Moderate speed-up predicted in MENA region's growth trajectory by 2025 amidst ambiguity
Rewritten Article:
Hey there! Let's dive into a fresh take on the World Bank's recent report titled, "Shifting Gears: The Private Sector as an Engine of Growth in the Middle East and North Africa." According to the report, the region's growth is estimated to gradually improve, with a predicted 1.9% growth in 2024 and a moderate boost to 2.6% in 2025. However, uncertainties prevail due to the evolving global environment.
The surge among oil exporters is attributed to plans to restore oil production cuts, while the growth in oil importing nations is expected to escalate due to increased consumption as inflation decreases and a recovery of the agricultural sector. Nonetheless, factors such as conflict, extreme weather, oil market fluctuations, and changes in global policy add to the uncertainties. These uncertainties are amplified by potential impacts on global growth and inflation due to volatile trade dynamics.
Interestingly, the report brandishes the private sector's crucial role in fostering growth, creating employment, and sparking innovation. The region's growth potential has been restrained by the inadequacy of a vibrant private sector.
Most private sector entities in MENA struggle to be dynamic. Labor market productivity has dwindled in many countries, and few companies invest in innovation. Few firms enter and exit markets, and a divide exists between the formal and informal sectors in terms of productivity. Moreover, women's participation in the private sector remains limited.
Ousmane Dione, World Bank Vice President for MENA, expressed, "The region has underutilized human capital, with women sidelined in the labor market. Businesses can broaden their talent pool by attracting female leaders, who in turn will hire more women. Closing the gender employment gap could potentially double income per capita in a typical MENA economy."
Both governments and private entities share responsibilities in nurturing a more dynamic private sector. Governments can bolster corporate performance by cultivating competition, enhancing the business environment, and investing in data collection and access. Dynamic private sectors are integral to fostering sustainable growth and prosperity in the region emphasizes Roberta Gatti, World Bank Chief Economist for MENA. "To seize this potential, governments across the region ought to assume their role as guardians of competitive markets."
Meanwhile, businesses can empower themselves by refining their management practices. Engaging and leveraging the forgotten potential of women entrepreneurs and workers can ignite growth. The report suggests that a prosperous future for the MENA private sector is attainable if governments reconsider their role and corporations wisely invest in and utilize talent.
Enrichment Insights:
- Management Practices: Enhance productivity and competitiveness by focusing on improved management practices.
- Gender Employment Gap: Closing the gender employment gap could potentially double income per capita in many MENA countries.
- Competition and Business Environment: Governments can foster a better business environment and promote competition for improvement.
- Bridging the Informal Sector Gap: Implementing policies that encourage formalization can help bridge the productivity gap between formal and informal sectors.
- Job Creation Initiatives: Initiatives focusing on job creation are critical, such as the Private Sector Investment Lab, which aims to address barriers to private sector investment at scale.
- To foster sustainable growth and prosperity in the Middle East and North Africa (MENA) region, private businesses should consider refining their management practices, particularly in areas that enhance productivity and competitiveness.
- Closing the gender employment gap in the MENA region could potentially double income per capita in many of these countries, making it crucial for businesses to engage and leverage the potential of women entrepreneurs and workers.
- Governments in the MENA region can contribute to a more dynamic private sector by promoting competition, enhancing the business environment, and investing in data collection and access, thereby encouraging a more competitive and healthy economy.
