After decades of market-oriented reforms, the ESCWA region is facing fundamental questions about the parameters of future development. The expectation that top-down economic stabilization, liberalization of markets and strategic privatization would lead to more competitive, diversified and inclusive economies has only partially materialized. The employment situation in particular remains a constant challenge and needs to be addressed through a more integrated approach to labour market policy, combining economic and social policy. This report continues the ESCWA series of integrated social policy reports, which advocate for harmonization across policy domains. It reviews labour market statistics collected from member countries, traces recent changes in labour market regulation and labour governance, analyses active labour market policy and looks at selected aspects of economic policy, such as the employment elasticity of economic growth. The report concludes that labour market policy needs to take a broader approach. The segmentation of labour markets is repeated in the fragmentation of social security systems and in the economy at large. Policies need to address such divisions by adopting a more holistic approach in order to successfully address the employment challenges facing ESCWA member countries.