In the Middle East, the middle class is grumpy.
And if the mass protests in Cairo’s Tahrir Square and Tunisia’s Habib Bourguiba Avenue over the past year haven’t made that clear, a survey of the people who make up the region’s soccer moms and middle managers articulates their angst in ways rallies often fail.
Less than a third of the people surveyed in the three Middle East and North African (MENA) countries of Egypt, Saudi Arabia and Morocco said they are “extremely satisfied” or “very satisfied” with their current economic situation, according to the poll conducted by consulting firm Booz & Co. Respondents who said they were “not at all satisfied” and only “slightly satisfied” reached 48%.
The survey comes at a time when the region’s leaders – both those who have come to power on the back of Arab Spring protests and those who are trying to head them off – are grappling with how to steer their countries to greater prosperity and freedom. So far, they are stumbling, with most of the region’s economies reeling from political upheaval and the transition to democracy proceeding slowly, if at all.
“There has never been a more critical time for policymakers in the Middle East to focus on empowering the region’s sizable—and politically significant—middle class,” Richard Shediac, Samer Bohsali and Hatem Samman, the authors of the report said. “There is a dire need for change, via a set of economic, social, and political policies aimed at developing a large, dynamic, and sustainable middle class.”
Compared to the West, MENA’s middle class is both undersized and understudied. Indeed, Booz had to develop its own parameters for defining its parameters, which it settled on as families with incomes between 75% and 150% of each country’s median. Turning that into dollar terms, that works out to an annual household income of as little as $23 a day in Morocco to $149 at the upper end for wealthy Saudi Arabia.
Middle class views on their economic situation vary widely from country to country, according to the poll.
To Moroccans, economic conditions have not changed markedly over the past five years, while Egyptians are the most dissatisfied with the present situation. Saudis, whose economy is booming on the back of high oil prices, overwhelmingly rate their cur rent economic status favorably.
MENA’s middle class is different than its peers in Europe and North America. Booz said it produces fewer entrepreneurs and therefore is less a source of economic growth. That is because the public sector is the main employer of the middle class rather than the private sector.
In Saudi Arabia and Egypt, for example, small and medium-sized businesses account for between 25% and 38% of employment, respectively, compared with 55% in the US, and 60% in Germany.
The survey gives some insight into why: 44% rated “having a secure job” as their most important factor in choosing an occupation while only 3% ranked “participating in new business venture” as so important.
Despite relying on it, employer trust in government is low. Less than a third of the middle class gives it a passing grade for disclosing adequate and accurate information, fighting corruption or having a fair and open court system. This figure is below 10% in Morocco. Less than a fifth of the MENA middle class trust their country’s court system
The poll also found that the middle class feels the educational system is performing poorly. More than half said it fails to provide opportunities for them or for their children, in terms of work. Nevertheless, More than 80% claim to save money for their children’s education, up to a 10th of their monthly income in some cases.
An average of 57% percent for all three countries said that their salary covers basic expenses, with a little for extras. Between 27% and 30% are barely able to make ends meet, while 3% said they could not even do that.
When they have free time, MENA’s middle class prefer shopping malls, restaurants, and amusement parks to nightclubs, pubs or museums. Saudis preferences are, of course, limited since movie theaters and nightclubs are banned in the country, but in Morocco where they are permitted, only 19% go to them. Egyptians are heavy cinema goers, with 60% saying they buy tickets. Nearly 100% of the middle class claims to watch television every day
“To many Westerners, these forms of entertainment may seem superficial and limiting. Yet surprisingly, middle class respondents report overall contentment with their entertainment options.” the report said.
Nevertheless, half of MENA’s middle class claims to be satisfied with their entertainment and cultural offerings, and in Saudi Arabia that number rises to 70%, with the highest rating among women. “One explanation for this disparity is that people cannot miss something they have never experienced,” the report suggests, noting that foreign travel among the region’s middle class is not that common.
In spite of the current pessimism, a surprising number of middle class people remain bullish about the future, Booz found. About 70 percent have a positive outlook for the economy over the next five years, especially in Saudi Arabia and Egypt. If only 5% said they are “extremely satisfied” with the economic conditions today, 29% said they expected it to be “much better” five years from now.