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Public sector reform ready to take off in MENA

World bank official talks of new trends in region

After years of talking about public sector reform but doing little to push the process forward, change may be on the way in the Arab world. Three important new trends in public sector governance have started to make themselves felt throughout parts of the Middle East and North Africa, according to a senior World Bank official working on governance issues in the region.

In an interview with The Daily Star and in comments at a recent presentation at a public sector reform conference in Jordan, Robert P. Beschel, Jr. said that the three new trends could be grouped under the headings of recognition, legitimacy and self-confidence.

Beschel, the lead public sector specialist of the social and economic development group in the World Bank's Middle East and North Africa (MENA) vice presidency, said that a series of recent and ongoing meetings on MENA reform agendas are useful steps in a growing dialogue on the reform issue, perhaps even signaling the start of a new phase of closer cooperation on this matter between Arab and Western governments.

"In general, we are seeing more coordination and discussion, though this is not all new. If one moves away from the sweeping rhetoric of reform articulated by U.S. President George W. Bush and others, and the response to it in various Arab capitals, and looks at the nuts and bolts of institutional development, there has long been close coordination between many Arab governments and the West on various aspects of reform," he said.

Jordan's reforms, for example, have benefited from the extensive involvement of British consultants in many phases of their design, as is true with the French in Morocco and a host of donors in Yemen, he noted, with the countries of the Gulf being a particular case in point.

"My own view is that we are seeing at least three important dynamics coalesce. The first is a growing recognition and acknowledgement that there are problems of governance in the region. The 1990s was an extraordinarily rich period for the global governance agenda, with major developments along a wide variety of fronts. Many of these trends were felt only distantly or not at all in MENA. Now this is changing."

He notes that in comparison with other regions of the world, the Middle East and North Africa fares well in terms of political stability and e-governance, and fair in terms of facilitating private sector development, service delivery and anti-corruption, though there are wide variations among countries. The MENA region as a whole fares worse than the rest of the world on issues of decentralization, public voice, accountability, and participation.

Second, Beschel said, "there is a growing acknowledgement among many regional governments that the topic of reform is a legitimate one for public discourse and debate. Governance is a sensitive topic, and many regional countries were among the most reticent to discuss it. Several still are. Yet the taboo has been broken, and now both representatives from civil society and civil servants are talking about the need for major reforms."

The third new and refreshing trend, he says, is that "we are seeing a new self-confidence among the more dynamic Arab countries. There is much less sensitivity about where good administrative reform ideas come from and if their paternity makes them suspect, but rather a healthy sense of looking for examples of promising practice wherever they can be found, and adopting them accordingly to local conditions."

He says that the most successful developing countries, such as Japan, have a genius for the relentless importation of foreign concepts and practices - which are subsequently modified, adopted to local circumstances, and occasionally extended - all the while retaining their unique social and cultural values. Something of this sort is happening in parts of the Arab world, he suggests.

He believes that some of the recent gatherings to discuss reform, such as the Dead Sea forum in Jordan to launch a public sector reform initiative - jointly managed by Arab countries, the Organization for Economic Security and Development (OECD), and the United Nations Development Programme - mark "an interesting and welcome turn away from general statements to the nuts and bolts of institutional reform."

He cautions, however, that there may be less than meets the eye in some of the ongoing reform meetings, because some governments see the term "governance" as "vague and amorphous enough that it can be adopted to mean whatever one wants." Some North African governments, for example, can thus spend a great deal of time discussing their legitimate achievements in the area of cost-effective service delivery, while politely ignoring issues of voice and accountability. Others in the Levant can discuss their dynamic civil society, without addressing problems of a dysfunctional civil service.

Decentralization, one common measure of public sector reform, is a process that has moved slowly in the MENA region. Compiled data from seven MENA countries shows that their local government expenditures are just 3.3 percent of gross domestic product (GDP), compared to 4.6 percent for all developing countries and 12.7 percent in the OECD states.

The 15 MENA countries ranked low compared to other world regions in the "index of governance quality," measuring in the negative in the index, and below non-MENA developing countries, East Asia, Latin America and Central Europe.

In terms of using e-government, the MENA region ranked 1.76, compared to the global index rank of 1.62. The U.A.E. was the highest Arab country at 2.17, and Algeria the lowest at 1.27 (Lebanon was 2, Egypt 1.73, Jordan 1.75, Saudi Arabia 1.86, and Israel 2.26).

Beschel and his team at the World Bank have identified three broad reform priorities. The first is the overall size of public sector in many MENA countries, whether viewed both in terms of per capita population or as an overall proportion of the labor force, or the fiscal impact of the wage bill upon government budgets.

"MENA has the largest state employment of any developing region in the world," he said. "Unfortunately, many MENA countries also have high unemployment rates, which makes it very difficult to address this problem."

The MENA region ranks highest in the developing world in terms of general government employment, central government employment (3 percent of population), largest military (not counting other security personnel), and central government wages (over 10 percent of GDP).

A second a more tractable problem, provided that the political will to tackle it exists, is the relative underdevelopment of checks and balances upon executive power. Beschel said these include both external mechanisms (parliamentary public accounts committees, civil society and nongovernmental organizations) and internal accountability mechanisms (internal audit, independent anticorruption commissions, ombudsmen, etc.).

This factor, he suggests, is related to the third problem - the need to enshrine the rule of law.

"Many Arab countries have solid legal frameworks, but they do not always apply to everyone. Personal and tribal connections - and, of course, wasta - occasionally mean more than the formal legal and regulatory structure," he said.

Beirut,16May2005
Rami G. Khoury
The Daily Star


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