## Investment and Growth in the Arab World - A Scoping Note

_Policy Papers, May 2, 2016_

## Source details

**Canonical URL:** [Investment and Growth in the Arab World - A Scoping Note](https://www.imf.org/en/publications/policy-papers/issues/2016/12/31/investment-and-growth-in-the-arab-world-a-scoping-note-pp5037)

## Other formats

- [Markdown version](/en/publications/policy-papers/issues/2016/12/31/investment-and-growth-in-the-arab-world-a-scoping-note-pp5037/index.md)
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## Bibliographic details
- Published: May 2, 2016
- Series: Policy Papers

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### Summary
- Enhancing public and private investment, and ensuring that this translates into higher growth and employment, have long been key policy challenges in Arab countries.
- Reflecting an improvement in policies and global conditions, investment rates in Arab countries have increased over the past couple of decades.
- Despite these improvements—and notwithstanding significant differences across the region—investment has on average been somewhat weaker than in peer countries and less effective at generating growth.
- Private investment, particularly foreign direct investment (FDI), has underperformed significantly.
- Public capital spending has benefited from high oil prices in resource–rich countries, but has continued to lag in oil importers.

### Key findings and analysis
- Investment rates in Arab countries increased over the past couple of decades.
- Investment performance relative to peers: on average somewhat weaker and less effective at generating growth.
- Private investment shortfall: private investment and FDI have underperformed significantly.
- Public investment divergence: resource–rich countries saw benefits from high oil prices; oil importers continued to experience lagging public capital spending.

### Policy implications and priorities
- Strengthen both public and private investment to translate into higher growth and employment.
- Address underperformance of private investment, with particular attention to FDI.
- For oil importers, prioritize measures to raise public capital spending effectiveness and levels.

### Subjects and classification
- Cooperation Council for the Arab States of the Gulf
- Economic growth
- Employment
- Fiscal reforms
- Investment
- Labor markets
- Middle East and Central Asia Department
- Private investment
- Public investment

*Source: Investment and Growth in the Arab World - A Scoping Note (May 2, 2016), International Monetary Fund.*

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- **Executive Summary**
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_Source: https://www.imf.org/en/publications/policy-papers/issues/2016/12/31/investment-and-growth-in-the-arab-world-a-scoping-note-pp5037_