Unleashing Growth Potential in the Middle East

IMF Blog, February 24, 2011

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Unleashing Growth Potential in the Middle East

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Bibliographic details

• Authors: Masood Ahmed
• Published: February 24, 2011

Short-run economic impact

• 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.
• The economic and social costs of chronically high unemployment in the region have been on the IMF's radar for some time.

Reforms, governance, and competition

• By providing the impetus for reforms, these events may encourage:
  • better governance,
  • greater transparency,
  • more competition.
• These reforms address many of the constraints that have held back progress in these societies.

Unemployment and private sector job creation

• Creating opportunities for the private sector to provide more jobs is identified as the major policy priority.
• This priority is especially important in those countries “where unemployment has been a problem for many years”.

Social safety nets — design and priorities

• Measures will be needed to ease the human costs of today’s social pressures.
• Priority should be designing a well-targeted social safety net.
• Characteristics of well-targeted schemes:
  • Provide assistance only to those most needy.
  • Target people, not products.
• Contrast with generalized subsidies that benefit everyone, which are implied to be less sustainable and less efficient.

Additional commentary and outreach

• Masood Ahmed discussed events in the region, the policy challenges, and actions that might help these countries recognize their full potential in a recent interview (video below).

Masood Ahmed — February 24, 2011

References

• chronically high unemployment
• late last year
• Managing Director stressed