## Scaling-up the Inclusive Growth Agenda in the Arab Region

_IMF News, January 30, 2018_

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**Canonical URL:** [Scaling-up the Inclusive Growth Agenda in the Arab Region](https://www.imf.org/en/news/articles/2018/01/29/sp013018-md-morocco-opening-remarks)

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## Bibliographic details
- Published: January 30, 2018

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### Introduction
- Remarks by Christine Lagarde, Managing Director, International Monetary Fund.
- Marrakesh, Morocco — January 30, 2018.
- Opening framing: inclusive growth requires providing opportunity to work, innovate, and grow for all, with special emphasis on youth and women.

### Regional context and urgency
- Finding: Since the 2014 Amman conference, job creation and inclusive growth have been central to reform agendas, with progress, but not enough.
- Key statistics and facts:
  - More than 27 million young people in the region will join the workforce over the next five years.
  - Youth unemployment in the region averages 25 percent.
  - More than 60 percent of citizens perceive that connections – or wasta – determine whether or not you find a job.[2]
  - IMF global projections (released last week from the speech):
    - Global growth reached 3.7 percent in 2017.
    - Global growth is expected to accelerate to 3.9 percent this year and 3.9 next year as well.
    - Some 120 countries representing three-quarters of global GDP are participating in this cyclical upswing.
  - Regional growth expectations:
    - Growth is expected to pick up, but at 3½ percent in 2018 and 2019 it is well below the average 5.6 percent achieved during 2000-2008.
  - Drivers of weaker regional performance: conflicts and lower commodity prices.

### Adjustments, transitions, and examples of progress
- General assessment: Many promising steps have been taken (financial and economic access, private sector development), but implementation needs to be accelerated, broadened, and scaled-up.
- Examples of progress:
  - Fintech and technology:
    - Fintech startups in the region have increased seven-fold since 2009, mostly in Egypt, Jordan, Lebanon, and the United Arab Emirates.
    - Jordan’s eFawateerCom processes more than one million transactions a year and connects people with more than 70 online billers.
    - Small entrepreneurs use technology to match job seekers with business needs (example: youth innovation contest winner Saeed Alfagieh in Yemen).
  - Business climate and SME environment:
    - Morocco: improvement in the business climate and creation of Free Trade Zones in Casablanca and Tangiers have generated some 85,000 jobs in the automotive industry.
    - Close to 45 percent of car parts for the auto sector in Morocco are sourced from local suppliers.
  - Constraints remaining:
    - SMEs face limited access to finance and weak legal frameworks that inhibit scaling up.

### Policy agenda — three priorities to operationalize inclusive growth
- Priority 1: Create a vibrant private sector for higher growth and more jobs
  - Move away from the model where the state is employer of first resort.
  - Actions: level the playing field, combat corruption, increase competition, leverage global trade and new technologies.
  - Expectations of firms: invest within the region, pay their fair share of taxes, and collaborate with the public sector on infrastructure.
- Priority 2: Support excluded groups (youth, women, rural populations, refugees)
  - Policies: better education, active labor market policies to help youth and women find employment.
  - Financial inclusion highlighted as a powerful tool, especially for women; including women economically and financially described as a potential global game-changer.
- Priority 3: Use fiscal policy to invest in people and infrastructure
  - Current social spending and needs:
    - Social spending – on social safety nets, health and education services – is less than 11 percent of GDP.
    - This compares to 19 percent in emerging Europe.
  - Challenge: increase spending on social services and infrastructure when budgets are tight.
  - Key policy direction: build broader and more equitable tax bases so that all pay their fair share while protecting the poor.
  - Fiscal gains from moving away from the state-as-employer model can create space for high-return social and infrastructure outlays.

### Implementation, ownership, and collective responsibility
- Conference role: forum for public officials, private sector, and civil society from more than 20 countries to share experiences and operationalize inclusive growth agendas.
- Importance of dialogue: engaging those affected by reforms fosters trust and ownership, increasing the sustainability and impact of reforms.
- Observation from conference: positive energy, quality of discussions, and actionable ideas (i-labs cited as source of findings).

### Conclusion
- Central message: Today’s youth are the Arab region’s greatest potential and their aspirations must be heeded.
- Closing quote referenced: “Your children are not your children. They are the sons and daughters of Life's longing for itself.” — Khalil Gibran.
- Closing word: Shukran!

*Remarks by Christine Lagarde, Managing Director, International Monetary Fund; Marrakesh, Morocco; January 30, 2018.*

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## References

- [Christine Lagarde](https://www.imf.org/en/About/senior-officials/Bios/christine-lagarde)
- [Morocco and the IMF](http://www.imf.org/external/country/MAR/index.htm)
- [Speeches](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2018/01/29/sp013018-md-morocco-opening-remarks_