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Mexico & Central America
‘Sembrando Vida’, Illicit Crop Cultivation and Rural Violence in Mexico
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Middle East & North Africa
Gendered Impact of Austerity Measures on Public Services in Tunisia
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- Source: Based on data from table A7 from Maddison, Angus. Contours of the world economy, 1-2003 AD: Essays in macro-economic history. Oxford: Oxford University Press, 2007.
- Source: World Bank Data, “External balance on goods and services (% of GDP) – Middle East & North Africa (excluding high income)
- Source: Author calculations based on figures from: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD
- *Oil exporting countries: Algeria, Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, Libya, UAE.
- **Oil importing countries: Egypt, Tunisia, Morocco, Syria, Sudan
- ***Excluded West bank and Gaza, Yemen, Jordan and Lebanon because the unavailability of data before 1980
- Source: Durand, Cédric, and Wiliiam Milberg. 2019. “Intellectual Monopoly in Global Value Chains.” Review of International Political Economy 27 (2): 404–29. doi:10.1080/09692290.2019.1660703.
-
Middle East & North Africa
Colonialism’s bitter aftertastes: the monetary and ecological trade balances of the WANA region
Executive Summary
In February 2019, the Mexican federal government began implementing Sembrando Vida (Sowing Life). Considered one of the priority programs of the six-year term of Andrés Manuel López Obrador (AMLO), this policy sought to address two problems detected in rural areas of the country: poverty and environmental degradation.
Sembrando Vida consists of the distribution of a direct monthly support of 5,000 Mexican pesos to people who comply with a series of requirements, including a commitment, signed in writing, not to engage in “illicit productive or commercial activities”.
This last requirement points to the fact that, in certain regions of Mexico, Sembrando Vida, in addition to fighting poverty and preserving the environment, follows another unspoken objective: the voluntary substitution of illicit crops – mainly poppy and marijuana for legal crops and tree planting.
By December 2021, 10% of Sembrando Vida’s beneficiaries were located in 46 municipalities with a history of illicit crops distributed among Chihuahua, Sinaloa, Durango, Nayarit, Guerrero and Oaxaca.
In Mexico, the generation of legal economic alternatives and subsidies by the federal government, with a commitment not to get involved in illicit activities, is an unprecedented undertaking. After more than a century in which state policy focused exclusively on the forced eradication of crops – through aerial spraying or manual destruction – Sembrando Vida was intended as a departure from the traditional coercive policy to reduce the supply of illegal drugs.
However, three years after the program’s launch, illicit crop destruction campaigns – also operated by the federal government – are far from over.
Between 2019 and 2021, the armed forces report having destroyed 35,419 hectares (ha) of poppy and 6,709 of marijuana as part of their “operations to combat drug trafficking,” which involve the deployment of around 3,500 elements throughout the year. Although these areas represent approximately half of what was destroyed during the previous three years – 74,511 ha of poppy and 12,371 of marijuana between 2016 and 2018 -, it should be noted that the proportion of the area destroyed increased after spraying with Paraquat, a non-selective herbicide banned in several countries for its potential harmfulness to health – from 15% between 2016 and 2018 to 20% between 2019 and 2021.
Since the start of program implementation in these municipalities, we observed an overall reduction in the area planted with legal crops at the same time as an increase in production value.
Depending on the contexts, this trend reflects an increase in producer prices and/or an improvement in yields, but no substantial change in the types of legal crops planted is observed. On the other hand, the areas of illicit crops destroyed by the authorities decreased, as a result of a possible reduction in the areas cultivated with poppy and marijuana and/or a reduction in the efforts of the Armed Forces to destroy them. There was also a decrease in homicides in most municipalities, but an increase in the use of firearms to perpetrate them.
However, the research conducted for this report allowed us to identify information gaps that continue to hinder the understanding of the cultivation of plants declared illicit in Mexico, as well as the possible relationship of this phenomenon with the implementation of Sembrando Vida. First, the absence of open data at the municipal level on the cultivation – and not the destruction – of poppy and marijuana prevents us from monitoring the areas planted and harvested, yields or producer prices.
These are basic variables for monitoring any type of crop and are collected by SIAP in the case of legal crops in Mexico. In other countries, they are also generated for declared illicit crops from satellite images and field work. In Colombia, for example, the Ministry of Justice and Law publishes annual data at the municipal level on the areas under cocaine cultivation and even the cartographic files with which it measures crop density are detected by the “Integrated Illicit Crop Monitoring System” (SIMCI) since 1999 and with the support of UNODC (UNO- DC).
Similarly, the project “Monitoring Opium Production in Afghanistan”, also promoted by UNODC, publishes data since 1994 on poppy production at the district level in that country. In Mexico, although there is a similar program – the project “MEXK54 Monitoring System of Illicit Cultivation in the Mexican Territory” – UNODC and the Mexican government only publish an annual report with aggregate estimates by region and no open data at the local level.
Second, it should be noted that, although the Mexican federal government presents Sembrando Vida as a program that encourages voluntary substitution of illicit crops and that beneficiaries commit in writing not to engage in “illicit activities,” the truth is that, since its launch in 2019, this component is not formally mentioned in the program’s rules of operation. Its inclusion is essential for external monitoring and evaluation of Sembrando Vida against previously established objectives and goals in the matter.
Finally, our report shows that it is essential for the Mexican federal government to be more open in accessing program data, so that external monitoring and evaluation of Sembrando Vida against previously established objectives and goals can be carried out.
10 Key Ideas from the Sembrando Vida Report
1. In 2021, the Sembrando Vida program closed the year with around 449,939 beneficiaries, and by 2022, its budget amounted to 29.4 billion pesos, the fourth highest among the federal government’s 30 priority programs.
2. In certain regions of Mexico, Sembrando Vida, in addition to the fight against poverty and the preservation of the environment, follows another unspoken objective: the voluntary substitution of illicit crops for legal crops and the planting of trees.
3. Of 995 municipalities benefiting from Sembrando Vida, 46 have a history of illicit crops (our municipalities of interest), and these are located in Guerrero (15), Durango (9), Chihuahua (8), Sinaloa (6), Nayarit (4) and Oaxaca (4).
4. Since the beginning of Sembrando Vida in municipalities with a history of illi- cit crops, the average legal area planted has been reduced and the types of legal crops planted have not changed substantially. This suggests that the program does not significantly encourage the introduction of new crops and the substitution of old legal or illegal crops.
5. The Armed Forces, in turn, registered a reduction in the destruction of poppy and marijuana, although a proportionally greater use of aerial spraying since the beginning of the program in our municipalities of interest. However, this trend seems to be linked to factors unrelated to the program (fall in opium gum prices in particular).
6. The implementation of Sembrando Vida coincided with an overall reduction in homicide rates in our municipalities of interest. The annual homicide rate went from an average of 58 homicides per 100,000 inhabitants during the five years prior to the start of Sembrando Vida to 37 per 100,000 inhabitants.
7. There is a possible increase in the availability of firearms and development of incentives and capacities to use firearms, since the implementation of the program also coincides with an increase in the proportion of homicides that are committed with a firearm, which went from 75% during the five years prior to Sembrando Vida to 77%, in our municipalities of interest.
8. Unlike Colombia or Afghanistan, in Mexico, we still lack data at the local level on the production of illicit crops, which forces us to approximate the phenomenon based on destruction records.
9. It is so far impossible to monitor and evaluate the voluntary substitution of illicit crops with the program, because although the official governmental communication presents Sembrando Vida as a program of voluntary substitution of illicit crops since 2019, specific goals and objectives have not yet been contemplated.
10. It is essential for the Mexican federal government to be more open in accessing program data, so that external monitoring and evaluation of Sembrando Vida against previously established objectives and goals can be carried out.
Paul Frissard Martínez is the author of this report, and an independent consultant and fellow at Noria Research MXCA.
The author would like to thank the people interviewed in Chilpancingo, Guerrero, who made this research possible.
‘, ‘post_title’ => ‘‘Sembrando Vida’, Illicit Crop Cultivation and Rural Violence in Mexico’, ‘post_excerpt’ => ”, ‘post_status’ => ‘publish’, ‘comment_status’ => ‘closed’, ‘ping_status’ => ‘closed’, ‘post_password’ => ”, ‘post_name’ => ‘sembrando-vida-illicit-crop-cultivation’, ‘to_ping’ => ”, ‘pinged’ => ”, ‘post_modified’ => ‘2024-11-15 17:07:48’, ‘post_modified_gmt’ => ‘2024-11-15 16:07:48’, ‘post_content_filtered’ => ”, ‘post_parent’ => 0, ‘guid’ => ‘https://noria-research.com/mxac/?p=584’, ‘menu_order’ => 0, ‘post_type’ => ‘post’, ‘post_mime_type’ => ”, ‘comment_count’ => ‘0’, ‘filter’ => ‘raw’, )Introduction
Like many other countries in the global south, Tunisia began adopting neoliberal policy prescriptions in the 1980s. The process was advanced according to the terms of the IMF’s structural adjustment program and disciplined through loan conditionalities. Prioritizing fiscal consolidation, reforms dictated significant budget cuts for public services, amongst other things. These cuts were instituted without accounting for the outsized impact they were to have on marginalized groups, women especially.
Two of the domains where neoliberal reform have most negatively affected Tunisian women are public transportation and healthcare. The deterioration of public transportation, which was induced by austerity, has limited women’s mobility and in doing so, increased their vulnerabilities. Declines in public sector healthcare capacity and the attendant push toward privatization, meanwhile, have led to worsening health and financial outcomes for women.
Public transportation
State withdrawal and struggling public service providers
The underfunding of public transportation in Tunisia has been apparent for some time. It is largely a function of policymakers’ (coerced) embrace of neoliberalism, and revealed in governments’ investing more in road infrastructure than they do in public transportation: Over the past twenty years, in fact, the state has consistently privileged investments in road networks (which favor private car ownership) over investing in the public transportation system.[1] As owning a car is cost prohibitive, one effect of this policy is to restrict mobility for low income groups. More generally, disinvestment has led usage of public transportation to decline markedly. In Greater Tunis, it is estimated that the percentage of the population using public transportation dropped from 68% in 1977 to 28% in 2011.[2]
The effects of austerity are easily observed with TRANSTU, the main public transportation provider in Tunis. At this stage, the state only subsidizes TRANSTU’s school transportation programs, which received 435 million dinars in 2017. Funding for general urban public transport, contrarily, has been squeezed.[3] This provoked TRANSTU’s development of a sizable debt burden. Facing hard financial restraints, the company has not only been prevented from investing to meet rising demand introduced by demographic expansion, but from maintaining its existing fleet. As of 2020, only 650 of TRANSTU’s buses were operational, down from 966 in 2010.[4]
For households, TRANSTU’s declining service capacity has substantially increased the financial cost of mobility. By 2015, the average Tunisian household was spending 360 dinars annually on transport, which represented 9.3% of household expenses. The corresponding figure in 1990 was 7.7%.[5] For low-income families, rising costs hit particularly hard, forcing cuts in daily movement. Due to their lacking access to private vehicles, declines in the availability of public transit options have had acute gendered effects, too.
Women and public transportation: Limited access and unique challenges
While declining public transportation capacity affects both men and women in Tunisia, it impacts women disproportionately. In the first instance, this is because women have comparatively less recourse to private transportation options: A 2016 study from CREDIF (Center for Research, Studies, Documentation and Information on Women) established that only 4.5% of Tunisian women own a vehicle, as compares to 22% of men.[6] As such, though public transportation hardly represents an ideal option—more than a fifth of Tunisia women report experiencing a form of violence (sexual harassment in a plurality of cases) on public transportation—reducing its availability nevertheless implies a loss in welfare for women, and one suffered in low-income neighborhoods most of all.[7] Women in these areas report foregoing higher paid work opportunities located due to the long, multi-leg commutes required to reach more affluent districts.[8]
To reform the public transportation system with an eye on equitability, policymakers must first increase funding for TRANSTU so that it and partner organizations have the capacity to provide connectivity across Tunisia. Thereafter, they must ensure that the length and complexity of commutes do not obstruct people in pursuing their livelihoods. Special attention must be paid to the needs of lower income groups, whose place of residence is typically of greater distance to commercial centers. Furthermore, policymakers should address the variables contributing to women’s experience of sexual harassment on public transportation. This is imperative for a number of reasons. Obviously, it is the right thing to do in and of itself. More than that, though, the prevalence of sexual harassment disincentivizes women from seeking out sources of income and encourages them to strive for car ownership. The former is problematic for obvious reasons. The latter is problematic inasmuch as car ownership is both costly for the individual and ecologically unsustainable for Tunisian society.
Policy Reform Recommendations
Regarding policy fixes, lessons should be learned from the SARS-CoV-2 pandemic. During the time when contagion-related restrictions were imposed, women reported facing significantly less harassment on buses and trains. This suggests that it is overcrowding which mediates the propensity of sexual harassment on public transportation.[9] A pathway to safer, more equitable, and environmentally conscientious mobility can therefore be found in increasing the frequency with which public transportation options run.[10]
Note that there are forms of shared transportation apart from buses and trains in Tunisia, such as taxis, “taxi collectif,” and carpooling. For women, however, these options do not present a viable alternative to public transportation. That’s because they too are frequently host to gender-based violence, and because they evince extremely high rates of accidents. The danger is most pronounced in rural areas, where women working in the agricultural sector have no choice but to use these means of transportation. From 2015 to 2021, commuting agricultural workers were involved in 46 accidents that left 47 dead and 637 injured.[11] The state, in ceding its responsibility for public transportation, is ultimately to blame. It must step back into the breach or risk this continuing to happen.
Health care
Speeding towards privatization
Like its public transportation system, Tunisia’s public healthcare system has been negatively affected by the imposition of austerity. In the case of healthcare, austerity led to a widening footprint for private providers and higher out-of-pocket expenditures for households.
Though preceding the democratic transition, the harsh decline in public spending on healthcare continued throughout the post-Ben Ali era. Between 2013 and 2018, government health spending per capita fell from $165 to $110, while as a percentage of GDP, government spending sank to a decade low of 5.9% during the years in question. Expectantly, this resulted in out-of-pocket expenditures for households hitting an all-time high in 2018.
A brief uptick in government healthcare spending was prompted by the SARS-CoV-2 pandemic.[12] It receded, however, after the emergency-stage of the policy response passed. Thereafter, the trend of shifting the expenditure burden onto households continued.
In terms of service provision, some of the vacuum created by the state’s retreat from the healthcare sector has been filled by private institutions. Whereas the number of state-run healthcare facilities has declined over the past decade in net terms, the number of private facilities has increased by 23%.[13] Similarly, the volume of heavy equipment like X-Rays and MRIs possessed by the private sector has grown at such a rate as to now total three times the holdings of the public sector.[14]
Given that recourse to private healthcare facilities is contingent upon one having either the insurance coverage or personal funds required to pay for services, the divergent trajectories of Tunisia’s public and private healthcare systems in recent times have been of enormous social consequence. Leaving the less well-off with worse care while extracting a greater share of income from lower and middle-income earners, changes on the provider side of things have accentuated inequalities in Tunisian society considerably. Unsurprisingly, these changes have also had gendered and geographic dimensions.
Gender and SR healthcare: challenges at all stages, from health coverage to treatment
The gendered and geographic effects of Tunisia’s changing healthcare system are easily observed when it comes to sexual and reproductive care.
To begin, there is the matter of healthcare insurance coverage: Only 12.7% of women have insurance in their own name, compared to 28% of men.[15] This renders access to treatment externally dependent, creating a fundamental vulnerability for many women. In rural areas, gendered-based disparities are even wider. Only 33% of women working in the agriculture sector benefit from social protection of any kind, health insurance included, while a mere 10% report qualifying for free healthcare. Insofar as women in the sector also face a wage gap—their wages often but a half of those of men doing the same tasks—while being more exposed to work-related accidents,[16] the weak prevalence of coverage creates enormous health risks.
As pertains specifically to sexual and reproductive health, there are austerity-induced absences in preventative care access to consider as well. With government spending on healthcare receding, existing preventative programs have not been sufficiently maintained. The effects of this are apparent in statistics like contraceptives use, which dropped by 7% for women aged 15 to 49 between 2012 and 2018.[17] Such a decline cannot be explained by lessening demand for contraceptives: After all, during the same years, the percentage of married women aged 15 to 49 reporting an unmet need for contraceptives increased by 12%.[18] Predictably, it is rural women who have been hurt most by the state’s divestment on preventative care. The mobile healthcare teams once deployed by the public healthcare system to service the sexual and reproductive health needs of women in the countryside were disbanded in the 1990s. Ever since, access to contraception has become increasingly limited to those able to afford the travel and accommodation costs associated with seeking care in urban centers.[19]
The declining reach of the public health care system has also pushed women in need of natal care toward the more expensive options provided in the private sector. The last decade has seen a significant increase in the number of women giving birth in private health institutions, up to 10% in certain urban areas.[20] This may reflect a preference for private care as much as the inaccessibility of public care. Regardless, the change contains pronounced social biases. This is because access to private childbirth services is contingent upon income: 64% of households earning more than 2000 dinars per month report being able to afford private care, compared to only 8% of households with monthly incomes between 500 and 800 dinars.[21] As private health services grow their share of the healthcare market, the possibility of low income families being locked out of natal care becomes very real.
Policy Reform Recommendations
To remedy these issues and reverse trends presenting such obvious social and gendered biases, policymakers need to take a number of steps. First, they must pour funding into Tunisia\’s public healthcare and social protection systems. In the case of the former, they should emphasize the building of capacity for delivering preventative services. Jointly, this investment will not only ensure equitable access to medical care, but also help cut long-term costs for both households and the state. Clearly, they must revitalize now dormant sexual and reproductive health preventive (SRH) programs as well. All Tunisians must be able to access quality care, regardless of income or geographic location. Given existing disparities in access to care–disparities which break according to location and socioeconomic status–implementing this reform will be particularly crucial.
In addition, policymakers must scale up the recruitment of healthcare workers, specialists especially, and make certain that these workers are distributed equitably across the country. Presently, the concentration of healthcare resources in urban centers is rather extreme. Finally, investments in equipment for the public healthcare system, diagnostic tools like X-rays and MRIs most of all, must be undertaken. This is necessary to close the service gap between private and public providers, a critical step in rebuilding a socially equitable healthcare system.
Conclusion
Gendered biases in accessing public services in Tunisia at once derive from entrenched inequalities and make those inequalities worse. As this policy brief highlights, austerity has led to the systematic underfunding of Tunisian public services, transportation and healthcare included. Resulting declines in service capacity have disproportionately impacted vulnerable groups, women foremost amongst them. Amongst other things, women are suffering from reduced mobility, lack of access to healthcare, and increasing expenditures. With female-headed households already 34% more likely to experience extreme poverty than male-headed ones, the effects of these changes have been pronounced.[22]
For Tunisian women to have a chance at a better life, the country’s policymakers must opt out of the austerity paradigm. The path to social justice lies in prioritizing investments in public services, with special attention granted to the needs of women and other vulnerable groups.
[1] République tunisienne Politique nationale de la mobilité urbaine, “Rapport de synthèse de la démarche PNMU en Tunisie”, Report (2020): 16
[2] Gina Porter, Emma Murphy, Saerom Han, Hichem Mansour, Hanen Keskes, Claire Dungey, Sam Clark, and Kim van der Weijd, “Improving young women’s access to safe mobility in a low-income area of Tunis: Challenges and opportunities pre- and post-Covid”, Transportation Research Procedia 60 (September 2021): 2
[3] World Bank, “Note de stratégie sectorielle relative au secteur des transports urbains”, Report (2019): 13
[4] Bedirhem Erdem Mutlu, “Freedom, justice, and dignity in movement: Mobility regimes in the Grand Tunis”, Arab Reform Initiative (July 2022)
[5] Ibid
[6] Stéphanie Pouessel, “Femmes et transport en Tunisie: l’insécurité du quotidien. l’épreuve genrée des déplacements du quotidien en contexte urbain et rural”, Aswaat Nissa (2024): 19
[7]Porter et al. (2021): 3
[8] Ibid: 4
[9] Ibid: 6
[10] On ecological sustainability, note that many women report wanting to purchase a car in order to avoid the sexual harassment that is so rampant on public transportation. 44.8% of women, in fact, express a preference for owning a car due to the burdens and dangers that public transportation presents. In the face of climate change, though, the reality is more and more car ownership is not viable
[11] Stéphanie Pouessel (2024): 58
[12] World bank: Domestic general government health expenditure per capita (current US$) – Tunisia (Accessed October 10,2024)
[13] Sahar Mechmech and Houssem Chammem, “Austerity, A Chronic Condition of Public Health”, Al Bawsala (2022): 13
[14] IBID: 18
[15] Jawhar Mzid, “Youth health services in Tunisia” Report: International Alert (2023): 21
[16] Alessandra Bajec, “Tunisia: COVID-19 Increases Vulnerability of Rural Women”, Arab Reform Initiative (November 2020)
[17] World bank Gender Data: Contraceptive prevalence, % of women ages 15-49 (Accessed October 10,2024)
[18] World Bank Gender Data: Unmet need for contraception, % of married women ages 15-49 (Accessed October 10,2024)
[19] Irene Maffi, “Governing Reproduction in Post-revolutionary Tunisia:Contraception, Abortion and Infertility”, Medical Anthropology 41 (2022): 4
[20] Jawhar Mzid (2023): 67The disparities are even more pronounced at the regional level. In El Mourouj (Greater Tunis), 43.8% of women gave birth in private institutions, whereas in more marginalized regions like northern Tataouine and Kasserine, the rates were significantly lower at 10.7% and 21.5%, respectively. This geographic divide underscores the unequal access to healthcare, where women in disadvantaged areas face additional barriers to receiving quality natal care, further entrenching the cycle of inequality across the country.
[21] Ibid
[22] MENAFem, “Impact of structural adjustment and austerity measures imposed by Bretton Woods Institutions on Women’s welfare and social safety nets”, Blog: MENAFEM (July 2024).
‘, ‘post_title’ => ‘ Gendered Impact of Austerity Measures on Public Services in Tunisia’, ‘post_excerpt’ => ”, ‘post_status’ => ‘publish’, ‘comment_status’ => ‘closed’, ‘ping_status’ => ‘closed’, ‘post_password’ => ”, ‘post_name’ => ‘gendered-impact-of-austerity-measures-on-public-services-in-tunisia’, ‘to_ping’ => ”, ‘pinged’ => ”, ‘post_modified’ => ‘2024-11-07 16:06:13’, ‘post_modified_gmt’ => ‘2024-11-07 15:06:13’, ‘post_content_filtered’ => ”, ‘post_parent’ => 0, ‘guid’ => ‘https://noria-research.com/mena/?p=579’, ‘menu_order’ => 0, ‘post_type’ => ‘post’, ‘post_mime_type’ => ”, ‘comment_count’ => ‘0’, ‘filter’ => ‘raw’, )The IMF and their local allies in West Asia and North Africa (WANA, also known as MENA) have attributed the region\’s developmental crisis to insufficient economic openness. On the basis of this claim, the same parties push WANA economies into adopting export-oriented development models. To date, those models have failed, and rather spectacularly so, to yield notionally desired results. Failure must be understood in light of the extra-economic determinants of value. This factor predisposes WANA economies to external imbalances. This is because the determinants in question, primarily political and legal in their nature, arbitrarily reduce the value of exported commodities, on the one hand, while increasing the value of imported goods on the other. Knock-on effects in terms of the incurrence of debt follow, and with them, structural restraints on WANA economies’ growth potential.
The IMF and Export-led Growth
Inasmuch as the IMF assumes the role of ‘lender of last resort’ in many parts of the world, its level of activity in a given region offers a good indication of the prevalence of trouble. Since the 2008 financial crisis, the IMF has significantly increased its activity in WANA oil importing countries, establishing recurring lending arrangements with Tunisia, Egypt and Jordan.[1]
In the framing of the IMF, the troubles facing the three countries derive from a handful of structural problems. Like other adherents of neoliberalism, the Fund attributes significant causal power to currency overvaluation and insufficient integration into the global economy, the latter caused by restrictions on capital inflows and high tariff and non-tariff barriers to trade. Per the IMF’s line of argumentation, these variables engender two drags on development. First, they insulate local businesses from competitive pressures, thereby limiting productivity growth and overall economic efficiency. Second, they undermine the international competitiveness of domestic goods, thereby hindering export performance while generating external imbalances.[2] On the basis of this diagnosis, the Fund’s policy prescriptions emphasise current and capital account liberalisation alongside the floating of national currencies, amongst other things.[3]
Myriad issues compromise the IMF’s analysis and the reform agenda it informs. To start, there is the empirical challenge presented by the world’s most export-oriented economies also ranking amongst the world’s most underdeveloped and crisis-prone economies. Whereas China and Japan are lifted up as paragons of export-led development, the fact is that exports constitute a greater percentage of GDP for the struggling economies of sub-Saharan Africa and the WANA region.[4] Excluding the oil and gas producers, exports represent approximately 25% GDP across the WANA region, a significantly larger percentage than what is observed in east Asia and 2.5 times the corresponding figure for the United States. There is also the illogic inherent to the IMF’s proposals. Most pertinent here is the ‘fallacy of composition’: Whether the IMF’s export-centric prescriptions retain validity in a vacuum or not, in the context of a world economy, they are self-cancelling; after all, one country’s exports imply and require another’s imports. As such, the simultaneous pursuit of export-led growth by all cannot yield universal gains, as at a system-wide level, it undercuts the demand for imports which is needed for export-led growth to be successful.
The Value-added Corollary
Without acknowledging the logical incoherence of its recommendations, the IMF has, in recent times, nuanced its approach by specifying that export-led development hinges on the value-added levels of a country’s exports. Alas, the Fund’s revised thesis also falls short. This is principally due to the inadequate treatment of value. In keeping with neoliberal orthodoxy, the IMF posits value as a characteristic of the commodity itself shaped by economic factors such as consumer preferences, utility, and productivity. The reality, however, is that value is a function of a complex and contested process. It is established, at least in part, through the interplay of contemporary and historic political forces, with the value of some commodities being suppressed and others elevated on that basis; at a fundamental level, valuation is not a purely economic phenomenon but a political and legal one mediated by history.
Recent decades in the WANA region provide abundant examples of commodity value being manipulated by extra-economic determinants. On the upside, OPEC’s action to cut supplies of oil to Western countries in 1973, resulting in the 1973/4 oil crisis, quadrupled the price of oil in just a few months. Almost overnight, the value added of oil skyrocketed, and did so on the back of a politically-induced supply shock.[5] Downside examples from the region are, of course, more numerous. In the 19th and 20th century, for instance, Britain worked tirelessly on the behalf of its textile industry to bring down the price of cotton. Nevertheless, after the American civil war (1861-1865), the price of cotton increased massively as a result of the embargo imposed on the American South, which was the largest supplier of cotton to the Lancashire textile factories in Britain.[6] This price boom had a huge and lasting impact on Egypt, a major grower of cotton at the time. Incentivized by the prices on offer, Egypt would dedicate a third of its cultivable land to cotton production.[7] Simultaneously, the country would see age-old textile craftsmanship erode due to local industry’s inability to compete with industrially produced British textiles, as also occurred in India, the Levant, China and Turkey.[8] When the price of cotton ultimately collapsed as direct result of British policy–principally, efforts designed to future proof the textile industry against supply shocks by way of expanding cotton production across the empire, in India most of all–Egypt succumbed to successive waves of acute economic crisis. One of the more intense begat the Urabi revolution and thereafter, British colonisation of Egypt.
Mindful of this history, re-industrialisation became one of the key pillars of Egypt’s independence aspirations. And starting in the 1930s, meaningful progress was made in reindustrialising the economy, with energy and capital flowing into textile production in particular. Alas, by the time this process began, the spread of textile production around the globe had created downward price pressures on the commodity, pushing it into the lower value-added tier of manufactured goods.[9] This structurally reduced the developmental gains Egypt was able to derive from industrialisation. By extension, the economy’s dependence on the export of primary goods, cotton especially, endured well into the post-war era. This dependence would in many ways define the parameters of possibility for the Egyptian Republic, established in 1953. Though major efforts were put into industrialising and urbanising the economy, reliance on the import of machinery from the global north hamstrung Egypt’s infant industries while straining the country’s balance of payments through unequal exchange.[10] Unequal exchange laid the path to external indebtedness. The combination of burdensome repayment obligations and creditor-imposed policy change, in turn, made changing the terms of exchange nearly impossible. Similar dynamics played out for the countries of western North Africa (maghreb). There, production followed cues laid down by colonial France. This initially confined the region’s exports to (forcibly) undervalued primary commodities like phosphate rock and agricultural goods like citrus fruits and olive oil. Later, it locked them into low value, factor driven and labour-intensive manufacturing.
Obstructions to Development: Dealing with Structure
As this brief review attests, variables exogenous to the WANA region and structural in nature play a significant role in defining the course of national development. Ranking senior amongst such variables is today’s globalised trade regime. Contrary to the claims put forth by the regime’s champions–who pledged the liberalised trade would power a convergence in development outcomes[11]–globalisation, as institutionalised since the mid-1980s, has contributed to divergence in a great many instances. The primary reason for this is the manner with which the current trade regime resolves trade imbalances between nations. For all effects and purposes, it has done so through subjecting trade deficit countries to expanding systems of economic and political control. In the first instance, these systems are entrenched through the loans and foreign direct investment inflows that fund trade deficits. More recently, they have also been deepened through deficit countries’ making themselves open to speculative capital exports from surplus countries. The latter dynamic is visibly evinced in the WANA region, where these kinds of capital exports have been leveraged by oil exporters to exert control over oil importers.
Prior to the 1970s, wealth was distributed relatively equally across the WANA region. Within each country, of course, class structures mediated significant inequalities of both income and wealth. Due to the two major oil supply shocks of the 1970s, however, everything changed, and a regional version of the Great Divergence commenced (See Figure 1). The first shock broke with the 1973 October War; by virtue of Arab oil-exporting countries deciding to cut supplies to countries that supported Israel, oil prices witnessed a four-fold increase over the span of a few months. The second stemmed from the Iranian revolution of 1979. Thereafter, oil prices skyrocketed from about $4 a barrel in 1973 to almost $40 by the end of the decade.
Figure 1: The Great Divergence
Until the 19th century, the world showed little variance in development levels. Inequalities remained pronounced, of course, but were mediated by local class relations rather than geographic variables. Where spatial divergences in income and wealth holdings did emerge, moreover, they primarily resulted from leaps in productive capacity in China and India: what we know today as the global north lagged behind.[12] With the industrial revolution and attendant consolidation of modern capitalism, everything shifted quite quickly. In the space of a few hundred years, the concentration of global wealth in the global north became quite extreme.[13]
Pronounced as the oil boom’s impact was on the global economy, its effects on the regional economy of the WANA were perhaps even more consequential. At the most basic level, the boom created massive trade surpluses for oil-exporting MENA countries, and massive trade deficits for their oil importing counterparts. After consistently running trade surpluses during the early post-colonial period, from 1981 to 2023, low and middle-income WANA countries would run trade deficits in 31 of 42 years (See Figure 2). The performance would be even worse if oil exporters like Libya, Iran, and Algeria were excluded from the calculation. For a time, these deficits were partially closed by flows of remittances and aid. Ultimately, however, they set WANA’s oil exporters and importers on to entirely different trajectories. For the importers, the course was set for debt and developmental crises (see Figure 3).
Figure 2: The falling surpluses and growing deficits of oil-importing MENA countries (1965-2023)
Figure 3: The WANA Great Divergence
WANA Importers’ Double Deficit
The trade deficits suffered by oil-importing WANA countries have been compounded by a deficit of a second and perhaps more salient kind. The latter can be appreciated through consulting a relatively new trade dataset known as Environmentally Extended Multiregional Input Output (EEMRIO). At the highest level of abstraction, EEMRIO allows researchers to calculate the movement of embodied resources implied in the exchange of internationally traded commodities. EEMRIO provides a country-by-country look at the balance of biophysical resources, tracking the transfer of raw materials, energy, labour and land that is exacted through the trade of commodities. Widening the scope beyond the monetary imbalances of trade, EEMRIO affords a look into the realities of ecologically unequal exchange (EUE).[14]
Expectantly, WANA’s oil exporters are significant net exporters of raw material equivalents (RMEs) and embodied energy. This is despite their importing of large amounts of embodied labour and land via the exchange of commodities. The imports in question speak to these countries’ shortcomings in terms of economic diversity and their resulting dependency on external sources for labour-intensive goods and land-intensive agricultural products such as food and textiles. The picture is more troublesome for WANA’s oil-importing countries. Though to a lesser degree, they too are net exporters of RMEs and energy (see Table 1). However, their biophysical balance shows a higher degree of unequal exchange. These countries export rather massive sums of embodied RMEs in order to acquire fairly small sums of embodied labour. Given the environmental stresses already bearing down on countries like Tunisia, Morocco, and Egypt, the strains being incurred through the export of high volumes of RMEs are especially acute in impact. Climate change-driven drought lasting for six years has significantly reduced Morocco and Tunisia’s crop yields, forcing both countries to scale up imports of foodstuffs at great cost to the trade balance.[15] In Egypt, water shortages are becoming more intense in part due to Ethiopia’s construction of the Renaissance Dam, threatening Egypt’s already insufficient water share from the Nile equivalent to the levels of 1959, when the country’s population was only one fourth of what it is today .[16]
| Table 1 The physical trade balance of MENA countries in 2015 | |||||
| Population | total net import of RMEs [t] | total net import of embodied energy [GJ] | total net import of embodied land [ha] | Total import of embodied labour [p-yeq] | |
| Oil exporting | 134,922,576 | -1,570,549,157 | -1,998,920,629 | 25,730 | 13,918,032 |
| Oil importing | 239,164,933 | -430,582,631 | -48,427,642 | -70,745 | 260,115 |
| Source: Author’s calculation of 46 sub-Saharan African countries based on data provided in: Dorninger, Christian, Alf Hornborg, David J. Abson, Henrik von Wehrden, Anke Schaffartzik, Stefan Giljum, John-Oliver Engler, Robert L. Feller, Klaus Hubacek, and Hanspeter Wieland. “Global Patterns of Ecologically Unequal Exchange: Implications for Sustainability in the 21st Century.” Ecological Economics 179 (January 2021): 106824. https://doi.org/10.1016/j.ecolecon.2020.106824. | |||||
The other side of the valuation coin
The WANA region’s Great Divergence reveals a great deal about the global economy today. Most immediately, it shows that the monetary values of commodities are neither intrinsic to them nor purely determined by economic forces. Politically-induced supply shocks or cartel activity, after all, can shift prices of a commodity overnight and forever change the course of development history in the process. What should also be apparent from the Great Divergence is that the solution to the WANA’s economic and environmental crises will not be found in some perfect design of economic policy. The scaling of resource-intensive exports may yield temporary income gains, though at the expense of compounding ecological costs. Moving national economies into higher value-added production lines, meanwhile, will never be achieved without engaging the political domain. In the first instance, the global value regime must be transformed to more closely reflect the value that resource-intensive primary commodities and factor-driven secondary commodities present to economies and societies. In the second, it must be changed to reduce the value accruing to the Global North on the back of its intangibles–its control of design, marketing, distribution, research and development, and the like.
Downgrading the value of intangibles will require addressing the prevailing system of intellectual property rights (IPR). This system was institutionalised first through the World Trade Organisation’s Agreement on Trade-related Aspects of Intellectual Property (TRIPS) and later through bilateral trade and investment deals pushed by Global North countries. It has facilitated what amounts to the monopolisation of knowledge, granting firms in the global north monopolistic control over key technologies, standards, and brands. For some indication of scale, consider the concentration of patents and trademarks in developed economies: In 2013, 82.5% of triadic patents were registered in the US, EU, and Japan, with developing countries having but a minimal share of the total.[17]
Operating through global value chains, Durand and Milberg have shown how control of intellectual property supercharges international inequality. On the one hand, northern firms’ holdings of IP and intangibles of a similar kind impose cutthroat competition among suppliers in Global South countries. The results of this competition are dual: weakened bargaining power for labour in the Global South–and attending declines in wages–and an asymmetric distribution of value along the supply chain (See Figure 3)[18]: Due to issues of oversupply, the enforcement of IP claims, and the monopsony of power of northern multinationals, with firms at the bottom and middle rungs of the manufacturing and assembly processes are today accumulating ever lesser levels of capital despite productivity enhancements.[19] On the other hand, holdings of IP are facilitating staggeringly large flows of rent to northern firms. In 2023, high income countries received over $472 billion in IPR payments, compared to just over $16 billion for low- and middle-income countries.[20] This is also a grave underestimation of IPR-related flows; determining the volume of IPR transfers is effectively impossible as for many IPR-heavy products, such as patented pharmaceuticals, electronics and machinery, one cannot establish with any degree of certainty how much of the total product price derives from an IPR monopoly premium .
As major importers of patented pharmaceuticals, machinery, electronics, as well as services such as royalties, media and entertainment, franchises and branding, and ICT products (e.g. software licences), WANA countries contribute no small amount to these rents.[21][22]
Figure 4 The ‘Growing Smile’ of value distribution
The reordering of world capitalism around intellectual property holdings, a pivot driven by politics and institutionalised via the law, lowers the developmental horizon for all the non-oil exporters of the WANA region. Just as distressingly, control of intellectual property is allowing economies in the Global North to preserve their ecological capital via trade. A study conducted by Hickel et al. in 2022 established that in 2015, Global North economies, on a net basis, acquired 12 billion tons of embodied raw material equivalents (RMEs) from the rest of the world, 822 million hectares of embodied land, 21 exajoules of embodied energy (equivalent to 3.4 billion barrels of oil), and 188 million person-years of embodied labour. The study\’s authors estimate the value of these appropriations at $10.8 trillion in Global North prices.[23]
In view of all this, it should be clear that the WANA region’s underdevelopment is not a function of insufficient integration into the global economic system, but rather, of the manner with which the region has been integrated. By dint of historical and political reasons, this process has led to the undervaluation of commodities exported by WANA countries lacking significant endowments of oil and gas, and the overvaluation of imported commodities. As such, to change the region’s trajectory and extract it from recurring cycles of crisis will require a challenge to the international political order.
This publication has been supported by the Rosa-Luxemburg-Stiftung. The positions expressed herein do not necessarily reflect the views of Rosa-Luxemburg-Stiftung.
[1] Diab, Osama. “Out of Inflation Control: The IMF and Rampant Inflation in MENA” AUC School of Global Affairs and Public Policy (GAPP), 2024.
[2] The IMF has stuck to this explanation of crisis for a number of decades running. A report on the WANA regions struggles from 1997, for instance, attributed major responsibility to lags in terms of trade. Specifically, the report’s authors asserted that deficiencies in trade liberalisation ‘had a negative impact on production efficiency and will become more costly given the increasing globalisation and integration of the world economy’. The report also stated that this lag would reduce the region’s attractiveness for foreign investment. See: Alonso-Gamo, Patricia, Susan Fennell, and Khaled Sakr. “Adjusting to New Realities: MENA, the Uruguay Round and the EU-Mediterranean Initiative”
[3] Alonso-Gamo, Patricia, Susan Fennell, and Khaled Sakr. “Adjusting to New Realities: MENA, the Uruguay Round and the EU-Mediterranean Initiative” imf.org, 1997
[4] Diab, Osama. “Africa’s Unequal Balance.” Review of African Political Economy 50, no. 175 (2023). https://doi.org/10.1080/03056244.2023.2190453
[5] Walton, John K., and David Seddon. Free markets and food riots the politics of global adjustment John K. Walton ; David Seddon. New York, NY: John Wiley & Sons, 2011.
[6] Beckert, Sven. Empire of Cotton: A global history. New York: Vintage Books, 2015.
[7] Diab, Osama. 2023. “Prebisch and Singer in the Egyptian Cotton Fields.” AfricArXiv. June 20. doi:10.31730/osf.io/g69ed
[8] See Beckert, Sven. Empire of Cotton: A global history. New York: Vintage Books, 2015.
& Panza, Laura. “De‐industrialization and Re‐industrialization in the Middle East: Reflections on the Cotton Industry in Egypt and in the Izmir Region.” The Economic History Review 67, no. 1 (July 28, 2013): 146–69. https://doi.org/10.1111/1468-0289.12019
[9] Panza, “De‐industrialization and Re‐industrialization in the Middle East.”
[10] Gad, Mohamed. Mādhā jarā limashrūʿ Ṭalʿat Ḥarb? Miṣr wa-al-niẓām al-mālī al-ʿālamī fī miʾat ʿām (What happened to Talaat Harb’s project? Egypt and the international financial system in a 100 years). Cairo: Dar Al Maraya , 2021.
[11] Baldwin, Richard. The Great Convergence. Harvard University Press, 2016.
[12] Pomeranz, Kenneth. The great divergence: China, Europe, and the making of the Modern World Economy. Princeton, NJ: Princeton University Press, 2021.
[13] Ibid.
[14] In the eyes of EUE theorists, the widening of scope is necessary because prices do not fairly or comprehensively represent the value contained in trade exchanges. As such, a monetary balance of trade leaves a great deal out of the picture. Per Lauesen and Cope, prices do not explain value because it is prices that need to be explained. Hickel et al. similarly argue that prices ‘reflect, among other things, the (im)balance of power between market agents (capital and labour, core and periphery, lead firms and their suppliers, etc); in other words, they are a political artefact.’
See: Lauesen , Torkil, and Zak Cope. “Imperialism and the Transformation of Values into Prices” Monthly Review, July 27, 2015
Hickel, Jason, Christian Dorninger, Hanspeter Wieland, and Intan Suwandi. “Imperialist Appropriation in the World Economy: Drain from the Global South through Unequal Exchange, 1990–2015.” Global Environmental Change 73 (March 2022): 102467. https://doi.org/10.1016/j.gloenvcha.2022.102467.
[15] Metz, Sam. “Climate Change Imperils Drought-Stricken Morocco’s Cereal Farmers and Its Food Supply” AP News, July 24, 2024
[16] Mohy El Deen, Sherif. “Egypt’s Water Policy after the Construction of the Grand Ethiopian Renaissance Dam” Arab Reform Initiative, February 27, 2023
[17] Ibid
[18] Hamoud, Maher, and Osama Diab. 2022. “A Growing Smile and a Growing Demise: The Diminishing Value of Damietta Furniture Making.” AfricArXiv. November 28. doi:10.31730/osf.io/r2tnf.
[19] Durand, Cédric, and Wiliiam Milberg. “Intellectual Monopoly in Global Value Chains.” Review of International Political Economy 27, no. 2 (September 5, 2019): 404–29. https://doi.org/10.1080/09692290.2019.1660703.
[20] World Bank Data. “Charges for the Use of Intellectual Property, Receipts (BOP, Current US$) – Low & Middle Income, High Income” World Bank Data, 2024
[21] The Atlas of Economic Complexity. “Northern African Imports by Product Category, 2021”
[22] The Atlas of Economic Complexity. “Western Asian Imports by Product Category, 2021”
[23] Hickel, Jason, Christian Dorninger, Hanspeter Wieland, and Intan Suwandi. “Imperialist Appropriation in the World Economy: Drain from the Global South through Unequal Exchange, 1990–2015.” Global Environmental Change 73 (March 2022): 102467. https://doi.org/10.1016/j.gloenvcha.2022.102467.
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