahrain has made significant steps towards reducing inequality. The country’s journey is marked by remarkable achievements tempered by persistent challenges and looming risks. Sustainable progress will require continued efforts to address emerging sources of inequality, ensure fiscal sustainability, and safeguard the well-being of all segments of society.

A. Principles for effective policy solutions

The new era of multiple crises that the Arab region faces requires policies to be put in place that reflect the urgency and depth of the challenge these crises present. Care needs to be taken to ensure that Governments are not trapped in an endless process of short-term policymaking which prevents them from delivering sustainable long-term development.

There is a mutually reinforcing relationship between the risk of polycrisis and multidimensional inequality. This section of the report puts forward a series of coordinated policy recommendations aimed at breaking the relationship and protecting equality in times of crisis. All of the proposed policy solutions should take the following key principles into account.

The following section of the report sets out policy recommendations aimed at protecting equality in times of crisis. The proposals are divided into four categories: (i) reducing inequalities between countries in the Arab region, (ii) reducing inequalities within countries, (iii) tailored policies for countries in special situations, and (iv) financing to reduce inequalities.

B. Reducing inequalities between countries

C. Reducing inequalities within countries

1. Emergency policy solutions

D. Tailored policies for countries in special situations

Conflict-affected and least developed countries require tailored policies that take into account the heightened risk of polycrisis that they face, and the elevated level of multidimensional inequality thattheir populations experience. Conflicts often generate spillover effects that go beyond national borders. Addressing the root causes of conflict, war and occupation will therefore foster sustainable development and stability internationally as well as locally.

When delivered by a single donor, development aid appears to curtail corruption, boost public opinion, and reduce conflict. But under donor fragmentation, the benefits of aid are significantly reduced.

Becker Friedman Institute

E. Financing mechanisms at national level