The "Investing in People: Revisiting Fiscal Options to Finance Human Development in the MENA Region" report is part of the flagship publication “Embracing and Shaping Change: Human Development for a Middle East and North Africa in Transition”. This report’s focus on fiscal matters complements ongoing work on megatrends involving labor markets, skills, demographics and climate (KP-1) and institutional matters (KP-2).
Key Messages
The report underscores the importance of investing in people as central to sustainable growth and resilience in the face of demographic, technological, and climate disruptions:
1. Human Capital Is Both an Asset and a Vulnerability
Human capital remains the region’s greatest asset but current investment levels are insufficient to keep pace with changing needs in education, health, and social protection.
Significant gaps exist in basic skills for children (e.g., literacy/numeracy), and access to early childhood services remains low.
2. Megatrends Are Pressuring Human Development Systems
The region faces three major structural pressures:
Demographic change: aging populations will strain pensions and long-term care financing.
Climate change: extreme heat and water scarcity threaten health, learning, and food security.
Technological shifts: limited digital readiness could hinder productivity gains, even as platform work grows.
3. Financing Gaps Must Be Addressed Through Comprehensive Fiscal Reforms
To create fiscal space for human development, the report calls for:
Equitable domestic resource mobilization (e.g., broader tax bases and progressive revenue instruments).
Better allocation of public expenditure — prioritizing high-impact sectors like health, education, and social protection.
Leveraging non-traditional financing sources, including blended finance, private partnerships, and innovative instruments.
4. Institutional Reform Is Fundamental
Stronger institutions and governance are necessary to convert investments into real outcomes, improve accountability, and boost service effectiveness.
The report stresses data use, digitalization, and performance management to maximize returns on human development spending.
5. A Future-Oriented Policy Agenda
The analysis sets out a three-pronged agenda for transforming human development outcomes in MENA:
Future-fit policy frameworks that anticipate demographic, climate, and technology shocks.
Strengthened human capital foundations by expanding service reach and quality.
Sustainable fiscal strategies to sustain investments and avoid stagnation.
