Most Arab countries have embarked on, or are in the process of formulating, medium-term economic reform policies with an important common objective: sustaining a high level of economic growth. This objective reflects policymakers’ increasing recognition that structural changes and financial stability are needed if their economies are to (1) provide sustainable employment opportunities for the un- and underemployed, as well as for the increasing number of nationals entering the labor force; (2) progress further in improving basic social indicators; and (3) benefit from the important changes taking place in the regional and international economies.
This paper discusses the experiences of Jordan, Algeria, and Tunisia with social safety nets. Since the beginning of their developmental efforts, these countries have accorded special attention to social development, adopting strategies that were designed to ameliorate the living standards of the population, particularly low-income groups, and improve the distribution of income. Toward this end, they established elaborate and extensive schemes to provide targeted social services and transfers in cash and kind to these groups and in untargeted services to society at large.
Some of the economic benefits of the economic reform policies carried out by Egypt and several other Arab countries began to emerge a few years ago. However, these policies have also given rise to some adverse social effects, particularly for low-income groups. The comprehensiveness of reform implementation is the ultimate major determinant of economic benefits and transient disadvantages to society, namely, the aggravation of poverty and unemployment. It is even quite likely that inconsistent and slow reform could lead to the loss of expected benefits and to the emergence of negative effects.