IMF Managing Director Kristalina Georgieva Issues a Call for Action on Inclusive Growth in MENA
IMF News, October 15, 2023
Source details
- Canonical URL
- IMF Managing Director Kristalina Georgieva Issues a Call for Action on Inclusive Growth in MENA
Other formats
Bibliographic details
- Published: October 15, 2023
Context and purpose
- Press Release No. 23/354; October 15, 2023.
- Issued following Ms. Kristalina Georgieva’s meeting with ministers of finance and central bank governors of the Middle East and North Africa (MENA) and Pakistan during the World Bank-IMF Annual Meetings held in Marrakech.
- Reiterates the IMF’s long-standing partnership with MENA and builds on prior regional conferences (Amman (2014) and Marrakech (2018)) and previous IMF work on priority reforms for inclusive, job-rich growth.
Key diagnoses of the region’s challenges
- Large share of youth is inactive.
- Wide rural/urban disparities persist.
- Economic opportunities for women remain scarce.
- Social protection systems are weak and job creation feeble.
- Recent shocks and global trends compounding vulnerabilities:
- the pandemic,
- Russia’s war in Ukraine,
- climate change,
- automation.
- Resulting outcomes: rising inequalities and opportunity gaps and a narrower policy space to address them.
- High levels of public debt in a number of MENA economies leave them vulnerable to future shocks.
Five fronts for action (policy recommendations)
- Foster a vibrant private sector:
- Eliminate barriers preventing new firms from entering markets and existing small businesses and startups from growing in scale.
- Level the playing field between public and private firms.
- Reform burdensome government regulations.
- Enhance financial inclusion.
- Promote good governance.
- Accelerate digitalization and invest in new technologies.
- Overhaul social protection systems:
- Guarantee more equal access to basic services—such as health, education, and social insurance—through more efficient, cost-effective, and targeted social assistance.
- Provide opportunities for the youth:
- Revamp education and training systems to address skills mismatches.
- Prepare for "100 million youth reaching working age in the next 10 years" by equipping them with skills sought by 21st-century employers.
- Improve access to finance to foster entrepreneurship, innovation, and creation.
- Ease barriers to female participation in economic life:
- Address underutilization of a relatively large pool of highly educated young women.
- Goal example: "Doubling the female labor force participation rate over the next 15 years can improve potential output in a country like Morocco by about 3 percent."
- Make green investment an engine of growth and job creation:
- Prioritize adaptation strategies to boost growth and improve inclusiveness for the most vulnerable.
- Transition to renewable energy sources as both sustainability necessity and potential engine of growth and job creation.
Macroeconomic framework and fiscal policy guidance
- Macroeconomic stability is essential for transformative change.
- Rebuilding fiscal buffers may require:
- Redesigning tax systems to widen tax bases.
- Improving the progressivity of taxation.
- Reducing distortions that lead to informality.
- These principles will form the basis of the IMF’s engagement with MENA policymakers and other stakeholders for the years to come.
Strategic outlook and implementation
- Structural reforms take time; preserving reform momentum is essential.
- The Annual Meetings in Marrakech provided an opportunity to renew the call for action to close the gap between past growth models and future growth engines.
- The IMF commits to working with policymakers, the private sector, civil society, youth, and partner institutions to pursue more and better jobs, shared prosperity, and enhanced voice for youth and underrepresented groups.
IMF Press Release No. 23/354 — October 15, 2023