This report on a CARE workshop on our work on resilient market systems in the Middle East and North Africa (MENA) region provides key discussion points as well as CARE’s emerging thinking as a result of the workshop.
The document houses the learnings and recommendations from the workshop held in Cairo in March 2016. The document does not represent a conclusion of CARE’s thinking in relation to resilient market systems but rather a step towards finalising a more solid framework for this work.
Background:
The last six years have witnessed significant political, security, humanitarian, climate, demographic, and social changes and trends (see Insights Paper: Key MENA Regional Trend and Demographics by CARE RMU, 2015). Some of these changes have led many countries in MENA to experience turmoil/wars, including in Yemen, Syria, and Iraq. Some are locked in chronic crises with recurring spikes in violence (e.g. West Bank and Gaza - „WBG‟) whilst other countries are feeling the brunt of the crisis as a result of hosting refugees (e.g. in Lebanon where more than 25% of residents are Syrian refugees). This political crisis is also accompanied by a significant youth bulge (see WEE Pathways in CARE MENA Social and Gender Justice Framework 2015 - 2030), a high urbanization rate, more fluid social norms and culture, displacement and refugee crisis, and shifting market dynamics and systems, to name a few.
Why are Resilient Market Systems Important in MENA?
In the MENA region, there are several interwoven crises, crippling infrastructures, economies and livelihoods. This document will not seek to list out all these crises (several other publications as well as some CARE internal reports can be referenced instead). As highlighted in the workshop, there is significant destruction in many countries in MENA and it is crucial for CARE and other aid organizations to understand that this destruction goes beyond the production side of the market system. Based on evidence gathered by CARE in MENA, Market Systems in MENA are majorly affected by the following:
1) Destruction of critical infrastructure and productive capacities at the 1) production side, including farms, production units, etc.; 2) market and selling points where consumers can buy/get products; 3) processing capacities at the private sector; and ) other necessary infrastructure which can paralyze how a market system functions, including the damage caused to the energy and water sectors. As the accompanying document on Value Chain Development (in MENA) in Crisis Contexts illustrates: “…under destruction, damage and insecurity that have taken place in Yemen, Syria, and Palestine, the productive sectors of these countries have diminished greatly…during the pre-uprising, Syria saw a significant agricultural and livestock sector with 15.5 million sheep and 2.0 million goats, mid 2014, this had fallen by at least 40%. Their poultry sector, which was a mainly private sector investment, has lost almost 70% of its production.”
Displacement/ influx: displacement or migration of value chain participants, leading to significant changes throughout the market system.
Skills: some peoples‟ skills have become irrelevant due to displacement and loss of work opportunities.
Institutions: governmental institutions are weakened, broken down, or they cannot absorb the shock, reducing access to services and items.
Private Sector: distortion of private sector actors; small enterprises experience loss of property rights; etc.
Gender Based Violence (GBV) increases.
Social norms and gender roles are in rapid flux
It is important to note that formal and informal market rules, regulations, and restrictions that are sometimes based on conflict governance, largely influence market systems in MENA especially where there is crisis. The weaknesses in MENA market systems also have a deliberate planned policy/power aspect due to the ongoing man-made conflict. Similarly the informal social cultural roles limit women‟s ability to expand/diversify/etc. their market systems.
Due to all of the above, production and transaction costs are significantly raised due to insecurity and destruction. Sometimes, costs of material and services also become high in hosting countries for both refugees and hosting populations. The crisis is also accompanied by the loss of export opportunities and the loss of people‟s access (availability, economic access, quality) to key items (food, health, water, etc.). It is important to note that market systems development is not just about improving livelihoods but also about improving peoples‟ access to products, including material and inputs such as food, health material, water, etc. This is also important to consider when choosing certain value chains and market systems in crisis contexts.
Knowing the multifaceted issues and destruction, as a result of the crisis (let alone the major trends that are facing the region with or without the crisis), the solutions to improving people‟s livelihoods and products require a more systemic and holistic understanding of the various affected components of market systems, knowing that more destruction is also probable. As such, the resilience of the market system to absorb, adapt, and transform in the face of existing or new shocks is a necessity to integrate. With all of the destruction comes the responsibility and potential for CARE and other actors in the field to invest more deliberately in interventions that might provide the opportunity to build back better coping mechanisms, for citizens made most vulnerable by the crises in MENA.
And, suffice to say, for CARE‟s presence in the MENA region to continue to address the multiplicity of crises and complexities which exist there, it was paramount that the issues of resilience and market systems were prioritised last year and, in March 2016, at a regional workshop hosted in Cairo, to examine ways in which CARE could play a more proactive role in increasing resilience – both for displaced and vulnerable population groups, as well as for the market systems to which MENA countries and their economies and societies are beholden.