The Middle East and North Africa (MENA) is an economically diverse region that includes countries with a common heritage, vastly different levels of per capita income, and a common set of challenges (see Box 1). Historically, dependence on oil wealth in many countries and a legacy of central planning in other countries have played major roles in shaping the region’s development strategies.
The Middle East and North Africa (MENA) is an economically diverse region. Despite undertaking economic reforms in many countries, and having considerable success in avoiding crises and achieving macroeconomic stability, the region’s economic performance in the past 30 years has been below potential. This paper takes stock of the region’s relatively weak performance, explores the reasons for this out come, and proposes an agenda for urgent reforms.
Since the onset of the Arab Spring, economic uncertainty in Egypt, Jordan, Libya, Morocco, Tunisia, and Yemen (Arab Countries in Transition, ACTs) has slowed already sluggish growth; worsened unemployment, particularly of youth; undermined business confidence, affected tourist arrivals, and depressed domestic and foreign direct investment. Furthermore, political and social tensions have constrained reform efforts. Assessing policy options as presented in the voluminous literature on the Arab Spring and based on cross-country experience, this paper concludes that sustainable and inclusive growth calls for a two pronged approach: short term measures that revive growth momentum and partially allay popular concerns; complemented with efforts to adjust the public’s expectations and prepare the ground for structural reforms that will deliver the desired longer tem performance.
International Monetary Fund. External Relations Dept.
On September 29 at the IMF-World Bank Annual Meetings in Dubai, Abdlatif Y. Al-Hamad, Director General and Chair of the Board of Directors of the Arab Fund for Economic and Social Development and former Kuwaiti Finance Minister, delivered the 2003 Per Jacobsson Lecture, “The Arab World: Performance and Prospects” His remarks are summarized below; the full text is available at http://www.perjacobsson.org.