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MIDDLE EAST AND NORTH AFRICA:
Looking Forward
Photo: Salvatore Ferri / Shutterstock

Introduction

Ten years ago, women and men across the Middle East and North Africa (MENA) took to the streets to demand sweeping economic reforms that would create space for more jobs, better governance, and resilient dignity. Those early, hopeful waves of action—which came to be known as the “Arab Spring”—upended the prevailing status quo in countries across the region.

A decade after those dramatic events, what happened to those demands for change? Were MENA countries able to transform their economies and create new opportunities for the region’s vast reservoir of young people? Have living standards improved in an inclusive and sustainable manner?

These fundamental questions are set against the backdrop of COVID-19, which has had substantially negative economic and social impacts on countries across the region. Responding to the challenges of the pandemic is an urgent priority for MENA countries and the international community; however, understanding the long trajectory of development progress in the region is an essential step in plotting a course for structural reforms that will support a green, resilient, and inclusive recovery—and, in doing so, fulfill the promise of the movement a decade ago.

COVID-19

Before COVID-19, the MENA region faced longstanding development challenges. Key among them were a lack of jobs and economic opportunities for youth and women, limited trust in government, poor returns on investments in human capital, and uncompetitive economies.

The COVID-19 pandemic severely exacerbated these development challenges, contributing to a rise in poverty in the region, a deterioration in public finances and increase in debt vulnerabilities, and a further erosion of trust in the state. These challenges are especially acute in the region’s conflict-affected countries. At the same time, climate vulnerabilities continue to grow, multiplying threats to the region’s long-term development.

To emerge from this crisis, MENA countries must pursue a two-pronged approach that responds to the immediate health, social, and economic imperatives of COVID-19, while adopting structural reforms that help restore trust, strengthen human capital, support jobs and economic transformation, advance gender equity, address fragility, and enable green growth.

Photo: Zaid Abdour / World Bank

Going into a new decade, MENA countries face growing uncertainties. In the immediate term, the pace of vaccinations will determine how quickly countries can emerge from the shadow of the pandemic. At the same time, people in many MENA countries have once again taken to the streets to renew calls for jobs, transparency, and dignity.

MENA faces an urgent jobs challenge. Based on a projection of current demographic trends, nearly 300 million people will enter the job market by 2050. This represents enormous productive potential for economies of the region—provided this infusion of human capital is matched by a competitive private sector; improved services; and strengthened governance, transparency, and accountability.

These objectives can be advanced by i) transforming the role of the state in the economy through competition and innovation, reforms to state-owned enterprises, regional trade, and macroeconomic stability; and ii) raising productivity, improving business environments, investing in human capital, and accelerating digital transformation. These are among the chief aims of the World Bank Group’s MENA strategy.

Photo: Nabeel Darweesh / World Bank

Opportunities

In 2015, the World Bank Group launched the MENA strategy to support peace and stability in the region through economic and social inclusion. The strategy rests on four pillars, widely known as the “4Rs”: i) Renewing the Social Contract, ii) Resilience to Shocks, iii) Regional Cooperation, and iv) Recovery and Reconstruction.

The 4Rs played an important role in helping countries in the region stabilize their economies in the face of various macroeconomic, conflict- and climate-related shocks. For example, the World Bank Group helped client countries transition away from costly general subsidies to more targeted social assistance, extend much-needed concessional financing to middle-income countries Jordan and Lebanon to support refugees and host communities through the innovative Global Concessional Financing Facility, and support social cohesion through an active program in conflict-affected countries, such as Iraq and Yemen.

Photo: World Bank / Codex-Productions

At the start of the new decade, the World Bank Group is once again responding to the challenges facing the MENA region by focusing on urgent needs and structural reforms. In the very near term, the World Bank Group is helping countries address the social and economic challenges posed by COVID-19. This includes support for the procurement and distribution of vaccines and medical equipment and strengthening public health capacity, as well as extending income and livelihoods support to individuals, households, and small businesses.

In parallel, the World Bank Group is helping to advance structural reforms in the region—reforms meant to i) Restore Trust by strengthening governance and transparency and improving the availability and reliability of data for policymaking; ii) Strengthen Human Capital by modernizing education, health, and social protection systems; iii) Support Jobs and Economic Transformation by supporting competitive markets and leveraging digital technologies for private sector-led growth and job creation; iv) Advance Gender Equity by harnessing the vast productive potential of more women participating in the economy; v) Address Fragility by supporting public and private reconstruction efforts and targeting the root causes of conflict; and vi) Enable Green Growth by combating climate change and environmental degradation and preparing for energy transitions through green and inclusive investments.

These objectives are being supported through a substantial lending and knowledge program in the region, with projects and analysis advancing early childhood development and education reforms, health systems' strengthening, and the modernization of social protection schemes; improved access to high-speed internet and the expansion of digital payment infrastructure; and efforts to improve competition in markets along with private investments in critical, climate-smart infrastructure.

Photo: Mohamad Azakir / World Bank

Looking Forward

Working closely with clients and development partners, the World Bank Group is helping MENA countries navigate the uncharted road ahead, transforming decades of frustrations into productive, sustainable opportunities—for women and men, old and young alike—to fulfill the all-too-understandable desire for jobs and dignity that brought many of them to the streets ten years ago.

The 2022 Annual Meetings of the World Bank Group and International Monetary Fund in Marrakesh, Morocco, will be an opportunity to build momentum and showcase a fresh development agenda. Working together, countries can transform their economies and instill hope—in a new generation and in generations to come. With the right space and support, unbound by the constraints of old, broken social contracts, talented and energetic young people can show what a decade unbound can look like across the region.

Photo: Dominic Chavez / World Bank

Another future is possible, one where young people accelerate innovation toward a green, resilient, and inclusive economy. MENA’s challenges are far-reaching, but far from distant. Countries across the region cannot wait to create the hundreds of millions of jobs that will be needed to keep pace with young people entering the job market. They cannot wait to harness the youthful wave of energy, creativity, and hope.

The work must begin now.

To learn more, visit www.worldbank.org/mena.

Sources

Income stagnation infographic video: Global Economic Prospects, January 2021

Jobs Needed infographic video: United Nations, World Population Prospects 2019, World Bank staff calculations, and World Bank data: https://data.worldbank.org/indicator/SL.UEM.1524.ZS?end=2019&start=1991

Economic Perception infographic video: Arab Barometer survey: https://www.arabbarometer.org

Middle Classes infographic animation: World Bank staff calculations