Unleashing Growth Potential in the Middle East

By Masood Ahmed

Recent popular protests in the Middle East and North Africa region, although likely to have a negative economic impact in the short run, might actually help to unleash the countries’ long-term growth potential.

By providing the impetus for reforms, these events may encourage better governance, greater transparency, and more competition—in other words, tackling many of the constraints that have held back progress in these societies.

The economic and social costs of chronically high unemployment in the region have been on our radar for some time. And late last year, I emphasized that “the region can no longer afford the status quo.”

Creating opportunities for the private sector to provide more jobs is the major policy priority. As the Managing Director stressed, this is particularly important in those countries “where unemployment has been a problem for many years”.

We also need to accept that measures will be needed to ease the human costs of today’s social pressures.  But, to ensure that these social protections can continue to be provided over time, the priority should be designing a well-targeted social safety net. In contrast to generalized subsidies that benefit everyone, well-targeted schemes provide assistance only to those most needy. This means assistance that targets people, not products.

In a recent interview (video below), I talk more about events in the region, the policy challenges, and what actions might help these countries recognize their full potential.

2 Responses

  1. You want to unleash growth in the Middle East and encourage better governance, greater transparency, and more competition?

    Then propose the only thing that makes sense for them… which is sharing out all net oil revenues directly to their citizens… so that their government works for their citizens… so that their citizens don´t expect favors from government… so to avoid that bad petrocrat with his oilygarchs that will otherwise descend on them all again and again… sooner or later.

    And I, as an oil-cursed citizen, know very well what I am talking about.

    And don´t just offer them, like the well intentioned EITI does, the placebos of transparency… these do not suffice to alter the real balance of powers.

    http://theoilcurse.blogspot.com/

  2. […] This post was mentioned on Twitter by Conduit Journal, Global Updaid. Global Updaid said: IMF: Unleashing Growth Potential in the Middle East http://bit.ly/gLGq7F […]

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