This report aims to inform and stimulate the debate on key policy priorities for poverty reduction and food security in light of the Arab Awakening. Its findings are based on an innovative combination of datasets and rigorous economic analysis. Results suggest that poverty and income inequality in the Arab world are likely higher than official numbers have long suggested. Given that poverty indicators seem to be misleading for many countries in the region, the report introduces a new welfare measure reflecting food insecurity risks at both national and household levels to classify Arab countries into five risk groups. Regression analyses further show that, unlike in the rest of the world, manufacturing- and service sector–led growth, rather than agriculture-led growth, is most pro-poor in Arab countries. In addition, high levels of public spending in the Arab world do not do as much to stimulate growth as in other world regions, particularly in the case of education.
Three key policy recommendations emerge from this report: (1) improve data and capacity as the basis for evidence-based decisionmaking, (2) foster growth that enhances food security at national and household levels, and (3) significantly enhance the efficiency and retool the allocation of public spending. More generally, the report argues that the region urgently needs national dialogues about societies’ joint vision and economic development strategies. Successful design and implementation of these strategies will require visionary leadership, sound laws and institutions, politicians who are accountable and listen to the voices of the people, and civil society that is patient and accepts the tenets of democracy. The Arab world is awake—it is time to move forward.